Circular No. 15/2018/TT-BCT on the procedures for classifying channels in the process of issuing Preferential Origin Certificates

CIRCULAR

Regulations on the channeling process for issuing preferential certificates of originfor goods

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Pursuant to Decree No. 98/2017/NĐ-CP dated August 18, 2017, of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Industry and Trade;

Pursuant to Decree No. 31/2018/NĐ-CP dated March 8, 2018, of the Government detailing the Law on Foreign Trade Management regarding the origin of goods;

At the proposal of the Director of the Import-Export Department,

The Minister of Industry and Trade promulgates this Circular to regulate the channeling process for issuing preferential certificates of origin for goods. 

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular regulates the channeling process for issuing preferential certificates of origin (C/O).

Article 2. Applicability

This Circular applies to:

1. Business entities requesting issuance of preferential C/O;

2. Authorities or organizations issuing preferential C/O according to international treaties.

3. Relevant agencies, organizations, and individuals.

Article 3. Explanation of Terms

1. Green Channel is a priority regime in the process of issuing preferential C/O, under which business entities are granted priority in exemption, reduction, delayed submission of documents, reduced time for issuing C/O, and exemption from actual inspection of goods during the application process for C/O.

2. Red Channel is a control regime in the process of issuing preferential C/O, under which business entities must submit documents proving the origin of goods for all consignments and may be required to undergo actual inspection of goods during the application process for C/O.

3. Normal Channel is the current regime in the process of issuing preferential C/O as stipulated in Decree No. 31/2018/ND-CP dated March 8, 2018 of the Government detailing the Law on Foreign Trade Management regarding the origin of goods (hereinafter referred to as Decree No. 31/2018/ND-CP) and related guiding documents.

Chapter II

GREEN CHANNEL REGIME

Article 4. Criteria for Determining Business Entities Applying the Green Channel Regime

To apply the Green Channel regime in the process of issuing preferential C/O, business entities must meet the following criteria:

1. Being recognized by the Ministry of Industry and Trade as a reputable export enterprise; or

2. Being recognized by the Ministry of Finance as a priority enterprise in the field of state management of customs; or

3. Meeting the conditions below:

a) Compliance with laws: not violating regulations on origin in the two years immediately preceding the date of application for the Green Channel regime;

b) Record keeping: having a complete system for storing records (paper and electronic records) to ensure the authenticity of C/O and the origin of goods within the retention period as prescribed in Decree No. 31/2018/ND-CP;

c) Experience in using preferential C/O: implementing the electronic declaration process for C/O through the Electronic Origin Management and Certification System (www.ecosys.gov.vn) and having a frequency of at least 30 applications for preferential C/O per year.

Article 5. Priorities of the Green Channel Regime

1. Priority in application documents for preferential C/O

a) Business entities applying the Green Channel regime are exempted or reduced from some documents in the application documents for C/O as prescribed in Clause 1, Article 15 of Decree No. 31/2018/ND-CP:

- Business entities only need to submit paper copies of documents specified in Point a and Point b of Clause 1, Article 15 of Decree No. 31/2018/ND-CP;

- Business entities are permitted to submit electronic copies of documents specified from Point c to Point e of Clause 1, Article 15 of Decree No. 31/2018/ND-CP;

- Business entities are exempted from the remaining documents from Point g to Point i of Clause 1, Article 15 of Decree No. 31/2018/ND-CP.

2. Priority in delayed submission of documents

Business entities applying the Green Channel regime are granted an extension of up to 45 working days from the date of issuance of C/O for submitting delayed documents as allowed under Clause 3, Article 15 of Decree No. 31/2018/ND-CP.

3. Priority in processing time for preferential C/O

The processing time for application documents for preferential C/O for business entities applying the Green Channel regime submitting paper documents is a maximum of six working hours from the time of receiving complete and valid documents.

4. Priority in actual inspection of goods and production facilities

Business entities applying the Green Channel regime are exempted from actual inspection of goods and production facilities during the application process for preferential C/O.

Chapter III

RED CHANNEL REGIME

Article 6. Criteria for Determining Business Entities Subject to Red Channel Regime

1. Business entities that have violated the acts stipulated in Article 29 of Decree No. 31/2018/ND-CP within the two years immediately preceding the date of channel classification;

2. Business entities that fail to meet the requirements for verifying the origin of goods or have conclusions from the customs authority of the importing country indicating non-compliance with the origin of goods within the two years immediately preceding the date of channel classification;

3. Business entities applying the Green Channel or Normal Channel regimes who export goods subject to the Red Channel regime as prescribed in Article 7 of this Circular but do not have production facilities or production capacity that meets the requirements for producing exported goods.

Article 7. Criteria for Determining Goods Subject to Red Channel Regime

1. Goods subject to the Red Channel regime are determined based on the following criteria:

a) Goods with a high risk of fraudulent origin declaration to circumvent anti-dumping measures of the importing country or to benefit from preferential tariffs committed by the importing country to Vietnam; or

b) Goods with a significant and unusual increase in the number of Certificates of Origin (C/O) under investigation for origin verification at the request of the importing country.

2. The Department of Import-Export (Ministry of Industry and Trade) shall notify in writing the list of goods subject to the Red Channel regime for each specific period or stage.

Article 8. Requirements for the Red Channel Regime

1. Application for Preferential Certificate of Origin (C/O)

Business entities applying the Red Channel regime must submit complete application files (both paper and electronic versions) of the documents specified in Clause 1, Article 15 of Decree No. 31/2018/ND-CP.

2. Timeframe for Issuing Preferential Certificate of Origin (C/O)

The processing time for issuing preferential C/Os shall be within three working days as prescribed in Clause 3, Article 29 of Decree No. 31/2018/ND-CP, starting from the date when the complete and valid paper application file is received.

3. Inspection of Actual Goods and Production Facilities

The issuing agency or organization shall conduct inspections of actual goods and production facilities for goods for which a preferential C/O is requested for the first time or during the process of issuing preferential C/Os when there is suspicion of fraudulent origin declaration.

Chapter IV

IMPLEMENTATION

Article 9. Implementation of Channel Classification in the Preferential C/O Issuance Process

Based on the criteria prescribed in Articles 4, 6, and 7 of this Circular, the issuing agency or organization shall implement channel classification when business entities submit applications for preferential C/Os. The channel classification process in the preferential C/O issuance procedure shall be conducted automatically. The Department of Import-Export (Ministry of Industry and Trade) and the issuing agencies or organizations shall publicly announce cases applying the Green Channel, Normal Channel, or Red Channel on the Electronic System for Management and Issuance of Origin Certificates (www.ecosys.gov.vn).

Article 10. Principles for Channel Transfer

1. In cases where business entities applying the Red Channel regime do not violate the criteria stipulated in Articles 6 and 7 of this Circular, they may be allowed to transfer from the Red Channel to the Normal Channel.

2. In cases where business entities exporting goods subject to the Red Channel regime as prescribed in Article 7 of this Circular have already had their production facilities inspected and confirmed to have sufficient production capacity by the issuing agency or organization, they may be allowed to transfer from the Red Channel to the Normal Channel.

Chapter V

RESPONSIBILITIES OF RELATED AUTHORITIES AND IMPLEMENTATION PROVISIONS

Article 11. Responsibilities of the Import-Export Department (Ministry of Industry and Trade)

1. Drafting, submitting to competent authorities for issuance, or issuing within its authority, consolidated documents to implement lane allocation procedures in the preferential Certificate of Origin (C/O) issuance process;

2. Announcing the list of products subject to the Red Lane regime as stipulated in Article 7 of this Circular and coordinating with the E-commerce and Digital Economy Department to publish the list on the Electronic Origin Certification Management System at www.ecosys.gov.vn;

3. Taking the lead and coordinating with relevant agencies and units to manage and address emerging issues, and inspect lane allocation procedures in the preferential C/O issuance process.

Article 12. Responsibilities of the E-commerce and Digital Economy Department (Ministry of Industry and Trade)

1. Implementing electronic lane allocation for applications for preferential C/Os at www.ecosys.gov.vn;

2. Developing and adjusting technical infrastructure to support electronic lane allocation in the preferential C/O issuance process;

3. Coordinating with relevant agencies and units to promptly address emerging issues during implementation.

Article 13. Responsibilities of the agency or organization issuing preferential C/Os

1. Implementing lane allocation, guiding traders to prepare applications to participate in pilot enterprise lane allocation in the preferential C/O issuance procedure;

2. Preparing quarterly reports to the Import-Export Department (Ministry of Industry and Trade) on lane allocation implementation at the issuing organization;

3. Monitoring and reporting unusual situations during the issuance of preferential C/Os and assisting traders in enhancing their compliance capacity;

4. Cooperating with the Import-Export Department (Ministry of Industry and Trade) in actual goods inspection, production facility inspection, and handling emerging issues during implementation. In necessary cases, the agency or organization issuing preferential C/Os shall report to the Import-Export Department (Ministry of Industry and Trade) for comments on the actual inspection of the trader's production facilities as a basis for lane allocation.

Article 14. Responsibilities of traders

1. Adhering strictly to laws and equipping themselves with knowledge about product origin;

2. Bearing legal responsibility for the accuracy and truthfulness of declared information;

3. Cooperating in providing complete documentation required when the Ministry of Industry and Trade and the agency or organization issuing preferential C/Os conduct inspections at the trader’s headquarters and production facilities.

Article 15. Effective Date

This Circular takes effect from August 15, 2018.