VCN – The Certificate of Origin (C/O) is an effective tool in helping businesses enjoy the advantages of FTAs. However, many businesses are not correctly using the certificate.
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Mr Dang Thai Phien speaks at the seminar. Photo: C.L
At the seminar “Improving competitiveness, promoting the export of agricultural, forestry and fishery products" held by Customs News on July 26, Mr. Dang Thai Thien Deputy Head of Customs Control and Supervision Division under HCM city Customs Department, emphasized the role of C/O in promoting the export of agricultural, forestry and fishery products. Accordingly, in order to increase the export turnover of these products, enterprises should take advantages of the effective FTAs.
Currently, 15 FTAs have been taken effect but the data of the Ministry of Industry and Trade showed that the rate of exports has not taken full advantage of these FTAs. In 2021, only 33% of exports took advantage of the FTAs, including four FTA that have completed the tariff reduction program.
“Through talks with businesses, I see that many enterprises have not yet paid attention to making use of incentives from the FTAs, because they think that goods exported to these markets enjoy a tax rate of 0%, so they do not need to apply for C/O. Some businesses don’t even know to apply for C/O for their goods,” Thien said.
Mr. Phan Minh Thong, General Director of Phuc Sinh Company, an enterprise that exports many agricultural products such as pepper, cashew nuts, and coffee, with annual export turnover up to US$300 million, also shared about contents related to C/O.
|Mr. Pham Minh Thong speaks about the application of C/O form B. Photo: C.L|
When importing raw cashew nuts for export processing, the company often uses C/O form B, that does not enjoy tax incentives. In order to apply for C/O form B, the company must meet one of three criteria, including the Change of Tariff Sub-heading (CTSH), Local Value Content: (LVC) and Wholly Obtained (WO). Currently, most Vietnamese enterprises apply for C/O form B under WO criteria, but the enterprises find it difficult to meet the criteria. For example, for cashew products, 40-60% of Vietnam's export kernels are used the imported raw materials.
When applying for C/O form B under the Wholly Obtained, Phuc Sinh Company faced difficulties in inspecting, traceability and declaring the manifest and challenge when the customs authority performs post-clearance audit.
“We consulted the VCCI’s Legal Department about the application for C/O of cashew nut shipments with HS code 08013200. The department answered that, in order to be granted C/O form B, the company only needs to satisfy one of three criteria of WO or CTSH or LVC. The company can be easy to meet the CTSH or LVC but the WO depends on from the provider” said Thong.
Therefore, Mr. Thong proposed the VCCI and the Customs to widely recommend to businesses to facilitate in applying for C/O.
By Nguyen Hien/ Ngoc Loan