Circular No. 16-TC/TCT dated March 05, 1996 of the Ministry of Finance guiding the implementation of Decree No.91-CP dated December 18, 1995 of the Government on the issue of the list of goods for the enforcement of the Asean agreement on common effective preferential tariffs (CEPT) in 1996
THE MINISTRY OF FINANCE
SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
Hanoi ,March 05, 1996
GUIDING THE IMPLEMENTATION OF DECREE No.91-CP OF DECEMBER 18, 1995 OF THE GOVERNMENT ON THE ISSUE OF THE LIST OF GOODS FOR THE ENFORCEMENT OF THE ASEAN AGREEMENT ON COMMON EFFECTIVE PREFERENTIAL TARIFFS (CEPT) IN 1996
In compliance with the Agreement on Common Effective Preferential Tariffs signed in Singapore on January 28, 1992 for the building of the ASEAN Free Trade Area (AFTA), and the amending Protocol signed in Bangkok on December 15, 1995;
Pursuant to Decree No.91-CP of December 18, 1995 of the Government on the issue of the list of goods in execution of the ASEAN Agreement on Common Effective Preferential Tariffs (CEPT) in 1996;
The Ministry of Finance provides the following guidance:
I. SCOPE OF REGULATION
Imports subject to the import tax rates specified in Point 2 of the said Decree are the goods imported from ASEAN countries, which must meet the following conditions:
1. They are included in the List of goods issued together with Decree No.91-CP of December 18, 1995 of the Government;
2. They are included in the List of goods eligible for import duty reduction under CEPT regulations applied by the exporting country which is an ASEAN member at a tax rate not exceeding 20%;
3. They meet the standards on their original content as required by CEPT and certified for their origin in ASEAN countries;
The organizations and individuals importing goods specified in the above Paragraph I of this Circular are obligated to submit to the Customs Offices the Certificates of Origin, form D, granted by the competent agencies of the exporting countries.
At present, the agencies authorized to grant Certificates of Origin for products from ASEAN countries are:
- The Ministry of Industry and Natural Resources in Brunei;
- The Ministry of Trade in Indonesia;
- The Ministry of Commerce and Industry in Malaysia;
- The Customs Service in the Philippines;
- The Council for Trade Development in Singapore;
- The Department of Commercial Preferential Treatment of the Ministry of Trade in Thailand;
- The Ministry of Trade in Vietnam.
A Certificate of Origin, form D, shall be made in four copies, one original (copy No.1, in light purple) and three copies (copies No.2, 3 and 4, in orange).
The original and the 3rd copy shall be delivered by the exporter to the importer for submission to the Customs Office at the place where the goods are imported.
4. Goods sent directly to Vietnam from an exporting ASEAN country. Goods transported in the following cases shall be regarded as being sent directly from an exporting ASEAN member country to Vietnam:
(i) Goods transported directly from the ASEAN member country to Vietnam without passing through another country;
(ii) Goods transported through the territory of another ASEAN member country;
(iii) Goods on transit in one or many non-ASEAN countries with or without being transhipped or temporarily stored in those countries, if:
- The transit is considered necessary due to geographical conditions or transport requirements;
- The goods must not be consumed in those countries; and
- The goods must not be subject to any activity other than loading, unloading and protection activities.
II. TAX TARIFFS
Tax rates applicable to import goods that meet the conditions prescribed in Part I of this Circular are the rates provided for in the List of goods issued together with Decree No.91-CP of December 18, 1995 of the Government.
Where the import goods fail to meet all the conditions prescribed in Part I of this Circular, the tax rates prescribed in the current Import Tax Tariffs shall apply.
III. CHECKING THE CERTIFICATE OF ORIGIN
In case of any suspicion of the truthfulness and acuracy of the Certificates of origin, form D, the Customs Office may request a re-examination and suspend the application of the preferential tax rates provided for in the List of goods issued together with Decree No.91-CP of December 18, 1995 of the Government, and shall apply the tax rates stipulated in the current Import Tax Tariffs. Pending the result of the re-examination, the procedures for the release of goods shall continue to apply if such goods are not banned or restricted from import and there is no suspicion of a false declaration. In cases where the goods’ owner produces documents proving that the goods have their ASEAN origin, he/she shall be considered for the reimbursement of the tax amount paid in excess (the difference between the tax amount paid according to the tax rates in the common Import Tariffs and that according to the preferential tax rates).
Goods recognized to originate from the ASEAN countries must meet one of the following conditions:
(i) They are entirely produced or exploited in the exporting country which is an ASEAN member, including:
a/ Minerals exploited from the soil, water or seabed of that country;
b/ Agricultural products harvested in that country;
c/ Animals born and raised in that country;
d/ Products from animals mentioned in Point (c);
e/ Products gained from hunting or fishing in that country;
f/ Products of seafisheries and marine products exploited by ships of that country;
g/ Products processed or manufactured from products mentioned in Point (f) on board in the ship(s) of that country;
h/ Used raw materials collected in that country;
i/ Industrial waste collected in that country; and
j/ Goods manufactured from the products mentioned above, from Point (a) to Point (i).
(ii) Goods not produced or exploited in the exporting country which is an ASEAN member, but meeting one of the following conditions:
a/ Having at least 40% of the content originating from an ASEAN member country; namely, the total value of the input materials, parts or products originating from non-ASEAN countries or unidentifiable, shall not exceed 60% of the FOB prices of the products manufactured or processed on the territory of the exporting country which is a member of ASEAN.
The 40%-ASEAN content formula shall be defined as follows:
The value of the input materials, parts and products imported from non-ASEAN countries
The value of the input materials, parts and products with unidentified origins
x 100% <>
The value of the input materials, parts and products imported from non-ASEAN countries is the CIF (Cost, Insurance and Freight) prices at the moment of the import;
The value of the input materials, parts and products with unidentified origins is their initial prices before being processed on the territory of the exporting country which is a member of ASEAN.
b/ Products which meet all the conditions on origin and are used as the input in another member country shall be considered products originating from the country which completes the processing provided that the total ASEAN content of the finished products is no less than 40%.
IV. OTHER PROVISIONS
Bases for tax calculation; tax payment regime, tax accounting, reporting on the tax payment and collection; the regime of import tax reduction and exemption; regime of tax reimbursement, tax arrears collection and handling of violations shall comply with the regulations of the Law on the Import-Export Duties and the current guiding documents.
V. ORGANIZATION OF IMPLEMENTATION
This Circular takes effect from January 1st, 1996.
In the course of its implementation, if any difficulty or obstacle arises, the units and agencies are requested to promptly report it to the Ministry of Finance for consideration and appropriate guidance.-
FOR THE MINISTER OF FINANCE
Vu Mong Giao