Circular No. 03/2019/TT-BCT

CIRCULAR

PROVIDING RULES OF ORIGIN UNDER THE COMPREHENSIVE AND PROGRESSIVE AGREEMENT FOR TRANS-PACIFIC PARTNERSHIP

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

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

In implementation of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership signed on March 8, 2018 in Chile;

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

The Minister of Industry and Trade promulgates the Circular providing rules of origin under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular provides the rules of origin under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (hereinafter referred to as the Agreement).

Article 2. Subjects of application

This Circular applies to:

1. Authorities and organizations issuing Certificates of Origin (C/O).

2. Traders.

3. Agencies, organizations and individuals involved in the origin of exported and imported goods under the Agreement.

Article 3. Interpretation of terms

For the purposes of this Circular, the following terms shall be construed as follows:

1. Aquaculture means the farming of aquatic organisms, including fish, molluscs, crustaceans, other aquatic invertebrates and aquatic plants, from seedstock such as eggs, fry, fingerlings or larvae, by intervention in the rearing or growth processes to enhance production, such as regular stocking, feeding or protection from predators.

2. Identical and interchangeable goods or materials means goods or materials that are interchangeable for commercial purposes and whose properties are essentially identical.

3. Generally accepted accounting principles means those principles that are recognised by consensus or applied in the territory of a Member country with respect to the recording of revenues, expenses, costs, assets and liabilities; the disclosure of information; and the preparation of financial statements. These principles may encompass broad guidelines as well as detailed standards, practices and procedures.

4. Good means any merchandise, product, article or material.

5. Indirect material means a material used in the production, testing or inspection of a good but not physically incorporated into that good; or a material used in the maintenance of buildings or the operation of equipment associated with the production of a good, including:

a) Fuel, energy, catalysts and solvents;

b) Equipment, devices and machinery used for the testing or inspection of goods;

c) Gloves, glasses, footwear, clothing, safety equipment and machinery;

d) Tools, dies and moulds;

dd) Spare parts and materials used in the maintenance of equipment and buildings;

e) Lubricants, greases, compounding materials and other materials used in production or used to operate equipment and buildings;

g) Any other material that is not incorporated into the good but the use of which in the production of the good can reasonably be demonstrated to be a part of that production.

6. Material means a good that is used in the production of another good.

7. Non-originating good or non-originating material means a good or material that does not satisfy the rules of origin under this Circular.

8. Originating good or originating material means a good or material that satisfies the rules of origin under this Circular.

9. Packing materials and containers for shipment means goods used to protect a good during its transportation, other than packaging materials and containers in which a good is packaged for retail sale.

10. Producer means an individual or an enterprise that engages in the production of a good or takes part in the process of producing a good.

11. Production means operations including growing, cultivating, raising, mining, harvesting, fishing, trapping, hunting, capturing, collecting, breeding, extracting, aquaculture, gathering, manufacturing, processing or assembling a good.

12. Transaction value means the price actually paid or payable for a good when sold for export or another value determined in accordance with the Customs Valuation Agreement of the World Trade Organization.

13. Value of the good means the transaction value of the good excluding any costs incurred in the international shipment of the good.

14. Member country means any State or separate customs territory implementing this Agreement.

15. Person of a Member country means an individual or a trader of a Member country.

16. Day means a calendar day;

17. Recovered material means a material:

a) derived from a used good disassembled into individual parts;

b) cleaned, inspected, tested or processed as to those individual parts so as to bring them into a better condition.

18. Remanufactured good means a good composed wholly or partly of recovered materials, classified under HS Chapters 84 through 90 or under heading 94.02, except for goods under HS headings 84.18, 85.09, 85.10 and heading 85.16, 87.03 or subheadings 8414.51, 8450.11, 8450.12, 8508.11, subheading 8517.11, and which must satisfy the following conditions:

a) It has a similar life expectancy and a similar appearance to a new good;

b) It has a similar warranty as that applicable to a new good.

Article 4. Provisions on certification and verification of origin of goods in Viet Nam

1. The following Appendices are issued together with this Circular:

a) Appendix I: Product Specific Rules;

b) Appendix II: Provisions related to the Product Specific Rules for vehicles and parts and accessories thereof;

c) Appendix III: Exceptions to the application of De Minimis;

d) Appendix IV: Viet Nam's CPTPP C/O form;

dd) Appendix V: Form of the additional page of Viet Nam's CPTPP C/O;

e) Appendix VI: Instructions for completing the CPTPP C/O and the additional page;

g) Appendix VII: Product Specific Rules for textile and apparel goods;

h) Appendix VIII: Short Supply List;

i) Appendix IX: List of Viet Nam's authorities and organizations issuing the CPTPP C.O.

2. Viet Nam applies the mechanism of certification of origin issued by the competent C/O issuing authority for goods exported from Viet Nam to other Member countries of the Agreement. The list of Viet Nam's authorities and organizations issuing the CPTPP C/O is provided in Appendix IX issued together with this Circular and is updated on the electronic origin certification and management system of the Ministry of Industry and Trade at www.ecosys.gov.vn. The authorities and organizations issuing the CPTPP C/O shall register their specimen seals and signatures and update those specimen seals and signatures in accordance with the regulations of the Ministry of Industry and Trade.

3. The procedures for certification and verification of origin of goods shall comply with the Government's Decree No. 31/2018/ND-CP dated March 8, 2018, detailing the Law on Foreign Trade Management regarding origin of goods, and the relevant provisions of this Circular.

Chapter II

GENERAL RULES OF ORIGIN

Article 5. Originating goods

1. A good shall be considered originating if that good:

a) Is wholly obtained or produced entirely in the territory of one or more Member countries as provided in Article 6 of this Circular;

b) Is produced entirely in the territory of one or more Member countries exclusively from originating materials;

c) Is produced entirely in the territory of one or more Member countries using non-originating materials, provided that the good satisfies all applicable requirements set out in Appendix I issued together with this Circular.

2. A textile or apparel good shall be considered originating if it satisfies the provisions of this Circular and complies with other relevant provisions of law.

Article 6. Wholly obtained goods

For the purposes of point a, clause 1, Article 5 of this Circular, a good shall be considered wholly obtained or produced entirely in the territory of one or more Member countries in the following cases:

1. Plants and plant products grown, cultivated, harvested, picked or gathered there.

2. Live animals born and raised there.

3. Goods obtained from live animals there.

4. Animals obtained from hunting, trapping, fishing, gathering or capturing there.

5. Goods obtained from aquaculture there.

6. Minerals or other naturally occurring substances not included in clauses 1 through 5 of this Article, extracted or taken from there.

7. Fish, shellfish and other marine life taken from the sea, seabed or subsoil outside the territories of the Member countries and, in accordance with international law, outside the territorial sea of non-Member countries, by vessels that are registered, listed or recorded with a Member country and entitled to fly the flag of that Member country.

8. Goods produced from the products referred to in clause 7 of this Article on board a factory ship that is registered, listed or recorded with a Member country and entitled to fly the flag of that Member country.

9. Goods, other than fish, shellfish and other marine life, taken or obtained by a Member country or a person of a Member country from the seabed or subsoil outside the territories of the Member countries, and beyond areas over which non-Member countries exercise jurisdiction, provided that the Member country or the person of the Member country has the right to exploit that seabed or subsoil in accordance with international law.

10. Waste and scrap derived from production or consumption there, provided that such waste and scrap is fit only for the recovery of raw materials.

11. Goods produced there exclusively from the goods referred to in clauses 1 through 10 of this Article, or from their derivatives.

Article 7. Provisions on recovered materials used in the production of remanufactured goods

1. A recovered material derived in the territory of one or more Member countries shall be treated as originating when it is used in the production of, and incorporated into, a remanufactured good.

2. A recovered material or a remanufactured good is originating only if such material or good satisfies the provisions of Article 5 of this Circular.

Article 8. Regional value content

1. The regional value content provided for in this Circular and the relevant Appendices for the purpose of determining whether a good is originating shall be calculated as follows:

a) Focused value formula: Based on the value of specified non-originating materials:

b) Build-down formula: Based on the value of non-originating materials:

c) Build-up formula: Based on the value of originating materials:

d) Net cost formula (applicable only to automotive goods):

Where:

RVC is the regional value content of the good, expressed as a percentage.

VNM is the value of non-originating materials, including materials of undetermined origin, used in the production of the good.

NC is the net cost of the good determined in accordance with Article 12 of this Circular.

FVNM is the value of non-originating materials, including materials of undetermined origin, specified in Appendix I issued together with this Circular and used in the production of the good. Non-originating materials not specified in Appendix I shall not be taken into account in determining FVNM.

VOM is the value of originating materials used in the production of the good in the territory of one or more Member countries.

2. All costs considered for the calculation of the regional value content shall be recorded and maintained in conformity with the generally accepted accounting principles applicable in the territory of the Member country where the good is produced.

Article 9. Materials used in production

1. Where a non-originating material is used in the subsequent production of a good and satisfies the provisions of this Circular, that material shall be considered originating for the purpose of determining the origin of the subsequently produced good, regardless of whether that material was produced by the producer of the good.

2. Where a non-originating material is used in the production of a good, the following values may be counted towards the originating content of the good when the regional value content criterion is applied:

a) The value of the processing of the non-originating material undertaken in the territory of one or more Member countries;

b) The value of any originating material used in the production of the non-originating material undertaken in the territory of one or more Member countries.

Article 10. Value of materials used in production

For the purposes of this Circular, the value of a material is:

1. For a material imported by the producer of the good, the transaction value of the material at the time of importation, including the costs incurred in the international shipment of the material and the related costs.

2. For a material acquired in the territory where the good is produced:

a) The price paid or payable by the producer in the Member country where the producer is located.

b) The value determined for an imported material in accordance with clause 1 of this Article.

c) The earliest ascertainable price paid or payable in the territory of the Member country.

3. For a self-produced material:

a) All the costs incurred in the production of the material, including general expenses; and

b) An amount equivalent to the profit added in the normal course of trade, or equal to the profit that is usually reflected in the sale of goods of the same class or kind as the self-produced material that is being valued.

Article 11. Further adjustments to the value of materials

1. For originating materials, the following expenses shall be added to the value of the material where they are not included under Article 10 of this Circular:

a) The costs of freight, insurance, packing and all other costs incurred in transporting the material to the location of the producer of the good.

b) Duties and customs brokerage fees on the material paid in the territory of one or more Member countries, other than duties and fees that are waived, refunded, refundable or otherwise recoverable, including any deferred payment or fee paid or payable.

c) The cost of waste and spoilage resulting from the use of the material in the production of the good, less the value of reusable scrap or by-products.

2. For non-originating materials or materials of undetermined origin, the following expenses may be deducted from the value of the material:

a) The costs of freight, insurance, packing and all other costs incurred in transporting the material to the location of the producer of the good.

b) Duties, fees and customs brokerage fees on the material paid in the territory of one or more Member countries, other than duties and fees that are waived, refunded, refundable or otherwise recoverable, including credits against duties or fees paid or payable.

c) The cost of waste and spoilage resulting from the use of the material in the production of the good, less the value of reusable scrap or by-products.

3. Where the costs listed in clause 1 or clause 2 of this Article are unknown or documentary evidence of the adjusted value is not available, no further adjustment shall be made to the value of the material.

Article 12. Net cost

1. Where the regional value content criterion set out in Appendix I issued together with this Circular is applied to determine the origin of automotive goods of subheadings 8407.31 through 8407.34, subheading 8408.20, subheadings 8409.91 through 8409.99, headings 8701 through 8709 or heading 8711, the origin of such goods shall be determined on the basis of the net cost formula provided in Article 8 of this Circular.

2. For the purposes of this Article:

a) Net cost means total cost minus sales promotion, marketing and after-sales service costs, royalties, shipping and packing costs, and non-allowable interest costs that are included in the total cost;

b) Net cost of a good means the net cost that can be reasonably allocated to the good using one of the following methods:

- Calculating the total cost incurred with respect to all automotive goods produced by that producer, subtracting any sales promotion, marketing and after-sales service costs, royalties, shipping and packing costs, and non-allowable interest costs that are included in the total cost of those goods, and then reasonably allocating the resulting net cost to the good.

- Calculating the total cost incurred with respect to the automotive goods produced by that producer, reasonably allocating the total cost to the good, and then subtracting the sales promotion, marketing and after-sales service costs, royalties, shipping and packing costs, and non-allowable interest costs that are included in the portion of the total cost allocated to the good; or

- Reasonably allocating each cost that forms part of the total cost with respect to the good, so that the aggregate of these costs does not include any sales promotion, marketing and after-sales service costs, royalties, shipping and packing costs, or non-allowable interest costs, provided that the allocation of such costs is consistent with the provisions on the reasonable allocation of costs of the generally accepted accounting principles.

3. For the purpose of applying the net cost formula to motor vehicles of headings 8701 through 8706 or heading 8711, the calculation may be averaged over the producer's fiscal year using any of the following categories, on the basis of either all motor vehicles in that category or only those motor vehicles in the category that are exported to the territory of another Member country:

a) The same model line of motor vehicles in the same class of vehicles produced in the same plant in the territory of a Member country;

b) The same class of motor vehicles produced in the same plant in the territory of a Member country;

c) The same model line of motor vehicles produced in the same plant in the territory of a Member country;

d) Any other category as the Member countries may decide.

4. For the purpose of applying the net cost method provided in clauses 1 and 2 of this Article, with respect to materials used in the production of motor vehicles of subheadings 8407.31 through 8407.34, subheading 8408.20, heading 8409, heading 8706, heading 8707 or heading 8708 that are produced in the same plant, the calculation may be averaged over:

a) The fiscal year of the motor vehicle producer to whom the good is sold by that person;

b) Any quarter or month;

c) The fiscal year of the producer of the automotive material;

Provided that the good was produced during the fiscal year, quarter or month forming the basis for the calculation, in which:

- The average referred to in point a of this clause is calculated separately for those goods sold to one or more motor vehicle producers; or

- The average referred to in point a or point b of this clause is calculated separately for those goods that are exported to the territory of another Member country.

5. For the purposes of this Article:

a) Model line of motor vehicles means any of the following groups of motor vehicles:

- Motor vehicles classified under subheading 8701.20, motor vehicles for the transport of 16 or more persons classified under subheading 8702.10 or subheading 8702.90, and motor vehicles classified under subheading 8704.10, 8704.22, 8704.23, 8704.32 or 8704.90, or heading 8705 or heading 8706;

- Motor vehicles classified under subheading 8701.10 or subheadings 8701.30 through 8701.90;

- Motor vehicles for the transport of 15 or fewer persons classified under subheading 8702.10 or subheading 8702.90, and motor vehicles classified under subheading 8704.21 or subheading 8704.31;

- Motor vehicles classified under subheadings 8703.21 through 8703.90; or

- Motor vehicles classified under heading 8711.

b) Class of motor vehicles means a group of motor vehicles having the same platform and model name;

c) Non-allowable interest cost means the interest cost incurred by a producer that exceeds 700 basis points above the yield on debt obligations of comparable maturities issued by the central government of the Member country in which the good is produced.

d) Reasonably allocate means to allocate in a manner consistent with the generally accepted accounting principles.

dd) Royalty means a payment of any kind, including a payment under a technical assistance agreement or a similar agreement, made as consideration for the use of, or the right to use, any copyright; literary, artistic or scientific work; patent; trademark; design; model; plan; secret formula or process, excluding payments under a technical assistance agreement or a similar agreement that can be related to specific services such as:

- Personnel training, regardless of where it is performed; or

- Engineering, tooling, die-setting, software design and similar computer services, or other services, if performed in the territory of one or more Member countries.

e) Sales promotion, marketing and after-sales service costs means the costs related to sales promotion, marketing and after-sales service listed below:

- Sales and marketing promotion; media advertising; advertising and market research; promotional and demonstration materials; exhibits; sales conferences, trade shows and conventions; banners; marketing displays; free samples; sales, marketing and after-sales service literature (product brochures, catalogues, technical literature, price lists, service manuals and sales aid information); establishment and protection of logos and trademarks; sponsorships; wholesale and retail restocking charges; and entertainment;

- Sales and marketing incentives; consumer incentives; rebates for wholesalers, retailers and consumers; and other merchandise incentives;

- Salaries and wages; sales commissions; bonuses; benefits such as medical, insurance or pension benefits; travelling and living expenses; and membership and professional fees for sales promotion, marketing and after-sales service personnel;

- Recruiting and training of sales promotion, marketing and after-sales service personnel; and after-sales training of customers' employees, where such costs are identified separately for sales promotion, marketing and after-sales service of the good on the financial statements or cost accounts of the producer;

Product liability insurance;

- Office supplies for sales promotion, marketing and after-sales service, where such costs are identified separately for sales promotion, marketing and after-sales service of the good on the financial statements or cost accounts of the producer;

- Telephone, mail and other communications, where such costs are identified separately for sales promotion, marketing and after-sales service of the good on the financial statements or cost accounts of the producer;

- Rent and depreciation of sales promotion, marketing and after-sales service offices and distribution centres;

- Property insurance premiums, taxes, cost of utilities, and repair and maintenance costs of sales promotion, marketing and after-sales service offices and distribution centres, where such costs are identified separately for sales promotion, marketing and after-sales service of the good on the financial statements or cost accounts of the producer;

- Payments by the producer to other persons for warranty repairs.

g) Shipping and packing costs means the costs incurred in packing a good for shipment and shipping the good from the point of direct shipment to the buyer, excluding the costs of preparing and packaging the good for retail sale.

h) Total cost means all product costs, period costs and other costs incurred in the territory of one or more Member countries, where:

- Product costs are the costs that are associated with the production of a good and include the value of materials, direct labour costs and direct overheads.

- Period costs are the costs, other than product costs, that are expensed in the period in which they are incurred, such as selling expenses, administrative expenses and general expenses.

- Other costs are all the costs recorded on the books of the producer that are not product costs or period costs, such as interest.

Total cost does not include profits earned by the producer, regardless of whether they are retained by the producer or paid to other persons as dividends, or taxes paid on those profits, including capital gains taxes.

Article 13. Accumulation

1. A good shall be considered originating where the good is produced in the territory of one or more Member countries by one or more producers, provided that the good satisfies the provisions of Article 5 and the other provisions of this Circular.

2. A good or material that is originating in one or more Member countries and that is used in the production of another good in the territory of another Member country shall be considered as originating in the territory of that Member country.

3. Production undertaken on a non-originating material in the territory of one or more Member countries by one or more producers shall be counted towards the originating content of the good for the purpose of determining its origin, regardless of whether that production was sufficient to confer originating status on the material itself.

Article 14. De Minimis

1. Except as provided in Appendix III issued together with this Circular, a good that contains non-originating materials that do not satisfy the applicable change in tariff classification rule set out in Appendix I issued together with this Circular shall nonetheless be considered originating if the value of all such materials does not exceed 10% of the value of the good, as defined in clause 13, Article 3 of this Circular, and the good satisfies the other provisions of this Circular.

2. Clause 1 of this Article applies only when the non-originating material is used in the production of another good.

3. Where a good referred to in clause 1 of this Article is subject to a regional value content criterion, the value of those non-originating materials shall be included in the value of non-originating materials for the purpose of calculating the regional value content.

4. For textile and apparel goods, Article 29 of this Circular shall apply.

Article 15. Identical and interchangeable goods or materials

Identical and interchangeable goods or materials shall be considered originating where:

1. There is physical segregation of each identical and interchangeable good or material.

2. An inventory management method recognised in the generally accepted accounting principles is applied where identical and interchangeable goods or materials are commingled, provided that the inventory management method selected must be used throughout that fiscal year.

Article 16. Accessories, spare parts, tools, and instructional or other information materials

1. For the purposes of this Article;

a) Where the origin of a good is determined on the basis of the wholly obtained criterion, or the satisfaction of a specific production process or a change in tariff classification set out in Appendix I issued together with this Circular, the origin of the accessories, spare parts, tools, and instructional or other information materials referred to in clause 3 of this Article shall not be taken into account in determining the origin of the good.

b) Where the origin of a good is determined on the basis of the regional value content criterion, the value of the accessories, spare parts, tools, and instructional or other information materials referred to in clause 3 of this Article shall be taken into account as the value of originating or non-originating materials, as the case may be.

2. The accessories, spare parts, tools, and instructional or other information materials of a good referred to in clause 3 of this Article shall be considered to have the same origin as the good with which they are delivered.

3. For the purposes of this Article, accessories, spare parts, tools, and instructional or other information materials are taken into account where:

a) The accessories, spare parts, tools, and instructional or other information materials are classified with, delivered with and not invoiced separately from that good;

b) The types, quantities and value of the accessories, spare parts, tools, and instructional or other information materials are customary for that good.

Article 17. Packaging materials and containers for retail sale

1. Where a good is subject to a change in tariff classification criterion set out in Appendix I issued together with this Circular, or where a good is wholly obtained, the packaging materials and containers in which the good is packaged for retail sale, if classified with the good, shall be considered originating.

2. Where a good is subject to a regional value content criterion, the value of the packaging materials and containers in which the good is packaged for retail sale, if classified with the good, shall be taken into account as the value of originating or non-originating materials, as the case may be.

Article 18. Packing materials and containers for shipment

Packing materials and containers for shipment shall not be taken into account in determining the origin of a good.

Article 19. Indirect materials

An indirect material shall be considered originating without regard to where it is produced.

Article 20. Sets of goods

1. For a set of goods classified as a result of the application of rule 3(a) or 3(b) of the General Rules for the Interpretation of the Harmonized Commodity Description and Coding System, the origin of the set shall be determined in accordance with the Product Specific Rule applicable to that set.

2. For a set of goods classified as a result of the application of rule 3(c) of the General Rules for the Interpretation of the Harmonized Commodity Description and Coding System, the set shall be considered originating only if each good in the set is originating. Both the set and the goods in the set must satisfy the other provisions of this Circular.

3. Notwithstanding clause 2 of this Article, for a set of goods classified as a result of the application of rule 3(c) of the General Rules for the Interpretation of the Harmonized Commodity Description and Coding System, the set shall be considered originating if the value of the non-originating goods in the set does not exceed 10% of the value of the set.

4. For the purposes of clause 3 of this Article, the value of the non-originating goods in the set and the value of the set shall be calculated in the same manner as the value of non-originating materials and the value of the good.

Article 21. Transit and transhipment

1. A good transported to the importing Member country shall retain its originating status if it is not transited or transhipped through the territory of a non-Member country.

2. Where a good is transported through the territory of one or more non-Member countries, that good shall retain its originating status if it meets the following conditions:

a) It does not undergo any operation of production or processing outside the territories of the Member countries, other than:

- Loading, unloading, splitting of the consignment, storing, labelling or marking as required by the importing Member country; or

- Any other operation necessary to preserve the good in good condition or to transport the good to the territory of the importing Member country.

b) It remains under customs control in the territory of the non-Member country.

Chapter III

PROCEDURES FOR CERTIFICATION AND VERIFICATION OF ORIGIN OF GOODS

Article 22. Issuance of the certification of origin

1. A certification of origin issued by the competent authority may be:

a) Issued for a single shipment of a good into the territory of a Member country;

b) Issued for multiple shipments of identical goods within any period stated in the certification of origin, not exceeding 12 months.

2. A certification of origin shall remain valid for one year after the date on which it was issued, or for such longer period as provided by the law of the importing Member country.

Article 23. Discrepancies in the certification of origin

1. The competent authority of the importing Member country shall not reject a certification of origin due to minor errors or discrepancies in that certification of origin.

2. Minor errors or discrepancies in the certification of origin shall be determined by the competent authority of the importing Member country.

Article 24. Waiver of the certification of origin

1. A trader shall be exempted from the requirement of a certification of origin in the following cases:

a) The customs value of the imported shipment does not exceed USD 1,000 (one thousand US dollars) or the equivalent amount in the currency of the importing Member country, or such higher amount for a waiver as may be established by the importing Member country;

b) The importing Member country has waived the requirement for, or does not require, the importer to present a certification of origin.

2. A trader shall not be exempted from the requirement of a certification of origin where the importation forms part of a series of importations carried out or planned for the purpose of evading the requirement of the importing Member country to submit a certification of origin in order to obtain tariff preferences.

Article 25. Obligations relating to exportation

1. A trader shall be liable before the law for providing false information in a certification of origin.

2. Where an exporter or producer becomes aware that the information or data in a certification of origin is inaccurate or does not satisfy the rules of origin, that exporter or producer shall have the obligation to promptly notify in writing the importer and the competent authority of the importing Member country.

Article 26. Record keeping

The authorities and organizations issuing the CPTPP C/O and traders shall maintain records and documents proving the origin of goods and the certification of origin for at least 5 years from the date of issuance, in any medium that allows for prompt retrieval, including electronic, optical, magnetic or written form, in accordance with the law of Viet Nam.

Article 27. Verification of origin

1. The competent authority of the importing Member country shall conduct the verification of the origin of imported goods by the following means:

a) A request to the competent authority of the exporting Member country for information on the origin of the goods;

b) A request to the importer for information on the origin of the goods;

c) A request to the exporter or producer of the goods for information on the origin of the goods;

d) A verification visit to the premises of the exporter or producer of the goods;

dd) Other means than those provided in points a, b and c, clause 1 of this Article, as decided by the competent authority of the importing Member country and the Member country where the producer or exporter is located.

2. When conducting a verification, the competent authority of the importing Member country shall receive information directly from the competent authority of the exporting Member country, the importer, the exporter or the producer.

3. A written request for information or for a verification visit to the premises under points a, b, c and d, clause 1 of this Article shall be made in English or in the official language of the Member country to which the request is addressed. The request shall include:

a) Full information on the government agencies and organizations concerned;

b) A statement of the reasons, including the specific issues that the requesting Member country seeks to clarify or resolve through the verification;

c) Sufficient information to identify the goods subject to the verification;

d) 1 copy of the relevant documents submitted for the shipment, including the certification of origin;

dd) In the case of a verification visit to the premises, the request shall state the proposed date, location and purpose of the verification, and the verification must be consented to by the exporter or producer.

4. Where the importing Member country requests a verification under point c or point d, clause 1 of this Article, the competent authority of the importing Member country shall notify the importer of the verification.

5. Where a verification is conducted under points a, b, c and d, clause 1 of this Article, the competent authority of the importing Member country shall:

a) Ensure that the written request for information or for documents to be reviewed during a verification visit is limited to the information and documents necessary for the purpose of verifying the origin of the goods;

b) Describe the information or documents in sufficient detail to allow the importer, exporter or producer to identify the information and documents necessary to respond;

c) Allow the importer, exporter or producer at least 30 days to provide the information from the date of receipt of the written request under point a, b, c or d, clause 1 of this Article;

d) Allow the exporter or producer to consent to or refuse the request for a verification visit within 30 days of receipt of the written request under point d, clause 1 of this Article; and

dd) Issue a determination following the verification as expeditiously as possible and no later than 90 days after receiving the necessary information, including any information received under clause 8 of this Article, and no later than 365 days after the first request for information or other request under clause 1 of this Article. In exceptional cases, such as where the relevant information or technical matters are highly complex, a Member country may extend the 365-day period in accordance with its law.

6. Where the importing Member country requests a verification under point c, clause 1 of this Article:

a) The importing Member country shall, in accordance with its regulations and law, notify the Member country where the exporter or producer is located, and its own requirements. The competent authority of the importing Member country shall decide the form and timing of the notification to the Member country where the exporter or producer is located regarding the conduct of the verification.

b) The Member country where the exporter or producer is located may, if it considers it necessary and in accordance with its law, assist with the verification at the request of the importing Member country. Such assistance may include providing a contact point for the verification, collecting information from the exporter or producer on behalf of the importing Member country, or other activities enabling the importing Member country to make a determination as to whether the good is originating. The importing Member country shall not deny a claim for tariff preferences solely on the ground that the Member country where the exporter or producer is located did not provide assistance with the verification.

7. Before issuing a written determination, the competent authority of the importing Member country shall notify the results of the verification to the competent authority of the exporting Member country, the importer, the exporter or the producer that directly provided the information. The importing Member country shall allow the competent authority of the exporting Member country, the importer, the exporter or the producer at least 30 days to submit additional information relating to the origin of the goods before denying tariff preferences.

8. The importing Member country shall:

a) Notify the competent authority of the exporting Member country of the determination on the origin of the goods, including the basis for that determination;

b) Notify the importer in writing of the determination on the origin of the goods, including the basis for that determination;

c) Notify the importer, exporter or producer that provided the information of the determination on the origin of the goods, including the basis for that determination.

9. Where, in the course of verifying the origin of identical goods, the competent authority of the importing Member country detects a pattern of conduct by an importer, exporter or producer of providing false information or of failing to cooperate in the verification of origin, that Member country may suspend tariff preferences for such identical goods. “Identical goods” means goods that are the same in all respects relevant to the rules of origin.

Article 28. Confidentiality

The competent authority of Viet Nam shall ensure the confidentiality of information relating to the origin of goods so as to avoid prejudicing the competitive position of the individuals and organizations providing such information, in accordance with this Circular and other relevant provisions of law.

Chapter IV

SPECIFIC PROVISIONS FOR TEXTILE AND APPAREL GOODS

Article 29. De Minimis for textile and apparel goods

1. A textile or apparel good not classified under Chapters 61, 62 or 63 of the Harmonized Commodity Description and Coding System that uses non-originating materials that do not satisfy the change in tariff classification rule set out in Appendix VII issued together with this Circular shall nonetheless be considered originating, provided that the total weight of those non-originating materials does not exceed 10% of the total weight of the good and the good satisfies the other provisions of this Chapter and of Chapter II of this Circular.

2. A textile or apparel good classified under Chapters 61, 62 or 63 of the Harmonized Commodity Description and Coding System that uses non-originating fibres or yarns in the production of the component of the good that determines its tariff classification and that does not satisfy the change in tariff classification rule set out in Appendix VII issued together with this Circular shall nonetheless be considered originating if the total weight of those fibres or yarns does not exceed 10% of the total weight of that component and the good satisfies all the other provisions of this Circular.

3. A good referred to in clause 1 or clause 2 of this Article that contains elastomeric yarns in the component of the good that determines its tariff classification shall be considered originating only if those elastomeric yarns are wholly formed in the territory of one or more Member countries.

Article 30. Sets of goods

1. Except as provided in the Product Specific Rules for textile and apparel goods set out in Appendix VII issued together with this Circular, a textile or apparel good classified as goods put up in sets for retail sale as a result of the application of Rule 3 of the General Rules for the Interpretation of the Harmonized Commodity Description and Coding System shall not be considered originating unless each of the goods in the set is originating or the total value of the non-originating goods in the set does not exceed 10% of the value of the set.

2. For the purposes of clause 1 of this Article:

a) The value of the non-originating goods in the set shall be determined in the same manner as the value of non-originating materials provided in this Circular;

b) The value of the set shall be determined in the same manner as the value of the good provided in this Circular.

Article 31. Short Supply List

1. For the purpose of determining whether a textile or apparel good is originating under point c, clause 1, Article 5 of this Circular, a material listed in Appendix VIII issued together with this Circular shall be considered originating, provided that the material satisfies any requirement, including any end-product requirement, specified in that Appendix.

2. Where a textile or apparel good that is originating on the basis of the incorporation of a material listed in Appendix VIII issued together with this Circular is granted tariff preferences, the importing Member country may require the certification of origin, the item number or the description of the material in that Appendix to be included in the import dossier.

3. A non-originating material listed in the “Temporary” table in Appendix VIII issued together with this Circular may be considered originating under clause 1 of this Article for a period of 5 years from the date of entry into force of the Agreement.

Chapter V

IMPLEMENTATION PROVISIONS

Article 32. Issuance of C/O for goods exported before the effective date of this Circular

The C/O issuing authorities and organizations shall consider issuing the CPTPP C/O for Vietnamese goods exported before the effective date of this Circular so that such goods may enjoy tariff preferences in accordance with the Agreement and with the regulations of the importing Member country.

Article 33. Effect

This Circular takes effect from March 8, 2019.

APPENDIX I

PRODUCT SPECIFIC RULES (issued together with Circular No. 03/2019/TT-BCT dated January 22, 2019 of the Ministry of Industry and Trade providing rules of origin under the CPTPP Agreement)

1. For the interpretation of the Product Specific Rules in this Appendix, the following terms shall be construed as follows:

“Section” means a section of the Harmonized Commodity Description and Coding System;

“Chapter” means a chapter of the Harmonized Commodity Description and Coding System;

“Heading” means the first four digits of the tariff classification number in the Harmonized Commodity Description and Coding System; and

“Subheading” means the first six digits of the tariff classification number in the Harmonized Commodity Description and Coding System.

2. For the purposes of this Appendix, an originating good is a good produced entirely in the territory of one or more Member countries by one or more producers using non-originating materials, provided that:

a) Each non-originating material used in the production of the good satisfies the change in tariff classification rule (CC, CTH or CTSH), the specific production process rule, the regional value content (RVC) rule, or any other rule set out in this Appendix; and

b) The good satisfies all the other provisions of this Circular.

3. For the interpretation of the Product Specific Rules in this Appendix:

a) The Product Specific Rule, or set of Product Specific Rules, that applies to a heading, subheading or a grouping of headings or subheadings is set out in the column adjacent to that heading, subheading or grouping of headings or subheadings;

b) Section, Chapter or Heading notes, where applicable, appear at the beginning of each Section or Chapter and are applied together with the Product Specific Rules and may add conditions to, or provide an alternative to, the Product Specific Rules;

c) The change in tariff classification rule (CC, CTH or CTSH) applies only to non-originating materials;

d) Where a Product Specific Rule excludes certain materials of the Harmonized Commodity Description and Coding System, the excluded materials must be originating in order for the good to be considered originating.

dd) Where a Product Specific Rule provides a choice of rules of origin, the good is originating if it satisfies any one of those rules of origin;

e) Where a Product Specific Rule provides for the combined application of several rules of origin, the good is originating only if it satisfies all of those combined rules of origin;

g) Where a single Product Specific Rule applies to a grouping of headings or subheadings and that rule of origin requires a change in tariff classification at the heading (CTH) or subheading (CTSH) level, that change in tariff classification applies to non-originating materials of a heading or subheading other than, or which may be other than, the heading or subheading of the good within the same grouping.

4. The Product Specific Rules for textile and apparel goods are set out in Appendix VII issued together with this Circular.

5. For goods of Chapters 84 and 87 marked with the symbol (#), traders may choose the RVC formula to be applied. Those formulas are provided in Appendix II issued together with this Circular.

6. The list of Product Specific Rules is as follows:

APPENDIX II

PROVISIONS RELATED TO THE PRODUCT SPECIFIC RULES FOR VEHICLES AND PARTS AND ACCESSORIES THEREOF (issued together with Circular No. 03/2019/TT-BCT dated January 22, 2019 of the Ministry of Industry and Trade providing rules of origin under the CPTPP Agreement)

1. For the purpose of satisfying the Regional Value Content (RVC) rule of the Product Specific Rules applicable to goods of subheadings 8701.10 through 8701.30, or of headings 8702 through 8705, a material listed in Table A that is used in the production of such goods is originating where:

a) It satisfies the rules of origin applicable to that material under this Appendix; or

b) The production of that material in the territory of one or more Member countries includes one or more of the production processes listed in Table B.

More specifically, one or more of the production processes in Table B must be undertaken in the production of the material listed in Table A. The performance of a production process on one or more parts or subsystems used in the production of a subsequent material in Table A is not sufficient for the material to be considered originating.

2. For the purpose of satisfying the Regional Value Content (RVC) rule of the Product Specific Rules applicable to the goods listed in Table C, a material used in the production of such goods is originating where:

a) It satisfies the rules of origin applicable to that material under this Appendix; or

b) Subject to clause 3 of this Appendix, the production of that material in the territory of one or more Member countries includes one or more of the production processes listed in Table B.

3. The value of a material that is originating under point b, clause 2 of this Appendix shall be counted as originating content, provided that the value counted as originating content does not exceed the threshold listed in Table C relative to the value of the good under the build-up formula or the build-down formula, or relative to the net cost of the good under the net cost formula.

Table A

Table B

Note 1: “Complex” means a production operation that requires specialised skills and the use of machinery, equipment or tools produced or installed specifically for that production operation, regardless of whether such machinery, equipment or tools were designed to carry out that production operation for a specific good.

Note 2: The production operations set out in Table B do not include the simple assembly of non-originating parts classified as a good pursuant to rule 2(a) of the General Rules for the Interpretation of the Harmonized Commodity Description and Coding System.

Table C

APPENDIX III

EXCEPTIONS TO THE APPLICATION OF DE MINIMIS (issued together with Circular No. 03/2019/TT-BCT dated January 22, 2019 of the Ministry of Industry and Trade providing rules of origin under the CPTPP Agreement)

Article 14 of Chapter II of this Circular does not apply to:

a) Non-originating materials of headings 0401 through 0406, or non-originating dairy preparations containing over 10% by dry weight of milk solids of subheading 1901.90 or subheading 2106.90, used in the production of a good of headings 0401 through 0406, except for goods of subheadings 0402.10 through 0402.29 or subheading 0406.30.1

b) Non-originating materials of headings 0401 through 0406, or non-originating dairy preparations containing over 10% by dry weight of milk solids of subheading 1901.90, used in the production of the following goods:

- Preparations for infant use containing over 10% by dry weight of milk solids of subheading 1901.10;

- Mixes and doughs, containing over 25% by dry weight of butterfat, not put up for retail sale, of subheading 1901.20;

- Dairy preparations containing over 10% by dry weight of milk solids of subheading 1901.90 or subheading 2106.90;

- Goods of heading 2105;

- Beverages containing milk of subheading 2202.90;

- Animal feeds containing over 10% by dry weight of milk solids of subheading 2309.90.

c) Non-originating materials of heading 0805 or of subheadings 2009.11 through 2009.39, used in the production of a good of subheadings 2009.11 through 2009.39, or of fruit or vegetable juice of any single fruit or vegetable, fortified with minerals or vitamins, whether or not concentrated, of subheading 2106.90 or subheading 2202.90.

d) Non-originating materials of Chapter 15 of the Harmonized System used in the production of a good of heading 1507, 1508, 1512 or 1514;

dd) Non-originating peaches, pears or apricots of Chapters 08 through 20 of the Harmonized Commodity Description and Coding System used in the production of a good of heading 2008.

_____________

1 Milk powder of subheadings 0402.10 through 0402.29, and processed cheese of subheading 0406.30, that is originating after the application of the 10% De Minimis provided in Article 14 of Appendix I issued together with this Circular, shall be considered an originating material when used in the production of a good of headings 0401 through 0406 under point a of this Appendix or of a good listed in point b of this Appendix.

APPENDIX IV

VIET NAM'S CPTPP C/O FORM (issued together with Circular No. 03/2019/TT-BCT dated January 22, 2019 of the Ministry of Industry and Trade providing rules of origin under the CPTPP Agreement)

APPENDIX V

FORM OF THE ADDITIONAL PAGE OF VIET NAM'S CPTPP C/O (issued together with Circular No. 03/2019/TT-BCT dated January 22, 2019 of the Ministry of Industry and Trade providing for the implementation of rules of origin under the CPTPP Agreement)

ADDITIONAL PAGE(S) OF CERTIFICATE OF ORIGIN FORM CPTPP

Reference No. ……………………………… Page ……. / …….

APPENDIX VI

INSTRUCTIONS FOR COMPLETING THE CPTPP C/O AND THE ADDITIONAL PAGE

(issued together with Circular No. 03/2019/TT-BCT dated January 22, 2019 of the Ministry of Industry and Trade providing rules of origin under the CPTPP Agreement)

Viet Nam's CPTPP C/O must be completed in English and typed. The declared contents must be consistent with the customs declaration for which customs procedures have been completed and with other documents such as the bill of lading, the commercial invoice and the record of verification of origin (where verification is required). The specific contents of the C/O shall be declared as follows:

1. The box at the top right-hand corner shall state the reference number (to be filled in by the C/O issuing authority or organization). The reference number consists of 13 characters divided into 5 groups, to be written as follows:

a) Group 1: the abbreviation of the exporting Member country, which is Viet Nam, consisting of 02 characters: “VN”;

b) Group 2: the abbreviation of the importing Member country under the CPTPP Agreement, consisting of 02 characters, as follows:

c) Group 3: the year of issuance of the C/O, consisting of 02 characters. For example, issuance in 2019 shall be written as “19”;

d) Group 4: the code of the C/O issuing authority or organization, consisting of 02 characters. The list of C/O issuing authorities and organizations is specified in Appendix IX issued together with this Circular. This list is updated on the electronic origin certification and management system of the Ministry of Industry and Trade at www.ecosys.gov.vn whenever there is a change;

dd) Group 5: the serial number of the C/O, consisting of 05 characters;

e) A hyphen “-” is placed between group 1 and group 2; a slash “/” is placed between group 3, group 4 and group 5.

Example: where the Ho Chi Minh City regional Import-Export Management Office issues the 6th C/O for a consignment exported to Canada in 2019, the reference number of that C/O shall be written as: “VN-CA 19/02/00006”.

2. Box 1: the business name of the exporter, its address and the name of the exporting Member country (Viet Nam).

3. Box 2: the name of the consignee, its address and the name of the importing Member country.

4. Box 3: the date of departure, the name of the means of transport (if the goods are sent by air, state “By air”; if sent by sea, state the name of the vessel) and the name of the port of discharge.

5. Box 4: the C/O issuing authority or organization shall tick (√) the appropriate box in the following cases:

a) “Non-Party Invoicing” where a commercial invoice of a country that is not a Party to the Agreement is used;

b) “Certified True Copy” where a certified true copy of the original C/O is issued. The date of issuance of this copy shall be typed or stamped in Box 12.

6. Box 5: the name of the producer, its address and the name of the country/territory where the last production process that created the goods took place.

Where the goods are supplied by several producers, state “Various” or attach a list of the producers.

Where the information of the producer is to be kept confidential, state “Available upon request by the importing authorities”. The exporter or the trader applying for the C/O must provide the information of the producer upon request by the competent authority of the importing Member country.

7. Box 6: the item numbers of the goods (where several items are declared on one C/O, each item shall have its own item number).

8. Box 7: the marks, number and kind of packages, and the description of the goods (including the 6-digit HS code of the importing Member country and the brand name of the goods (if any)).

a) Where a textile or apparel good uses originating materials, state “Yarn/fabric of HS (i) originating from (ii)”. In which:

(i) The 6-digit HS code of the originating yarn or fabric.

(ii) The name of the country of origin of the yarn or fabric.

b) Where a textile or apparel good uses materials on the Short Supply List provided in Appendix VIII of this Circular, state “Yarn/fabric from No. (#) of SSL”. In which:

(#) is the item number of the material on the Short Supply List.

9. Box 8: state the origin criterion of the goods:

10. Box 9: the gross weight of the goods (or another unit of measurement) and the value. Traders may choose whether or not to declare the value of the goods on the C/O.

11. Box 10: the number and date of the commercial invoice issued for the consignment imported into the importing Member country.

12. Box 11:

- The first line shall state the name of the country of origin of the goods, being the place where the last production process that created the goods took place.

- The second line shall state the name of the importing Member country.

- The third line shall state the place and date of the application for the C/O, and the full name and signature of the person signing the application for the C/O.

13. Box 12: reserved for the C/O issuing authority or organization to state: the place and date of issuance of the C/O, the signature and full name of the person authorised to sign the C/O, and the seal of the C/O issuing authority or organization.

14. Additional page of Viet Nam's CPTPP C/O:

Where a trader uses the additional page in the form provided in Appendix V issued together with this Circular to declare more items than can be accommodated on one C/O, the following information shall be declared:

- State the reference number on the additional page of the C/O in the same way as the reference number of the C/O.

- State the page numbers where 2 (two) or more additional pages of the C/O are used.

Example: page 1/3, page 2/3, page 3/3

- Complete Box 6 through Box 12 in the same manner as instructed in clauses 7 through 13 of this Appendix. The information in Box 11 and Box 12 must be shown in the same way as on the C/O.

APPENDIX VII

PRODUCT SPECIFIC RULES FOR TEXTILE AND APPAREL GOODS (issued together with Circular No. 03/2019/TT-BCT dated January 22, 2019 of the Ministry of Industry and Trade providing rules of origin under the CPTPP Agreement)

1. Interpretation of terms:

For the interpretation of the Product Specific Rules for textile and apparel goods in this Appendix, the following terms shall be construed as follows:

“Section” means a section of the Harmonized Commodity Description and Coding System;

“Chapter” means a chapter of the Harmonized Commodity Description and Coding System;

“Heading” means the first four digits of the tariff classification number in the Harmonized Commodity Description and Coding System;

“Subheading” means the first six digits of the tariff classification number in the Harmonized Commodity Description and Coding System.

2. For the purposes of this Appendix, an originating good is a good produced entirely in the territory of one or more Member countries, by one or more producers, using non-originating materials, provided that:

a) Each non-originating material used in the production of the good satisfies the Change in Tariff Classification rule (CC, CTH or CTSH), the Specific Production Process rule, the Regional Value Content (RVC) rule or any other rule set out in this Appendix;

b) The good satisfies all the other provisions of this Circular.

3. For the interpretation of the Product Specific Rules for textile and apparel goods in this Appendix:

a) The Product Specific Rule, or set of Product Specific Rules, that applies to a heading, subheading or a grouping of headings or subheadings is set out in the column adjacent to that heading, subheading or grouping of headings or subheadings;

b) Section, Chapter or Heading notes, where applicable, appear at the beginning of each Section or Chapter, and are applied together with the Product Specific Rules and may add conditions to, or provide an alternative to, the Product Specific Rules;

c) The change in tariff classification rule (CC, CTH or CTSH) applies only to non-originating materials;

d) Where a Product Specific Rule excludes certain materials of the Harmonized Commodity Description and Coding System, this shall be understood to mean that the excluded materials must be originating in order for the good to be originating.

dd) Where alternative rules of origin apply, the good shall be originating if it satisfies any one of those rules;

e) Where a combination of rules of origin applies, the good shall be originating only if it satisfies all of those combined rules;

g) Where a rule of origin applies to a grouping of headings or subheadings and that rule of origin requires a Change in Tariff Classification at the heading (CTH) or subheading (CTSH) level, that change in tariff classification applies to non-originating materials of a heading or subheading other than, or which may be other than, the heading or subheading of the good within the same grouping.

4. The Short Supply List set out in Appendix VIII issued together with this Circular shall be applied together with the Product Specific Rules for textile and apparel goods provided in this Appendix.

5. The list of Product Specific Rules for textile and apparel goods is as follows:

APPENDIX VIII

SHORT SUPPLY LIST (issued together with Circular No. 03/2019/TT-BCT dated January 22, 2019 of the Ministry of Industry and Trade providing rules of origin under the CPTPP Agreement)

1. Temporary list:

2. Permanent list:

APPENDIX IX

LIST OF VIET NAM'S AUTHORITIES AND ORGANIZATIONS ISSUING THE CPTPP C/O (issued together with Circular No. 03/2019/TT-BCT dated January 22, 2019 of the Ministry of Industry and Trade providing rules of origin under the CPTPP Agreement)