Decree no. 19/2006/ND-CP of February 20, 2006 detailing the provisions of the commercial law on goods origin

DECREE

DETAILING THE PROVISIONS OF THE COMMERCIAL LAW ON GOODS ORIGIN

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;
Pursuant to the June 14, 2005 Commercial Law;
At the proposal of the Trade Minister,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- Governing scope
This Decree provides for origin of imports and origin of exports.
Article 2.- Subjects of application
This Decree applies to:
1. Traders.
2. The state management agency in charge of goods origin; organizations issuing certificates of origin of exports.
3. The agency inspecting origin of imports and exports.
4. Organizations assessing origin of goods.
5. Other organizations and individuals engaged in commerce-related activities.
Article 3.- Interpretation of terms
In this Decree, the terms and expressions below are construed as follows:
1. “Origin of goods” means a country or a territory where such goods has been wholly obtained or where the last substantial processing operation has been carried out when more than one country and/or territory are concerned in the production of such goods.
2. “Preferential rules of origin” mean regulations on origin applicable to goods subject to agreements on tariff preferences and non-tariff preferences.
3. “Non-preferential rules of origin” mean regulations on origin applicable to goods other than those specified in Clause 2 of this Article and in case of application of such non-preferential commercial instruments as most-favored-nation  treatment,  anti-dumping  and countervailing duties, safeguard measures, quantitative restrictions or tariff quotas, government procurement and trade statistics.
4. “Certificate of origin” means a documentary proof issued by an organization of a country or a territory of exportation of a goods on the basis of relevant regulations and requirements on origin, clearly identifying the origin of such goods.
5. “Change in tariff classification of goods” means a change in HS heading (in export and import tariffs) of a goods made in a country or a territory in the production thereof from materials not originating from such country or territory.
6. “Ad valorem percentage” means the proportion of an added value obtained after a country or a territory produces, manufactures or processes materials not originating from such country or territory to total value of produced goods.
7. “Manufacturing or processing operation” means a main production process in which basic characteristics of a goods are created.
8. “Substantial  transformation”  means  the transformation of a goods through a production process into a new commercial article which is distinctive in appearance, properties, basic charac-teristics or utility as compared with the original goods.
9. “Production” means methods of making goods, including cultivation, exploitation, harvest, rearing, extraction, collection, gathering, fishing, trapping, hunting, manufacturing, processing or assembly.
10. “Materials” include raw materials, ingredients, spare parts, accessories, knocked down parts and goods which, in their combinations, constitute other goods after undergoing a production process.
11. “Product” means an article of commercial value which has undergone one or more production process.
12. “Goods” mean materials or products.
Chapter II

PREFERENTIAL RULES OF ORIGIN

Article 4.- Preferential rules of origin under international treaties
The identification of origin of imports or exports for enjoyment of tariff or non-tariff preferences shall comply with treaties to which Vietnam has signed or acceded and relevant legal documents detailing the implementation of these treaties.
Article 5.- Preferential rules of origin under general tariff preferences and other unilateral preferences
The identification of origin of exports for enjoyment of general tariff preferences and other unilateral preferences shall comply with the rules of origin of countries of importation regarding these preferences.
Chapter III

NON-PREFERENTIAL RULES OF ORIGIN

Article 6.- Goods having an origin
Goods shall be regarded as originating from a country or a territory when they are:
1. Wholly obtained in this country or territory.
2. Not wholly obtained in this country or territory.
Article 7.- Identification of wholly obtained goods
Wholly obtained goods mentioned in Clause 1, Article 6 of this Decree shall be recognized as originating from a country or a territory when they fall into one of the following cases:
1. Plants and plant products harvested in such country or territory.
2. Live animals born and raised in such country or territory.
3. Products derived from live animals specified in Clause 2 of this Article.
4. Products obtained as a result of hunting, trapping, fishing, rearing, collection or catching in such country or territory.
5. Minerals and natural substances not listed in Clauses 1 thru 4 of this Article and extracted or obtained from earth, water, seabed or sea subsoil of such country or territory.
6. Products obtained from water, seabed or sea subsoil outside territorial waters of such country or territory, provided such country or territory has the right to exploit such water, seabed or sea subsoil according to international law.
7. Sea-fishing and other marine products obtained from the high seas by vessels registered with such country or territory and permitted to hoist its flag.
8. Products processed or produced from products specified in Clause 7 of this Article onboard vessels registered with such country or territory and permitted to hoist its flag.
9. Products obtained in such country or territory which are no longer capable of performing their original functions and so irreparable and unrestorable that they can only be scrapped or used as materials or raw materials or recycled.
10. Goods obtained or produced in such country or territory from products specified in Clauses 1 thru 9 of this Article.
Article 8.- Identification of not wholly obtained goods
1. Not wholly obtained goods mentioned in Clause 2, Article 6 of this Decree shall be recognized as originating from a country or a territory where the last substantial processing operation conducive to the substantial transformation of such goods has been carried out in such country or territory.
2. “Change in tariff classification of goods” criterion shall serve as the principal criterion to determine the substantial transformation of goods mentioned in Clause 1 of this Article.
“Ad  valorem  percentage”  criterion  and “manufacturing or processing operation” criterion shall be taken as supplementary or substitute criteria upon determination of substantial transformation of goods.
3. The Trade Ministry shall promulgate the list of goods subject to “ad valorem percentage” criterion and “manufacturing or processing operation” criterion specified in Clause 2 of this Article.
Article 9.- Simple manufacturing or processing operations which are not taken into account upon identification of origin of goods
The following manufacturing or processing operations, either independently performed or combined together, shall be considered simple and not be taken into account upon identification of origin of goods:
1. Steps of goods preservation in the course of transportation and storage (ventilation, spreading, heat-drying, chilling, brining, sulfuration or addition of other additives, removal of damaged parts and similar steps).
2. Steps of dust-cleaning, screening, selection, classification (including grouping into sets), cleansing, painting or cutting into pieces.
3. Change of packaging and disintegration or assembly of goods lots; bottling, packaging, putting up into packs or boxes, and other simple packaging jobs.
4. Affixture on products or product packages of labels, marks or similar distinctive signs.
5. Simple mixture of products, including assorted ingredients thereof, provided one or more than one component of such a mixture fail to satisfy the set conditions for being regarded as originating from the place where such mixture has been made.
6. Simple assembly of parts of a product into a complete product.
7. Combination of two or more jobs listed inclauses 1 thru 6 of this Article.
8. Slaughtering of animals.
Article 10.- Identification of origin of unassembled or knocked down packages, accessories, spare parts, tools or goods
1. Articles used for packaging, packaging materials and packages of goods shall be considered having the same origin with goods contained therein and usually put up for retail.
2.  Documents  introducing or providing use instructions for goods; accessories, spare parts and tools accompanying goods and of anappropriate type and quantity shall be considered having the same origin with such goods.
3. For unassembled or knocked down goods which must be imported in separate shipments instead of a single shipment due to transportation or production conditions, goods in such shipments shall, at the request of the importer, be considered having the same origin.
Article 11.- Indirect elements which are not taken into account upon identification of origin of goods
Origin of tools, machinery, equipment, workshops and energy used for the production of goods or materials used in the production process but neither remaining in nor constituting part of such goods shall not be taken into account upon identification of origin of goods.
Chapter IV

ISSUANCE OF CERTIFICATES OF ORIGIN; PROCEDURES FOR INSPECTION OF ORIGIN OF GOODS

Article 12.- Issuance of certificates of origin of exports
1.  Certificates of origin  shall  be  issued  by organizations in charge of issuance of certificates of origin according to set forms.
2. Applicants for certificates of origin of exports must submit to organizations in charge of issuance of certificates of origin dossiers of application for certificates of origin and shall be held resoonsible before law for accuracy and truthfulness of contents of such dossiers.
3. Organizations in charge of issuance of certificates of origin shall inspect dossiers for identifying origin of exports and issuing certificates of origin within 3 working days after the receipt of valid and complete dossiers. Where it is necessary to conduct field inspection, the time limit for issuance may be prolonged but must not exceed 5 working days.
4. Certificates of origin shall not be issued if exports fail to satisfy the origin criteria specified in this Decree or dossiers of application are invalid.
5. Where customs offices, competent agencies of countries or territories importing Vietnamese goods or competent agencies of Vietnam request the inspection of truthfulness of origin of goods, organizations in charge of issuance of certificates of origin shall have to verify origin of these goods and notify verification results to requesting agencies.
Article 13.- Cases where certificates of origin of imports must be submitted to customs offices
In the following cases, certificates of origin of imports must be submitted to customs offices at the time of carrying out customs procedures
1. Goods which originate from a country or group of countries granted by Vietnam tariff and non-tariff preferences according to the provisions of Vietnam law and treaties to which Vietnam has signed or acceded, if importers wish to enjoy such preferences.
2. Goods which originate from countries granted by Vietnam preferential tax rates under Vietnam’s most-favored-nation treatment on the reciprocal or unilateral basis.
In the absence of certificates of origin, importers must undertake that their goods originate from the said countries and take responsibility before law for accuracy and truthfulness of undertaking contents.
3. Goods which are subject to import management regulations provided for by Vietnamese law or bilateral or multilateral agreements to which Vietnam and the said country or group of countries are contracting parties.
4. Goods which are announced by Vietnam or international organizations to be in a moment of potentially causing harms to social safety, the community’s health or environmental sanitation, and must be controlled.
5. Goods which are imported from foreign countries announced by Vietnam to be currently subject to application of anti-dumping or countervailing duties, safeguard measures, tariff quotas or quantitative restrictions.
Article 14.- Prior certification of origin of imports
Importers who wish to get prior certification of origin of imports must submit relevant documents and materials to customs offices requesting the latter to certify in writing the origin of goods lots which are going to be imported.
Article 15.- Procedures for identification and inspection of origin of imports
1. After receiving dossiers for registration of customs declarations of importers, customs offices shall consider the identification of origin of imports.
2. For imported goods which are consistent with those stated in prior certifications of origin, customs offices shall not re-identify the origin thereof. When detecting imported goods which are inconsistent with those stated in prior certifications of origin, customs offices shall base themselves on the provisions of this Decree to re-identify origin of such imports.
3. When having a doubt about truthfulness of documents or accuracy of information relating to the origin of goods, customs offices may send requests for inspection together with relevant certificates of origin to organizations which have issued such certificates of origin. Requests for inspection must clearly state reasons and information casting doubt about truthfulness of certificates of origin and origin of goods in question.
4. Pending the availability of inspection results, goods shall not enjoy tariff preferences but shall still be eligible for customs clearance according to common customs procedures.
5. The inspection specified in Clause 3 of this Article must be completed as soon as possible but must not last more than 150 days after importers submit complete and valid dossiers.
Article 16. -Archive and confidentiality of information
1. Dossiers related to the issuance of certificates of origin and the identification of origin shall be archived by organizations having issued such certificates of origin, customs offices and applicants for certificates of origin for at least three (03) years from the date of issuance or certification.
2. Information and documents used for the verification and identification of origin must be kept confidential by concerned agencies, except where they are supplied to competent agencies.
Chapter V

STATE MANAGEMENT OF ORIGIN OF GOODS

Article 17.- Tasks and powers of the Trade Ministry
1. To elaborate and submit to competent authorities for promulgation, or promulgate according to its competence legal documents on origin of goods.
2. To organize the issuance of certificates of origin of exports; to directly issue or authorize the Vietnam Chamber of Commerce and Industry and other organizations to issue certificates of origin of goods.
3. To manage researching activities, and enter into international cooperation in the domain of origin of goods.
4. To assume the prime responsibility for negotiations on rules of origin according to treaties.
Article 18.- Tasks and powers of the Finance Ministry
1. To elaborate and submit to competent authorities for promulgation or promulgate according to its competence legal documents on inspection of origin of imports and exports.
2. To organize the implementation of the Regulation on inspection of origin of imports and exports.
3. To organize an information network, provide for a reporting regime, build and manage a database to serve and facilitate units in performing the inspection of origin of imports and exports.
Article 19.- Tasks and powers of concerned ministries and agencies
Concerned ministries, ministerial-level agencies and Government-attached agencies shall, within the ambit of their respective tasks and powers, have to coordinate with the Trade Ministry and the Finance Ministry in performing the state management of origin of goods according to the provisions of this Decree and relevant provisions of law.
Chapter VI

HANDLING OF VIOLATIONS AND SETTLEMENT OF COMPLAINTS

Article 20.- Handling of violations
1. All acts of violating this Decree’s provisions on certificates of origin shall, depending on their seriousness, be administratively handled or examined for penal liability according to current provisions of law.
2. Cadres, civil servants and individuals of organi-zations authorized to issue certificates of origin, agencies inspecting origin of goods and goods-assessing agencies that violate the provisions of this Decree or abuse their positions or powers to issue certificates of origin at variance with the provisions of this Decree, or cause troubles to or obstruct the issuance of certificates of origin, inspection of origin of goods, or commit other acts of violation while on duty shall, depending on the nature and seriousness of their violations, be disciplined, administratively handled or examined for penal liability. Where damage is caused by their violations to interests of the State or agencies, organizations and individuals, violators must pay compensations therefor according to the provisions of law.
3. Certificates of origin which are used for improper purposes or illegally issued shall be withdrawn.
Article 21.- Settlement of complaints about origin of goods
Where they are refused to be issued certificates of origin for exports or refused to have origin of imports certified, applicants for certificates of origin or importers shall have the right to lodge complaints according to the provisions of law on complaints and denunciations.
Chapter VII

IMPLEMENTATION PROVISIONS

Article 22.- Implementation provisions
1. This Decree takes effect 15 days after its publication in “CONG BAO.”
2. Except for legal  documents concerning preferential origin in implementation of treaties, all stipulations on origin of imports and exports which are contrary to the provisions of this Decree are hereby annulled.
3. Ministers, heads of ministerial-level agencies, heads of Government-attached agencies and presidents of People’s Committees of provinces or centrally-run cities shall have to guide and implement this Decree.