Self-certification of product origin puzzles businesses

13:14 | 16/04/2015 Trade

From 2015, Vietnamese businesses must declare and certify the origin of their export products themselves instead of obtaining C/O (certificate of origin) from management agencies.

Self-certification of product origin puzzles businesses

Vietnamese businesses’ origin certification will be accepted when they export products to Indonesia, the Philippines and Laos as a part of a pilot program Vietnam has joined in preparation for wide application of origin of goods self-certification within the ASEAN bloc.

Tran Thi Thu Huong from the Vietnam Chamber of Commerce and Industry (VCCI) said that Vietnamese businesses would save time and money once they do not have to ask for C/O from management agencies as they do now.

Truong Dinh Hoe, secretary general of the Vietnam Association of Seafood Exporters and Producers (VASEP), also said seafood exporters would get big benefits from the new origin certification mechanism, because ASEAN is their third largest export market, after the US and the EU.

“Once they can cut the expenses on storage and administrative procedures, they would be able to cut production costs and make their products more competitive,” Hoe said.

Nguyen Duc Thanh, director of Tan An Farm Produce Export Company, said it now takes him one week on average to fulfill the procedure for C/O granting. 

Though he had some workers in charge of the issue, he sometimes could not deliver exports as scheduled because of the prolonged procedures, and was later fined.

Nguyen Van Kich, general director of Cafatex, who applauds the new system, still worries that self-certification would confuse businesses because they are not well informed about it.  

Meanwhile, state officials are even more worried. According to Huong, self-certification may lead to trade fraud relating to the origin of goods.

The mechanism may pave the way for non-Vietnamese products to enjoy preferential tariffs when being exported to ASEAN countries. 

Exporters could declare Vietnamese origin for non-Vietnamese goods so as to enjoy preferential tariffs and therefore, more easily penetrate ASEAN markets.

“If a Vietnamese business is discovered as committing trade fraud, it will see its export products rejected by importers. However, the company will not be the only one suffering, because this will affect the whole industry and all Vietnamese products,” Huong warned.

Management agencies have not released any document which clearly stipulates the responsibilities businesses have to take when implementing the new mechanism. 

Huong said that in other countries which apply self-certification, enterprises that violate regulations have to pay a fine two to three times higher than the value of the export consignments or face criminal charges. The punishment is still unclear in Vietnam. 

                                                                                                                                                                       Source VOV News