Circular No. 16/TC-TCT guiding the implementation of Decree No. 91/CP dated December 18, 1995 of the Government on the issuance of the list of goods for implementing the Agreement on the Trade Liberalization Scheme (CEPT) of ASEAN countries for the year 1996.

CIRCULAR

OF THE MINISTRY OF FINANCE

||| Guidelines for implementing Decree No. 91/CP dated December 18, 1995 of the Government on issuing the list of goods to implement the Common Effective Preferential Tariff (CEPT) Agreement of the ASEAN countries for 1996

||| To implement the Agreement on the Program of Common Effective Preferential Tariffs (CEPT) for the establishment of the ASEAN Free Trade Area (AFTA), signed in Singapore on January 28, 1992, and the Protocol Amending the Agreement on the Program of Common Effective Preferential Tariffs (CEPT) for the establishment of the ASEAN Free Trade Area (AFTA), signed in Bangkok on December 15, 1995;

||| Implementing Decree No. 91/CP dated December 18, 1995 of the Government on issuing the list of goods to implement the Common Effective Preferential Tariff (CEPT) Agreement of the ASEAN countries for 1996;

||| Goods imported under the tariff rate specified in Point 2 of the Decree are goods imported from ASEAN countries and must meet the following conditions:

||| 1. They are items listed in the List of Goods issued together with Decree No. 91/CP dated December 18, 1995 of the Government;

The Ministry of Finance hereby provides guidance as follows:

I. SCOPE OF APPLICATION

||| 2. They are items included in the tariff reduction list under the CEPT program of the exporting country which is a member of ASEAN with a lower or equal tariff rate of 20%;

||| 3. They comply with the origin criteria under CEPT and have a certificate of origin from ASEAN countries;

||| Organizations and individuals importing goods as stipulated in Part 1 of this Circular shall be responsible for submitting to the Customs Authority the Certificate of Origin Form D issued by the competent authority of the exporting country's government;

||| Currently, the competent authorities issuing Certificates of Origin in ASEAN countries are as follows:

||| In Indonesia, it is the Ministry of Trade;

||| In Malaysia, it is the Ministry of Trade and Industry;

In Brunei, it is the Ministry of Industry and Resources;

||| In Thailand, it is the Department of Trade Promotion, Ministry of Trade;

||| The Certificate of Origin Form D issued includes four copies, one original copy (Copy No. 1, light purple color) and three duplicate copies (No. 2, 3, 4, yellowish orange color);

In the Philippines, it is the Bureau of Customs;

In Singapore, it is the Board of Trade Development;

||| The original copy and duplicate Copy No. 3 shall be handed over by the exporter to the importer for presentation to the Customs Authority at the place of importation;

In Vietnam, it is the Ministry of Trade.

||| 4. Goods shipped directly from an ASEAN member country to Vietnam. Goods transported in the following cases will be considered as being shipped directly from an ASEAN member exporting country to Vietnam:

||| (i) Goods transported from an ASEAN member country directly to Vietnam without passing through any other country;

||| (ii) Goods transported must pass through the territory of any ASEAN member country;

||| (iii) Goods transported must transit through one or more non-ASEAN member countries, with or without transshipment or temporary storage there, if:

||| The transit is deemed necessary due to geographical reasons or transportation requirements;

||| The goods are not consumed in that country; and

||| The goods do not undergo any activity other than unloading and reloading or other activities aimed at protecting the goods;

||| The applicable tariff rate for imported goods meeting the conditions set out in Part I of this Circular is the rate specified in the List of Goods issued together with Decree No. 91/CP dated December 18, 1995 of the Government;

||| In case imported goods do not meet all the conditions set out in Part I of this Circular, the applicable tariff rates shall be those provided in the current Import Tariff Schedule;

II. TARIFF SCHEDULE

||| If there is any doubt about the authenticity and accuracy of the Certificate of Origin Form D, the Customs Authority may request a recheck and suspend the application of the preferential tariff rate specified in the List of Goods issued together with Decree No. 91/CP dated December 18, 1995 of the Government, and apply according to the tariff rate provided in the current Import Tariff Schedule. While waiting for the recheck results, the procedures for releasing the goods shall continue if these goods are not prohibited or restricted imports and there is no suspicion of false declaration. If the consignee can provide sufficient evidence proving that the goods originate from ASEAN, they will be eligible for a refund of the excess tax paid (the difference between the general import tariff rate and the preferential tariff rate);

||| The principles for recognizing goods as originating from ASEAN countries are that the goods must meet one of the following conditions:

III. VERIFICATION OF CERTIFICATE OF ORIGIN

||| (i) Goods produced entirely or extracted in the exporting country, which is a member of ASEAN, including:

||| a. Minerals extracted from the ground, surface, or seabed of that country;

||| b. Agricultural products harvested in that country;

||| d. Animal products mentioned in part (c);

||| e. Products obtained from hunting or fishing in that country;

c. Animals born and raised in that country;

||| f. Seafood products obtained from fishing at sea and marine products obtained by ships of that country from the sea;

||| g. Products processed or manufactured from products mentioned in part (f) on board ships of that country;

||| h. Used materials collected in that country;

||| j. Goods produced from products mentioned from item (a) to item (i);

||| (ii) Goods not produced or extracted in the exporting country, which is a member of ASEAN, but satisfy one of the following conditions:

i. Industrial waste from activities in that country; and

||| a. This good has at least 40% ASEAN origin content, meaning the total value of raw materials, parts, or inputs with unknown origin from non-ASEAN member countries does not exceed 60% of the FOB value of the product produced or processed on the territory of the exporting country, which is a member of ASEAN. The formula for 40% ASEAN content is as follows:

||| Value of raw materials, parts, Value of raw materials, parts,

Imported inputs from non-ASEAN + inputs not determined

member countries. x 100% < 60%

The value of raw materials, parts, imported inputs from non-ASEAN member countries is the CIF value at the time of import;

The value of raw materials, parts, inputs not determined to be of origin is the initial value before processing on the territory of the exporting country, which is a member of ASEAN.

member of ASEAN.

x 100% < 60%

FOB Price

The value of raw materials, parts, and products imported as inputs from countries that are not members of ASEAN is the CIF value at the time of import.

The value of raw materials, parts, and products that cannot be determined as to origin is the initial value before being processed on the territory of the exporting country which is a member of ASEAN.

b. Products that have satisfied the origin criteria and are used as inputs in another member country shall be considered products originating from the member country where the final product processing is completed if the total ASEAN content of the final product is not less than 40%.

IV. OTHER PROVISIONS

The provisions on tax basis determination; tax collection and payment regime, accounting for taxes, reporting on tax collection results; import tax exemption and reduction regime; tax refund regime; tax recovery and violation handling are implemented in accordance with the provisions of the Law on Export Tax and Import Tax and current guiding documents.

V. IMPLEMENTATION

This Circular takes effect from January 1, 1996.

In the course of implementation, if there are difficulties or obstacles, it is recommended to promptly report to the Ministry of Finance for research and supplementary guidance as appropriate.