Customs & Global Trade Update | October 2024

This update highlights the following matters:

• Draft Decree amending some provisions related to Vietnam’s special preferential import and export tariff schedule under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) for 2022 to 2027

• List of scraps temporarily suspended from temporary importation, re-exportation and border-gate transfer

• Policies on granting licenses that allow importation, exportation and administers the precursors of formic acid 

• Amendments to border trade conditions

• Official Letters (OLs) providing guidance on the following matters:

• Value-Added Tax (VAT) refund for imported goods of Export Processing Enterprises (EPEs) which are re-exported

• Duty refund for imported goods that have been confiscated 

• Duty refund for goods imported for manufacturing or trading but were used in the production of exported goods

• Labelling the origin on exported goods

• Chile issues electronic Certificate of Origin (e-C/O) Form VC under the VCFTA

• e-C/O Form D under the ATIGA 

Draft Decree amending some provisions related to Vietnam’s special preferential import and export tariff schedule under the CPTPP for 2022 to 2027

On 24 September 2024, the Ministry of Finance (MoF) issued OL No. 10152/BTC-HTQT that encloses a proposal for a Draft Decree amending some provisions of Decree No. 115/2022/ND-CP, dated 30 December 2022, on Vietnam’s preferential export tariff schedule and special preferential import tariff schedule for the implementation of the CPTPP for the period 2022 to 2027 (Decree 115) and Decree No. 68/2023/ND-CP dated 7 September 2023, amending Decree 115 (Decree 68) – hereafter referred as the “amending Decree”. 

The objective of the draft amending Decree is to implement tariff commitments with the United Kingdom (the UK) and North Ireland, with some key contents as follows:

• Amending provisions that grant preferential export duty rates and special preferential import duty rates under the CPTPP to goods exported from Vietnam to the UK and North Ireland or imported into Vietnam from the UK and North Ireland. The amending Decree is expected to cover the period from 2024 to 2027. 

• Regarding the tariff schedule implementation roadmap for the UK and North Ireland, in accordance with the provisions under the CPTPP, Vietnam will carry out a similar tariff roadmap as for other member countries (except for Mexico). 

• Where the amending Decree comes into effect after the effective date of the accession protocol of the UK to the CPTPP (the Protocol), for customs declarations of goods exported from Vietnam to the UK and North Ireland or imported from the UK and North Ireland into Vietnam dated between the effective date of the Protocol and the effective date of the amending Decree, if they are eligible for preferential export duty rate or special preferential import duty rate as prescribed in the draft amending Decree, Decree 115, and Decree 68, and paid customs duty at higher rates, the competent customs authority will handle the tax overpayments in accordance with tax administration regulations.  

As requested by the Government Office, the MoF was assigned to draft, finalize, and submit the draft amending Decree to the Government before 15 November 2024. 

List of scraps temporarily suspended from temporary importation, re-exportation and border-gate transfer 

On 8 October 2024, the Ministry of Industry and Trade (MoIT) issued Circular No. 18/2024/TT-BCT prescribing a list of scraps which are temporarily suspended from temporary importation and re-exportation, and border-gate transfer (Circular 18) in order to:

• Avoid legal loopholes upon the expiration of Circular No. 27/2019/TT-BCT dated 15 November 2019 issued by the MoIT. 

• Continue to maintain policies to enhance the oversight to scraps importation.

• Prevent trade fraud as well as preventing turning Vietnam into a waste-dumping-ground or transferring of outdated technologies from other countries. 

• Update the list of scraps temporarily suspended from temporary importation and re-exportation, and border-gate transfer in accordance with the List of Vietnam's export and import goods promulgated together with Circular No. 31/2022/TT-BTC issued 8 June 2022 by the MoF.

Circular 18 applies to traders and related parties involved in temporary importation and re-exportation, and border-gate transfer business activities. It does not apply to border-gate transfer activities where goods are transported directly from the exporting country to the importing country without passing through a Vietnamese border gate. 

The detailed list of scraps temporarily suspended from aforementioned business activities is provided in Appendix enclosed to Circular 18.

Circular 18 will take effect from 1 January 2025 to 31 December 2029. 

Policies on granting licenses that allows importation, exportation and administers the precursors of formic acid

On 31 August 2024, the Government Office issued OL No. 6254/VPCP-KGVX to the Ministers of the Ministry of Public Security (MoPS), the MoIT, the MoF, and the Ministry of Agriculture and Rural Development (MARD) regarding the licensing of import, export and the administration of products containing formic acid precursors. Accordingly: 

• The MoIT shall carry out the import export licensing and carry out measures to manage products containing the precursors to formic acid in accordance with the Law on Drug Prevention and Control and related guiding Decrees.

• The MARD shall re-assess the drug precursors being used in livestock feed, aquaculture feed, and other agricultural products. 

• The MoPS shall take a leading role in coordinating with other ministries to promptly review and suggest competent authorities to amend relevant legal documents to provide a basis for managing livestock feed and aquaculture feed products containing drug precursors.

Amendments to border trade conditions 

On 4 October 2024, the Government issued Decree No. 122/2024/ND-CP (Decree 122), amending several provisions of Decree No. 14/2018/ND-CP dated 23 January 2018 regulating border trade activities.

Some notable points in Decree 122 are: 

• Cash payments are only permitted on trading activities carried out by residents living across the border. For other border trade activities, payments must be made via bank transfer or by offsetting the value of exported goods and services with imported goods and services (with the net balance amount settled via bank transfer).

• Goods traded or exchanged across the border by traders and residents living across the border must meet conditions on quality, regulations on origin traceability, and other conditions in accordance with relevant regulations of importing countries.  

• Traders and individuals involved in border trading activities must comply with the amended conditions stipulated in Clauses 4, 5, and 6 of Article 1 of this Decree.

Decree 122 also sets fort some key milestones as follows: 

• In 2029, the MoF will report to the Government to decide on the number of instances of tax exemption, duty exempted thresholds of imported goods under the border trade scheme.

• From 1 January 2029, residents living across the border must be physically present at the customs authorities place to perform import and export procedures. 

• From 1 January 2030, it will only be permitted to carry out customs clearance procedures for goods at international border gates; main border gates (bilateral border gates); auxiliary border gates; customs clearance paths, dedicated routes for transporting goods at international border gates; and open border crossings that have completed the procedures for opening and upgrading border gates and open border crossings in accordance with current regulations and have reached bilateral agreements allowing the export, import and exchange of goods.

Decree 122 will take effect from 1 December 2024. Please refer to the Decree for more details. 

Some guidance provided in the form of OLs:

Goods imported from Comoros and Timor-Leste are eligible for preferential tax rates