Circular 08/2020/TT-BCT rules of origin under Vietnam - Cuba Trade Agreement

CIRCULAR

Providing the rules of origin under the Vietnam - Cuba Trade Agreement

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Pursuant to the Government’s Decree No. 98/2017/ND-CP dated August 18, 2017 on 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 dated March 08, 2018 on detailing the Law on Foreign Trade Management regarding goods origin;

In furtherance of the Vietnam - Cuba Trade Agreement signed on November 09, 2018, in Vietnam;

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

The Minister of Industry and Trade hereby promulgates the Circular on providing the rules of origin under the Vietnam - Cuba Trade Agreement.

Chapter I

SPECIFIC PROVISIONS

Article 1. Scope of regulation

This Circular provides the rules of origin under the Vietnam - Cuba Trade Agreement (hereinafter 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

According to this Circular, the following terms are construed as follows:

1.Heading changeis the use of non-originating materials in the production process to convert HS codes at the 4-digit level.

2.“Chapters”,“Headings”and“Subheadings”mean Chapters (02 digits), Heading (04 digits) and Subheading (06 digits) used in the list of the Harmonized Commodity Description and Coding System; hereinafter referred to as "Harmonized System" or "HS".

3.CIF valuemeans the value of the imported goods when they are shipped to the port or the border gate of the importing country, including the insurance and freight charge. This value is calculated according to the Customs Valuation Agreement.

4.“Classified”means the classification of goods or materials into specific Chapters, Headings or Subheadings of the Harmonized System.

5.Competent agencymeans the agency in charge of managing and supervising the implementation of the Agreement:

a) In Cuba, the Ministry of Industry and Trade and the Ministry of Finance shall coordinate.

b) In Vietnam, the competent agency shall be the Ministry of Industry and Trade.

6.Customs agencymeans the agency in charge of managing and implementing regulations and customs law, according to each country s law:

a) In Cuba, the customs agency shall be the General Department of Customs.

b) In Vietnam, the customs agency shall be the General Department of Vietnam Customs.

7.Daymeans the working day, excluding Saturday, Sunday and holidays.

8.FOB valueis the value of the goods on board, including the cost of goods transportation to the port or the final place before the cargo ship leaves the port. This value is calculated according to the Customs Valuation Agreement.

9.Fungible materialsmeans materials that are interchangeable for commercial purposes, whose properties are essentially identical and are indistinguishable by the naked eye.

10.Goodsmeans product or material; such material or product may be wholly obtained even when used as material in the production of other goods.

11.Harmonized Systemis an internationally standardized system of names and numbers to classify traded products. It was developed and maintained by the Customs Organization.

12.Intermediate materialis the material used as an input in the production of other goods. Intermediate material’s characteristics allow it to be sold in the market separate with the final goods.

13.Materialsmean the raw materials, supplies, intermediate material and accessories used in the production of goods.

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

15.Productionmeans the methods of producing goods, including but not limited to the cultivating, breeding, raising, mining, harvesting, fishing, hunting, capturing, aquaculture, gathering, producing, processing, assembling or dismantling a goods.

16.Agency and organization granting C/Omeans the government-attached agency and organization or non-governmental agency and organization, is authorized to grant the certification of origin by the competent agency:

a) In Cuba: Chamber of Commerce and Industry.

b) In Vietnam: Authorized agencies and organizations.

17.Set of goodsmeans a product which is assembled into set for a certain purpose, packaged for retail sale and classified according to Rule 3 of the Harmonized System.

18.Report on origin verificationmeans a document issued by the customs agency or agency and organization granting C/O as the result of the goods origin verification.

Article 4. Provisions on certification and inspection of documents certifying goods origin

1. To promulgate together with this Circular the following appendices:

a) Appendix I: Product specific rules.

b) Appendix II: VN-CU C/O form.

c) Appendix III: Guidance for filling VN-CU C/O form (for export).

d) Appendix IV: List of agencies and organizations granting Vietnam’s VN-CU C/O forms.

2. Goods specific rules prescribed in Appendix II of this Circular including goods in the tariff specified in the Agreement.

3.The list of agencies and organizations granting Vietnam’s VN-CU C/O form is provided in Appendix IV attached to this Circular and updated to the Ministry of Industry and Trade’s system for management and issuance of electronic certificates of origin at www.ecosys.gov.vn.

4. The process of certification and inspection of origin must comply with the Government’s Decree No. 31/2018/ND-CP dated March 08, 2018, on detailing the Law on Foreign Trade Management regarding origin of goods, and provisions of relevant Circulars.

Chapter II

DETERMINATION OF GOODS ORIGIN

Article 5. Originating goods

A goods is considered originating if it is:

1. Being wholly obtained or produced entirely in the territory of such member country.

2. Being produced entirely in the territory of such member country, exclusively from originating materials.

3. Being produced from non-originating materials and concurrently, such materials being produced entirely in the territory of one member country and the product is classified into other heading other than the materials’ headings.

4. To meet the criteria that the regional value content (RVC) is not less than X% of the FOB export value of the final goods. Provisions of this Clause shall be applied when goods does not meet requirements as prescribed in Clause 3 of this Article because the production process is not related to the heading change with non-originating materials.

5. Being produced entirely in the territory of one member country and concurrently using non-originating materials provided the goods satisfies specific requirements in Appendix I attached to this Circular. Provisions of this Clause shall be applied in case goods does not meet requirements as prescribed in Clauses 3 and 4 of this Article.

Article 6. Wholly obtained goods

According to Clause 1, Article 5 of this Circular, a goods is considered wholly obtained or entirely produced in the territory of one or many member countries if it is:

1. A mineral extracted in the territory of one member country.

2. A plant product harvested, picked or gathered in the territory of one member country.

3. Live animal born and raised in the territory of one member country.

4. A product obtained by hunting, trapping, harvested, aquaculture or fishing in the territory of one member country.

5. Fish, shellfish, and other marine life taken from the sea outside the territories of member countries by vessels owned or registered by enterprises registered and established in the territory of one member country and such vessels registered or recorded with a member country and entitled to fly the flag of that country.

6. A goods obtained or produced from fish, shellfish, and other marine life on vessels owned or registered by enterprises registered and established in the territory of one member country and entitled to fly the flag of that country.

7. A goods obtained from one member country or a person of one member country from the seabed, or subsoil outside the continental shelf of such country and concurrently, such member country or such person has the right to exploit seabed or subsoil.

8. Waste and scrap derived from production or collection in the territory of one member country, provided such waste or scrap is fit only for use as raw materials.

9. A goods produced entirely in the territory of one member country, exclusively from the goods referred to in Clauses 1 through 8 of this Article or from their derivatives in any production process.

Article 7. Accumulation

1. A material originating from one member country territory that is used to produce one particular product in the territory of the exporting country shall be considered to be originating from the exporting country.

2. If the member countries have an trade agreement in force with the same country other than a member country of this Agreement, their raw materials are considered to be originating goods under this Agreement.

3. Provisions of Clause 2 herein shall only be applied if the member countries have reach an agreement on mechanism, procedures and materials used in origin accumulation.

Article 8. De Minimis

A goods shall be considered to be originating if the CIF value of all non-originating materials used in the production do not satisfy the rule of goods code change and do not exceed 10% of the FOB value of the goods.

Article 9. Intermediate materials

For cases as prescribed in Clause 4, Article 5 of this Circular, to determine the origin of goods, the producer may review the total value of the intermediate goods used to produce a originating goods and concurrently, such intermediate goods satisfies requirements specified in this Circular.

Article 10. Simple processing and producing stage

1. Processing and producing stages below-mentioned shall be considered as the simple processing and producing stages and shall not be considered when determining the origin of goods:

a) To preserve goods in the good conditions for the purpose of transportation or storage.

b) To create favorable for the goods transportation or delivery.

c) To pack or display goods for sale.

2. A goods originating from the territory of a member country shall retain its original origin when exported from another member country in the case of processing or producing stages not exceeding those specified in Clause 1 of this Article.

Article 11. Accessories, spare parts and tools

1. Accessories, spare parts and tools that are invoiced together with a goods and are normal parts of a goods shall be considered as the parts of such goods. Accessories, spare parts and tools shall not be considered when determining all non-originating materials in the production of a goods suffering the code change process.

2. If a goods origin is determined under RVC criteria, the value of its accessories, spare parts and tools as prescribed in Clause 1 of this Article shall be respectively considered to be originating or non-originating when determining RVC.

Article 12. Sets of goods

1. A set of goods under the definition in Rule 3 of the General Rules in the Harmonized System and goods described in the Harmonized System is a set of goods, considered to be originating if all constituent goods are originating.

2. If one set of goods contains originating goods and non-originating goods and the CIF value of the goods does not exceeding 15% of the FOB value of the set of goods, such set of goods shall be considered as originating goods.

Article 13. Packaging materials and containers for retail sale

1. In case a goods is determined to be originating under the RVC criteria, the value of the packaging materials and containers for retail sale shall be calculated until the time of determining origin, because the packaging materials and containers for retail sale is considered as the constituent materials of the entire goods.

2. In case a goods is determined to be originating under the criteria for goods code change, the packaging materials and containers for retail sale are not required to satisfy the criteria for goods code change if they are classified together with the packed goods.

Article 14. Packing materials and containers for shipment

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

Article 15. Intermediary factors and indirect materials used in production

Factors and materials used in production which are disregarded in determining whether a goods is originating:

1. Fuel and energy.

2. Tools, dies and molds. Spare parts and supplies used to warrant machinery, equipment and construction works.

3. Lubricants, greases, compounding substances and other materials used in production or used to operate equipment and buildings.

4. Gloves, glasses, footwear, clothing, safety equipment and supplies.

5. Equipment and supplies used to inspect and test goods.

6. Catalysts and solvents.

7. Any other material that does not constitute or is not constituted the final products of goods and can be proved to be part of the production process.

Article 16. Fungible materials

1. The determination of origin of fungible materials shall be performed by separating each material or using warehouse accounting principles, or warehouse management practices of the exporting country.

2. If there is a decision on the warehouse management method, such method shall be used for the whole financial year.

Article 17. Direct transportation

1. A originating goods shall be considered as direct transportation from the exporting country to the importing country if:

a) A goods is transported without passing the territory of a non-member country.

b) A goods is transported with a purpose of transiting a non-member country, including or excluding transshipment or temporary storing in such country and concurrently satisfy the following conditions:

- The transit due to the geographical reasons, delivery or transport requirements.

- A goods is not engaged in a commercial transaction or consumption in the territory of a non-member country.

- A goods does not undergo any operation of producing or processing in the territory of a non-member country, other than unloading; reloading; separation from a bulk shipment or any other operation necessary to preserve it in good conditions.

2. In case a goods originating from an exporting country imported through one or many non-member countries or after being exhibited in a non-member country, the customs agency of the importing country may request the importer to submit evidencing documents such as transport documents, customs documents or other documents.

Article 18. Goods deposited in bonded warehouses

1. A goods with the certificate of origin shall retain its original origin if it does not undergo any other operation of processing other than storing, preserving and separating from a bulk shipment for transport to a member country and is supervised by the customs agency during the transportation and deposit in bonded warehouse of the third country.

2. The customs agency of the importing country may request a certification that such goods does not change.

Article 19. Goods for exhibition

A originating goods transported from a member country to the third country for exhibition or display for sale after or during the exhibition, then imported into other member country shall be entitled to the preferential tariffs if satisfy this Circular’s regulations and accompanied by customs documents proving the display or exhibition of goods.

Chapter III

PROCEDURES FOR CERTIFICATION AND INSPECTION OF ORIGIN

Article 20. The Certification of origin

1. A Certification of origin is the only document to certify that a goods satisfying regulations on origin of goods as prescribed in this Circular and it is used for requesting for the preferential tariffs according to the Agreement.

2. A Certificate of origin as prescribed in Clause 1 of this Article shall be granted according to the form specified in Appendix II attached to this Circular. A Certificate of origin shall be granted for one shipment.

Article 21. Validity of a Certification of origin

1. A Certificate of origin shall be granted within 03 days from the date of exporting according to Article 20 and shall be valid for one year from the date of issue. A Certificate of origin shall be invalid if the declared information is not sufficient and valid.

2. A Certificate of origin must bear the name, signature and stamp of the competent agency.

3. A Certificate of origin shall not be granted before the issuing date of the commercial invoices and may be granted in the same date with the issuing date of the commercial invoices.

Article 22. Application keeping

Agencies and organizations issuing VN-CU C/Os and traders shall keep applications, documentation demonstrating that the goods is originating and Certificates of origin for a period of no less than 05 years from the date of issue of such paper or electronic documents in accordance with Vietnam’s law.

Article 23. Invoices of the third country

In case a goods is originating and its commercial invoices issued by the exporting country registering in the third country, the Certification of origin must state “Non-party invoicing”.

Article 24. Issuance of Certificates of origin

Upon the request of the competent agencies, the exporter requesting for issuance of the Certificate of origin shall submit documents proving the goods origin and comply with regulations of this Circular.

Article 25. Application for issuance of the Certificate of origin

A set of application for issuance of the Certificate of origin including a written request of the exporter and documents demonstrating that the goods satisfy requirements of this Circular and relevant regulations.

Article 26. Refusal of preferential tariff treatment

The importing country may deny preferential tariff treatment if the goods do not satisfy the regulations and time limit as prescribed in this Circular.

Article 27. Amendment of granted C/Os

The granted C/O is not allowed to erase or write additional content. Any change should be carried out by the following methods:

1. To cross out the error and add necessary information. Such a change must be approved by a person competent to sign in the C/O and certified by the agencies and organizations granting C/Os. The remaining space must be crossed out to avoid additional filling.

2. To grant the new C/O to replace the original C/O. The new C/O must have the reference number and issuing date of the original C/O. The new C/O must clearly state: “replaces C/O No. .... date of issue....”. The new C/O shall be valid from the issuing date of the original C/O.

Article 28. Issuance of the certified true copy of a C/O

If a C/O is stolen, lost or damaged, the exporting country may request agencies and organizations granting C/O for re-granting a certified true copy. Such copy must clearly state: “CERTIFIED TRUE COPY”. The copy shall have the issuing date of the original C/O and shall be valid for 01 year from the issuing date of the original C/O.

Article 29. Inspection and verification of origin and approving the preferential tariff treatment

1. In addition from requesting for submitting the Certificate of origin in accordance with this Circular, the customs agency of the importing country is allowed to request for information from the competent authorities of the exporting country to verify the origin of goods. The importing country may deny the preferential tariff treatment if the notice on requesting for verifying the origin of the exporting country replying the written request for verifying the origin is not received within 90 days from the date of issuance of the notice on request for verifying the origin. The exporting country shall feedback the result of verifying the origin within 180 days from the date on which the notice on request for verifying the origin is received.

2. A notice on request for verifying the origin of the customs agency of the importing country comprises the following content:

a) Name of the agency requesting for verifying the origin.

b) The reference number and issuing date of C/O or the number of C/Os granted for the exporter in a particular time.

c) Description of the request for verifying the origin.

d) Reasons for requesting.

3. In case information collected from the verification of application as prescribed in Clauses 1 and 2 of this Article is not enough for verifying the origin of goods, the customs agency of the importing country, through the competent agencies of the exporting country, shall give:

a) A written request for providing information from the exporter of producer.

b) A list of queries for the importer, exporter or the producer.

c) A written request for verifying the origin in the manufacturing facility of the exporter or producer in the territory of each party, in order to inspect the additional documents or verify a basis serving the production of goods, for the case that the collected information that is the result of Points a and b, Clause 3 of this Article is not sufficient.

d) Other procedures according both parties’ agreement.

4. The customs agency of the importing country shall send the notify request for verifying the origin to the importer, exporter or producer and the competent agencies of the importing country in accordance with Clause 3 of this Article. Such a notification shall be sent by email or any means; the recipient shall send a confirmation on receiving the request for verifying the origin.

5. The written request for providing information or list of queries as prescribed in Points a and b, Clause 3 of this Article include the following content:

a) Name of the agency requesting for information.

b) Name of the importer, exporter and producer who are requested for verifying.

c) Description of required information and documents.

d) Reasons for requesting for verifying the origin or the list of queries.

6. The importer, exporter or producer who receives the list of queries or a written request for providing information according to Points a and b, Clause 3 of this Article must complete and send back the list of queries or the feedback on verifying the origin within 45 days from the date on which such documents are received.

7. A request for verifying the origin as prescribed in Point c, Clause 3 of this Article comprises the following information:

a) Name of the customs agency requesting for verifying the origin.

b) Name of the exporter or producer who is requested for verifying the origin at its manufacturing facility.

c) The date and location expected to request for verifying the origin according to Clause 8 of this Article.

d) Purposes and scope of verifying the origin, specifying goods required to verify the origin at the manufacturing facility.

dd) Name of title of official verifying the origin at the manufacturing facility.

e) Reasons for requesting for verifying the origin at the manufacturing facility.

8. The competent agency of the exporting country shall send a reply to the customs agency of the importing country about approving to verify the origin at the manufacturing facility within 30 days from the date on which the request is received. The verification of origin at the manufacturing facility shall be carried out after 60 days from the date of approval.

9. The exporter or producer may send a request in writing to the competent agencies of the exporting country and importing country to temporarily suspend the verification of origin at the manufacturing facility with compelling reasons. The suspending period is maximum of 30 days from the date as agreed. The suspending period may be more than 30 days if it is approved by the customs agencies of the importing country and exporting country. The customs agency of the importing country shall notify the new schedule for verifying the origin at the manufacturing facility of the exporter or producer.

10. When completing the verification of origin at the manufacturing facility, the customs agency of the importing country shall make a draft record on verifying the origin at the manufacturing facility. Such a record shall include information and result of origin verification at the manufacturing facility. Such a record is signed by the competent of the importing country, the exporter and producer.

11. The origin verification shall be considered as completion when the customs agency of the importing report on result of the goods’ origin after verifying according to this Article, within 30 days at the latest, from the date of receiving information or finishing the origin verification at the manufacturing facility.

12. A report on verifying the origin must comprise information, findings, legal basis for verification of origin at the manufacturing facility and shall be notified to the importer, exporter or producer on whether the goods is originating or not.

13. A goods that is being verified shall be entitled to the preferential tariffs in the following cases:

a) Past the time limit as prescribed in Clause 11 of this Article and the customs agency of the importing does not provide the report on verifying the origin; or

b) The importing country does not comply with the time limit as prescribed in this Article.

14. If the customs agency of the importing country has any reasonable evidence for the suspicion of the origin of goods in the same shipment, such customs agency may suspend the preferential tariff treatment for such suspected shipment. A goods shall be allowed to clear customs according to the regulations of the importing country. The party detecting any suspicion shall notify and consult the other party to reach a mutually beneficial solution.

Article 30. Responsibility of the exporter

1. If the exporter has a reason to believe that the C/O s information is not accurate, such exporter must promptly notify in writing to the agencies and organizations granting C/O about information that may affect to the accuracy or validity of such C/O.

2. The exporters shall not be fined for providing inaccurate information if they have voluntarily notify in writing to the competent agency before being entitled to the preferential tariff treatment or inspected and verified at the manufacturing facilities by the customs agency of the importing country.

Article 31. Responsibility of the importer

An importer requesting for the preferential tariff treatment for a goods shall be required by the customs agency of each party as follows:

1. To declare in writing in the import application as prescribed by law based on the certificate of origin that the goods is originating.

2. To submit the Certificate of origin when declaring according to Clause 1 of this Article as prescribed by laws of the importing country.

3. To immediately submit the amended declaration and remit difference tax if the importer has any reason to believe that the declared information in the import declaration based on the Certificate of origin is inaccurate.

Article 32. Refund of tax

In case the imported goods is originating but is not entitled to the preferential tariffs at the time of importing, the importer may base on the current regulations of Vietnam s laws and request for refund of tax that has been remitted to the customs agency of the importing country, attached with the following documents:

1. A writing declaring that such goods meets the origin requirement at the time of importing.

2. The Certificate of origin

3. Other documents related to the import of goods upon request of the importing country.

Article 33. Small discrepancies in C/O

1. The customs agency of the importing country shall not consider minor errors such as minor mistakes or omissions, typographical errors or information that spills outside the declaration box, provided that such minor errors do not affect the authenticity of the C/O, the accuracy of the information provided on the C/O or not affect the origin status of the certified goods.

2. For the C/O declaring many goods, mistakes of one of the listed goods shall not affect or delay the approval of the preferential tariff treatment of the remaining goods declared on the C/O.

Article 34. Confidentiality

The competent agencies of Vietnam as prescribed by law shall keep confidentiality of provided information in accordance with this Circular. Information shall not be disclosed without permission of a person or agency competent to provide such information.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 35. Issuance of C/O for exported goods before the effective date of this Circular

Agencies and organizations granting C/O shall consider granting VN-CU C/O form for Vietnam’s exports before the effective date of this Circular for entitlement to preferential tariff treatment under the Agreement and regulations of importing countries.

Article 36. Implementation organization and effect

1. Guidance, agreement and interpretation regarding the implementation of the Rules of Origin of goods shall be circulated alternately by both parties in the reports of meetings of the Committee on Rules of Origin and the Joint Committee for implementing the Vietnam - Cuba Trade Agreement shall be the basis for the implementation of agencies and organizations granting C/O and the customs agencies.

2. Provisions specified in Clause 1 of this Article shall send the notice to agencies and organizations granting C/O and the customs agencies through the focal points of the Committee on Rules of Origin and the Joint Committee for implementing the Vietnam - Cuba Trade Agreement.

3. This Circular takes effect on May 25, 2020./.

* All Appendices are not translated herein.