German Market

EVFTA commitments on Customs and Trade Facilitation?

Question: EVFTA commitments on Customs and Trade Facilitation?

Answer: 

The EVFTA has a Chapter on Customs and Trade Facilitation (Chapter 4) and a Protocol (Protocol 2) on Administrative Cooperation between Vietnam and the EU in the field of customs. Commitments on Customs in the EVFTA apply to both Vietnam and the EU (including Germany), with the main contents on simplification and facilitation of import and export procedures, and a number of commitments on specific customs procedures, applicable to all imported and exported goods.

These commitments will help facilitate trade between Vietnam and Germany, and are especially beneficial for small and medium-sized enterprises that often face difficulties in understanding and meeting the customs regulations. Below is a summary of some notable commitments on customs and trade facilitation under the EVFTA:

(i) General commitments

Regarding import and export procedures and customs, according to the requirements of the EVFTA, Vietnam and Germany shall have to ensure the following general principles:

The customs legislation and procedures of the Parties shall:

  • Aim at the protection of legitimate trade and prevention of fraud, illegal or harmful practices;

  • Avoid unnecessary or discriminatory burdens on economic operators;

  • Provide for further facilitation for operators with high levels of compliance;

  • Ensure measures against customs violations: (i) corresponding to the violation; (ii) non-discriminatory and (iii) not unduly delay the release of goods;

  • Make sure to review procedures and regulations when possible to speed up the release and clearance of goods;

  • Simplify and standardize data and documentation.

General requirements for simplification of customs procedures:

  • Simplified customs procedures must be transparent and efficient in order to reduce costs and increase predictability;

  • A single administrative document (paper or electronic) shall be used for the purposes of completing the formalities required for placing the goods under a customs procedure;

  • Apply modern customs techniques (risk assessment and post-clearance audit methods);

  • Promote the development and use of systems for electronic exchange of data between businesses, customs administrations and other related agencies.

(ii) Commitments on some specific issues

Advance Rulings

Upon written request from traders on tariff classification or on any other matter before the goods are imported, the Customs Authorities of the importing country must issue written advance rulings according to the request of traders. Advance rulings must be published (subject to any confidentiality requirements in each Party's laws and regulations), for example on the official website.

Risk management

The Risk management approach is designed based on risk level (focusing on control of high-risk goods only, not all shipments) must be applied:

  • In the procedures for inspection and release of goods, post-clearance audit;

  • In regards to all requirements and procedures to control import, export, transit and transshipment.

The use of customs brokers is not required

Vietnam and Germany will not require in their respective customs legislation and procedures the mandatory use of customs brokers. Howevery, the two countries will apply transparent, non-discriminatory and proportionate rules when licensing customs brokers.

Appeal Procedures

Vietnam and Germany will provide effective, prompt, non-discriminatory and easily accessible procedures to guarantee the right of appeal against decisions of Customs and other agencies related to the import, export or transit of goods.

In recent years, Vietnam's customs has been reformed and has made significant progress to facilitate import and export activities for enterprises. However, compared to other countries, Vietnam's import and export procedures are still not really convenient for businesses. According to the assessment of Doing Business 2020, the Trading across Borders Index of Vietnam only scored 70.8/100 points and ranked 104/190. As for Germany, its Trading across Borders Index is 91.8/100 points, much higher than Vietnam but still lower than the average point of 94.3/100 of other OECD countries, and ranked 42/190.

Therefore, the commitments on customs and trade facilitation in the EVFTA Agreement are expected to create more favorable conditions for import-export activities of Vietnamese and German businesses.

 

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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