Description

This section introduces the main rules of origin and the origin procedures of the trade agreement.

Origin is the 'economic nationality' of traded goods. If you are new to the topic, find an introduction to the main concepts in the goods section.

Rules of origin

Your product needs to comply with certain rules that prove its origin in order to qualify for the preferential rate.

Where can I find the rules?

Rules of origin are set out in the Protocol concerning the definition of ‘originating products’ and method of administrative cooperation of the EU-Viet Nam Free trade agreement

Does my product originate in the EU or Viet Nam?

For your product to qualify for the lower or zero preferential tariff under the EU-Viet Nam Free trade agreement, it must originate in the EU or Viet Nam. A product is considered to originate in the EU or in Viet Nam if it is

  • wholly obtained in the EU or Viet Nam

  • produced exclusively from materials originating in the EU or Viet Nam

  • produced in the EU or Viet Nam using non-originating materials provided that such materials have undergone sufficient working or processing by fulfilling the product specific rules set out in Annex II

See Annex I ‘Introductory notes’ to product-specific rules of origin.

Examples of the main types of product specific rules in EU trade agreements

  • the value-added rule – the value of all of the non-originating materials in a product cannot exceed a certain percentage of its ex-works price

  • the change of tariff classification – the production process results in a change of tariff classification between the non-originating materials and the final product – for example production of paper (Harmonised System Chapter 48) from non-originating pulp (Harmonised System Chapter 47)

  • specific operations – a specific production process is required, for example spinning of fibres into yarn – such rules are mostly used in the textiles clothing and chemical sectors

 You can find the applicable product specific rules in the search form of the Trade Helpdesk.

Tips and tricks to help comply with the product specific rules

Additional flexibility is foreseen to help you comply with product specific rules, such as tolerance or cumulation.

Tolerance

In the EU-Viet Nam Free Trade Agreement, the tolerance rule allows the producer to use non-originating materials that are normally prohibited by the product specific rule as long as their net weight or value does not exceed

  • 10% of the weight of the product for agricultural and processed agricultural products falling within Chapters 2 and 4 to 24 of the Harmonized System, other than processed fishery products of Chapter 16

  • 10% of the ex-works price of the product for industrial products other than textiles and clothing

Specific tolerances apply to textiles and clothing classified in HS Chapters 50 to 63, which are included in Note 6 and Note 7of Annex A.

This tolerance cannot be used to exceed any maximum-value threshold of non-originating materials listed in the product-specific rules.

Cumulation

The EU-Viet Nam Free Trade Agreement provides for four ways of cumulating origin. Please note however that currently only the first one applies (bilateral cumulation).

  • bilateral cumulation: materials originating in Viet Nam can be counted as originating in the EU (and vice versa) when used in the manufacture of a product.

  • cumulation with an ASEAN country which has a preferential agreement with the EU, in which materials listed in Annex III can be counted as materials originating in Viet Nam when further processed or incorporated into one of the products listed in Annex IV. Currently this cumulation does not apply.

  • Fabrics originating in the Republic of Korea shall be considered as originating in Viet Nam when further processed or incorporated into one of the products listed in Annex V obtained in Viet Nam. Currently this cumulation does not apply.

  • On request of a Party, it may be decided that fabrics originating in a country with which both the EU and Viet Nam apply a preferential trade agreement shall be considered as originating in the EU or Viet Nam when further processed or incorporated into one of the products listed in Annex V to this Protocol obtained in that Party. Currently this cumulation does not apply.

Other requirements

Your product must also meet all other applicable requirements of the Protocol. See in particular the rules on insufficient working or processing, or also the non-alteration rule.

Non-alteration rule

Originating products must be transported from the EU to Viet Nam (and vice-versa) without being further processed in a third country.

Some operations can be conducted in a third country if the products remain under customs supervision, such as

  • adding or affixing marks, labels, seals or any documentation to ensure compliance with specific domestic requirements of the importing country

  • preserving products in good conditions

  • storage

  • splitting consignments

The customs authorities may request evidence of compliance with the rule, such as

  • contractual transport documents such as bills of lading

  • factual or concrete evidence based on marking or numbering of packages

  • any evidence related to the goods themselves

Vessels conditions

The following conditions apply to the vessel or factory ship in order to render the products caught or further processed on board originating (wholly obtained) in the EU or Viet Nam.

The vessel or factory ship must

  • be registered in a Member State of the European Union or in Viet Nam

  • fly the flag of a Member State of the European Union or of Viet Nam

  • satisfy one of the following requirements

    • it is at least 50 per cent owned by nationals of a Member State of the EU or Viet Nam

    • it is owned by companies

      • which have their head office and their main place of business in a Member State of the EU or Viet Nam and

      • are at least 50 per cent owned by a Member State of the EU or by Viet Nam or by public entities or nationals of a Party.

Duty drawback

Duty drawback is allowed. 

 

Origin procedures

How to claim preferential tariff?

Section B of the Protocol on Rules of Origin of the agreement sets out the origin procedures related to a claim for preferential tariff and the verification by customs authorities.

Importers can claim preferential tariff treatment based on an origin declaration provided by the exporter.

Origin declaration

No proof of origin is required when the total value of the products does not exceed

  • for import to the EU €500 in case of small packages or €1,200 for personal luggage
  • for import to Viet Nam $200 in case of small packages or $200 for personal luggage

Proofs of origin

Exporters from the EU can self-declare that their product originates in the EU by providing a statement on origin that can be completed by

  • an exporter registered in the Registered Exporter System (REX)

  • any exporter provided that the total value of the products does not exceed €6,000

For products originating in Viet Nam, exporters can use the following proofs of origin:

  • a certificate of origin

  • an origin declaration completed by

    • any exporter provided that the total value of the products does not exceed €6,000

    • after Viet Nam has notified such a system to the EU (not the case yet), an exporter approved or registered in accordance with the relevant legislation of Viet Nam

What should the proof of origin contain?

Statement on origin

What should it say?

  • the statement on origin should appear on an invoice or on any commercial document identifying the product

  • the text of the origin declaration can be completed in any of the official languages of the EU, and can be found in Annex VI. The importing country may not require that the importer submits a translation of a statement on origin.

You can find further explanations, e.g. on the statement on origin for multiple shipments of identical products in a guidance document for the rules of origin of the EU-Viet Nam Free Trade Agreement.

 

Submission and validity

the statement on origin remains valid for 12 months from the date it was made out

normally the statement on origin will be for one consignment, but it may also cover multiple consignments of identical products during a period not exceeding 12 months

 

Certificate of origin

  • a certificate of origin shall be issued by the competent authorities of Viet Nam, by using the specimen of Annex VII

Submission and validity

  • a certificate of origin shall be issued as soon as possible, but not later than 3 working days after the date of exportation (the declared shipment date)

  • a certificate of origin can be issued retrospectively in specific situations:

    • it was not issued at the time of exportation because of errors, involuntary omissions or other valid reasons;

    • a certificate of origin was issued but was not accepted at importation for technical reasons; or

    • the final destination of the products concerned was not known at the time of exportation.

  • It is possible to issue a duplicate of a certificate of origin in the case of e.g. theft, loss, destruction

  • It shall be valid for 12 months

Verification of origin

The customs authorities may verify whether a product imported is indeed originating or fulfils other origin requirements. The EU-Viet Nam Free Trade Agreement is based on the following principles

  • verification is based on administrative cooperation between customs authorities of the importing and the exporting Party

  • checks on the origin of the products are done by local customs. Visits of the importing Party to the exporter are not allowed.

  • Once the verification is concluded, the authorities of the exporting Party makes the final determination of origin and inform of the results the authorities of the importing Party.