How to enjoy preferential tariff through origin of products under EVFTA?

How to enjoy preferential tariff through origin of products under EVFTA?

Under commitments in the Free Trade Agreement between EU and Vietnam (“EVFTA”), Vietnamese exporters could get an incentive (i.e. a preferential tariff treatment) for products exporting from Vietnam to EU countries when such products are originating or considered as originating from a member country. Thus, Vietnamese exporters should take some following notes to obtain incentives when exporting products from Vietnam to EU countries:

1. Ensure the nature of originating of exporting products

EVFTA considers a product as originating from Vietnam is one qualifying the conditions of rules of origin pursuant to such agreement, in which 02 types of originating products are as follows:

(i) Firstly, products are wholly obtained in Vietnam. They are mineral products, plants, vegetable or any products totally extracted, grown, harvested, gathered, born, raised, hunt in the region of Vietnam or fish (Vietnamese vessels catch) from outside any territorial sea of Vietnam or the products made, processed in Vietnam from the products wholly obtained in Vietnam as listed; and

(ii) Secondly, products are not wholly obtained in Vietnam but those products are sufficiently worked or processed and fulfill the specific conditions set out in the EVFTA. They are exclusive of simple operations such as preserving, storage, breaking-up and assembly of packages, washing, cleaning, sharpening, simple grinding or simple cutting, peeling, stoning and shelling of fruits, nuts and vegetables, and other prescribed process does not lead to any changes in products’ nature (“Insufficient Working and Processing”).

In addition, the EVFTA also allows the Cumulation of Origin rule, in which:

(i) Products are also regarded as being obtained in Vietnam when incorporating materials originating in the other member countries (i.e. in EU countries). The condition is that the working or processing carried out in Vietnam goes beyond the Insufficient Working and Processing;

(ii) Squids and octopuses, originating in an ASEAN country which mutually engages in a preferential trade agreement with EU, are considered as originating from Vietnam; or

(iii) Fabrics originating in the Republic of Korea shall be considered as originating from Vietnam. The condition is the working or processing carried out in Vietnam goes beyond the Insufficient Working and Processing.

2. Obtain the proofs of origin

To get benefits from the EVFTA, Vietnamese exporters must submit to the custom authorities of importing countries one of the following documents as recording the origin of products:

(i) A certificate of origin (the “C/O”) issued by authorities having competence to grant the C/O. Those authorities may be import – export management authorities, management boards of industrial parks, export processing zones, economic zones, hi-tech zones, etc.;

(ii) An origin declaration made out by any exporter for consignments the total value of which shall not exceed EUR6,000; or

(iii) An origin declaration by an exporter approved or registered in accordance with the relevant legislation of the Ministry of Industry and Trade of Vietnam.

Of note, a proof of origin as mentioned above shall be valid for 12 months from the date of issuance. Vietnamese exporters shall submit such proof to the custom authorities of the importing countries within that period. Such authorities may request a translation of such proof of origin if it is not in English.

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3. Prepare other supporting documents

To obtain the C/O and make origin declaration, Vietnamese exporters must prepare and preserve documents including:

(i) Firstly, evidences of the manufacturing or other processes carried out by the exporter or supplier to obtain the goods concerned, contained for example in their accounts or internal book-keeping;

(ii) Secondly, documents proving the originating status of materials used, issued or made out;

(iii) Thirdly, documents proving the working or processing of materials; and

(iv) Lastly, proof of origin proving the originating status.

In addition, Vietnamese exporters should keep 04 above-mentioned documents at least 03 years.


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