Circular 04/2024/TT-BCT amend Circular 20/2014/TT-BCT implement Rules of Origin in Agreement for ASEAN-Korea Free Trade Area

CIRCULAR

Amending and supplementing a number of articles of the Minister of Industry and Trade’s Circular No. 20/2014/TT-BCT of June 25, 2014, on the implementation of the Rules of Origin provided in the Agreement for the ASEAN-Korea Free Trade Area^[1]

Pursuant to the Government’s Decree No. 96/2022/ND-CP of November 29, 2022, 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 implementation of the Third Protocol to Amend the Agreement on Trade in Goods under the Framework Agreement on Comprehensive Economic Cooperation among the Governments of the Member Countries of the Association of Southeast Asian Nations (ASEAN) and the Republic of Korea, signed alternately on November 22, 2015, in Kuala Lumpur, Malaysia, within the framework of the 27^th ASEAN Summit, and approved by the Government under Resolution No. 150/NQ-CP of September 22, 2023;

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

The Minister of Industry and Trade promulgates the Circular amending and supplementing a number of articles of the Minister of Industry and Trade’ Circular No. 20/2014/TT-BCT of June 25, 2014, on the implementation of the Rules of Origin provided in the Agreement for the ASEAN-Korea Free Trade Area.

Article 1. To amend and supplement a number of articles of the Appendices to the Minister of Industry and Trade’s Circular No. 20/2014/TT-BCT of June 25, 2014, on the implementation of the Rules of Origin provided in the Agreement for the ASEAN-Korea Free Trade Area (below referred to as Circular No. 20/2014/TT-BCT)

1. To amend and supplement Article 4, Appendix I (Rules of Origin) to Circular No. 20/2014/TT-BCT, as follows:

“Article 4. Not wholly obtained goods

1. For the purpose of applying Point b, Clause 1, Article 2, goods not mentioned in Article 5 specified in this Appendix shall be considered originating goods if they have a regional value content (RVC) of at least 40% calculated according to FOB value, or undergo a process of change of tariff heading (CTH) for 4 (four)-digit commodity codes of the Harmonized System.

2. The formula for RVC calculation is either of the following:

a/ Direct formula:

In which: VOM is the value of originating materials, including the value of originating materials, direct labor cost, direct allocation cost, transportation cost and profits.

Or:

b/ Indirect formula:

In which: VNM is the value of non-originating materials or materials of undetermined origin, which may be:

b1/ CIF price at the time of import of materials, spare parts or goods; or,

b2/ Earliest purchase price of materials, spare parts or goods of undetermined origin in the territory of the member country where the manufacturing and processing steps take place.

3. Exporters or manufacturers of exporting member countries may flexibly apply the direct formula for RVC calculation or indirect formula for RVC calculation as specified in Clause 2 of this Article. The selected formula for RVC calculation must continue to be applied throughout the fiscal year of such exporters or manufacturers. In case the importing member country conducts inspection and verification of the origin of goods, any inspection or verification of the RVC criterion shall be based on the formula for RVC calculation already applied by the exporter or manufacturer of the exporting member country.”.

2. To amend and supplement Clause 1, Article 5, Appendix V (Procedures for issuance and inspection of C/O) to Circular No. 20/2014/TT-BCT as follows:

“1. A C/O according to regulations must meet the following conditions:

a/ Being in paper form which shall be printed out with the signature and seal issued in the form of direct issuance or with the signature and seal issued in electronic form by the C/O-issuing institutions of the exporting member country;

b/ Being made on A4-sized paper;

c/ Conforming to the form specified in Appendix VI-A to Circular No. 20/2014/TT-BCT, and referred to as C/O form AK;

d/ Being declared in English.”.

Article 2. To rename the Agreement for the ASEAN-Korea Free Trade Area in Circular No. 20/2014/TT-BCT

To rename the Agreement for the ASEAN-Korea Free Trade Area as the Agreement on Trade in Goods under the Framework Agreement on ASEAN-Korea Comprehensive Economic Cooperation.

Article 3. Implementation provisions

This Circular takes effect on May 11, 2024.-

For the Minister of Industry and Trade
Deputy Minister
NGUYEN SINH NHAT TAN