Vietnam’s implementation of the EU and Vietnam Free Trade Agreement (“EVFTA”)

Vietnam’s implementation of the EU and Vietnam Free Trade Agreement (“EVFTA”)

The EU and Vietnam Free Trade Agreement (“EVFTA”) has been in force since 1 August 2020. The EVFTA is broadly recognized as a “new generation” FTA, as it covers a very wide scope of commitments and a high level of commitment of Vietnam. This leads to extensive trade opportunities between Vietnam and the 27 member states of the EU.

Vietnam committed to eliminating 99.8% of all tariffs within 10 years and 64.5% of them from enforcement of the EVFTA. The EU committed to removing 99.7% within 7 years and, of this, 64.5% with enforcement of the EVFTA.

Implementation of the various regulations included in the EVFTA in Vietnam is an ongoing process. Many implementing regulations are in the process of alignment with the commitments. Some notable points are as follows:

Transition period
During the transition period of 7 years, the Generalised System of Preferences (“GSP”) is applied in parallel to the EVFTA. Therefore, it must be considered, on a case-by-case basis, which scheme is providing the more advantageous conditions.

Certificate of Origin
For goods imported from the EU to Vietnam, the EU announced that the origin certification according to the provisions of Clause 1(c), Article 15, Protocol 1 of the EVFTA Agreement shall apply, whilst Clause 1(a) and 1(b) of Article 15 shall not apply. For EU exporters, the
Registered Exporter System (“REX”) will be the only method to certify the origin of goods under EVFTA. Specifically, the self-certification applies to exporters registered in REX or any exporter for consignments with a total value of below EUR 6,000. The self-certification
should be made in commercial documents such as the invoice, delivery note, proforma invoice, or packing list.

Vietnam Customs will review the validity and authenticity of the self-certification according to commercial documents by registered exporter or by other exporters with goods of a value of below EUR 6,000. Vietnam Customs is performing the desktop validation of the REX number.

Vietnam announced the application of the origin certification specified in Clause 1 (a) Article 15, Protocol 1 of the EVFTA Agreement, which means that Certificate of Origin (“CO”) Form EUR.1 will be used. In addition, a statement of origin can be made by approved
exporters or any exporter for shipments with a value not exceeding EUR 6,000.

Submission of the CO
Importation submission: The CO must be submitted at the time of importation; or

Late submission: The importer may register late submission at the time of importation and submit the CO within 2 years of the date of the customs declaration. The CO must be submitted during its period of validity (12 months from the issue date). The importer must pay the MFN rate at the time of importation and then request the refund after submission of the CO.

Some key information on the CO
The country of origin in the CO must be shown as “EU” or “European Union” and not display an EU member country. If the CO shows the name of an EU member country, it is not valid under the EVFTA.

If the commercial documents in which the self-certification is produced include both goods not originating in the EU and goods originating in the EU, the self-certification is valid provided that the other information in the documents is correct.

For a full update on news on trade and customs developments from all over the world, please see: Global Customs Newsletter #2/2021