Decree No. 19/2006/NĐ-CP detailing the Law on Trade regarding the origin of goods

DECREE

Regulations on the origin of goods under the Commercial Law

______________________

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Law on Trade dated June 14, 2005;

At the proposal of the Minister of Trade,

DECREE:

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree stipulates on the origin of exported goods and the origin of imported goods.

Article 2. Applicability

This Decree applies to:

1. Trader.

2. State management agency on the origin of goods; organization issuing Export Origin Certificates.

3. Agency inspecting the origin of exported and imported goods.

4. Organization appraising the origin of goods.

5. Other organizations and individuals involved in trade activities.

Article 3. Explanation of Terms

In this Decree, the following terms are understood as follows:

1. "Origin of goods" means the country or territory where all the goods are produced or where the final substantial processing operation is carried out for the goods when there are multiple countries or territories participating in the production process of such goods.

2. "Preferential origin rules" are the provisions on origin applicable to goods subject to preferential tariff and non-tariff treatment.

3. "Non-preferential origin rules" are the provisions on origin applicable to goods not covered by the provisions of Clause 2 of this Article and in cases applying non-preferential treatment measures such as most-favored-nation treatment, anti-dumping, countervailing duties, safeguard measures, quantity restrictions or tariff quotas, government procurement, and trade statistics.

4. "Certificate of Origin" is a document issued by an organization of the exporting country or territory based on relevant regulations and requirements regarding origin, clearly indicating the origin of the goods.

5. "Change of commodity code" refers to the alteration of the HS code (in the Import-Export Tariff) of goods produced in a country or territory during the production process from materials without origin from that country or territory.

6. "Percentage value added" is the portion of the increased value obtained after a country or territory produces, processes, or manufactures goods from materials without origin from that country or territory compared to the total value of the produced goods.

7. "Processing and manufacturing operations" refer to the main production process that creates the basic characteristics of the goods.

8. "Substantial change" means the transformation of a good through a production process to form a new commercial item that differs in shape, features, basic characteristics, or intended use from the original good.

9. "Production" includes methods to create goods such as cultivation, extraction, harvesting, breeding, distillation, collection, gathering, fishing, trapping, hunting, manufacturing, processing, working, or assembling.

10. "Material" includes raw material, component, part, accessory, and goods that can be combined to form another product after undergoing a production process.

11. "Product" is a merchandise item with commercial value that has undergone one or more production processes.

12. Goods include materials or products.

Chapter II

PREFERENTIAL ORIGIN RULES

Article 4. Preferential origin rules according to international treaties

The determination of the origin of exported goods and imported goods to enjoy preferential tariff and non-tariff treatment shall be applied in accordance with international treaties to which Vietnam is a party or has acceded and detailed regulations provided in related legal documents for implementing these treaties.

Article 5. Rules for Preferential Origin under the Generalized System of Preferences (GSP) and other unilateral preferences

The determination of the origin of exported goods to enjoy preferential treatment under the GSP and other unilateral preferences shall be carried out according to the rules of origin of the importing country for these preferences.

Chapter III

NON-PREFERENTIAL ORIGIN RULES

Article 6. Goods with Origin

Goods are considered to have origin when they fall into one of the following cases:

1. Pure Origin.

2. Non-pure Origin.

Article 7. Determination of Goods with Pure Origin

Goods with pure origin as stipulated in Clause 1 of Article 6 of this Decree are recognized as originating from a country or territory when they fall into one of the following cases:

1. Plants and plant products harvested in that country or territory.

2. Live animals born and raised in that country or territory.

3. Products from live animals referred to in Clause 2 of this Article.

4. Products obtained from hunting, trapping, fishing, farming, gathering, or hunting in that country or territory.

5. Minerals and natural substances not listed in Clauses 1 to 4 of this Article extracted or taken from land, water, seabed, or subsoil of that country or territory.

6. Products taken from waters, seabed, or subsoil outside the territorial sea of that country or territory, provided that the country or territory has rights to exploit those waters, seabed, and subsoil according to international law.

7. Products caught and other marine products caught from the high seas by ships registered with that country and permitted to fly its flag.

8. Products processed or produced on board ships from products referred to in Clause 7 of this Article registered in that country or territory and permitted to fly its flag.

9. Items obtained in that country or territory which no longer perform their original functions and cannot be repaired or restored and can only be discarded or used as raw materials or used for recycling purposes.

10. Goods obtained or produced from products referred to in Clauses 1 to 9 of this Article in that country or territory.

Article 8. Determination of Goods with Non-pure Origin

1. Goods with non-pure origin as stipulated in Clause 2 of Article 6 of this Decree are recognized as originating from a country or territory when that country or territory carries out the final substantial processing operation that changes the goods fundamentally.

2. The criterion "Change in Harmonized System Code" is the main criterion for determining the fundamental change of goods as prescribed in Clause 1 of this Article.

The criteria "Percentage Value" and "Manufacturing Process or Processing Operation" are supplementary or alternative criteria for determining the fundamental change of goods.

3. The Ministry of Commerce promulgates a list of goods using the criteria "Percentage Value" and "Manufacturing Process or Processing Operation" as prescribed in Clause 2 of this Article.

Article 9. Simple Manufacturing Processes and Operations Not Considered When Determining the Origin of Goods

The following manufacturing processes and operations, when performed separately or in combination, are considered simple and are not considered when determining the origin of goods:

1. Preservation work during transportation and storage (ventilation, spreading out, drying, cooling, salting, sulfur fumigation, or adding other additives, removing damaged parts, and similar work).

2. Work such as dusting, screening, selection, sorting (including assembly), cleaning, painting, cutting into pieces.

3. Changing packaging and disassembling or assembling consignments; bottling, packing, bagging, boxing, and other simple packaging work.

4. Sticking labels, marks, brands, or similar distinguishing signs onto products or their packaging.

5. Simple mixing of products, including different components, if one or more components of the mixture do not meet the conditions required to be considered as having origin at the place where the mixing takes place.

6. Simple assembly of product parts to form a complete product.

7. Combination of two or more operations listed from Clause 1 to Clause 6 of this Article.

8. Slaughtering and butchering of animals.

Article 10. Determining the origin of packaging, accessories, spare parts, tools, unassembled goods, or goods that have been disassembled

1. Packaging materials, packaging items, and packaging of goods shall be considered to have the same origin as the goods they contain and are usually used for retail sales.

2. Product brochures, user manuals, accessories, spare parts, and tools accompanying the goods in appropriate quantities shall also be considered to have the same origin as the goods.

3. Unassembled goods or goods in a disassembled state imported in multiple shipments due to transportation or production conditions which prevent importation in a single shipment, if requested by the importer, the origin of the goods in each shipment shall be considered to have the same origin as the goods.

Article 11. Indirect factors not considered when determining the origin of goods

The origin of tools, machinery, equipment, factories, energy used to produce goods, or raw materials used in the production process but not remaining in the goods or not forming part of the goods shall not be considered when determining the origin of the goods.

Chapter IV

ISSUING ORIGIN CERTIFICATES FOR GOODS; PROCEDURES FOR VERIFYING THE ORIGIN OF GOODS

Article 12. Issuing Origin Certificates for Exported Goods

1. Origin certificates are issued by organizations authorized to issue origin certificates according to the prescribed form.

2. The person requesting the issuance of an origin certificate for exported goods must submit to the organization issuing the origin certificate a complete and valid application file and bear legal responsibility for the accuracy and truthfulness of the content of the application file.

3. The organization issuing the origin certificate will examine the application file to determine the origin of the exported goods and issue the origin certificate within no more than three working days from the date of receipt of a complete and valid application file. In cases requiring on-site verification, the issuance period may be extended but shall not exceed five working days.

4. An origin certificate will not be issued if the exported goods do not meet the origin criteria stipulated in this Decree or if the application file is invalid.

5. In cases where the Customs authority, the competent authority of the importing country or territory, or the competent authority of Vietnam requests verification of the authenticity of the origin of the goods, the organization issuing the origin certificate has the responsibility to verify the origin of the goods and report back to the requesting authority.

Article 13. Regulations on the submission of origin certificates for imported goods to customs authorities.

In the following cases, the origin certificate for imported goods must be submitted to the customs authority at the time of customs procedures:

1. Goods originating from countries or groups of countries granted preferential treatment under Vietnamese laws and international treaties to which Vietnam is a party, if the importer wishes to benefit from such preferential treatments.

2. Goods originating from countries granted preferential treatment based on reciprocity or unilaterally by Vietnam under the most-favored-nation tariff rate.

In the absence of an origin certificate, the importer must provide a declaration confirming the origin of the goods from those countries and bear legal responsibility for the accuracy and truthfulness of the content of the declaration.

3. Goods subject to import management regimes prescribed by Vietnamese laws or bilateral or multilateral international agreements to which Vietnam and the countries or groups of countries are parties.

4. Goods subject to notification by Vietnam or international organizations as being in a period posing risks to social safety, public health, or environmental hygiene and requiring control.

5. Goods imported from countries subject to anti-dumping duties, countervailing duties, safeguard measures, quantitative restrictions, or quota tariffs imposed by Vietnam.

Article 14. Pre-confirmation of origin for imported goods

The importer, if desiring pre-confirmation of origin for imported goods, must submit relevant documents to request the Customs authority to confirm in writing the origin of the goods about to be imported.

Article 15. Procedures for determining and inspecting the origin of imported goods

1. After receiving the customs declaration registration dossier from the importer, the Customs authority will proceed to examine the determination of the origin of the imported goods.

2. For goods that have been imported and are consistent with those mentioned in the pre-confirmation of origin, the Customs authority will not re-determine the origin. In cases where imported goods are found to be inconsistent with those mentioned in the pre-confirmation of origin, the Customs authority shall re-determine the origin of the imported goods according to the provisions of this Decree.

3. In cases where there is doubt regarding the authenticity of the documents or the accuracy of information related to the origin of the goods, the Customs authority may send a request for inspection along with the Certificate of Origin to the organization issuing the Certificate of Origin. The inspection request must clearly state the reasons and suspicious information regarding the authenticity of the Certificate of Origin and the origin of the goods under examination.

4. While awaiting the inspection results, the goods will not enjoy preferential tariffs but will still be allowed to clear customs through normal customs procedures.

5. The inspection procedure stipulated in Clause 3 of this Article must be completed within the shortest possible time but not exceeding one hundred and fifty (150) days from the date when the importer submits a complete and valid dossier.

Article 16. Storage and confidentiality of information

1. Dossiers related to the issuance of Certificates of Origin and the determination of origin must be stored by the organization issuing the Certificate of Origin, the Customs authority, and the applicant for at least three (03) years from the date of issuance or confirmation.

2. Information and documents used for inspection and determination of origin must be kept confidential by relevant authorities, except for provision to authorized authorities.

Chapter V

STATE MANAGEMENT OF ORIGIN OF GOODS

Article 17. Tasks and powers of the Ministry of Trade

1. To draft, submit to competent authorities for promulgation or promulgate within its competence legal documents on the origin of goods.

2. To organize the implementation of the issuance of Certificates of Origin for exported goods; directly issue or authorize the Vietnam Chamber of Commerce and Industry and other organizations to carry out the issuance of Certificates of Origin for goods.

3. To manage research activities and international cooperation in the field of origin of goods.

4. To lead negotiations on Rules of Origin under international treaties.

Article 18. Tasks and powers of the Ministry of Finance

1. To draft, submit to competent authorities for promulgation or promulgate within its competence legal documents on the inspection of origin for exported and imported goods.

2. To organize the implementation of regulations on the inspection of origin for exported and imported goods.

3. To organize a network of information, reporting systems, build and manage databases to facilitate the work of inspecting the origin of exported and imported goods.

Article 19. Tasks and powers of relevant Ministries and agencies

Relevant Ministries, agencies equivalent to Ministries, and government agencies within their functions, tasks, and powers must cooperate with the Ministry of Trade and the Ministry of Finance to implement state management of the origin of goods as prescribed in this Decree and related laws.

Chapter VI

HANDLING VIOLATIONS AND COMPLAINTS

Article 20. Handling Violations

1. Any violation of the provisions on Certificates of Origin stipulated in this Decree, depending on the degree of violation, will be subject to administrative handling or criminal prosecution according to current laws.

2. Civil servants, employees, and individuals belonging to organizations authorized to issue Certificates of Origin, inspection authorities of goods' origin, and commodity appraisal authorities who violate the provisions of this Decree or abuse their positions and powers to issue Certificates of Origin for goods contrary to the provisions of this Decree, or cause difficulties and obstacles in issuing Certificates of Origin and inspecting goods' origin, or commit other violations while performing their duties, will be subject to disciplinary action, administrative fines, or criminal prosecution depending on the nature and degree of the violation. In cases where the violation causes damage to the interests of the State or organizations and individuals, compensation for damages must be provided according to the law.

3. Certificates of Origin that are misused or issued due to illegal actions will be revoked.

Article 21. Handling complaints regarding the origin of goods

In cases where an Export Origin Certificate is refused for exported goods or the origin of imported goods is not recognized, the person requesting the issuance of the Export Origin Certificate or the importer has the right to lodge a complaint in accordance with the laws on complaints and denunciations.

Chapter VII

IMPLEMENTING PROVISIONS

Article 22. Effectiveness

1. This Decree shall take effect fifteen days from the date of publication in the Official Gazette.

2. Except for legal documents related to preferential origin aimed at implementing international treaties, all provisions concerning the origin of exported goods and imported goods that contravene this Decree shall be abolished.

3. The Ministers, Heads of ministerial-level agencies, Heads of government agencies, Chairpersons of provincial People's Committees under central cities are responsible for guiding and implementing this Decree./.