09:22 | 20/02/2016 Trade
(VEN) - Free trade agreements (FTAs) between Vietnam and other countries have brought domestic exporters benefits from import tax deductions and exemptions. For example, the US’ textile import tax, which is now rated at 17 percent, will be reduced after the Trans-Pacific Partnership (TPP) Agreement takes effect.
The self-certification of origin of goods helps streamline export procedures
However, exporters must abide by the rules of origin to get this preferential treatment. So, the CO is considered as a passport for Vietnamese exports to enter countries that have signed FTAs with Vietnam.
To further promote trade liberalization, new-generation FTAs including the TPP Agreement and EU-Vietnam Free Trade Agreement have passed new CO rules which stipulate that eligible businesses may be allowed to self-certify their origin of goods. Two goods origin self-certification projects are being piloted in the ASEAN Economic Community and Vietnam, Thailand, Laos, Indonesia and Philippines have participated in one of the two.
According to Deputy Director of the Ministry of Industry and Trade’s Import and Export Department Tran Thanh Hai, the ministry has issued Circular 28/2015/TT-BTC on the pilot implementation of self-certification within the ASEAN Trade in Goods Agreement, which is part of Vietnam’s commitments to ASEAN and provides exporters with an opportunity to gain related tax incentives.
Since October 2015, Vietnam has allowed a selected number of domestic exporters to pilot self-certification of origin of goods to be exported to Thailand, Laos, Indonesia and the Philippines. The selected firms must meet a number of requirements including being both producer and exporter, having clean COs for at least for two years in a row, exporting at least US$10 million worth in the previous year and having CO staff trained by the Ministry of Industry and Trade-nominated facilities.
This self-certification will help exporters shorten export terms while remaining proactive in issuing commercial invoices. Moreover, exporters will become more proactive in learning rules of origin, a technically complicated part of any free trade agreement, to take related advantage of tax incentives. The goods origin self-certification has gradually become a trend in free trade agreements signed between Vietnam and other countries in the recent period.
According to Tran Duc Tho from the Ha Phong Import-Export Co. Ltd, businesses must bear all responsibilities related to their exports when implementing self-certification. In case of need, raw material suppliers are required to provide related COs.
Instead of acquiring a certificate of origin (CO), domestic exporters are eligible for self-certification of origin of goods to be exported to a number of markets, which has helped streamline export procedures through shortened export time.