Article 1 Definitions

Article 1
Definitions

For the purposes of this Protocol:

"authorised enterprise(s) of Russia" shall include:

1. "Automobile plant "GAZ", LLC

Legal address: 603004, Russian Federation, Nizhny Novgorod, pr. Ilyicha, 5;

2. KAMAZ Foreign Trade Company Incorporated

Legal address: 423815, Russian Federation, Republic of Tatarstan, Naberezhny Chelny, Avtozavodsky avenue, 2;

3. LLC "Ulyanovsky Avtomobilny Zavod" (UAZ)

Legal address: 432034, Russian Federation, Ulyanovsk, Moskovskoye shosse, 92,

and the newly proposed authorised enterprise(s) of Russia provided for in paragraph 2 of Article 3 (Specific Requirements) of this Protocol,

which are authorised by the Russian Party to establish the joint ventures in the territory of Viet Nam with the interested enterprises of Viet Nam in accordance with the respective laws and regulations of Viet Nam and the provisions of this Protocol;

"joint venture(s)" shall mean the legal entity(ies) established by agreement(s) concluded by the authorised enterprise(s) of Russia and the interested enterprise(s) of Viet Nam in the territory of Viet Nam in accordance with the respective laws and regulations of Viet Nam and the provisions of this Protocol;

"motor transport vehicles" shall mean certain types of SUV of "UAZ" (M1G), motor transport vehicles for the transport often or more persons, including the driver (M2, M2G, M3, M3 G), trucks (Ni, Ni G, N2, N2G, N3, N3 G) and special purpose motor transport vehicles (SB, SC, SD) agreed by the authorised enterprise(s) of Russia and the interested enterprise(s) of Viet Nam.(1) The list of motor transport vehicles shall be included in the production plan(s) of the joint venture(s) which shall be approved by the Vietnamese Party;

"semi-knocked down (SKD) industrial assembly" shall mean the industrial assembly of motor transport vehicles in the territory of Viet Nam using parts and components both imported by the joint venture(s) to the territory of Viet Nam and produced in the territory of Viet Nam;

"SKD set" shall mean a set of parts and components, which is imported by the joint venture(s) to the territory of Viet Nam and necessary for semi-knocked down industrial assembly of motor transport vehicles, except for the parts and components produced in the territory of Viet Nam;

"level of localisation" is the local value added content which is calculated according to the following formula:

Direct Direct Viet Nam + Labour + Overhead + Profit Material Cost Cost Cost Level of *100% localisation EXW Price

.

For the purposes of calculating the level of localisation:

1. "Viet Nam Material Cost" shall mean value of materials, parts or goods, originating in the territory of Viet Nam, that meet the origin criteria in accordance with Chapter 4 (Rules of Origin) of the EAEU-VN FTA;

2. Direct Labour Cost shall include wages, remuneration and other employee benefits including compulsory social and health insurances associated with the manufacturing process as required by the respective laws and regulations of Viet Nam;

3. Direct Overhead Cost shall include, but is not limited to commercial and administrative costs; costs of property items associated with the production process (rental and leasing costs, depreciation on buildings, taxes, including income tax, interests on mortgage); leasing costs and interest payments for plant and equipment; factory guard costs; insurance costs (plant, equipment and materials used in the manufacture of the goods); utility costs (energy, electricity, water and other costs of utilities directly associated with the production of goods); research and development, design and engineering costs; dies, moulds, tooling and depreciation, maintenance and repair of plant and equipment; royalties or licences (in connection with patented machineries or processes used in the production process of goods or the right to produce the goods); costs of inspection and testing of materials and goods; costs of storage and handling in the factory; disposal of recyclable waste costs; and cost elements used in calculation of the value of raw materials, i.e. port and clearance charges and import duties paid for dutiable component;

4. "Profit" shall mean net profit of the joint venture(s) after deducting all taxes and fees provided for in the respective laws and regulations of Viet Nam;

5. "EXW Price" shall mean the price of the goods on Ex Works basis which is provided for in Incoterms 2010 by the International Chamber of Commerce.