The CPTPP Agreement took effect in Vietnam as of
January 14th, 2019 including 11 founding countries including
Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Singapore, New
Zealand, Peru and Vietnam. On January 22nd, 2019, the Vietnam
Ministry of Industry and Trade issued Circular No. 03/2019/TT-BCT (Circular 03)
regulating rules of origin of goods in the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership (CPTPP) to incorporate and implement
the commitments of CPTPP. These rules are important for investors whom
are transitioning their factories and manufacturing sites from neighboring
counties to Vietnam and set up company to obtain the certificate of origin from Vietnam. However, the understanding of
regulations of the circular and relating laws requires the consultation
of international trade lawyers in Vietnam for application in particular cases.
Goods
are treated as an originating goods if meeting the following requirements:
-Wholly
obtained or produced entirely in the territory of one or more of the Member
States;
-Produced
entirely from materials originating in the territory of one or more of the
Member States; or
-Produced
entirely in the territory of one or more of the Member States using
non-originating materials provided that the goods satisfy all applicable
requirements of Annex I attached to the Circular 03.
Moreover,
CPTPP Agreement stipulates the origin rule for the Remanufactured Good and Sets
of Goods, regulated in Article 7 and Article 20 of Circular 03 respectively.
-Regarding
the Sets of Goods, the set is treated as originating if the value of all the
non-originating goods in the set does not exceed 10% of the value of the set.
-Regarding
the Remanufactured Good, Remanufactured Good are committed to treat as new
goods at the same type. CPTPP also has very flexible rules regarding rules of
origin for these Good: a recovered material derived in the territory of one or
more of the Member States is treated as originating when it is used in the
production of, and incorporated into, a Remanufactured Good.
Both
CPTPP Agreement and Circular 03 (Article 14) also provide De Minimis
regulations, which means that a goods that contains non-originating materials
that do not satisfy the applicable change in tariff classification requirement
for the good is nonetheless an originating good if the value of all those
materials does not exceed 10% of the value of the goods.
In
addition to Build-up Method and Build-down Method for calculating Regional
Value Content (RVC) based on the value of originating and non-originating
materials respectively, CPTPP also stipules Focused Value Method based on the
value of specified non- originating materials and Net Cost Method for
automotive goods only.
Relating to C/O granting, Vietnam shall use the
mechanism of certification by competent authority for goods exported to other
Member States. The time for implement the mechanism of self-certification of
goods origin by exporters is carried out from 5 to 10 years under the guidance
of the Ministry of Industry and Trade. The mechanism of Vietnamese importers
self-certifying their origin is implemented after 5 years from the effective
date of CPTPP. The procedures of certification and inspection of goods origin
shall comply with the provisions of Decree No. 31/2018/ND-CP dated on March 8th,
2018 of the Government detailing the Law on Foreign Trade Management on goods
origin and other related documents.
Lawyers at International Trade and Taxes
practice of ANT Lawyers always follow the changes in law to update client for
decision making process in investing and optimizing operations in Vietnam.