A TL International Trade Production Co., Ltd. in Binh Dinh (TL Co., Ltd.) is in need of producing antibacterial fabrics and medical masks. However, in the list of business industries of the Company does not have the industry of exporting antibacterial cloth and medical masks.
Enterprises with partners are HT Technical Investment JSC in Hanoi (HT Company) is qualified to produce medical masks. Therefore, TL company wishes to cooperate with HT company quickly implement the procedures to deploy production and business of the above-mentioned items; And want to carry out production independently of HT. The company has come to consult and help of DFC Lawyers.
After studying the dossier documents, request for additional information from the two enterprises on the conditions as well as processes and purposes of cooperation of the two parties; we offer a plan to advise customers as follows:
1. Conditions on production facilities, equipment and quality management of enterprises exporting antibacterial cloths, medical masks
2. Products are antibacterial cloth masks:
What conditions do businesses need to produce medical masks
In order to carry out the production of antibacterial fabric masks, TL Company needs to carry out the following procedures:
Firstly, Certification and declaration of product regulations in accordance with QCVN 01:2017/BCT
In accordance with the Law on Standards and Technical Regulations, this is a product that needs to be certified in accordance with regulations, therefore, the Company needs to carry out the certificate of suit and announce the regulations according to QCVN 01:2017/BCT.
Secondly, Attach a valid label to the product label for legal sale in the market.
Third, Suitable production facilities, equipment and personnel.
Fourth, ISO 9001:2015 certification; ISO 13485 or equivalent
To ensure the quality of enterprises need to implement certification: ISO 13485
– ISO 9001:2015: Quality Management System
- ISO 13485:2016 : Medical Equipment Management System
Thursday, Check and test the antibacterial ability of the mask product according to decision No. 870/QD-BYT technical instructions for masks resistant to droplets, antibacterial.
Therefore, in order to carry out the production of antibacterial fabric masks, the Company does not need to use the license of HT Company but needs to carry out simpler procedures as above.
3. For products that are medical masks:
To carry out the production of medical masks, enterprises need to carry out the following procedures:
Firstly, build standards for your medical mask products.
According to Article 67 of Decree 36/2016/ND-CP: " Medical equipment manufacturers, which have been operating before the effective date of this Decree, may continue production activities but must complete the announcement of production eligibilityby July 1, 2017. Particularly for regulations on quality management system: Medical equipment production facilities must complete the application of iso 9001 quality management system by January 1, 2018 and iso 13485 quality management system by January 1, 2020"
Therefore, at the present time, the Company wants to carry out the production of medical masks need to build standards for its products according to the quality management system under ISO 13485 as required by law. Usually the time taken to get ISO certification is from 7-10 days.
Secondly, Announcing eligibility for medical equipment production at the Department of Health
According to Decree 36 and the guiding documents, conditions for medically damaged production establishments need to meet the necessary conditions before the product is officially licensed to market.
Accordingly, the following conditions should be met:
- About personnel
Conditions of professional responsibilities: Having a degree from technical college of medical equipment or higher or a degree from a technical university or medical or pharmacy major or higher; Having a direct working time in medical equipment engineering at medical equipment facilities for 24 months or more; Work full-time at the production facility. The appointment and appointment of professional in-charge of production establishments must be expressed in writing. There are staff who meet the production requirements for the type of medical equipment that the facility produces.
- In terms of facilities, equipment and quality management
Medical equipment production establishments must meet: There are locations, area, factories in accordance with the requirements of the type of medical equipment that the establishments produce. There are equipment and production processes, quality inspection in accordance with the requirements of the type of medical equipment that the facility produces. In case there is no quality inspection equipment, there must be a contract with a facility capable of quality inspection to check the quality of medical equipment produced by the manufacturer.
- The museum's treasure trove meets the minimum conditions
Having an area suitable for the type and quantity of medical equipment preserved; Ensure airy, dry, clean, not near sources of pollution; Meet other storage requirements of medical equipment according to the instructions for use.
After achieving ISO 13485:2016 certification for the management system of the medical device manufacturing facility. Enterprises need to complete dossiers and boxes of dossiers to announce production eligibility at the Department of Health where the factory is located. Upon receiving the complete and valid dossier, the Department of Health shall grant a dossier to announce the eligibility for production of medical equipment and shall settle it after 03 working days. Usually the time to carry out this procedure is 15-20 days.
Third, Classification of Medical Devices for Masks
According to Article 4, Article 5 of Decree 36, amended by Article 6 of Decree 169/2018/ND-CP, medical equipment consists of 2 groups and is classified into 4 categories based on the level of potential risks related to technical design and production of medical equipment as follows:
- Group 1 consists of medical equipment of type A which is a low-risk medical device;
- Group 2 consists of medical equipment of type B, C and D, in which: type B has a low average risk level, type C has a high average and type D has a high level of risk.
In fact; Medical masks will usually be classified into group A. Enterprises registered for classification in organizations with the function of classifying medical equipment.
Before the classification of medical equipment, the organization that conducts the classification of medical equipment sends a dossier announcing eligibility for classification of medical equipment as prescribed in the Ministry of Health (Department of Medical Equipment and Works). Upon receiving the complete and valid dossier, the Ministry of Health grants to the establishment the announcement of the dossier to announce eligibility for classification of medical equipment according to form No. 01 specified in Appendix IV issued together with Decree No. 36/2016/ND-CP. Within 03 working days after the date stated on the dossier receiving voucher, the Ministry of Health shall publicize on the website of the Ministry of Health the following information: Name, address, phone number of the facility performing the classification of medical equipment and dossiers of declaration of eligibility for classification of medical equipment. Usually the actual duration is about 3 days.
Wednesday, Announcing standards applicable to type A medical equipment
Before putting medical equipment of class A circulating on the market, the facility responsible for bringing medical equipment to market is responsible for sending dossiers of publication of applicable standards as prescribed to the Department of Health where the facility is located;
Upon receiving the complete and valid dossier, the Department of Health grants to the establishment the announcement of the dossier to announce the applicable standard according to form No. 03 specified in Appendix IV issued together with Decree No. 36/2016/ND-CP;
Within 03 working days after the date stated on the dossier receiving voucher, the Department of Health shall publicize on the portal the following information: Name, classification, production facility, country of production of medical equipment; circulation of medical equipment; name and address of owners of medical equipment; name and address of the owner of the circulating number; names and addresses of medical equipment warranty establishments and dossiers of publication of applicable standards of medical equipment. Usually the duration is 20-25 days
We offer a plan to meet the requirements of the company's medical mask business in the current context, as follows:
4. Cooperation plan for TL company to organize the production of medical masks and antibacterial masks
Based on the actual conditions and purpose requirements of TL Company, we would like to propose a plan to implement to conduct the production of masks as follows:
TL company will cooperate with HT Company through business cooperation contract to co-organize the production of products.
Article 3 of Clause 9 of the Investment Law 2014 provides for business cooperation contracts as follows:
" Business cooperation contract (hereth called BCC contract) isa contract signed between investors to cooperate in business division of profits, division of products without establishing an economic organization."
Article 29 Clause 2 of the Investment Law 2014 also provides:
"In the course of the implementation of the BCC contract,the contracting parties are agreed to use assets formed from business cooperation to establish enterprises in accordance with the law on enterprises "
Accordingly, business cooperation contracts are cooperation between investors, enterprises in business in order to share profits and products, not establish new legal people. This cooperation will be implemented on a legal person available by business partners. Therefore, if the two parties cooperate to carry out the production and trading of medical mask products based on legal people, HT Company is eligible for production and business in accordance with the provisions of law; and the parties may agree on the division of profits in the form of product division to make the sale to the market.
5. Advantages and difficulties in business cooperation
The plan of cooperation through signing a business cooperation contract without establishing a new legal person will have some advantages and disadvantages as follows:
a.Advantages
The two sides cooperate through the form of BCC does not require the establishment of legal people is considered a prominent advantage for investors in general and especially foreign investors. Specifically, when implementing this cooperation contract, TL Company can shorten the time due to not having to establish a legal person. The procedure for opening production and business establishments is much shorter than the procedure for applying for a license or the investment cooperation parties have established new legal people because the production and trading of medical mask products will be based on the legal body is HT Company.
In addition, when the two sides do not want to continue investment cooperation, investors do not have to worry about the issue of re-operation. This form is suitable for short-term investment projects and fast implementation schedule.
b.Cons
In the course of business operations, joint venture between investors who do not establish new legal people will have difficulties in trading, foreign affairs, profit distribution and decentralized management. Therefore, the two parties are forced to choose one of the two seals and in this case will have to use the seal of the Company HT. Then, the use of only one seal will have limitations, unpredictable risks. These are the worries of the investor (TL Company) to feel bound, not proactive because all transactions must depend on the seal of the partner. The party using the seal (HT Company) is concerned about the liability and legal consequences of the party using the seal directly. Therefore, if the two sides have disagreements or conflicts; HT company does not agree to use the seal, the production and business will have to stop and wait for settlement. Therefore, this is a great limitation and disadvantage when choosing this cooperation plan for TL Company.
The above is the opinion of DFC's lawyers only apply to the case of TL company at the time of giving advice, advice given on the basis of Vietnamese law and information provided by TL Company.
Luật Sư: Lê Minh Công
Với bề dày kinh nghiệm hơn 15 năm trong ngành tư vấn pháp luật, Luật sư tranh tụng tại Tòa án, Ông Lê Minh Công đã dẫn dắt DFC trở thành một thương hiệu uy tín và chất lượng cho người dân và là một trong những công ty đi đầu tại Việt Nam trong lĩnh vực tư vấn luật qua tổng đài.
