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Vietnam: Certificates of origin to be issued by exporters next year

The Hanoitimes – Vietnamese exporters to the European Union (EU) will be obliged to issue self-certification of origin (C/O) from next year to be able to enjoy the Generalized System of Preferences (GSP).
According to the Ministry of Industry and Trade (MoIT)’s Import and Export Department, under the EU’s policy, exporting companies will take responsibility for issuing C/O instead of State agencies. This means the companies will carry out procedures, abide by criteria for origin, and be held accountable for their accuracy. Currently, MoIT is the only body that can authorize C/Os.
Besides, exporters will be asked to provide evidence of origin like receipts without the involvement of State agencies.
The GSP is a preferential tariff system which provides for a formal system of exemption from the more general rules of the World Trade Organization. The system, which has long been used in the EU for over 40 years, has numerous advantages such as simplifying administrative procedures, reducing time and cost for enterprises, minimizing risks for licensing agencies, and easing pressure on customs authorities.
The department’s deputy head Tran Thanh Hai said the EU will allow local enterprises to familiarize themselves with the system in six months. If they have yet to issue C/O on their own, they can have such documents from State agencies during the period.
Bui Kim Thuy, deputy head of the Goods Origin Division at the department, said those exporters whose turnover reaches at least US$10 million are allowed to issue their own certificates. They are also required to have long complied with tax, customs and import-export regulations.
Data of the trade ministry shows as many as 2,700 local exporters with EU-bound shipments are enjoying incentives from the GSP.
The MoIT has recommended export firms to actively study the mechanism for self-issuing C/O for goods under free trade agreements (FTAs) to boost exports for several years as many firms were not fully aware of the mechanism, which would result in rampant confusion during the implementation of the procedure.
Experts said that Vietnamese firms, especially those in the garment and textile industry, would face with a lot of difficulties in determining the rules of origins and origin verification procedures.
For example, the origins of garment and textile products were very complicated and different origins would result in different tax rates being imposed.
According to the General Department of Customs, firms might be accused of trade fraud as many could take advantage of the self-certification of origin procedure to enjoy preferential tax rates for goods which did not meet origin rules.
Fraud in C/O could hurt exports as import countries could suspend the imports of products if their origin was revealed to be fraudulent, the department said.
MoIT said self-certification of origin was a challenge, but if export firms were eligible for self-certification of origin, this would help firms enhance competitiveness, grasp opportunities from FTAs and boost exports.
The ministry would also decide on the list of enterprises allowed to self-issue certificates of origin.
Experts also urged firms to actively study the mechanism for self-certification of origin and prepare to become eligible for self-certification of origin in order to grasp opportunities stemming from upcoming FTAs.
Vietnam last year earned more than US$43 billion from shipments to the European market, up 13.7 percent against the previous year. 
Vietnamese exporters are also waiting for the EU- Vietnam Free Trade Agreement (EVFTA) to take effect this year to further boost the exports to the market. The agreement brings great benefits to the country, as it is estimated it would generate an additional 2.5 percent to Vietnam’s GDP by 2020, and 4.6 percent by 2025.
Source: http://www.hanoitimes.vn/economy/2018/05/81E0C627/certificates-of-origin-to-be-issued-by-exporters-next-year/