Circular No. 15/2018/TT-BCT dated June 29, 2018 of the Ministry of Industry and Trade on providing the channeling in the process of issuance ofpreferential certificates of origin

CIRCULAR

Providing the channeling in the process of issuance ofpreferential certificates of origin

Pursuant to the Government’s Decree No. 98/2017/ND-CP of August 18, 2017, providing 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 origin of goods;

At the proposal of the Director of the Import-Export Department;

The Minister of Industry and Trade promulgates the Circular providing the channeling in the process of issuance of preferential certificates of origin.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular provides the channeling in the process of issuance of preferential certificates of origin (C/O).

Article 2. Subjects of application

This Circular applies to:

1. Traders applying for issuance of preferential C/O;

2. Agencies and organizations issuing preferential C/O under treaties;

3. Related agencies, organizations and individuals.

Article 3. Interpretation of terms

1. Green channel means the priority regime applied in the process of issuance of preferential C/O under which traders are entitled to exemption from submission of documents or reduction of the number of to-be-submitted documents, may submit documents after the prescribed deadline, have  C/O issued within a reduced time limit, and are exempt from physical inspection of goods in the process of applying for issuance of C/O;

2. Red channel means the control regime applied in the process of issuance of preferential C/O under which traders must submit documents proving the origin of goods for all goods lots and may be requested to provide goods for physical inspection in the process of applying for issuance of C/O;

3. Ordinary channel means the current regime applied in the process of in issuance of preferential C/O under the Government’s Decree No. 31/2018/ND-CP of March 8, 2018, detailing the Law on Foreign Trade Management regarding origin of goods (below referred to as Decree No. 31/2018/ND-CP) and relevant guiding documents.

Chapter II

THE GREEN CHANNEL REGIME

Article 4. Criteria for identification of traders eligible for application of the green channel regime

To be eligible for application of the green channel regime in the process of issuance of preferential C/O, a trader must meet the following criteria:

1. The trader is recognized by the Ministry of Industry and Trade as prestigious exporter; or

2. The trader is recognized by the Ministry of Finance as enterprise entitled to priority in state management of customs; or

3. The trader meets the following conditions:

a/ Law observance: having committed no violations of regulations on origin of goods in 2 years preceding the time of applying for application of the green channel regime;

b/ Dossier retention: having a dossier retention system (paper dossiers and electronic dossiers) so as to be able to prove the authentication of C/O and origin of goodsthroughout the dossier retention period as prescribed in Decree No. 31/2018/ND-CP;

c/ Experience in use of preferential C/O: conducting e-declaration of C/O via the electronic certificate of origin management and issuance system  (www.ecosys.gov.vn) and applying for issuance of at least 30 sets of preferential C/O  per year.

Article 5. Priorities under the green channel regime

1. Priority regarding dossier of application for issuance of preferential C/O

a/ A trader eligible for application of the green channel regime will be entitled to exemption from submission of documents or reduction of the number of to-be-submitted documents in the dossier of application for issuance of preferential C/O prescribed in Clause 1, Article 15 of Decree No. 31/2018/ND-CP as follows:

- The trader is not required to submit only the documents prescribed at Points a and b, Clause 1, Article 15 of Decree No. 31/2018/ND-CP in paper version.

- The trader may submit the documents prescribed at Points c thru e, Clause 1, Article 15 of Decree No. 31/2018/ND-CP in electronic version;

- The trader is not required to submit the documents prescribed at Points g thru i, Clause 1, Article 15 of Decree No. 31/2018/ND-CP.

2. Priority regarding late submission of documents

A trader eligible for application of the green channel regimemay extend the time limit for submission of documents allowed to be submitted lateunder Clause 3, Article 15 of Decree No. 31/2018/ND-CP to 45 working days from the date of issuance of a C/O.

3. Priority regarding the time limit for issuance of preferential C/O

The time limit for processing a dossier of application for issuance of preferential C/O of a trader that is eligible for application of the green channel regime and submits dossiers in paper version is 6 working hours from the receipt of a complete and valid dossier.

4. Priority regarding physical inspection of goods and production establishments

A trader eligible for application of the green channel regime will be exempt from physical inspection of goods and production facilities in the process of applying for issuance of preferential C/O.

Chapter III

THE RED CHANNEL REGIME

Article 6.Criteria for identification of traders subject to application of the red channel regime

1. Traders have committed a violation prescribed in Article 29 of Decree No. 31/2018/ND-CP in 2 years preceding the time of channeling;

2. Traders have failed to meet requirements for verification of origin of goods or importing countries’ customs authorities have made conclusion that traders’ goods fail to meet requirements on origin of goods in 2 years preceding the time of channeling;

3. Traders that are eligible for application of the green channel or ordinary channel regime have export items subject to application of the red channel regime prescribed in Article 7 of this Circular but have no production facilities or their production capacity fails to meet requirements for production of such export items.

Article 7. Criteria for identification of items subject to application of the red channel regime

1. Items subject to application of the red channel regime shall be identified as follows:

a/ Items with high risk of origin fraud for the purpose of dodging commercial safeguard measures of importing countriesor seeking benefits from preferential tax commitments reserved for Vietnam by importing countries; or

b/ Items of which the number of C/O subject to investigation and verification of origin of goods at the request of importing countries significantly and abnormally increases.

2. The Import-Export Department (the Ministry of Industry and Trade) shall notify in writing the list of items subject to the application of the red channel regime in each specific period and stage.

Article 8. Requirements under the red channel regime

1. Dossiers of application for issuance of preferential C/O

Traders subject to application of the red channel regime must submit dossiers with sufficient documents (paper and electronic versions) as prescribed in Clause 1, Article 15 of Decree No. 31/2018/ND-CP.

2. Time limit for issuance of preferential C/O

The time limit for processing a dossier of application for issuance of preferential C/O is 3 working days from the date of receipt of a complete paper dossier as prescribed in Clause 3, Article 29 of Decree No. 31/2018/ND-CP.

3. Physical inspection of goods and production facilities

Agencies and organizations issuing preferential C/O shall conduct physical inspection of goods and production facilities for items applying for issuance of preferential C/O for the first time or when there are doubts about origin of goods during the process of applying for preferential C/O.

Chapter IV

ORGANIZATION OF IMPLEMENTATION

Article 9.Conducting the channeling in the process of issuance of preferential C/O

On the basis of the criteria prescribed in Articles 4, 6 and 7 of this Circular, agencies and organizations issuing preferential C/O shall conduct the channeling when traders submit dossiers of application for issuance of preferential C/O. The channeling in issuance of preferential C/O shall be conducted automatically. The Import-Export Department (the Ministry of Trade) and agencies and organizations issuing preferential C/O shall publicize cases entitled to the green channel regime and those subject to the red channel regime or ordinary channel regime atthe electronic certificate of origin management and issuance system (www.ecosys.gov.vn).

Article 10. Principles of shifting channels

1. A trader that is subject to the application of the red channel regime and commits no violations according to the criteria prescribed in Articles 6 and 7 of this Circular may shift from the red channel to the ordinary channel.

2. In case a trader exports an item subject to the application of the red channel regime under Article 7 of this Circular but an agency or organization issuing preferential C/O has provide results of physical inspection of the trader’s production facilities and certifies its production capacity, such trader may shift from the red channelto the ordinary channel.

Chapter V

RESPONSIBILITIES OF RELATED AGENCIES AND ORGANIZATIONS AND IMPLEMENTATION PROVISION

Article 11. Responsibilities of the Import-Export Department

1. To formulate and submit to competent authorities for promulgation, or promulgate according to its competence, documents on channeling in the process of issuance of preferential C/O;

2. To publicize  the list of goods items subject to the application of the red channel regime under Article 7 of this Circular and coordinate with the E-Commerce and Digital Economy Department in publishing such list in the electronic certificate of origin management and issuance system at www.ecosys.vn.

3. To assume the prime responsibility for, and coordinate with related agencies and units in, managing and handling arising problems and inspecting the channeling in the process of issuance of preferential C/O.

Article 12.Responsibilities of theE-Commerce and Digital Economy Department

1. To conduct the e-channeling of dossiers of application for issuance of C/O at the address www.ecosys.gov.vn;

2. To build and adjust technical infrastructure serving the e-channeling in the process of issuing preferential C/O;

3. To coordinate with related agencies and units and promptly handling issues arising in the course of implementation.

Article 13. Responsibilities of agencies and organizations issuing preferential C/O

1. To conduct the channeling and guide traders to make dossiers of application for participation in pilot channeling of enterprises in issuance of preferential C/O;

2. To make quarterly reports on the channeling at their agencies or organizations and send such reports to the Import-Export Department (the Ministry of Industry and Trade);

3. To monitor and report abnormal phenomena in the process of issuing preferential C/O and help traders improve their law observance capacity;

4. To coordinate with the Import-Export Department (the Ministry of Industry and Trade) in physical inspection of goods and production facilities and handling of problems arising in the course of implementation. When necessary, to seek opinions of the Import-Export Department (the Ministry of Industry and Trade) on the physical inspection of traders’ production facilities to serve as a basis for the channeling.

Article 14. Responsibilities of traders

1. To properly observe law and obtain knowledge on origin of goods;

2. To be held responsible before law for the accuracy and truthfulness of the information they declare;

3. To coordinate with and provide sufficient documents to the Ministry of Industry of Trade and agencies and organizations issuing preferential C/O in case the latter conduct inspection at their headquarters and production facilities.

Article 15. Effect

This Circular takes effect on August 15, 2018.-

Minister of Industry and Trade

TRAN TUAN ANH