RULES OF ORIGIN IN THE UKVFTA
The Free Trade Agreement between Vietnam and the United Kingdom of Great Britain and Northern Ireland (“UKVFTA”) was officially signed by both countries at the end of December 2020. On 11 June 2021, the Ministry of Industry and Trade of Vietnam (“MOIT”) issued Circular 02/2021/TT-BCT regulating the rules of origin in the UKVFTA (“Circular 2”).
Circular 2 provides specific provisions on goods which are deemed to be purely originating in a Member State and non-originating goods. For materials that do not meet the origin criteria, they may still be used if the total value or net weight of such materials does not exceed 10% of the export price or weight of the product.
Circular 2 also provides some notable provisions related to the origin certification (“C/O”) mechanism in the UKVFTA. Specifically:
For Vietnam’s exports: (i) exporters are allowed to self-certify origin if export value is less than EUR6,000; and (ii) the C/O mechanism issued by an agency or organization authorized by the MOIT shall be applied for exports valued at over EUR6,000.
For goods imported into Vietnam: (i) exporters are allowed to self-certify origin if export value less than EUR6,000; and (ii) exporters that are eligible under the UK regulations can self-certify their origin if exports value more than EUR6,000.
In addition, C/O is valid for 12 months from the date of issuing in the exporting Member State and must be submitted to the customs authorities of the importing Member State within the period of validity. For small packages with a total value not exceeding EUR500 or goods that are traveler’s belongings who enter into the UK with a total value not exceeding EUR1,200, those goods will be exempt from C/O requirements.
In order to enjoy tariff preferences under the UKVFTA, C/O must be submitted to the Vietnamese customs authority within 2 years from the importation. The Vietnamese customs authority may require a translation if the C/O is not in English.
Circular 2 has a total of 5 chapters, 40 articles and 8 annexes attached. It officially took effect on 27 June 2021.