Circular No. 03/2019/TT-BCT dated January 22, 2019 of the Ministry of Industry and Trade on providing the rules of origin under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership

CIRCULAR

Providing the rules of origin under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership^[1]

Pursuant to the Government’s Decree No. 98/2017/ND-CP August 18, 2017, defining the functions, tasks, powers and organizational structure of the Ministry of Industry and Trade;

Pursuant to the Government’s Decree No. 31/2018/ND-CP of March 8, 2018, detailing the Law on Foreign Trade Management regarding goods origin;

In furtherance of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership signed on March 8, 2018, in Chile;

At the proposal of the Director General of the Agency of Foreign Trade,

The Minister of Industry and Trade promulgates the Circular providing the rules of origin under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

Chapter I

GENERAL PROVISIONS

Article 1.Scope of regulation

This Circular provides the rules of origin under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (below referred to as the Agreement).

Article 2.Subjects of application

This Circular applies to:

1. Agencies and organizations issuing certificates of origin (C/O).

2. Traders.

3. Agencies, organizations and individuals engaged in activities concerning origin of imports and exports under the Agreement.

Article 3.Interpretation of terms

In this Circular, the terms below are construed as follows:

1.Aquaculturemeans farming aquatic organisms including fish, mollusks, crustaceans, other aquatic invertebrates, and aquatic plants  from seed stock such as eggs, fry, fingerlings, or larvae, by intervention in the rearing or growth process to enhance production such as regular stocking, feeding or protection from predators.

2.Fungible goods or materialsmeans goods or materials that are interchangeable for commercial purposes and whose properties are essentially identical.

3.Generally accepted accounting principlesmeans those principles recognized by consensus or with substantial authoritative support in the territory of a Party with respect to the recording of revenues, expenses, costs, assets and liabilities; the disclosure of information; and the preparation of financial statements. These principles may encompass broad guidelines for general application, as well as detailed standards, practices and procedures.

4.Goodmeans any merchandise, product, article or material.

5.Indirect materialmeans a material used in the production, testing or inspection of a good but not physically incorporated into the good; or a material used in the maintenance of buildings or the operation of equipment, associated with the production of a good, including:

a/ Fuel, energy, catalysts and solvents;

b/ Equipment, devices and machinery used to inspect or test goods;

c/ Gloves, glasses, footwear, clothing, safety equipment and machinery;

d/ Tools, dies and molds;

dd/ Spare parts and materials used in the maintenance of equipment and buildings;

e/ Lubricants, greases, compounding substances and other materials used in production or used to operate equipment and buildings; and,

g/ Any other material that is not incorporated into the good but the use of which in the production of the good can reasonably be demonstrated to be a part of that production.

6.Materialmeans a good that is used in the production of another good.

7.Non-originating goodornon-originating materialmeans a good or material that does not qualify as originating under the rules of origin prescribed in this Circular.

8.Originating goodororiginating materialmeans a good or material that qualified as originating under the rules of origin prescribed in this Circular.

9.Packing materials and containers for shipmentmeans a good used to protect another a product during its transportation, other than the packaging materials or containers in which a good is packaged for retail sale.

10.Producermeans a person or an enterprise that produces or engages in the production of a good.

11.Productionmeans operations including growing, cultivating, raising, mining, harvesting, fishing, trapping, hunting, capturing, collecting, breeding, extracting, aquaculture, gathering, producing, processing or assembling a good.

12.Transaction valuemeans the price actually paid or payable for the good when sold for export or other value determined in accordance with the Customs Valuation Agreement of the World Trade Organization.

13.Value of the goodmeans the transaction value of the good, excluding any costs incurred in the international shipment of the good.

14.Partymeans any state or separate customs territory that enforces the Agreement.

15.Person of a Partymeans a person or trader of a Party.

16.Daysmeans calendar days;

17.Recovered materialmeans a material that:

a/ Results from the assembly of a used good into individual parts; or,

b/ Results from the cleansing, inspecting, testing or other processing of those individual parts for improvement of their conditions.

18.Remanufactured goodmeans a good classified in HS Chapters 84 through 90 or under heading 94.02, except goods classified under HS headings 84.18, 85.09, 85.10, 85.16, and 87.03 or subheadings 8414.51, 8450.11, 8450.12, 8508.11, and 8517.11, that is entirely or partially composed of recovered materials, and:

a/ Has a similar life expectancy and performs the similar to such a good when new; and,

b/ Has a factory warranty similar to that applicable to such a good when new.

Article 4.Provisions on certification and inspection of origin in Vietnam

1. To promulgate together with this Circular:

a/ Appendix I: Product specific rules;

b/ Appendix II: Provisions related to product specific rules for vehicles and their parts and accessories;

c/ Appendix III:De minimisexceptions;

d/ Appendix IV: Vietnam’s CPTPP C/O form;

dd/ Appendix V: Form of supplementary declaration to Vietnam’s CPTPP C/Os;

e/ Appendix VI: Guidance for filling CPTPP C/Os and supplementary declarations;

g/ Appendix VII: Product specific rules for textile and apparel goods;

h/ Appendix VIII: Short supply list;

i/ Appendix IX: List of agencies and organizations issuing Vietnam’s CPTPP C/Os.

2. Vietnam applies the mechanism of certification of origin through issuance of C/Os for goods exported from Vietnam to other Parties of the Agreement. The list of agencies and organizations issuing Vietnam’s CPTPP C/Os is provided in Appendix IX to this Circular and updated to the Ministry of Industry and Trade’s system for management and issuance of electronic certificates of origin atwww.ecosys.gov.vn. Agencies and organizations issuing Vietnam’s CPTPP C/Os shall register their seal and signature specimens and update changes thereof according to regulations of the Ministry of Industry and Trade.

3. The process of certification and inspection of origin must comply with the Government’s Decree No. 31/2018/ND-CP of March 8, 2018, detailing the Law on Foreign Trade Management regarding origin of goods, and relevant provisions of this Circular.

Chapter II

GENERAL RULES OF ORIGIN

Article 5.Originating goods

1. A good is considered originating if it is:

a/ Being wholly obtained or produced entirely in the territory of one or more of the Parties as prescribed in Article 6 of this Circular;

b/ Being produced entirely in the territory of one or more of the Party, exclusively from originating materials.

c/ Being produced entirely in the territory of one or more of the Parties and concurrently using non-originating materials provided the good satisfies all applicable requirements in Appendix I to this Circular.

2. Textile and apparel goods shall be considered originating if satisfying the requirements in this Circular and complying with other relevant laws.

Article 6.Wholly obtained goods

According to Point a, Clause 1, Article 5 of this Circular, a good is considered wholly obtained or entirely produced in the territory of one or more of the Parties if it is:

1. A plant and plant product grown, cultivated, harvested, picked or gathered there.

2. A live animal born and raised there.

3. A good obtained from a live animal there.

4. An animal obtained by hunting, trapping, fishing, gathering or capturing there.

5. A good obtained from aquaculture there.

6. A mineral or another naturally occurring substance, not included in Clauses 1 through 5 of this Article, extracted or taken there.

7. Fish, shellfish, and other marine life taken from the sea, seabed, or subsoil outside the territories of the Parties and in accordance with international law, outside the territorial waters of non-Parties by vessels registered or listed or recorded with a Party and entitled to fly the flag of that Party.

8. A product produced from the products referred to in Clause 7 of this Article on board ships registered, listed or recorded with a Party and entitled to fly the flag of that Party.

9. A good other than fish, shellfish, and other marine life taken by a Party or a person of a Party from the sea, seabed, or subsoil outside the territories of the Parties and beyond the areas over which non-Parties exercise jurisdiction rights, provided that Party or person of that Party has the right to exploit seabed or subsoil in accordance with international law.

10. Waste or scrap derived from production or consumption there, provided such waste or scrap is fit only for use as materials.

11. A good produced there, exclusively from the goods referred to in Clauses 1 through 10 of this Article or from their derivatives.

Article 7.Provisions on recovered goods used in production of remanufactured goods

1. A recovered material derived in the territory of one or more of the Parties  is treated as originating when it is incorporated into or used in the production of a remanufactured good.

2. A recovered material or remanufactured good is originating only when it satisfies the requirements in Article 5 of this Circular.

Article 8.Regional value content

1. A regional value content requirement specified in this Circular and relevant Appendices to determine whether a good is originating, is calculated as follows:

a/ Focused value method: based on the value of specified non-originating materials

b/ Build-down method: based on the value of non-originating materials

c/ Build-up method: based on the value of originating materials

d/ Net-cost method (for automotive goods only)

In which:

RVC is the regional value content of a good, expressed as a percentage.

VNM is the value of non-originating materials, including materials of undetermined origin, used in the production of the good.

NC is the net cost of the good determined under Article 12 of this Circular.

FVNM is the value of non-originating materials, including materials of undetermined origin, specified in Appendix I to this Circular and used in the production of the good. Non-originating materials that are not specified in Appendix I are not taken into account for the purpose of determining FVNM.

VOM is the value of originating materials used in the production of the good in the territory of one or more of the Parties.

2. All costs considered for the calculation of regional value content are recorded and maintained in conformity with the generally accepted accounting principles applicable in the territory of a Party where the good is produced.

Article 9.Materials used in production

1. If a non-originating material undergoes further production such that it satisfies the requirements of this Circular, the material is treated as originating when determining the originating status of the subsequently produced good, regardless of whether or not that material is produced by the producer of the good.

2. If a non-originating material is used in the production of a good, the following may be counted as originating content for the purpose of determining whether the good meets a regional value content requirement:

a/ The value of processing of the non-originating material undertaken in the territory of one or more of the Parties; and,

b/ The value of any originating material used in the production of the non-originating material undertaken in the territory of one or more of the Parties.

Article 10.Value of materials used in production

For the purpose of this Circular, the value of a material is:

1. For a material imported by the producer of the good, the transaction value of the material at the time of importation, including the costs incurred in the international shipment of the material and related costs.

2. For a material acquired in the territory where the good is produced:

a/ The price paid or payable by the producer in the Party where the producer is located;

b/ The value as determined for an imported material in Clause 1 of this Article; or,

c/ The earliest ascertainable price paid or payable in the territory of the Party.

3. For a material that is self-produced:

a/ All the costs incurred in the production of the material, which include general expenses; and,

b/ An amount equivalent to the profit added in the normal course of trade, or equal to the profit that is usually reflected in the sale of goods of the same class or kind as the self-produced material that is being valued.

Article 11.Further adjustments to the value of materials

1. For an originating material, the following costs may be added to the value of the material, if not included under Article 10 of this Circular:

a/ The costs of freight, insurance, packing and all other costs incurred in transporting the material to the location of the producer of the good;

b/ Duties, taxes and customs brokerage fees on the material, actually paid in the territory of one or more of the Parties, other than duties and taxes that are waived, refunded, refundable or otherwise recoverable, which include late-payment fines or freight paid or payable; and,

c/ The cost for waste and spoilage resulting from the use of the material in the production of the good, less the value of reusable scrap and by-product.

2. For a non-originating material or material of undetermined origin, the following costs may be deducted from the value of the material:

a/ The costs of freight, insurance, packing and all other costs incurred in transporting the material to the location of the producer of the good;

b/ Duties, taxes and customs brokerage fees on the material paid in the territory of one or more of the Parties, other than duties and taxes that are waived, refunded, refundable or otherwise recoverable, which include credit against duty, tax or freight  paid or payable; and,

c/ The cost for waste and spoilage resulting from the use of the material in the production of the good, less the value of reusable scrap and by-product.

3. If the cost listed in Clause 1 or 2 of this Article is unknown or documentary evidence of the amount of the adjustment is not available, then no adjustment is allowed for that particular cost.

Article 12.Net cost

1. In case of applying a regional value content requirement prescribed in Appendix I to this Circular to determine whether an automotive good of subheadings 8407.31 through 8407.34, subheading 8408.20, subheadings 8409.91 through 8409.99, headings 87.01 through 87.09 or heading 87.11 is originating, the requirement to determine the origin of that good based on the net cost method is calculated as set out under Article 8 of this Circular.

2. For the purposes of this Article:

a/ Net cost means total cost minus sales promotion, marketing and after-sales service costs, royalties, shipping and packing costs, and non-allowable interest costs that are included in the total cost; and,

b/ Net cost of the good means the net cost that can be reasonably allocated to the good, using one of the following methods:

- Calculating the total cost incurred with respect to all automotive goods produced by that producer, subtracting any sales promotion, marketing and after-sales service costs, royalties, shipping and packing costs, and non-allowable interest costs that are included in the total cost of all those goods, and then reasonably allocating the resulting net cost of those goods to the good;

- Calculating the total cost incurred with respect to all automotive goods produced by that producer, reasonably allocating the total cost to the good, and then subtracting any sales promotion, marketing and after-sales service costs; royalties, shipping and packing costs, and non-allowable interest costs that are included in the portion of the total cost allocated to the good; or,

- Reasonably allocating each cost that forms part of the total cost incurred with respect to the good, so that the aggregate of these costs does not include any sales promotion, marketing and after-sales service costs, royalties, shipping and packing costs, and non-allowable interest costs, provided that the allocation of all those costs is consistent with the provisions regarding reasonable allocation of costs set out in generally accepted accounting principles.

3. For the purposes of the net cost method for motor vehicles of headings 87.01 through 87.06 or heading 87.11, the calculation may be averaged over the producer’s fiscal year using any one of the following categories, on the basis of all motor vehicles in the category or only those motor vehicles in the category that are exported to the territory of another Party:

a/ The same model line of motor vehicles in the same class of motor vehicles produced in the same plant in the territory of a Party;

b/ The same class of motor vehicles produced in the same plant in the territory of a Party;

c/ The same model line of motor vehicles produced in the territory of a Party;

d/ Any other category as the Parties may decide.

4. For the purposes of the net cost method in Clause 1 or 2 of this Article, for automotive materials of subheadings 8407.31 through 8407.34, subheading 8408.20, heading 84.09, 87.06, 87.07, or 87.08, produced in the same plant, a calculation may be averaged:

a/ Over the fiscal year of the motor vehicle producer to whom the good is sold;

b/ Over any quarter or month;

c/ Over the fiscal year of the producer of the automotive material;

Provided that the good is produced during the fiscal year, quarter or month forming the basis for the calculation, in which:

- The average at Point a of this Clause is calculated separately for those goods sold to at least one motor vehicle producer; or,

- The average at Point a or b is calculated separately for those goods that are exported to the territory of another Party.

5. For the purposed of this Article:

a/ Class of motor vehicles means any one of the following categories of motor vehicles:

- Motor vehicles classified under subheading 8701.20, motor vehicles classified for the transport of 16 or more persons classified under subheading 8702.10 or 8702.90, and motor vehicles classified under subheading 8704.10, 8704.22, 8704.23, 8704.32 or 8704.90, or heading 87.05 or 87.06;

- Motor vehicles classified under subheading 8701.10 or subheadings 8701.30 through 8701.90;

- Motor vehicles for the transport of 15 or fewer persons classified under subheading 8702.10 or 8702.90, and motor vehicles classified under subheading 8704.21 or 8704.31;

- Motor vehicles classified under subheadings 8703.21 through 8703.90; or,

- Motor vehicles classified under heading 87.11.

b/ Model line of motor vehicles means a group of motor vehicles having the same platform or model name;

c/ Non-allowable interest costs means interest costs incurred by a producer that exceed 700 basis points above the yield on debt obligations of comparable maturities issued by the central level of government of the Party in which the producer is located;

d/ Reasonably allocate means to apportion in a manner appropriate under generally accepted accounting principles;

dd/ Royalty means payments of any kind, including payments under technical assistance or similar agreements, made as consideration for the use or right to use any copyright; literary, artistic or scientific work; patent; trademark; design; model; plan; or secret formula or process, excluding those payments under technical assistance or similar agreements that can be related to specific services such as:

- Personnel training, regardless where training is conducted; or,

- Engineering, processing, die-setting, software design and similar computer services, or other services, if performed in the territory of one or more of the Parties.

e/ Sales promotion, marketing and after-sales service costs means the costs related to sales promotion, marketing and after-sales service as listed below:

- Sales and marketing promotion; media advertising; advertising and market research; promotional and demonstration materials; exhibits; sales conferences, trade shows and conventions; banners; marketing displays; free samples; sales, marketing and after-sales service literature (good brochures, catalogues, technical literature, price lists, service manuals and sales aid information); establishment and protection of logos and trademarks; sponsorships; wholesale and retail restocking charges; and entertainment;

- Sales and marketing incentives; consumer, retailer or wholesaler rebates; and merchandise incentives;

- Salaries and wages; sales commissions; bonuses; benefits (for example, medical, insurance or pension benefits); travelling and living expenses; and membership and professional fees for sales promotion, marketing and after-sales service personnel;

- Recruiting and training of sales promotion, marketing and after-sales service personnel and after-sales training of customers’ employees, if those costs are identified separately for sales promotion, marketing and after-sales service of goods on the financial statements or cost accounts of the producer;

- Liability insurance for goods;

- Office supplies for sales promotion, marketing and after-sales service of goods, if those costs are identified separately for sales promotion, marketing and after-sales service of goods on the financial statements or cost accounts of the producer;

- Telephone, mail and other communications, if those costs are identified separately for sales promotion, marketing and after-sales service of goods on the financial statements or cost accounts of the producer;

- Rent and depreciation of sales promotion, marketing and after-sales service offices and distribution centers;

- Property insurance premiums, taxes, cost of utilities, and repair and maintenance of sales promotion, marketing and after-sales service offices and distribution centers, if those costs are identified separately for sales promotion, marketing and after-sales service of goods on the financial statements or cost accounts of the producer; and,

- Payments by the producer to other persons for warranty and repairs.

g/ Shipping and packing costs means the costs incurred to pack a good for shipment and to ship the good from the point of direct shipment to the buyer, excluding costs to prepare and pack the good for retail sale;

h/ Total cost means all product costs, period costs and other costs for a good incurred in the territory of one or more of the Parties, where:

- Product costs are costs that are associated with the production of a good and include the value of materials, direct labor costs and direct overheads;

- Period costs are costs, other than product costs, that are expensed in the period in which they are incurred, such as selling expenses, and general and administrative expenses; and,

- Other costs are all costs recorded on the books of the producer that are not product costs or period costs, such as interest.

Total cost does not include profits that are earned by the producer, regardless of whether they are retained by the producer or paid out to other persons as dividends, or taxes paid on those profits, including capital gains taxes.

Article 13.Accumulation

1. A good is originating if the good is produced in the territory of one or more of the Parties by one or more producers, provided that the good satisfies the requirements in Article 5 and other requirements of this Circular.

2. An originating good or material of one or more of the Parties that is used in the production of another good in the territory of another Party is considered originating in the territory of the other Party.

3. Production undertaken on a non-originating material in the territory of one or more of the Parties by one or more producers may contribute toward the originating content of a good for the purpose of determining its origin, regardless of whether that production was sufficient to confer originating status to the material itself.

Article 14.De Minimis

1. Except the cases prescribed in Appendix III to this Circular, a good that contains non-originating materials that do not satisfy the applicable change in tariff classification requirement specified in Appendix I to this Circular for the good is nonetheless an originating good if the value of all those materials does not exceed 10% of the value of the good, as defined under Clause 13, Article 3 of this Circular, and the good meets all the other applicable requirements of this Circular.

2. Clause 1 of this Article applies only when using a non-originating material in the production of another good.

3. If a good described in Clause 1 of this Article is also subject to a regional value content requirement, the value of those non-originating materials shall be included in the value of non-originating materials for the applicable regional value requirement.

4. With regard to a textile or apparel good, Article 29 of this Circular shall apply.

Article 15.Fungible goods or materials

A fungible good or material is treated as originating based on the:

1. Physical segregation of each fungible good or material; or,

2. Use of any inventory management method recognized in the generally accepted accounting principles if the fungible good or material is commingled, provided that the inventory management method selected is used throughout the fiscal year.

Article 16.Accessories, spare parts, tools, instructional or other information materials

1. For the purposes of this Article:

a/ In determining whether a good is wholly obtained, or satisfied a process or change in tariff classification requirement as set out in Appendix I to this Circular, the origin of accessories, spare parts, tools, instructional or other information materials as described in Clause 3 of this Article, is to be disregarded; and,

b/ In determining whether a good meets a regional value content requirement, the value of the accessories, spare parts, tools, instructional or other information materials, as described in Clause 3 of this Article, is to be taken into account as originating or non-originating materials, as the case may be, in calculating the regional value content of the good.

2. A good’s accessories, spare parts, tools, instructional or other information materials as described in Clause 3 of this Article have the originating status of the good with which they are delivered.

3. For the purposes of this Article, accessories, spare parts, tools, and instructional or other information materials are covered when:

a/ The accessories, spare parts, tools and instructional or other information materials are classified with, delivered and invoiced together with the good;

b/ The types, quantities, and value of the accessories, spare parts, tools and instructional or other information materials are customary for that good.

Article 17.Packaging materials and containers for retail sale

1. In case a good satisfies the applicable change in tariff classification requirement set out in Appendix I to this Circular or a good is wholly obtained, packaging materials and containers in which the good is packaged for retail sale, if classified with the good, are considered originating.

2. If a good is subject to a regional value content requirement, the value of the packaging materials and containers in which the good is packaged for retail sale, if classified with the good, are taken into account as originating or non-originating, as the case may be.

Article 18.Packing materials and containers for shipment

Packing materials and containers for shipment are disregarded in determining whether a good is originating.

Article 19.Indirect materials

An indirect material is considered to be originating without regard to where it is produced.

Article 20.Sets of goods

1. For a set classified as a result of the application of Rule 3a or 3b of the General Rules for the Interpretation of the Harmonized System, the originating status of the set shall be determined in accordance with the product specific rule of origin that applies to the set.

2. For a set classified as a result of the application of Rule 3c of the General Rules for the Interpretation of the Harmonized System, the set is originating only if each good in the set is originating and both the set and the goods meet the other applicable requirements of this Circular.

3. Notwithstanding Clause 2 of this Article, for a set classified as a result of the application of Rule 3c of the General Rules for the Interpretation of the Harmonized System, the set is originating if the value of all the non-originating goods in the set does not exceed 10% of the value of the set.

4. For the purposes of Clause 3 of this Article, the value of the non-originating goods in the set and the value of the set shall be calculated in the same manner as the value of non-originating materials and the value of the good.

Article 21.Transit and transshipment

1. An originating good retains its originating status if the good has been transported to the importing Party without passing through the territory of a non-Party.

2. If an originating good is transported through the territory of one or more non-Parties, the good retains its originating status provided that the good:

a/ Does not undergo any operation outside the territories of the Parties other than:

- Unloading; reloading; separation from a bulk shipment; storing; labeling or marking required by the importing Party; or,

- Any other operation necessary to preserve it in good condition or to transport the good to the territory of the importing Party.

b/ Remains under the control of the customs administration in the territory of a non-Party.

Chapter III

PROCEDURES FOR CERTIFICATION AND INSPECTION OF ORIGIN

Article 22.Certification of origin

1. A certification of origin may be issued by a authority to:

a/ A single shipment of a good into the territory of a Party; or,

b/ Multiple shipments of identical goods within any period specified in the certification of origin, but not exceeding 12 months.

2. A certification of origin is valid for one year after the date that it was issued or for such longer period specified by the laws and regulations of the importing Party.

Article 23.Discrepancies in certification of origin

1. Competent authorities of importing Parties shall not reject a certification of origin due to minor errors or discrepancies in the certification of origin.

2. Minor errors or discrepancies in the certification of origin shall be prescribed by competent authorities of importing Parties.

Article 24.Waiver of certification of origin

1. Traders shall be waived from certification of origin in the following cases:

a/ The customs value of the importation does not exceed USD 1,000 (one thousand) or the equivalent amount in the importing Party’s currency or any higher amount as the importing Party may establish;

b/ The importing Party has waived the requirement or does not require the importer to present a certification of origin for the good.

2. Traders shall not be waived from certification of origin provided that the importation does not form part of a series of importations carried out or planned for the purpose of evading compliance with the importing Party’s laws governing claims for preferential tariff treatment.

Article 25.Obligations relating to exportation

1. Traders shall be held responsible before law for provision of false information in a certification of origin.

2. If an exporter or a producer detects that information and data in a certification of origin is incorrect or does not to meet origin requirements, the exporter or producer shall promptly notify, in writing, to the importer and competent authorities of the importing Party.

Article 26.Record keeping

Agencies and organizations issuing CPTPP C/Os and traders shall keep records and documentation demonstrating that the good is originating for a period of no less than 5 years from the date of issuance in any medium that allows for prompt retrieval, including electronic, optical, magnetic or written form in accordance with Vietnam’s law.

Article 27.Inspection and verification of origin

1. Competent authorities of an importing Party may conduct an inspection or a verification of origin of imports by one or more of the following:

a/ A written request for information from the authority of the importing Party;

b/ A written request for information from the importer of the good;

c/ A written request for information from the exporter or producer of the good;

d/ An inspection or a verification visit to the premises of the exporter or producer of the good;

dd/ Procedures other than those prescribed at Points a, b and c, Clause 1 of this Article as may be decided by the authority of the importing Party and the Party where an exporter or producer of the good is located.

2. If the authority of the importing Party conducts an inspection or a verification, it shall accept information directly from the authority of exporting party, importer, exporter or producer.

3. A written request for information or for an inspection or a verification visit under Points a through d, Clause 1 of this Article shall be in English or in an official language of the Party of the person to whom the request is made. A written request must:

a/ Include the identity of the organization or government authority issuing the request;

b/ State the reason for the request, including the specific issue the requesting Party seeks to resolve with the inspection or verification;

c/ Include sufficient information to identify the good that is being inspected or verified;

d/ Include one copy of relevant information submitted with the good, including the certification of origin;

dd/ In the case of an inspection or a verification visit, request the written consent of the exporter or producer whose premises are going to be visited, and state the proposed date and location for the visit and its specific purpose.

4. If an importing Party has initiated an inspection or a verification in accordance with Point c or d, Clause 1 of this Article, the authority of the importing Party shall inform the importer of the initiation of the inspection and verification.

5. For an inspection or a verification under Point a, b, c, or d, Clause 1 of Article, the authority of the importing Party shall:

a/ Ensure that a written request for information, or for documentation to be reviewed during an inspection or a verification visit, is limited to information and documentation to determine whether the good is originating;

b/ Describe the information or documentation in sufficient detail to allow the authority of the exporting Party, importer, exporter or producer to identify the information and documentation necessary to respond;

c/ Allow the authority of the exporting Party, importer, exporter or producer to respond at least 30 days from the date of receipt of the written request for information under Point a, b, c or d, Clause 1 of this Article;

d/ Allow the exporter or producer 30 days from the date of receipt of the written request for a visit under Point d, Clause 1 to consent or refuse the request; and,

dd/ Make a determination following an inspection or a verification as expeditiously as possible and no later than 90 days after it receives the information necessary to make the determination, including, if applicable, any information received under Clause 8 of this Article, and no later than 365 days after the first request for information or other action under Clause 1 of this Article. If permitted by its law, a Party may extend the 365-day period in exceptional cases, such as where the technical information concerned is very complex.

6. If an importing Party makes an inspection or a verification request under Point c, Clause 1 of this Article:

a/ It shall, in accordance with its laws and regulations, inform the Party where the exporter or producer is located. The authority of the importing Party shall decide the manner and timing of informing the Party where the exporter or producer is located of the inspection or verification request;

b/ At the request of the importing Party, the Party where the exporter or producer is located may, as it deems appropriate and in accordance with its laws and regulations, assist with the inspection or verification. This assistance may include providing a contact point for the inspection or verification, collecting information from the exporter or producer on behalf of the importing Party, or other activities in order that the importing Party may make a determination as to whether the good is originating. The importing Party shall not deny a claim for preferential tariff treatment solely on the ground that the Party where the exporter or producer is located did not provide requested assistance.

7. Prior to issuing a written determination, the authority of the importing Party shall inform the authority of the exporting Party, importer and any exporter or producer that provided information directly to the importing Party, of the results of the inspection or verification. If the importing Party intends to deny preferential tariff treatment, it shall provide those entities a period of at least 30 days for the submission of additional information relating to the origin of the good.

8. The importing Party shall:

a/ Provide the authority of the exporting Party with a written determination of whether the good is originating that includes the basis for the determination;

b/ Provide the importer with a written determination of whether the good is originating that includes the basis for the determination;

c/ Provide the importer, exporter or producer that provided information with a written determination of whether the good is originating that includes the basis for the determination.

9. If inspections or verifications of identical goods by the authority of the importing Party indicate a pattern of conduct by an importer, exporter or producer of false or unsupported representations during inspection or verification of the originating status, the Party may withhold preferential tariff treatment to identical goods. “Identical goods” means goods that are the same in all respects relevant to rules of origin.

Article 28.Confidentiality

Vietnam’s authorities shall maintain the confidentiality of the information relating to the origin of goods and avoid prejudicing the competitive position of the person providing the information under this Circular and relevant provisions of law.

Chapter IV

SPECIFIC PROVISIONS ON TEXTILE AND APPAREL GOODS

Article 29.De Minimisfor textile and apparel goods

1. A textile or apparel good classified outside of Chapters 61 through 63 of the Harmonized Commodity Classification and Coding System that contains non-originating materials that do not satisfy the applicable change in tariff classification requirement specified in Appendix VIII to this Circular, shall nonetheless be considered to be an originating good if the total weight of all those materials is not more than 10% of the total weight of the good and the good meets all the other applicable requirements of this Chapter and Chapter II of this Circular.

2. A textile or apparel good classified in Chapters 61 through 63 of the Harmonized  Commodity Classification and Coding System that contains non-originating fibers or yarns in the component of the good that determines the tariff classification of the good that do not satisfy the applicable change in tariff classification set out in Appendix VII to this Circular, shall nonetheless be considered to be an originating good if the total weight of all those fibers or yarns is not more than 10% of the total weight of that component and the good meets all the other applicable requirements of this Circular.

3. A good described in Clause 1 or 2 of this Article and containing elastomeric yarn in the component of the good that determines the tariff classification of the good shall be considered to be an originating good only if such yarns are wholly formed in the territory of one or more of the Parties.

Article 30.Sets of goods

1. Notwithstanding the textile and apparel product-specific rules of origin set out in Appendix VII to this Circular, textile and apparel goods put  up in sets for retail sale, classified as a result of the application of Rule 3 of  the  General Rules for  the  Interpretation of  the Harmonized Commodity Classification and Coding System, shall not be regarded as originating goods unless each of the goods in the set is an originating good or the total value of the non-originating goods in the set does not exceed 10% of the value of the set.

2. For the purposes of Clause 1 of this Article:

a/ The value of non-originating goods in the set shall be calculated in the same manner as the value of non-originating materials in this Circular; and,

b/  The value of the set shall be calculated in the same manner as the value of the good in this Circular.

Article 31.Short supply list

1. For the purposes of determining whether a textile or apparel good is originating under Point c, Clause 1, Article 5 of this Circular, a material listed in Appendix VIII to this Circular is originating provided that the material meets any requirement, including any end use requirement, specified in this Appendix.

2. If a claim that a textile or apparel good entitled to preferential tariff treatment is originating relies on the incorporation of a material listed in Appendix VIII to this Circular, the importing Party may require in the importation documentation, such as a certification of origin, the number or description of the material in this Appendix.

3. Non-originating materials marked as temporary in Appendix VIII to this Circular may be considered originating under Clause 1 of this Article for 5 years from the date of entry into force of the Agreement.

Chapter V

IMPLEMENTATION PROVISIONS

Article 32.Issuance of C/Os for exports before the effective date of this Circular

Agencies and organizations issuing C/Os shall consider granting CPTPP C/Os for Vietnam’s exports before the effective date of this Circular for entitlement to preferential tariff treatment under the Agreement and regulations of importing Parties.

Article 33.Effect

This Circular takes effect on March 8, 2019.-

Minister of Industry and Trade
TRAN TUAN ANH

* The Appendices to this Circular are not translated.