Question: Types of Rules of Origin specified in the EVFTA?

Answer: 

two cases:

Case 1: Wholly Obtained Products

This case includes products that are naturally formed within the territory of Vietnam or EU member states (e.g. minerals, naturally formed animals, plants and products of these plant and animal species).

Goods considered as wholly obtained are specified in Article 4 in the Protocol 1 of the EVFTA. For example: minerals extracted in the territory of Vietnam/EU, fruits and vegetables grown and harvested or gathered in the territory of Vietnam/EU, live animals born and raised in Vietnam/EU…

Case 2: Materials have undergone sufficient working or processing

This case includes products that are formed from materials originating in whole or in part from the EU/Vietnam and worked or processed in Vietnam/EU, and fulfill conditions specified in Annex II in the Protocol 1 of the EVFTA.

There are 3 basic types of origin criteria in the EVFTA for this case, specifically:

• Change in Tariff Classification (CTC): This is the criterion that requires that the HS code of final product be different from the HS code of the non-originating materials at the 2-digit level (CC - Change in Chapter), 4-digit (CTH - Change in Tariff Heading), or 6-digit (CTSH - Change in Tariff Sub-Heading).

In the EVFTA, there is only 1 case having the rule of CC (HS 7306 – Tubes, pipes and hollow profiles, of iron or steel), the rest is CTH or CTSH.

• Value limit of non-originating materials (VL): This criterion limits the value (set maximum percentage) of non-originating material used in the working and processing. In other words, Regional Value content (RVC) of originating materials must meet a certain minimum percentage.

Similar to other FTAs, the EVFTA allows the cumulation of materials originating in the EU and Vietnam. However, unlike other FTAs, the EVFTA also allows the cumulation of materials originating in Korea and ASEAN for some products.

In addition, it should be noted that unlike many other FTAs, the VL calculation in the EVFTA uses the ex-work price for the product instead of the transaction price in the CPTPP or the FOB price in other FTAs.

• Specific Production Process: This criterion requires that non-originating materials undergo specific working or processing in the country of origin; or the product must be worked or processed from certain wholly obtained materials.

In the EVFTA, the ROO for each product can be one of the above criteria or a combination of some above criteria, it is specified for each product group in Annex II- List of required working or processing of for each specific product group in Protocol 1 of the EVFTA.

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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