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Vietnam EVFTA rules of origin: how exporters qualify

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Vietnam EVFTA rules of origin decide whether your goods get the lower EU tariff or pay the normal rate. A product only qualifies if it is "originating" under the agreement. You must also be able to prove it. This guide shows the steps in plain order.

What the agreement is

The EU Vietnam Free Trade Agreement was signed on 30 June 2019. It entered into force on 1 August 2020, so exporters have now used it for five years. The European Commission says the agreement removes 99 percent of tariffs over time. That cut only applies to goods that meet the origin rules. A product made in Vietnam is not automatically an originating product.

Sources: European Commission, EU Vietnam agreement page (policy.trade.ec.europa.eu); Official Journal of the European Union, L 186, 12 June 2020.

Where the origin rules sit

The rules are in Protocol 1 of the agreement. Its full title is the protocol concerning the definition of the concept of originating products and methods of administrative cooperation. It is part of the legal text published in the Official Journal on 12 June 2020. The EU adopted the agreement through Council Decision (EU) 2020/753. Vietnam's Ministry of Industry and Trade issued Circular 11/2020/TT-BCT to set out how the rules work on the Vietnamese side. Read Protocol 1 itself for the binding wording. Summaries, including this one, are only a guide.

Sources: Official Journal of the European Union, L 186, 12 June 2020, Protocol 1; European Commission, texts of the agreements page; Council Decision (EU) 2020/753.

The core idea: where goods come from

Origin rules ask a simple question. Where was the product really made? Goods can qualify in two broad ways. They can be wholly obtained in the partner country, such as crops grown or minerals extracted there. Or they can be made from imported parts that were worked on enough in that country. The "enough" test is set product by product. Simple steps, such as repacking, labelling or mixing, usually do not count as enough work.

The test differs by product code. One product may need a change of tariff heading. Another may limit the share of imported parts by value. Do not guess. Look up the exact rule for your six digit product code before you quote a price.

Sources: European Commission, EU Vietnam agreement page; Official Journal of the European Union, L 186, 12 June 2020, Protocol 1.

Find your product rule step by step

The European Commission runs a free portal called Access2Markets. Its My Trade Assistant tool shows the conditions to trade a product, including rules of origin. Use this order of work:

  • Find the correct customs code for your product.
  • Enter the code, the exporting country and the destination into My Trade Assistant.
  • Read the origin rule listed for that code.
  • Compare it with your bill of materials, with each input marked as local or imported.
  • Write down the result and keep it on file.

If your product fails the rule, you can still export. You simply pay the normal duty. A failed test is better to learn about early than at the EU border.

Sources: European Commission, Access2Markets portal (trade.ec.europa.eu/access-to-markets).

Prove it with records

Meeting the rule is only half the job. You also need proof of origin for the shipment, and the importer uses it to claim the lower tariff. Protocol 1 covers the proof documents and the cooperation between customs authorities. The Vietnamese rules for issuing these proofs are in Circular 11/2020/TT-BCT. Check the current form of proof and any value limits in the text before each shipment.

Customs can ask to check a claim later. Keep these records ready:

  • Supplier invoices and purchase orders for every input.
  • Production records that show the work done in Vietnam.
  • Your product rule check and the date you made it.
  • Transport papers showing the route the goods took.

Sources: Official Journal of the European Union, L 186, 12 June 2020, Protocol 1; Ministry of Industry and Trade of Vietnam, Circular 11/2020/TT-BCT.

Common mistakes to avoid

Most failed claims come from a few causes. Exporters pick the wrong customs code, so they read the wrong rule. They count imported parts as local. They ship through another country without keeping papers that show the goods stayed under customs control. They also forget to keep records after the sale. A short checklist per product line fixes most of these. Review it whenever a supplier or a material changes.

Treat this article as general information, not legal or customs advice. For a high value shipment, ask a licensed customs broker or the relevant authority to confirm your case.

Sources: European Commission, Access2Markets portal; Official Journal of the European Union, L 186, 12 June 2020.

Sources

  • https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/vietnam/eu-vietnam-agreement_en
  • https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/viet-nam/eu-viet-nam-agreements/texts-agreements_en
  • https://trade.ec.europa.eu/access-to-markets/en/home
  • https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:22020A0612(01)