German Market

Rules of origin to be eligible for EVFTA tariff preferences?

Question: Rules of origin to be eligible for EVFTA tariff preferences?

Answer: 

In order to enjoy EVFTA tariff preferences when exporting to Germany or importing from Germany into Vietnam, products must meet the EVFTA's rules of origin (ROO) and procedures for certification of origin.

Commitments on origin in the EVFTA are stipulated in Protocol 1 - Concerning the Definition of the Concept of "Originating Products" and Methods of Administrative Cooperation. This Protocol includes two main contents:

  • Text: includes general principles of ROO and procedures for certification of origin, and

  • 08 Annexes: include detailed commitments or specific instructions on some related contents in the Text (Certificate of Origin form, additional explanations...). In which, Annex II - List of required working or processing –  is a List of specific ROO for each product group (also known as the PSR List - Product Specific Rules) applicable to both Vietnamese and EU goods.

Note: When reading Annex II, it is necessary to read Annex I – Introductory Notes to understand terms and provisions in Annex II. The ROO of the EVFTA are essentially the same as those of Vietnam's existing FTAs, but the language and some contents are new or different from the existing FTAs.

Vietnam already issued a regulation guiding the implementation of the ROO of goods in the EVFTA - Circular No. 11/2020/TT-BCT dated June 15, 2020 of the Ministry of Industry and Trade.

Note to businesses

In the EVFTA, ROO are used for the purpose of determining whether goods are eligible for preferential tariff treatment of the EVFTA or not. Therefore, businesses that want to enjoy tariff preferences of the EVFTA when exporting goods to Germany or importing goods from Germany to Vietnam need to know and understand EVFTA’ ROO and origin certification procedures.

Basically, the ROO in the EVFTA have many similarities with the ROO in the GSP of the EU. However, the EVFTA’s ROO still have some differences which are more flexible in application, so businesses need to carefully study each rule applied to their specific product in order to properly and fully meet it.

It is noted that to meet the ROO of the EVFTA, companies need to prepare from the beginning of the production process, for example, from selecting the source of raw materials, collecting certificates of origin of raw materials, storing supporting documents, etc.). Thus, it is necessary to pay attention to these issues to arrange the supply, the production process early, and do not wait until the time of import/export.

 

EVFTA full text for more information: https://wtocenter.vn/chuyen-de/12778-eu-vietnam-trade-and-investment-agreements 

Source: The Center for WTO and International Trade

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