Circular No. 03/2023/TT-BCT

CIRCULAR

AMENDING AND SUPPLEMENTING A NUMBER OF ARTICLES OF CIRCULAR No. 22/2016/TT-BCT DATED OCTOBER 3, 2016 OF THE MINISTER OF INDUSTRY AND TRADE IMPLEMENTING THE RULES OF ORIGIN UNDER THE ASEAN TRADE IN GOODS AGREEMENT

Pursuant to the Government's Decree No. 96/2022/ND-CP dated November 29, 2022, 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 ASEAN Trade in Goods Agreement signed on February 26, 2009 at the 14th Summit in Thailand among the member countries of the Association of Southeast Asian Nations;

In implementation of the First Protocol to Amend the ASEAN Trade in Goods Agreement signed on January 22, 2019 in Viet Nam;

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

The Minister of Industry and Trade promulgates the Circular amending and supplementing a number of articles of Circular No. 22/2016/TT-BCT dated October 3, 2016 of the Minister of Industry and Trade implementing the rules of origin under the ASEAN Trade in Goods Agreement.

Article 1. Amendments and supplements to a number of articles of Circular No. 22/2016/TT-BCT dated October 3, 2016 of the Minister of Industry and Trade implementing the rules of origin under the ASEAN Trade in Goods Agreement (hereinafter referred to as Circular No. 22/2016/TT-BCT), as amended and supplemented by Circular No. 10/2019/TT-BCT dated July 22, 2019 and Circular No. 25/2019/TT-BCT dated November 14, 2019 of the Minister of Industry and Trade amending and supplementing Circular No. 22/2016/TT-BCT dated October 3, 2016 of the Minister of Industry and Trade implementing the rules of origin under the ASEAN Trade in Goods Agreement (hereinafter referred to as Circular No. 10/2019/TT-BCT and Circular No. 25/2019/TT-BCT)

1. To replace Appendix II - Product Specific Rules provided in Clause 2, Article 2 of Circular No. 22/2016/TT-BCT (already replaced by Appendix I in Clause 1, Article 1 of Circular No. 10/2019/TT-BCT) with Appendix I issued together with this Circular.

2. To replace Appendix III - Substantial transformation criteria for textile and garment products provided in Clause 3, Article 2 of Circular No. 22/2016/TT-BCT (already replaced by Appendix II in Clause 2, Article 1 of Circular No. 10/2019/TT-BCT) with Appendix II issued together with this Circular.

3. To replace Appendix IV - List of information technology products (ITA) provided in Clause 4, Article 2 of Circular No. 22/2016/TT-BCT (already replaced by the Appendix in Clause 1, Article 1 of Circular No. 25/2019/TT-BCT) with Appendix III issued together with this Circular.

Article 2. Implementation provisions

1. This Circular takes effect from April 1, 2023.

2. This Circular annuls Circular No. 10/2019/TT-BCT dated July 22, 2019 and Circular No. 25/2019/TT-BCT dated November 14, 2019 of the Minister of Industry and Trade amending and supplementing Circular No. 22/2016/TT-BCT dated October 3, 2016 of the Minister of Industry and Trade implementing the rules of origin under the ASEAN Trade in Goods Agreement./.

APPENDIX I

PRODUCT SPECIFIC RULES (issued together with Circular No. 03/2023/TT-BCT dated February 14, 2023 of the Minister of Industry and Trade)

1. In this Appendix, the following terms are construed as follows:

a) RVC40 or RVC35 means the regional value content of the goods, calculated in accordance with Clause 1, Article 5 of Appendix I issued together with Circular No. 22/2016/TT-BCT dated October 3, 2016 of the Minister of Industry and Trade, of not less than 40% (forty per cent) or 35% (thirty-five per cent) respectively, with the last production process carried out in a member country;

b) “CC” means that non-originating materials change from any other chapter to a chapter, heading or subheading of the goods. This means that all non-originating materials used in the production of the goods must undergo a change in HS code at the 2-digit level (change of chapter);

c) “CTH” means that non-originating materials change from any other heading to a chapter, heading or subheading of the goods. This means that all non-originating materials used in the production of the product must undergo a change in HS code at the 4-digit level (change of heading);

d) “CTSH” means that non-originating materials change from any other subheading to a chapter, heading or subheading of the goods. This means that all non-originating materials used in the production of the product must undergo a change in HS code at the 6-digit level (change of subheading);

dd) “WO” means goods wholly obtained or produced entirely in the territory of a member country.

e) The textile rule means the rule listed in Appendix II issued together with this Circular.

2. This Appendix is based on the 2022 version of the Harmonized Commodity Description and Coding System.

APPENDIX II

SUBSTANTIAL TRANSFORMATION CRITERIA FOR TEXTILE AND GARMENT PRODUCTS (issued together with Circular No. 03/2023/TT-BCT dated February 14, 2023 of the Minister of Industry and Trade)

1. For goods under a subheading preceded by the parameter “ex” (for example: ex.9619.00), the substantial transformation criteria for textile and garment products apply only to the items described in the table, not to other goods under that subheading.

2. Textile materials and textile products are considered originating in a member country when they undergo one of the following processes before being imported into another member country:

a) Petrochemical substances undergo polymerisation or polycondensation or any chemical or physical process to form a high-molecular compound (polymer);

b) A high-molecular compound (polymer) undergoes melt spinning or extrusion to form man-made fibres;

c) Spinning fibres into yarn;

d) Weaving, knitting or other fabric-forming processes;

dd) Cutting fabric into parts and assembling those parts into a finished product;

e) Dyeing of fabric, if accompanied by any finishing operation that has a direct effect on creating the pattern of the dyed product;

g) Printing of fabric, if accompanied by any finishing operation that has a direct effect on creating the pattern making the printed product usable;

h) Treatment processes such as impregnation or coating resulting in a new product classified under certain headings of the tariff schedule;

i) Embroidery, where the embroidery stitches cover at least 5% of the total area of the embroidered product.

3. Notwithstanding the provisions of Appendix I issued together with this Circular, a product or material is not considered originating in a member country if it undergoes only one of the following processes:

a) Simple combining operations, labelling, pressing, cleaning or dry cleaning, packaging, or any combination of these operations;

b) Cutting to length or width and hemming, sewing or overlocking ready-made fabric for use in a particular commercial form;

c) Trimming and/or joining together by sewing, looping, linking or attaching accessories such as straps, bands, beads, cords, rings or eyelets;

d) One or more finishing operations on yarn, fabric or other textile products such as bleaching, waterproofing, decating, filling, mercerising or similar operations; or

dd) Dyeing or printing of fabric or yarn.

4. The products listed below made from non-originating textile materials are considered originating if they undergo the processes referred to in Clause 2 and not merely the processes referred to in Clause 3:

a) Handkerchiefs;

b) Shawls, scarves, veils and similar products;

c) Sleeping bags and blankets;

d) Bed linen, pillowcases, table linen, towels and napkins;

dd) Sacks and bags used for packing goods;

e) Tarpaulins, canvas covers and blinds;

g) Floor cloths, dishcloths and similar simply made products.

5. Notwithstanding the processes referred to in Clauses 2, 3 and 4, the non-originating textile materials listed below are considered originating in a member country if they satisfy the working or processing operations set out below:

a) Fibres and yarn

The following production and processing operations are carried out on non-originating materials to create an originating product:

Manufacture through fibre formation (polymerisation, polycondensation and extrusion), spinning, twisting, texturising or plying from blended yarn or from one of the following:

- Silk;

- Wool, fine or coarse animal hair;

- Cotton fibres;

- Vegetable textile fibres;

- Man-made or synthetic filament yarn;

- Man-made or synthetic staple fibres.

b) Fabrics, carpets and other textile floor coverings; special yarns, twine, cordage, ropes, cables and the like.

The following production and processing operations are carried out on non-originating materials to create an originating product:

(i) Manufacture from:

- Polymers (for non-woven products);

- Fibres (for non-woven products);

- Yarn (for fabrics);

- Grey or unbleached fabric (for finished fabrics).

(ii) Undergoing one of the following substantial transformations:

- Needle punching / bonding / chemical bonding;

- Weaving or knitting;

- Tufting or lining or napping; or

- Dyeing or printing and finishing; or impregnating, coating, covering or laminating.

c) Apparel and clothing accessories and other made-up textile articles

The following production and processing operations are carried out on non-originating materials to create an originating product:

Manufacture through cutting and assembling parts into a finished product (for clothing and tents) combined with embroidery, decoration or printing (for made-up articles) from:

- Grey or unbleached fabric;

- Finished fabric.

APPENDIX III

LIST OF INFORMATION TECHNOLOGY PRODUCTS (ITA) (issued together with Circular No. 03/2023/TT-BCT dated February 14, 2023 of the Minister of Industry and Trade)