Preventing the use of "Made in Vietnam" to transit illegal goods

The Ministry of Industry and Trade is seeking comments on a draft Decree detailing a number of articles and measures to organize and guide the implementation of the Law on Foreign Trade Management on the origin of goods to promote exports and prevent trade fraud.

This draft expands the scope of regulation and updates many new concepts and criteria. Typically, for the first time, terms such as “goods of unchanged origin”, “back-to-back certificates of origin”, “identical and interchangeable materials” are clearly defined.

The draft Decree also distinguishes between “pure” and “impure” goods. Pure goods are goods that are produced entirely in one country, such as minerals, crops, animal products, etc. These criteria are regulated more strictly, especially for aquatic products caught outside national waters. Impure goods will have to meet technical criteria, such as HS code conversion and domestic value ratio.

The draft supplements and details regulations on: Self-certification of origin: Full regulations on conditions, procedures, responsibilities and inspection mechanisms for traders self-certifying origin. This aims to increase the initiative of businesses, while creating more favorable conditions when implementing commitments of Free Trade Agreements such as EVFTA (Vietnam - EU), Comprehensive and Progressive Agreement for Trans -Pacific Partnership (CPTPP)...

In particular, back-to-back C/O (certificate of origin of goods issued by competent authorities in FTA countries) and goods with unchanged origin are two new concepts. This reflects the reality of goods transiting through Vietnam, and clearly stipulates the cases where this C/O is granted, to ensure the continuity of the international supply chain without causing fraud.

The Ministry of Industry and Trade is developing new regulations on the origin of goods to prevent trade fraud.

Ms. Trinh Thi Thu Hien - The Deputy Director of the Import-Export Department, Ministry of Industry and Trade, said that Vietnam has issued many regulations on the origin of goods, including regulations on what constitutes a product that is considered to have originated in Vietnam. However, for domestically circulated goods, there are currently no regulations to determine whether goods have originated in Vietnam, causing difficulties for businesses and management agencies.

For example, Samsung is a Korean brand, but they have a manufacturing plant in Vietnam. That means this is a Korean phone product, not a Vietnamese phone.

According to Ms. Hien, considering the regulations related to the set of criteria of origin that Vietnam participates in within the framework of FTAs, Samsung phones are manufactured in Vietnam from components manufactured in Vietnam or components imported from other countries. After going through a full processing and manufacturing process in Vietnam, changing their nature, those components become the final phone product.

“The place where the change in nature, from components to phones, is determined as the place of origin of the goods,” Ms. Hien said, adding that it is necessary to clearly distinguish the concept of goods originating from Vietnam, with a certificate of origin from Vietnam according to the framework of agreements that Vietnam participates in. This is clearly shown with the concepts of labeling “Made in Vietnam”, “Product of Vietnam” or concepts related to whether they are Vietnamese or Korean goods.

Mr. Nguyen Anh Son - Director of the Import-Export Department - Ministry of Industry and Trade said that with a series of new points and measures to tighten management, this draft decree is expected to increase transparency and consistency in determining the origin of goods, helping Vietnam avoid the risk of being imposed defense taxes, fraud investigations from importing countries...