From January 2019, Vietnamese exporters exporting goods to the European Union (EU) need to self-verify their product origin, if they want to qualify for the Generalized System of Preferences (GSP), the tariff preference for developing countries.
This would shift the responsibility for self-certification from the Import and Export Agency which is under the Ministry of Industry and Trade to the exporters, which will increase the exporter’s liability for authenticity. From 2019, exporters have to issue their own Certificate of Origin (C/O) by adding, “this product is qualified for GSP” in their invoices and documents.
Benefits of self-certification
This transition mandated by the EU will shift the responsibilities to the exporters, which will reduce the administrative burden and risk for government agencies. In addition, this will also streamline the overall process, reducing unnecessary cost and delays.
With respect to the EU-Vietnam free trade agreement, self-certification will ensure that domestic firms are updated about the rules of origin commitments and help them in qualifying for preferential tariff treatment.
The 2,700 Vietnamese firms that currently qualify for GSP and export goods to the EU would require government support to ensure a smooth transition towards self-certification. The government is planning to organize events and seminars to train exporters in self-certification of goods. In addition, they are also working on a circular that would guide firms exporting goods to the EU. Once the circular has been finalized, the government will work closely with the Vietnam Chamber of Commerce and Industry (VCCI) and other provincial agencies to provide extensive training for exporters.
During the transition phase, if firms are unable to self-certify their goods, they can apply for an origin certificate from the VCCI and the Ministry of Industry and Trade, as they do now. Nevertheless, exporters should ensure that they can self-certify their goods by early 2019 to mitigate unnecessary cost and delays. In case, there are issues in determining the origin of goods or firms during trade, Vietnamese government agencies will provide the necessary information so that firms can work with the EU authorities in ensuring that their exports meet the necessary conditions.
Vietnam Briefing is published by Asia Briefing, a subsidiary of Dezan Shira & Associates. We produce material for foreign investors throughout Eurasia, including ASEAN, China, India, Indonesia, Russia & the Silk Road. For editorial matters please contact us here and for a complimentary subscription to our products, please click here.
Dezan Shira & Associates provide business intelligence, due diligence, legal, tax and advisory services throughout the Vietnam and the Asian region. We maintain offices in Hanoi and Ho Chi Minh City, as well as throughout China, South-East Asia, India, and Russia. For assistance with investments into Vietnam please contact us at email@example.com or visit us at www.dezshira.com
Dezan Shira & Associates Brochure
Dezan Shira & Associates is a pan-Asia, multi-disciplinary professional services firm, providing legal, tax and operational advisory to international corporate investors. Operational throughout China, ASEAN and India, our mission is to guide foreign companies through Asia’s complex regulatory environment and assist them with all aspects of establishing, maintaining and growing their business operations in the region. This brochure provides an overview of the services and expertise Dezan Shira & Associates can provide.
An Introduction to Doing Business in Vietnam 2017
An Introduction to Doing Business in Vietnam 2017 will provide readers with an overview of the fundamentals of investing and conducting business in Vietnam. Compiled by Dezan Shira & Associates, a specialist foreign direct investment practice, this guide explains the basics of company establishment, annual compliance, taxation, human resources, payroll, and social insurance in this dynamic country.
Managing Contracts and Severance in Vietnam
In this issue of Vietnam Briefing, we discuss the prevailing state of labor pools in Vietnam and outline key considerations for those seeking to staff and retain workers in the country. We highlight the increasing demand for skilled labor, provide in depth coverage of existing contract options, and showcase severance liabilities that may arise if workers or employers choose to terminate their contracts.