HCM City Customs answers questions about EVFTA for enterprises

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Customs officers inspect raw materials imported through Cat Lai port. Photo: T.H

Self-certification of origin

Most questions from enterprisesare about self-certification of origin under the REX system. Enterprisessaid in case they buy import goods from a distributor (not a manufacturer), the invoice includes many products from many different European manufacturers, which C / O does enjoy tax incentives under EVFTA.

Answering the question, HCMCityCustoms Department said that on August 21, 2020, the General Department of Customs issued Official Letter 5575 / TCHQ-GSQL notifying that the European Union applies self-certification of origin according to the REX system anddoes not apply the origin certification mechanism specified at Points a and b, Clause 1, Article 19 of Circular 11/2020 / TT-BCT

Regarding self-certification of origin for goods from the EU, enterprises are asked to study the provisions of Article 24 of Circular 11/2020 / TT-BCT for implementation.

Specifically, pursuant to Clause 5. Article 3 of Circular 11/2020 / TT-BCT “exporter” means an individual or organisation whose head office is located in the exporting member state exporting goods to another member state and is able to prove the origin of theexport goods. An exporter can be a manufacturer or the person that carries out the export formalities. The exporter is not necessarily a seller who issues the sales invoice for the consignment (third party invoicing). The seller can locate their headquarters in the territory of non-EVFTA member countries.

In addition, many enterprises asked if Vietnam applies the REX mechanism for the self-certification of origin under the EVFTA regulations as the European side has applied?

HCMCity Customs Department said that the Ministry of Industry and Trade sent official dispatch No. 812 / XNK-XXHH dated July 31, 2020 to export commodity associations and traders to guide on documents for certification of origin.

Under Point b, Clause 2, Article 19 of Circular No. 11/2020 / TT-BCT, any exporter can make self-certification of origin for Vietnam’s export consignments valued at no more than EUR 6,000.

Self-certification of origin is made in accordance with Article 25 of Circular No. 11/2020 / TT-BCT. After implementing self-certification of origin, traders are responsible for declaring and uploading proof of origin and documents related to exported consignments on www.ecosys.gov.vn as prescribed in Clause 7, Article 25 of this Circular.

For export consignments valued at more than EUR 6,000, the exporter must submit a C/O form EUR.1issued by an agency authorised by the Ministry of Industry and Trade. The process of declaration and certification of C / O form EUR.1 issimilar to that of prevailing C/O forms.

Answering the question of GROZ-BECKERT Vietnam Co., Ltd on declaration of origin for a consignment containing many products, of which only a few products originate from the EU or Vietnam, HCMCity Customs Department guided: If the shipment contains EU and non-EU goods, the enterprise must specify the origin of each item. The enterprise must declare the origin of non-EU goods according to what is specified at Point 1.79, Appendix II issued together with Circular 38/2015 / TT-BTC, as amended in Circular 39/2018 / TT-BTC (Enter the country code and territory where the goods are manufactured (produced) according to the UN / LOCODE table - based on the proof of the origin of the goods or other documents related to the consignment). Regarding expressing the declaration of origin in this case, the HCM City Customs Department will note this question to report to the General Department of Customs for guidance.

Questions about REX codes answered

For REX codes, enterprises asked if they could apply both REX for some product codes and the EVFTA for other codes at the same time depending on which ones get more tax incentives or not?

HCMCity Customs Department answered, currently, the enterprise has REX codes issued by VCCI according to Circular 38/2018 / TT-BCT to enjoy the Generalized System of Preference (GSP), meanwhile, to implement EVFTA, Vietnamese exported goods shall use C/O form EUR.1 or a self-issued certificate of origin issued by the exporter for consignments valued at less than EUR 6,000.

Therefore, the REX code cannot be used to replace for proof of origin to implement the EVFTA, to identify goods under GSP or EVFTA will enjoy more preferential tax rate, HCMCity Customs Department suggests the enterprise base on code and name of the goods and look up the relevant tariffs to make a decision.

Besides, problems arising from the special characteristic of goods import of enterprises have been guided. For example, Hanesbrands is garment product, so what are the specific requirements of the main fabric and auxiliary materials to meet the origin criteria?

To answer this question, HCMCity Customs Department said that according to Clause 2, Article 5 of Circular 11/2020 / TT-BCT, goods obtained in a party incorporating materials which have not been wholly obtained there, provided such materials have undergone sufficient working or processing in the party concerned within the meaning of Article 7 hereof.

Similarly, TedisViet Ha asked the company imports cosmetic consignment in which the goods are originating from France and are delivered from France. However, the seller is a Hong Kong-based company and does not have a REX code to have proof for self-certification of origin. So, how to apply tax incentives under the EVFTA?

On August 21, 2020, the General Department of Customs issued official letter No. 5575 / TCHQ-GSQL notifying that the EU officially applies self-certification of origin under the REX system and does not apply the certification of origin mechanism specified at Points a and b, Clause 1, Article 19 of Circular 11/2020 / TT-BCT.

Regarding self-certification of origin for goods originating from the EU, enterprises are asked to study the provisions of Article 24 of Circular 11/2020 / TT-BCT for implementation.

Pursuant to Clause 5, Article 3 of Circular 11/2020 / TT-BCT “exporter” means an individual or organisation whose head office is located in the exporting Member State exporting goods to another member state and is able to prove the origin of the exported goods. An exporter can be a manufacturer or the person who carries out the export formalities. The exporter is not necessarily a seller who issues the sales invoice for the consignment (third party invoicing). The seller is allowed to locate their headquarters in the territory of non-EVFTA member countries.

Customs News and HCM City Customs coordinate with EuroCham to hold a dialogue: “HCM City Customs and the business community part

Thus, according to the regulation that proof for self-certification of origin under the REX system will be issued by an enterprise with a REX code in France. Regarding how topresent commercial documents to match imported documents, HCM City Customs Department is synthesising and reporting to the General Department of Customs for guidance.