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Vietnam: Exporters should know rules of gameMonday, June 06, 2016 > 10:58:03
How many Vietnamese enterprises are allowed to issue their own certificates of origin?
The rule on certificates of origin (C/O) is very important in free trade agreements (FTA). They help enterprises enjoy the best treatment for their tax commitments.
Only by abiding by C/O rules can manufacturers and importers get a C/O.
When an enterprise has been granted a C/O for their goods, the imported tax levied on their goods will become zero. This rule is applied to all countries in the same free trade agreement.
In certain cases, enterprises can issue their own certificates of origin. To obtain this right the enterprises must satisfy certain criteria set by the government.
The scheme is still in the pilot period and so far only one enterprise has been granted the right to issue its own C/Os.
Some enterprises have recently applied to the Ministry of Industry and Trade to ask for the rights to issue C/Os for their goods to other ASEAN countries.
What are the challenges facing Vietnamese enterprises in acquiring C/Os of their goods?
A C/O is a form of technical barrier if the enterprises don’t know what procedures they have to complete. They must know C/O requirements in each trade agreement. All this is available online, particularly Circular 28/2015/TT-BCT.
But, to my understanding, the most challenging requirement for most Vietnamese enterprises is achieving US$10 million in their export turnover the previous year.
Will you please further elaborate on the C/O requirements in new generation FTAs, including the Trans-Pacific-Partnership (TPP)?
The C/O principle in old FTAs is rather reflexive compared with new FTA agreements, including the TPP.
That’s why the MoIT should hold regular training courses for Vietnamese enterprises to update them with changes in international trade, particularly in new FTAs.
However, there is a big difference between FTAs and the TPP regarding which agency will issue the C/O. Under the TPP, the importing country will grant the C/Os, not the exporting enterprises as regulated in other FTAs.