Vietnam: When will a good that does not satisfy a CTC requirement nonetheless be an originating good?

11:05, 04/08/2019

This is a very important content mentioned in Circular No. 12/2019/TT-BCT of the Ministry of Industry and Trade of Vietnam prescribing the rules of origin in the Framework Agreement on Comprehensive Economic Co-Operation between the Association of South East Asian Nations and the People’s Republic of China.

Currently, “Product Specific Rules” means rules that specify that the materials:

- have undergone a change in tariff classification (CTC); or

- have undergone a specific manufacturing or processing operation; or

- satisfy a Regional Value Content criterion; or

- satisfy a combination of any of the criteria: change in tariff classification (CTC); specific manufacturing or processing operation; and Regional Value Content criterion.

Xuất xứ hàng hóa là gì? Trường hợp nào hàng hóa được coi là có xuất xứ?

Specifically, De minimis is the ratio of materials that do not meet the criteria for CTC. A good that does not satisfy a CTC requirement pursuant to Article 7 of Circular No. 12/2019/TT-BCT of the Ministry of Industry and Trade of Vietnam will nonetheless be an originating good if:

- for a good, other than that provided for in Chapters 50 through 63 of the Harmonized System, the value of all non-originating materials used in the production of the good that did not undergo the required CTC does not exceed 10% of the FOB value of the good.

- for a good provided for in Chapters 50 to 63 of the Harmonised System:

+ the weight of all non-originating materials used in its production that did not undergo the required CTC does not exceed 10% of the total weight of the good; or

+ the value of all non-originating materials used in the production of the good that did not undergo the required CTC does not exceed 10% of the FOB value of the good.

The goods provided for above meet all other applicable requirements of Circular No. 12/2019/TT-BCT.

Note: “FOB” means the free-on-board value of the good, inclusive of the costs of transport to the port or site of final shipment abroad. The valuation shall be determined in accordance with the Customs Valuation Agreement.

View full text in Circular No. 12/2019/TT-BCT of the Ministry of Industry and Trade of Vietnam, which takes effect from September 12, 2019.

Thu Ba

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