Rule of Origin for Vietnam-Lao Agreement

CIRCULAR

ON IMPLEMENTATION OF THE RULES OF ORIGIN PROVIDED IN THE AGREEMENT BETWEEN THE MINISTRY OF INDUSTRY AND TRADE OF THE SOCIALIST REPUBLIC OF VIETNAM AND THE MINISTRY OF INDUSTRY AND TRADE OF THE LAO PEOPLE’S DEMOCRATIC REPUBLIC ON RULES OF ORIGIN APPLICABLE TO GOODS ELIGIBLE FOR VIETNAM-LAOS PREFERENTIAL IMPORT TARIFF TREATMENT

THE MINISTRY OF INDUSTRY AND TRADE

Rule of Origin for Vietnam-Lao Agreement

Pursuant to the Government’s Decree No. 189/2007/ND-CP of December 27, 2007, defining the functions, tasks, powers and organizational structure of the Ministry of Industry and Trade;
Pursuant to the Agreement between the Ministry of Industry and Trade of the Socialist Republic of Vietnam and the Ministry of Industry and Trade of the Lao People’s Democratic Republic on rules of origin applicable to goods eligible for Vietnam-Laos preferential import tariff treatment signed on October 1, 2009, in Hanoi, Vietnam;
Pursuant to the Government’s Decree No. 19/2006/ND-CP of February 20, 2006, detailing the Commercial Law regarding origin of goods;
The Minister of Industry and Trade stipulates the implementation of the rules of origin provided in the Agreement between the Ministry of Industry and Trade of the Socialist Republic of Vietnam and the Ministry of Industry and Trade of the Lao People’s Democratic Republic on rules of origin applicable to goods eligible for Vietnam-Laos preferential import tariff treatment as follows:

Chapter I GENERAL PROVISIONS

Article 1. Goods eligible for issuance of certificates of origin form S

A good eligible for issuance of certificates of origin form S (below referred to as C/O) means an originating good under the provisions of Annex 1 to this Circular for which a C/O is issued by a C/O form S issuer.

Article 2. Interpretation of terms

1. Vietnamese issuer of C/O form S (below referred to as C/O issuer) means organizations specified in Annex 10 to this Circular (not printed herein).

2. Applicant for C/O form S (below referred to as C/O applicant), means an exporter, producer or representative with a lawful power of attorney of an exporter or producer.

3. eCOSys means Vietnam’s electronic system for management and issuance of certificates of origin, with the website address http://www.ecosys.gov.vn.

Article 3. Responsibilities of C/O applicants

C/O applicants shall:

1. Register trader dossiers with C/O issuers under Article 5;

2. Submit C/O application dossiers to C/O issuers;

3. Demonstrate that their export goods satisfy requirements of origin and create favorable conditions for C/O issuers to verify the origin of these goods;

4. Take responsibility before law for the accuracy and truthfulness of their declarations related to C/O applications, even in case they are authorized by exporters;

5. Promptly report to C/O issuers in localities where they are located on the C/O issued by Vietnamese C/O issuers which are rejected by importing countries (if any);

6. Facilitate the verification by C/O issuers at production establishments or places where export goods are grown, cultured, harvested and processed;

7. Prove the truthfulness of the origin of export goods at the request of the Ministry of Industry and Trade, C/O issuers or customs offices of Vietnam or customs offices of importing countries.

Article 4. Responsibilities of C/O issuers

C/O issuers shall:

1. Guide C/O applicants when requested;

2. Receive and examine trader dossiers and C/O application dossiers;

3. Verify the real origin of products when necessary;

4. Issue C/O when goods satisfy the requirements of origin in this Circular and C/O applicants comply with Article 3;

5. Send specimen signatures of persons authorized to sign C/O and specimen seals of CI O issuers to the Ministry of Industry and Trade (the Import and Export Department) under the Ministry of Industry and Trade’s regulations for registration with competent authorities of importing countries;

6. Settle complaints about C/O issuance according to their competence;

7. Re-verify the origin of export goods at the request of competent authorities of importing countries;

8. Exchange information relating to C/O issuance with other C/O issuers;

9. Send reports to, participate in all professional training courses on origin organized by, and respond to other requests under regulations of the Ministry of Industry and Trade.

Chapter II PROCEDURES FOR C/O ISSUANCE

Article 5. Registration of trade dossiers

1. C/O applicants may be considered for C/O issuance at places where they have registered trader dossiers only after they have completed trader dossier registration procedures. A trader dossier comprises:

a/ Registration of the specimen signature of the person authorized to sign the C/O application and the specimen seal of the trader (Annex 9, not printed herein);

b/ Business registration certificate of the trader (a certified true copy);

c/ Tax identification number registration certificate (a certified true copy);

d/ A list of production establishments (if any) of the trader (Annex 8, not printed herein).

2. Before C/O application, any change in the trader dossier shall be notified to the C/O issuer with which this dossier has been registered. A trader dossier shall be updated once every two (2) years.

3. In case of a force majeure circumstance or for a plausible reason, if wishing to get a C/O issued by another C/O issuer in a locality other than that where it has registered its trader dossier, a C/O applicant shall provide plausible reasons in writing for the non-application for a C/O in the locality where it has registered its trader dossier, and register its trader dossier with the new C/O issuer.

Article 6. C/O application dossiers

1. A C/O application dossier comprises:

a/ A C/O application form (Annex 7, not printed herein), which has been fully and duly filled in as guided in Annex 6 (not printed herein);

b/ The C/O form (Annex 5), which has been fully filled in;

c/ A customs declaration for which customs procedures have been completed. For cases in which export goods are not subject to customs declaration under law, this declaration is not required;

d/ The commercial invoice;

e/ The bill of lading or equivalent document in case the trader has no bill of lading.

In case the customs declaration for which customs procedures have been completed and the bill of lading (or an equivalent document) are not available yet, the C/O applicant may submit these documents later but within fifteen (15) working days after the date of C/O issuance.

2. When finding it necessary, the C/O issuer may request the C/O applicant to supply additional documents related to export goods, such as customs declaration of imported materials and auxiliary materials; export permit (if any); purchase and sale contract; value-added invoices for purchase and sale of domestic materials and auxiliary materials; samples of materials and auxiliary materials or export goods; description of the manufacturing process with HS headings of input materials and products (for change in tariff classification (CTC) criterion or good manufacturing or processing operation criterion); or calculation of the local value content (LVC) (for LVC criterion); and other documents for evidencing the origin of export products.

3. For documents specified at Point c, d and e of Clause 1, and Clause 2, their copies bearing the signatures and true-copy stamps of heads or traders’ representatives at law or authorized persons, may be provided together with their originals for comparison at the request of C/O issuers when necessary.

4. For traders joining the eCOSys, their persons authorized to sign C/O applications shall declare data via eCOSys, give their e-signatures and automatically transmit them to C/O issuers. After examining application dossiers on the eCOSys, if agreeing to issue C/O, C/O issuers shall notify such via eCOSys to applying traders for submission of complete written dossiers to C/O issuers for comparison before issuing C/O.

Article 7. Receipt of C/O application dossiers

When C/O applicants file their dossiers, record officers shall receive and examine these dossiers, then notify C/O applicants in receipt or other written forms of one of the following actions:

1. Issuance of C/O under Article 8;

2. Request for supplementation of documents under Article 6;

3. Refusal to issue C/O when detecting that:

a/ C/O applicants fail to register trader dossiers under Article 5;

b/ C/O application dossiers are inaccurate or incomplete as required in Article 6;

c/ C/O applicants fail to submit documents they lack under Article 6;

d/ Dossiers contain contradictory details;

e/ C/O application dossiers are filed with offices other than those with which trader dossiers have been registered;

f/ C/O forms are filled in by handwriting, or erased or improperly modified, or unreadable, or printed in multicolor inks;

g/ There are lawful grounds to evidence that goods are non-originating under this Circular or C/O applicants have committed fraudulent or dishonest acts in demonstrating the origin of their goods.

Article 8. Issuance of C/O

1. A C/O shall be issued within three (3) working days after the C/O applicant files a complete and valid dossier, except for cases specified in Clause 2 of this Article.

2. C/O issuers may conduct verification at production establishments if they see that the dossier examination provides insufficient grounds for C/O issuance or when they detect signs of illegal acts in connection to previously issued C/O. Verifiers of C/O issuers shall make minutes of verification results and request C/O applicants and/or exporters to jointly sign these minutes. In case C/O applicants and/or exporters refuse to sign these minutes, verifiers shall write the reasons for such refusal in the minutes and sign them for certification.

The time limit for issuing or refusing to issue a C/O in this case is five (5) working days after the C/O applicant files a complete dossier.

3. In the course of consideration for C/O issuance, if detecting goods that fail to satisfy requirements of origin or C/O application dossiers which are incomplete or invalid. C/O issuers shall notify such to C/O applicants under Clause 2 or Clause 3, Article 7.

4. The verification must not impede the delivery of goods or payment by exporters, except for cases in which exporters are at fault.

Article 9. Withdrawal of issued C/O

C/O issuers shall withdraw C/O they have issued in the following cases:

1. Exporters or C/O applicants have forged documents.

2. Issued C/O are not conformable with the origin criteria.

Chapter III MANAGEMENT OF C/O ISSUANCE

Article 10. Competence to sign C/O

Only persons that have completed procedures for registering their specimen signatures with the Ministry of Industry and Trade for subsequent registration with the Ministry of Industry and Trade of Laos may sign and issue C/O.

Article 11. Focal point

The Import and Export Department is the focal point under the Ministry of Industry and Trade performing the following jobs:

1. Guiding and inspecting the C/O issuance;

2. Carrying out procedures for registering specimen signatures of persons competent to sign and issue C/O and specimen seals of Vietnamese C/O issuers with the Ministry of Industry and Trade of Laos, and forwarding specimen signatures of persons competent to sign and issue C/O and specimen seals of C/O issuers of Laos to the Ministry of Finance (the General Department of Customs);

3. Assisting the Minister of Industry and Trade in solving problems related to the issuance of CI O.

Article 12. Reporting regime

1. C/O issuers shall update information on CI O issuance on the eCOSys on a daily basis. Information updates must cover all information required to be declared in C/O application dossiers.

2. C/O issuers that have violated Clause 1 thrice shall be suspended from issuing C/O and be named on the website of the Ministry of Industry and Trade. After at least 6 months, the Ministry of Industry and Trade will consider empowering C/O issuers suspended from issuing C/O to issue C/O again based on the request and explanations of these organizations.

Article 13. Implementation provisions

1. This Circular takes effect on March 5, 2010.

2. To annul the Minister of Trade’s Decision No. 0865/2004/QD-BTM of June 29, 2004, promulgating the Regulation on issuance of certificates of origin of goods, form S, for enjoyment of tariff preferences under the Agreement on Economic, Cultural, Scientific and Technical Cooperation between the Government of the Socialist Republic of Vietnam and the Government of the Lao People’s Democratic Republic; the Minister of Trade’s Decision No. 244/2005/QD-BTM of February 17, 2005, amending the Regulation on issuance of certificates of origin of goods, form S, for enjoyment of tariff preferences under the Agreement on Economic, Cultural, Scientific and Technical Cooperation between the Government of the Socialist Republic of Vietnam and the Government of the Lao People’s Democratic Republic, promulgated together with the Minister of Trade’s Decision No. 0865/2004/QD-BTM of June 29, 2004; and the Minister of Trade’s Decision No. 06/2007/QD-BTM of February 6, 2007, amending and supplementing the Regulation on issuance of certificates of origin of goods, form S, for enjoyment of tariff preferences under the Agreement on Economic, Cultural, Scientific and Technical Cooperation between the Government of the Socialist Republic of Vietnam and the Government of the Lao People’s Democratic Republic, promulgated together with the Minister of Trade’s Decision No. 0865/2004/QD-BTM of June 29, 2004.

ANNEX 1 RULES OF ORIGIN

(To the Ministry of Industry and Trade’s Circular No. 04/2010/TT-BCT of January 25, 2010, on implementation of the rules of origin provided in the Agreement between the Ministry of Industry and Trade of the Socialist Republic of Vietnam and the Ministry of Industry and Trade of the Lao People’s Democratic Republic on rules of origin applicable to goods eligible for Vietnam-Laos preferential import tariff treatment)

Article 1. Definitions

In this Annex, terms are construed as follows:

1. “Aquaculture” means the farming of aquatic organisms including fishes, mollusks, crustaceans, other aquatic invertebrates and aquatic plants, from feedstock such as eggs, fry, fingerlings and larvae, by intervention in the rearing or growth processes to enhance production such as regular stocking, feeding, or protection from predators;

2. “OF” means the value of the goods imported, and includes the costs of freight and insurance up to the port or place of entry into the country of importation. The valuation shall be made in accordance with Article VII of GATT 1994 and the Agreement on the Implementation of Article VII of GATT 1994 as contained in Annex 1A to the WTO Agreement;

3. “FOB” means the free-on-board value of the goods, inclusive of the costs of transport to the port or site of final shipment abroad. The valuation shall be made in accordance with Article VII of GATT 1994 and the Agreement on the Implementation of Article VII of GATT 1994 as contained in Annex 1A to the WTO Agreement;

4. “Generally accepted accounting principles” means the recognized consensus or substantial authoritative support in 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 of general application as well as detailed standards, practices and procedures;

5. “Good” shall include materials and/or products, which can be wholly obtained or produced in a member state, even if they are intended for later use as materials in another production process. For the purposes of this Annex, the terms “goods” and “products” can be used interchangeably;

6. “Identical and interchangeable materials” means materials being of the same kind and commercial quality, possessing the same technical and physical characteristics, and which once they are incorporated into a complete product cannot be distinguished from one another for origin purposes by virtue of any markings;

7. “Materials” means any matter or substance used or consumed in the production of a good, physically incorporated into a good, or used in the production of another good;

8. “Originating good” or “originating material” means a good or material that qualifies as originating in accordance with this Annex;

9. “Packing materials and containers for transportation and shipment” means the goods used to protect a good during its transportation and shipment, different from those containers or materials used for its retail sale;

10. “Production” means methods of obtaining a good, including growing, mining, harvesting, raising, breeding, extracting, gathering, collecting, capturing, fishing, trapping, hunting, manufacturing, processing or assembling; and

11. “Product specific rules” means rules that require the materials undergo a change in tariff classification or a specific manufacturing or processing operation, or satisfy the local value content criterion or a combination of these criteria.

Article 2. Origin criteria

A good imported into the territory of a Member State from another Member State shall be treated as an originating good eligible for tariff incentives if it conforms to any of the following origin requirements:

1. It is wholly obtained or produced entirely in the territory of an exporting Member State as defined in Article 3; or

2. It is not wholly obtained or produced entirely in the territory of an exporting Member State, provided that the said good is eligible under Article 4 or Article 6.

Article 3. Wholly obtained or produced goods

Goods referred to in Clause 1, Article 2 shall be considered wholly obtained or produced entirely in the exporting Member State in the following cases:

1. Plant and plant products, including fruit, flowers, vegetables, trees, seaweed, fungi and other plants, grown and harvested, picked or gathered in the exporting Member State;

2. Live animals, including mammals, birds, fish, crustaceans, mollusks, reptiles, bacteria and viruses, born and raised in the exporting Member State;

3. Goods obtained from live animals in the exporting Member State;

4. Goods obtained from hunting, trapping, fishing, farming, aquaculture, gathering or capturing conducted in the exporting Member State;

5. Minerals and other naturally occurring substances, not included in Clauses 1 thru 4, extracted or taken from its soil, waters, seabed or beneath its seabed;

6. Products of sea-fishing taken by vessels registered with a Member State and entitled to fly its flag and other products[1] taken from the waters, seabed or beneath the seabed outside the territorial waters[2] of that Member State, provided that the Member State has the rights to exploit such waters, seabed and beneath the seabed in accordance with international law[3];

7. Products of sea-fishing and other marine products taken from the high seas by vessels registered with a Member State and entitled to fly the flag of that Member State;

8. Products processed and/or made on board factory ships registered with a Member State and entitled to fly the flag of that Member State, exclusively from products referred to in Clause 7 of this Article;

9. Articles collected there which can no longer perform their original purpose nor are capable of being restored or repaired and are fit only for disposal or recovery of parts of raw materials, or for recycling purposes;

10. Waste and scrap derived from:

a/ Production in the exporting Member State; or

b/ Used goods collected in the exporting Member State, provided that such goods are fit only for the recovery of raw materials; and

11. Goods obtained or produced in the exporting Member State from products referred to in Clauses 1 thru 10 of this Article.

Article 4. Not wholly obtained or produced goods

1. General origin criteria

a/ Goods referred to in Clause 2, Article 2 shall be deemed to be originating in the Member State where the manufacture or processing of these goods has taken place if:

– They have a local value content (below referred to as “Vietnam-Laos value content” or the “local value content (LVC)”) of not less than forty percent (40%) calculated using the formula set out in Article 5; or

– All non-originating materials used in the production of the goods have undergone a change in tariff classification (below referred to as “CTC”) at four-digit level (i.e. a change in tariff heading) of the Harmonized System.

b/ Each Member State shall permit the exporter of the good to decide whether to use either the criterion of LVC of not less than forty percent (40%) or a change in tariff classification at four-digit level set out at Point a. Clause 1, when determining the origin of the good.

2. Product specific rules

a/ Notwithstanding Clause 1 of this Article, goods shall qualify as originating goods if they satisfy the product specific rules negotiated later.

b/ Where product specific rules provide a choice of rules from an LVC-based rule of origin, a CTC-based rule of origin, a specific manufacturing or processing operation, or a combination of these, each Member State shall permit the exporter of the goods to decide which rule to use in determining whether the goods qualify as originating goods.

c/ The CTC-based and SP-based rules of origin apply only to non-originating materials.

d/ Goods referred to in Annex 3 are subject to application of either the general origin criteria provided in Clause 1 or relevant origin criteria provided in Annex 3.

Article 5. Formulas for LVC calculation

1. LVC referred to in Article 4 shall be calculated according to the following formula:

2. For the purposes of calculating LVC provided in Clause 1 of this Article:

a/ Value of non-originating materials, parts or goods is:

– The CJF value at the time of importation of the goods or importation can be proven; or

– The earliest ascertained price paid for the goods of undetermined origin in the territory of the Member State where the manufacture or processing takes place;

b/ FOB price means the free-on-board value of the goods as defined in Article 1. FOB price shall be determined by adding the value of materials, production cost, profit and other costs.

3. Locally procured materials produced by established licensed manufacturers, in compliance with domestic regulations, shall be considered having fulfilled the origin requirement of this Annex.

Article 6. Accumulation

1. Unless otherwise provided in this Annex, goods originating in a Member State, which are used in another Member State as materials for finished goods eligible for preferential tariff treatment, shall be considered to be originating in the latter Member State where manufacture or processing of the goods has taken place.

2. If the LVC of the material is less than forty percent (40%). it shall be cumulated (using the LVC criterion) in direct proportion to the actual domestic content provided that it is equal to or more than twenty percent (20%). The implementing guidelines are set out in Annex 2.

Article 7. Minimal operations and processes

1. The following operations or processes undertaken, by themselves or in combination with each other, are considered to be minimal and shall not be taken into account in determining whether a good has been originating in one Member State:

a/ Ensuring preservation of goods in good condition for the purposes of transport or storage;

b/ Facilitating shipment or transportation; and

c/ Packaging or presenting goods for sale.

2. A good originating in the territory of a Member State shall retain its initial originating status, when exported from another Member State, where minimal operations or processes referred to in Clause 1 of this Article have been undertaken.

Article 8. Direct consignment

1. Preferential tariff treatment shall be applied to goods satisfying the requirements of this Annex and which are consigned directly between the territories of the exporting Member State and the importing Member State.

2. The following shall be considered directly consigned:

a/ Goods transported from an exporting Member Stale to the importing Member State; or

b/ Goods transported through a non-Member State, provided that:

– The transit entry is justified for geographical reason or by consideration related exclusively to transport requirements;

– The goods have not entered into trade or consumption there; and

– The goods have not undergone any operation there other than unloading and reloading or any other operation to preserve them in good condition.

Article 9. De Minimis

1. A good that does not undergo a change in tariff classification shall be considered originating if the value of all non-originating materials used in its production that do not undergo the required change in tariff classification does not exceed ten (10) percent of the FOB value of the good and the good meets all other requirements criteria set forth in this Annex.

2. The value of non-originating materials referred to in Clause 1 of this Article shall, however, be included in the value of non-originating materials for any applicable LVC requirement for the good.

Article 10. Packages and Packing Materials

1. Packaging and Packing Materials for retail sale:

a/ If a good is subject to the LVC-based rule of origin, the value of the packaging and packing materials for retail sale shall be considered to be forming a whole with the good and taken into account in its origin assessment.

b/ Where Point a. Clause 1 of this Article is not applicable, the packaging and packing materials for retail sale, when classified together with the packaged good, shall not be taken into account in considering whether all non-originating materials used in the manufacture of a product fulfils the criterion corresponding to a change of tariff classification of the said good.

2. The containers and packing materials exclusively used for the transport of a good shall not be taken into account for determining the origin of the said good.

Article 11. Accessories, spare parts and tools

1. If a good is subject to the requirements of CTC- or SP-based rule, the origin of accessories, spare parts, tools and instructional or other informational materials presented with the good shall not be taken into account in determining whether the good qualifies as an originating good, provided that:

a/ The accessories, spare parts, tools and instructional or other informational materials are not invoiced separately from the good; and

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

2. If a good is subject to the LVC-based rule of origin, the value of the accessories, spare parts, tools and instructional or other informational materials shall be taken into account as the value of the originating or non-originating materials, as the case may be, in calculating the LVC of the originating good.

Article 12. Neutral elements

In order to determine whether a good originates, it is not necessary to determine the origin of the following which might be used in its production and not incorporated into the good:

1. Fuel and energy;

2. Tools, dies and moulds;

3. Spare parts and materials used in the maintenance of equipment and buildings;

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

5. Gloves, glasses, footwear, clothing and safety equipment;

6. Equipment, devices and machines used for testing or inspecting the good;

7. Catalyst and solvent;

8. Any other goods that are not incorporated into the good but of which use in the production of the good can reasonably be demonstrated to be a part of that production.

Article 13. Identical and interchangeable materials

1. The determination of whether identical and interchangeable materials are originating materials shall be made either by physical segregation of each of the materials or by the use of generally accepted accounting principles of stock control applicable, or inventory management practice, in the exporting Member States.

2. Once a decision has been taken on the inventory management method, that method shall be used throughout the fiscal year.

Article 14. Certificate of origin

To be accepted as eligible for preferential tariff treatment, a good must have a certificate of origin (C/O) form S as set out in Annex 5 issued by a government authority designated by the exporting Member State and notified to the other Member States in accordance with Annex 4.

ANNEX 2 IMPLEMENTING GUIDELINES FOR PARTIAL CUMULATION UNDER THE VIETNAM-LAOS RULES OF ORIGIN

(To the Ministry of Industry and Trade’s Circular No. 04/2010/TT-BCT of January 25,
2010, on implementation of the rules of origin provided in the Agreement between the Ministry of Industry and Trade of the Socialist Republic of Vietnam and the Ministry of Industry and Trade of the Lao People’s Democratic Republic on rules of origin applicable to goods eligible for Vietnam-Laos preferential import tariff treatment)

For the purpose of implementing Clause 2, Article 6 of the Vietnam-Laos rules of origin (Annex 1):

1. A good is eligible for partial cumulation if at least twenty percent (20%) of the local value content (LVC) of the good is originating in the Member State where working or processing of the good has taken place;

2. LVC of the good specified in Clause 1 of this Annex shall be calculated in accordance with the formula provided in Article 5 of the Vietnam-Laos rules of origin;

3. A good exported subject to partial cumulation is not eligible for Vietnam-Laos preferential tariff treatment of the importing Member State;

4. Agood exported under this Agreement shall be accompanied by a valid C/O (form S) duly and prominently marked in the “Partial Cumulation” box;

5. The relevant sections of Annex 4, including Article 17 and Article 18, are applicable to C/O (form S) issued for partial cumulation purposes.

ANNEX 3 LIST AND QUANTITIES OF GOODS OF LAO ORIGIN SUBJECT TO PROVISIONAL APPLICATION OF THE LOCAL VALUE CONTENT OF 30% (LVC(30)) THROUGH DECEMBER 31, 2010

(To the Ministry of Industry and Trade’s Circular No. 04/2010/TT-BCT of January 25, 2010, on implementation of the rules of origin provided in the Agreement between the Ministry of Industry and Trade of the Socialist Republic of Vietnam and the Ministry of Industry and Trade of the Lao People’s Democratic Republic on rules of origin applicable to goods eligible for Vietnam-Laos preferential import tariff treatment)

ANNEX 4 OPERATIONAL PROCEDURES ON THE ISSUANCE AND VERIFICATION OF CERTIFICATE OF ORIGIN UNDER THE VEETNAM-LAOS RULES OF ORIGIN

(To the Ministry of Industry and Trade’s Circular No. 04/2010/TT-BCT of January 25, 2010, on implementation of the rules of origin provided in the Agreement between the Ministry of Industry and Trade of the Socialist Republic of Vietnam and the Ministry of Industry and Trade of the Lao People’s Democratic Republic on rules of origin applicable to goods eligible for Vietnam-Laos preferential import tariff treatment)

For the purpose of implementing the rules of origin provided in Annex 1, the following operational procedures on the issuance and verification of the Certificate of Origin (form S) and the other related administrative matters shall be observed.

Article 1. Definitions

1. “Customs authority” means the competent authority that is responsible under the law of a Member State for the administration of customs laws and regulations;

2. “Exporter” means a natural or juridical person located in the territory of a Member State where a good is exported from by such a person;

3. “Importer” means a natural or juridical person located in the territory of a Member State where a good is imported into by such a person;

4. “Issuing authority” means the Government authority of the exporting Member State designated to issue a Certificate of Origin (form S) and notified to all the other Member States in accordance with this Annex; and

5. “Producer” means a natural or juridical person who carries out production in the territory of a Member State.

Article 2. Specimen signatures and official seals of C/O issuers

1. Each Member State shall provide a list of the names, addresses, specimen signatures and specimen of official seals of its C/O issuers, in hard copy and soft copy format to other Member States. Any change in the said list shall be promptly provided in the same manner.

2. The specimen signatures and official seals of the C/O issuers shall be updated biennially. Any C/O (form S) issued by an official not included in the list referred to in Clause 1 shall not be honored by the importing Member State.

Article 3. Documentary evidence

For the purpose of determining originating status, the C/O issuers have the right to request supporting documentary evidence or to carry out check(s) considered appropriate in accordance with respective domestic laws and regulations of a Member State.

Article 4. Pre-exportation examination

1. The producer and/or exporter of the good, or its authorized representative, shall apply to the C/O issuer, in accordance with the Member State’s domestic laws and regulations, requesting pre-exportation examination of the origin of the good. The result of the examination, subject to review periodically or whenever appropriate, shall be accepted as the supporting evidence in determining the origin of the said good to be exported thereafter. Pre-exportation examination may not apply to the good of which, by its nature, origin can be easily determined.

2. For locally procured materials, self-declaration by the final manufacturer shall be used as a basis when applying for a C/O (form S).

Article 5. C/O application

At the time of carrying out the formalities for exporting the products under preferential treatment, the exporter or his/her authorized representative shall submit a written application for a C/O (form S) together with appropriate supporting documents proving that the products to be exported qualify for the issuance of a C/O (form S).

Article 6. Examination of C/O applications

The C/O issuer shall, to the best of its competence and ability, carry out proper examination, in accordance with the domestic laws and regulations of the Member State, upon each application for a C/O (form S) to ensure that:

1. The application and the C/O (form S) are duly completed and signed by the authorized signatory;

2. The origin of the product is in conformity with Annex 1;

3. The other statements of the C/O (form S) correspond to supporting documentary evidence submitted;

4. Description, quantity and weight of goods, marks and number of packages, number and kinds of packages, as specified, conform to the products to be exported;

5. Multiple items declared on the same C/O shall be allowed provided that each item qualifies separately in its own right.

Article 7. C/O form S

1. The C/O must be on A4 size white paper in conformity to the specimen shown in Annex 5. It shall be made in English.

2. The C/O must comprise one original and two carbon copies.

3. Each C/O must bear a reference number separately given by each C/O issuer.

4. Each C/O must bear a handwritten signature and seal of each C/O issuer.

5. The original C/O shall be forwarded by the exporter to the importer for submission to the customs authority at the port or place of importation. The duplicate shall be retained by the C/O issuer in the exporting Member State. The triplicate shall be retained by the exporter.

Article 8. Indication of origin criterion

To implement the provisions of Article 2 of Annex 1, a C/O issued by the final exporting Member State shall indicate the relevant applicable origin criterion in box 8.

Article 9. Correction of errors in C/O

Neither erasures nor superimpositions shall be allowed on a C/O. Any alteration shall be made by:

1. Striking out the erroneous materials and making any addition required. Such alterations shall be approved by an official authorized to sign the C/O and certified by the C/O issuers. Unused spaces shall be crossed out to prevent any subsequent addition; or

2. Issuing a new C/O to replace the erroneous one.

Article 10. C/O issuance

1. A C/O shall be issued at the time of exportation or soon thereafter whenever the products to be exported can be considered originating in that Member State according to the rules of origin provided in Annex 1.

2. In exceptional cases where a C/O has not been issued at the time of exportation or no later than three (3) days from the declared exportation date, due to involuntary errors or omissions or other valid causes, the C/O may be issued retroactively but no longer than one (1) year from the date of shipment and shall be duly and prominently marked in the “Issued Retroactively” box.

Article 11. C/O Loss

In the event of theft, loss or destruction of a C/O (form S), the exporter may apply in writing to the C/O issuers for a certified true copy of the original C/O to be made out on the basis of the export documents in their possession bearing the endorsement of the words “CERTIFIED TRUE COPY” in box 12. This copy must bear the date of issuance of the original C/O (form S). The certified true copy shall be issued no longer than one year from the date of issuance of the original C/O (form S).

Article 12. Presentation

1. For the purpose of claiming preferential tariff treatment, the importer shall submit to the customs authority of the importing Member State at the time of carrying out import procedures a C/O (form S) including supporting documents (i.e. commercial invoices and, when required, the through bill of lading issued in the territory of the exporting Member State) and other documents as required in accordance with the domestic laws and regulations of the importing Member State.

2. In case a C/O (form S) is rejected by the customs authority of the importing Member State, it shall be marked in box 4 and sent back to the C/O issuer within an appropriate duration not exceeding sixty (60) days. The customs authority of the importing Member State shall also notify the C/O issuer of the rejection reason.

3. In case of rejection of a C/O (form S) referred to in Clause 2, the customs authority of the importing Member State may accept and examine justifications provided by the C/O issuer and reconsider whether such C/O (form S) is eligible for the preferential tariff treatment. Justifications of the C/O issuer must be detailed and clarify reasons furnished by the importing Member State for rejection.

Article 13. Validity of C/O (form S)

The following time limit for the presentation of a C/O (form S) shall be observed:

1. C/O (form S) is valid for twelve (12) months from the date of its issuance and must be submitted to the customs authorities of the importing Member State within that time limit.

2. Where the C/O (form S) is submitted to the customs authorities of the importing Member State after the expiration of the time limit provided in Clause 1 of this Article, such C/O (form S) is still to be accepted when failure to observe the time limit results from force majeure or other plausible causes beyond the control of the exporter; and

3. In all cases, the customs authorities in the importing Member State may accept such C/O (form S) provided that goods are imported before the expiration of the time limit of the said C/O (form S).

Article 14. Waiver of production of C/O

In the case of consignments of products originating in the exporting Member State and not exceeding USD 200 FOB, the production of C/O (form S) shall be waived and the use of simplified declaration by the exporter that the products in question have originated in the exporting Member State will be accepted. Products sent by post not exceeding USD 200 FOB shall also be similarly treated.

Article 15. Minor discrepancies

1. Where the origin of the good is not in doubt, the discovery of minor discrepancies, such as differences between the statements made in the C/O and those made in the documents submitted to the customs authorities of the importing Member State for the purpose of carrying out the formalities for importing the goods shall not ipso-facto invalidate the C/O (form S). if it does in fact correspond to the products exported.

2. In cases the exporting Member State and importing Member State have different HS code classification for a good subject to preferential tariffs, the goods shall be released at the MFN duty rate or higher, depending on relevant rules of origin, and no penalty or other charges shall be imposed on the importer in accordance with regulations of the importing Member State. Once the HS code classification differences have been resolved, the correct preferential duty rate shall be applied and any overpaid duty shall be refunded, in accordance with relevant regulations of the importing Member State, after the issue has been resolved.

3. For multiple items declared under the same C/O (form S), a problem encountered with one of the items listed shall not affect or delay the granting of preferential tariff treatment and customs clearance of the remaining items listed in the C/O (form S). Clause 3 of Article 17 may be applied to the problematic items.

Article 16. Record keeping requirement

1. For the purposes of the origin verification process pursuant to Article 17 and Article 18, the producer and/or exporter applying for a C/O (form S) shall, subject to the domestic laws and regulations of the exporting Member State, keep its supporting records for application for three (3) years from the date of issuance of the C/O (form S).

2. The application for C/O (form S) and all documents related to such application shall be retained by the C/O issuers for three (3) years from the date of issuance.

3. Information relating to the validity of the C/O (form S) shall be furnished upon request of the importing Member State by an official authorized to sign the C/O (form S) and certified by the appropriate Government authorities.

4. Any information communicated between the Member States concerned shall be treated as confidential and shall be used for the validation of C/O (form S) purposes only.

Article 17. Retroactive check

The importing Member State may request the C/O issuer of the exporting Member State to conduct a retroactive check at random and/or when it has reasonable doubt as to the authenticity of the document or as to the accuracy of the information regarding the true origin of the products in question or of certain parts thereof. Upon such request, the C/O issuer of the exporting Member State shall conduct a retroactive check on a producer/exporter’s cost statement based on the current cost and prices, within a six-month timeframe, specified at the date of exportation subject to the following conditions:

1. The request for retroactive check shall be accompanied with the C/O (form S) concerned and shall specify the reasons and any additional information suggesting that the particulars given on the said C/O (form S) may be inaccurate, unless the retroactive check is requested on a random basis;

2. The C/O issuer receiving a request for retroactive check shall respond to the request promptly and reply within ninety (90) days after the receipt of the request;

3. The customs authorities of the importing Member State may suspend the provisions on preferential treatment while awaiting the result of verification. However, they may release the products to the importer subject to any administrative measures as necessary, provided that they are not held to be subject to import prohibition or restriction and there is no suspicion of fraud;

4. The C/O issuer shall promptly transmit the results of the verification process to the importing Member State which shall then determine whether the subject good is originating. The entire process of retroactive check including the process of notifying the C/O issuer of the exporting Member State the result of determination whether the good is originating shall be completed within one hundred and eighty (180) days. While awaiting the results of the retroactive check, Clause 3 of this Article shall be applied.

Article 18. Verification visits

If the importing Member State is not satisfied with the outcome of the retroactive check mentioned in Article 17, it may, under exceptional cases, request verification visits to the exporting Member State.

1. Prior to a verification visit to the exporting Member State, the importing Member State, shall:

a/ Deliver a written notification of its intention to conduct the verification visit to:

– The exporter or producer whose premises are to be visited;

– The C/O issuer of the exporting Member State in whose territory the verification visit is to occur;

– The customs authority of the Member State in whose territory the verification visit is to occur; and

– The importer of the product subject of the verification visit.

b/ The written notification mentioned at Point a. Clause 1 of this Article shall be as comprehensive as possible including, among others:

– The name of the customs authority issuing the notification;

– The name of the exporter or producer whose premises are to be visited;

– The proposed date for the verification visit;

– The coverage of the proposed verification visit, including reference to the product subject of the verification: and

– The names and designation of the officials performing the verification visit;

c/ Obtain the written consent of the exporter or producer whose premises are to be visited.

2. When a written consent from the exporter or producer is not obtained within thirty (30) days upon receipt of the notification pursuant to Point a. Clause 1 of this Article, the importing Member State may deny preferential treatment to the product that would have been subject of the verification visit;

3. The C/O issuer receiving the notification may postpone the proposed verification visit and notify the importing Member State of such intention. Notwithstanding any postponement, any verification visit shall be carried out within sixty days (60) days from the date of such receipt, or for a longer period as the concerned Member States may agree.

4. The Member State conducting the verification visit shall provide the exporter or producer whose product is the subject of the verification and the relevant C/O issuer with a written determination of whether the subject product qualifies as an originating product.

5. Any suspended preferential treatment shall be reinstated upon the written determination mentioned in Clause 4 of this Article that the good qualifies as an originating good.

6. The exporter or producer will be allowed within thirty (30) days, from receipt of the written determination, to provide in writing comments or additional information regarding the eligibility of the product. If the product is still found to be non-originating, the final written determination will be communicated to the C/O issuer within thirty (30) days from receipt of the comments or additional information from the exporter or producer.

7. The verification visit process, including the actual visit and determination of whether the subject product is originating, shall be carried out and its results communicated to the C/O issuers within a maximum of one hundred and eighty (180) days. While awaiting the results of the verification visit, Clause 3 of Article 17 shall be applied.

Article 19. Confidentiality of information

Member States shall maintain, in accordance with their laws, the confidentiality of classified business information collected in the process of verification mentioned in Article 17 and Article 18 and shall protect that information from disclosure that could prejudice the competitive position of the person who provided the information. The classified business information may only be disclosed to those authorities responsible for the administration and enforcement of origin determination.

Article 20. Documents for direct consignment

For the purpose of implementing Point b, Clause 2, Article 8 of Annex 1, where transportation is effected through the territory of one or more non-Member State, the following shall be produced to the customs authorities of the importing Member State:

1. A through Bill of Lading issued in the exporting Member State;

2. A C/O (form S) issued by the C/O issuer of the exporting Member State;

3. A copy of the commercial invoice; and

4. Supporting documents in evidence that the requirements of direct consignment are being complied with.

Article 21. Goods for exhibition

1. Goods sent from an exporting Member State for exhibition in another Member State and sold during or after the exhibition for importation into a Member State shall benefit from the Vietnam-Laos preferential tariff treatment on the condition that the goods meet the requirements of the rules of origin provided in Annex 1 and provided that it is shown to the satisfaction of the relevant customs authorities of the importing Member State that:

a/ An exporter has dispatched those goods from the territory of the exporting Member State to the Member State where the exhibition is held and has exhibited them there;

b/ The exporter has sold the goods or transferred them to a consignee in the importing Member State;

c/ The goods have been consigned during the exhibition or immediately thereafter to the importing Member State in the state in which they were sent for the exhibition.

2. For the purpose of implementing the provisions in Clause 1 above, the C/O (form S) must be produced to the relevant authorities of the importing Member State. The name and address of the exhibition must be indicated.

3. Clause 1 of this Article shall apply to any trade, agricultural or crafts exhibition, fair or similar show or display in shops or business premises with a view to selling foreign products and where the products remain under customs control during the exhibition.

Article 22. Third country invoicing

1. Customs authorities in the importing Member State shall accept C/O (form S) in case the commercial invoice is issued either by a company located in a non-Member State or by a Vietnamese or Lao exporter for the account of the said company, provided that the good meets the requirements of the rules of origin provided in Annex 1.

2. The exporter shall tick in the “Third country invoicing” box and indicate such information as the name and country of the company issuing the invoice in the C/O (form S).

Article 23. Action against fraudulent acts

1 When it is suspected that fraudulent acts in connection with a C/O (form S) have been committed, the Government authorities concerned shall cooperate in the action to be taken in the respective Member State against the persons involved.

2. Each Member State shall provide legal sanctions for fraudulent acts related to a C/O (form S).

Article 24. Contact offices

1. Contact offices of the Government authorities concerned of the two Member States are:

– For Vietnam: The Import and Export Department, the Ministry of Industry and Trade

– For Laos: The Import and Export Department of the Ministry of Industry and Trade

2. Each Member State shall provide the other with the name, address, telephone number, fax number and e-mail address of its contact office after endorsing this Agreement and notify each other of any change in such information within thirty (30) days from the date of occurrence of such change.

ANNEX 5 C/O FORM S

(To the Ministry of Industry and Trade’s Circular No. 04/2010/TT-BCT of January 25, 2010, on implementation of the rules of origin provided in the Agreement between the Ministry of Industry and Trade of the Socialist Republic of Vietnam and the Ministry of Industry and Trade of the Lao People’s Democratic Republic on rules of origin applicable to goods eligible for Vietnam-Laos preferential import tariff treatment)

OVERLEAF NOTES

1. Parties which accept this form for the purpose of preferential treatment under the Vietnam-Laos Preferential Tariff Agreement:

LAOS                                                                                         VIETNAM

2. CONDITIONS: The main conditions for admission to the preferential treatment under the Vietnam-Laos Preferential Tariff Agreement are that goods sent to any Party listed above must:

(i) fall within a description of products eligible for concessions in the country of destination;

(ii) comply with the consignment conditions in accordance with Article 8 of Rules of Origin for the Vietnam-Laos Preferential Tariff Agreement (Vietnam-Laos ROO); and

(iii) comply with the origin criteria set out in Vietnam-Laos ROO.

3. ORIGIN CRITERIA: For goods that meet the origin criteria, the exporter and/or producer must indicate in Box 8 of this Form, the origin criteria met, in the manner shown in the following table:

4. EACH ARTICLE MUST QUALIFY: It should be noted that all the goods in a consignment must qualify separately in their own right. This is of particular relevance when similar articles of different sizes or spare parts are sent.

5. DESCRIPTION OF PRODUCTS: The description of products must be sufficiently detailed to enable the products to be identified by the Customs Officers examining them. Name of manufacturer, any trade mark shall also be specified.

6. HARMONISED SYSTEM NUMBER: The Harmonised System number shall be that of in ASEAN Harmonised Tariff Nomenclature (AHTN) Code of the importing Party.

7. EXPORTER: The term “Exporter” in Box 11 may include the manufacturer or the producer.

8. FOR OFFICIAL USE: The Customs Authority of the importing Party must indicate (V) in the relevant boxes in column 4 whether or not preferential treatment is accorded.

9. MULTIPLE ITEMS: For multiple items declared in the same Form S, if preferential treatment is not granted to any of the items, this is also to be indicated accordingly in box 4 and the item number circled or marked appropriately in box 5.

10. THIRD COUNTRY INVOICING: In cases where invoices are issued by a third country, “the Third Country Invoicing” box should be ticked (VV) and such information as name and country of the company issuing the invoice shall be indicated in box 7.

11. EXHIBITIONS: In cases where goods are sent from the territory of the exporting Party for exhibition in another Party and sold during or after the exhibition for importation into the territory of such Party, in accordance with Rule 21 of the Operational Certification Procedures, the “Exhibitions” box should be ticked (V) and the name and address of the exhibition indicated in box 2.

13. ISSUED RETROACTIVELY: In exceptional cases, due to involuntary errors or omissions or other valid causes, the Certificate of Origin (Form S) may be issued retroactively, in accordance with Rule 10(2) of the Operational Certification Procedures, the “Issued Retroactively” box should be ticked (V).

14. ACCUMULATION: In cases where originating in a Party is used in the other Party as materials for a finished good, in accordance with Article 6 of the Vietnam-Laos ROO, the “Accumulation” box should be ticked (V).

15. PARTIAL CUMULATION (PC): If the Local Value Content of material is less than 40%, the Certificate of Origin (Form S) may be issued for cumulation purposes, in accordance with Article 6(2) of the Vietnam-Laos ROOt the “Partial Cumulation” box should be ticked (V).

16. DE MINIMIS: If the value of all non-originating materials used in its production that do not undergo the required change in tariff classification does not exceed ten (10) percent of the FOB value of the good, in accordance with Article 9 of the Vietnam-Laos ROO, the “De Minimis” box should be ticked (V).