General Department of Customs' guidance on the classification of smartwatches in Vietnam

General Department of Customs' guidance on the classification of smartwatches in Vietnam (Internet image)

On April 4, 2024, the General Department of Customs issued Official Dispatch 1447/TCHQ-TXNK regarding the classification of smartwatches.

General Department of Customs' guidance on the classification of smartwatches in Vietnam

Specifically, through the review of classification databases, the General Department of Customs has observed that certain smartwatches are currently accepted for customs clearance under various tariff codes (e.g., 8517.62.59, 9102.12.00, etc.), which poses potential risks in terms of classification (e.g., some smartwatches belong to group 91.02 but are accepted for customs clearance under different tariff codes within group 85.17). In this regard, the General Department of Customs has the following opinions:

(1) Regarding the classification of goods:

Smartwatches are devices worn on the wrist, with electronic displays that may or may not have touch screens. They have the ability to connect (pair) with other devices such as smartphones, tablets (referred to collectively as "host devices")...via Bluetooth.

Based on the Vietnam Export-Import Commodity List issued with Circular 31/2022/TT-BTC, Detailed Explanatory Notes HS 2022, and the World Customs Organization's classification opinions, smartwatches are classified as follows:

- Smartwatches under group 85.17:

These products are designed to be worn on the wrist and operate on batteries. They have the ability to receive and transmit data via Bluetooth, are equipped with a touch screen, and may include sensor components such as a gyroscope, accelerometer, heart rate sensor, etc. Once paired with a host device, these devices can perform various functions, including:

+ Displaying date and time; receiving notifications from the host device; may or may not have functions such as alarm clocks, timers, voice recording, music playback, and camera features of the host device.

+ Performing the following functions:

(i) Making and receiving calls through the host device; and/or

(ii) Receiving calls through the host device, while also being able to receive and send SMS messages.

- Smartwatches under group 91.02:

+ When not paired with other devices, these devices can be used for functions such as displaying date and time, and can function as a stopwatch. They can also perform measurement functions such as heart rate monitoring and step tracking.

+ These devices can be paired with other devices via Bluetooth or USB to provide additional functions such as sports activity tracking, receiving phone notifications without the ability to reply, and sleep quality monitoring.

(2) Regarding the notifications of pre-determined codes issued by the General Department of Customs:

According to the provisions in point a, clause 6 of Article 24 of Decree 08/2015/ND-CP (amended by Decree 59/2018/ND-CP):

"Article 24. Procedures for pre-determination of code, origin and customs value

...6. The validity of the written announcement about the result of the pre-determination of code, origin, and customs value:

a) The validity of the written announcement about the result of the pre-determination of code, origin, and customs value shall be restricted to less than 03 years from the date on which the Director of the General Department of Customs brings it into effect..."

In accordance with the above regulation, there are currently 19 announcements about the pre-determination of codes issued by the General Department of Customs for smartwatches that have expired.

More details can be found in Official Dispatch 1447/TCHQ-TXNK, dated April 4, 2024.

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