Ministry of Industry and Trade release draft on "Made in Vietnam" goods

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Illustration photo. Source: Internet

What are Vietnamese goods?

The draft circular stated that goods are considered goods of Vietnam in the following cases.

First, goods are of pure origin or produced entirely in Vietnam according to the provisions of Article 8 of this Circular.

According to Article 8, goods are considered to be of pure origin or produced entirely in Vietnam under one of the following circumstances: Crops and crop products are grown and harvested in Vietnam; live animals are born and raised in Vietnam; products from live animals that are born and raised in Vietnam; products obtained from hunting, trapping, catching, farming, gathering or hunting in Vietnam.

Minerals and naturally occurring substances are extracted or taken from Vietnam's soil, water, seabed or under seabed; products taken from the water, the seabed or the under seabed outside the territorial sea, where Vietnam has the right to exploit waters, seabed and under seabed according to international law.

Fishing products and other seafood are caught ininternational waters by ships registered in Vietnam or permitted to hang Vietnamese flags; products processed or produced from fishing products and other seafood caught from international waters by ships registered in Vietnam or permitted to hang Vietnamese flags.

Items obtained during production or consumption in Vietnam are no longer able to perform the original function, cannot be repaired or restored and can only be discarded or used as raw materials or used for recycling purposes; goods obtained or produced from the products as stated above.

Second, goods of impure originor not produced entirely in Vietnam but undergoing the final processingin Vietnam which basically changesthe nature of the goods as prescribed in Article 9 of this Circular.

Under Article 9, goods of impure originor not produced entirely in Vietnamshall be considered goods of Vietnam if they meet the criteria of the List of Specific Rules of Goodsspecified in the AnnexI issued together with this Circular.

The criteria in Appendix I are determined as follows: Criteria "Converting commodity codes" (herein referred to as CTC), is a change in HS codes of goods at level 2 (two) numbers, 4 (four) numbers or 6 (six) numbers compared to HS codes of Vietnamese non-origin input materials (including imported materials and unidentified materials) used to produce goods; Criteria "Value added content" (referred to as VAC).

Goods that do not meet the "Converting commodity codes" criteria under the List of Specific Rules of Goods are still considered to be Vietnamese goods if: for goods with HS codes not from Chapter 50 to Chapter 63, the value of all non-originating materials used to produce goods that do not meet the requirements for a "Converting commodity codes" must not exceed 15% of the ex-factory price (EXW) of the goods.

For goods with HS codes belonging to Chapters 50 to 63, the weight of all non-originating materials used for the production of goods that do not meet the requirements for converting commodity codes does not exceed more than 15% of the total weight of goods, or the value of all non-originating materials used to produce goods that do not meet the requirements of a code change, must not exceed 15% of the ex-factory price (EXW) of goods.

No additional costs for enterprises

The Ministry of Industry and Trade statedtheCircular draft was writtenmainly based on the rules of origin currently applied to exports from Vietnam, including Decree No. 31/2018/ND-CP dated 8/3/2018 of the Government detailing the Law on Foreign Trade Management regarding goods origin

Themajor methods of determining origins of the world such as pure origin (WO), regional value content (RVC) or converting commodity code according to the Harmonized Commodity Descriptions and Coding System (HS System) of the World Customs Organization is applied in the draft Circular.

In principle, the Circular will not give rise to additional costs for enterprises because labeling of goods and publication of country of origin ongoods labels have long been a mandatory requirement under Decree 43.The Circular only helps organizations and individualshave grounds to comply with the requirements of Decree 43, to help eliminate accidental or intentional violation cases of information about the country of origin.

The draft Circular does not stipulate any new administrative procedures that people and enterprises must comply with.

Genuine enterprises will not face the risk of being accused of fraud of origin, avoiding litigation risks and losing credibility withconsumers. In addition, in conjunction with the strict implementation of Decree 43 at the border gate, the Circular will also help gradually eliminate the situation of imports disguised as Vietnamese goods.