import export module academic year 2023 2024 group assignment

- Form D: Issued for goods exported to ASEAN countries that qualify for preferential tariff treatment under the ASEAN Free Trade Area CEPT agreement.. - Form E: Issued for goods exported

Group Assignment

Members of group: Doan Hai Van 20010126

Dinh Thi Hoai Thuong 20010045 Pham Bich Ngoc 20010119 Tran Thuy Tien 20010071 Tang Minh Thuan 20010105

Lecturer MS Nguyen Thi Phuong Thao

December 2023

TABLE OF CONTENT | Introduction of C/O ( Certification of Origin)

4 The procedure to apply for C/O

Il Export Products to China 1 The different import tariff rates of our product 2 The best tariff rate for our product:

3 Company’s Preparations

4 APPENDIX:

Ill Reference

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fi Definition of C/O

According to the ICC, a Certificate of Origin certifies that goods in a shipment are wholly obtained, produced, manufactured, or processed in a particular country Normally, it may be required by the country's government where your goods are imported

2 The objectives of C/O

Besides determining the origin of goods, C/O is also used for purposes such as: - Determining how much duty the importer will pay to bring in your goods - Providing transparency and authenticity regarding the origin of goods - Preventing the circumvention of trade regulations and tariff evasion

- Preferential COs: given to goods subject to preferential tariff treatment or tariff-free based on trade agreements between two or more countries For example, The generalized System of Preferences (GSP), Common Effective

Preferential Tariff (CEPT), etc

3.2 Forms of C/O

There are many forms of C/O ( for each specific type of goods, importing and exporting countries, preferential tariff systems, etc.) that exporters need to determine for their goods

- Form A: Issued for goods exported to countries where Vietnam enjoys preferential tariff treatment under the Generalized System of Preferences (GSP)

- Form D: Issued for goods exported to ASEAN countries that qualify for preferential tariff treatment under the ASEAN Free Trade Area (CEPT) agreement - Form E: Issued for goods exported to China and ASEAN countries eligible for

preferential tariff treatment under the ASEAN-China Free Trade Agreement - Form S: Issued for goods exported to Laos, eligible for preferential tariff treatment

under the Vietnam-Laos bilateral agreement - Form AK: Issued for goods exported to South Korea and ASEAN countries eligible

for preferential tariff treatment under the ASEAN-Korea Free Trade Agreement - Form GSTP: Issued for goods exported to countries participating in the Global

System of Trade Preferences (GSTP} for Vietnam to enjoy GSTP preferences - Form B: Issued for goods exported to all countries without any preferential

treatment, according to standard export regulations - Form ICO: Issued for products from raw and harvested coffee in Vietnam,

exported to all countries according to the International Coffee Organization's

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4 The procedure to apply for C/O

Step fi Determine the Need for a Certificate of Origin: Check the regulations of the importing country to see if a Certificate of Origin is required for the product

Step 2 Identify the Issuing Authority: Find out which organization or chamber of commerce in the exporter’s country is authorized to issue Certificates of Origin

Step 3 Prepare Required Documents: The exporter prepares necessary documents, such as the Application for issuance of C/O, C/O form, invoices, packing lists, and any other supporting documents

Step 4 Product Classification: Determine the correct harmonized system (HS) code for the exporter’s product This code is used to classify the product for customs purposes

Step 5 Complete the Application Form: Receive and fill out the application form for the issuance of the Certificate of Origin provided by the issuing authority Provide accurate and detailed information about the product and its origin Then submit the completed form along with the required documents to the issuing authority

Step 6 Pay Fees (if applicable):

Check if there are any fees associated with obtaining a Certificate of Origin and make the necessary payments

Step 7 Review and Approval:

The issuing authority will review the application and supporting documents submitted by the business If everything is in order, the Certificate of Origin will be approved and stamped

Il Export Products to China

As an export company to China, we choose to export Cashew Nuts in shell With the 6HS code is O80f13fi, cashew products exported from Vietnam to China have 3 tariff regimes

including Most-Favored Nations (MFN duties), Preferential tariff (RCEP) for ASEAN

countries, and Preferential tariff for ASEAN countries (FTA) As the Macmap chart shows, MEN will not require Trade Agreements but conversely, RCEP and FTA will The tariff rate under MFN, RCEP, and FTA is 20%, 0%, and 0% respectively

Figure 1: Tax rate for product 080131 on Macmap Customs tariffs ©

For product 0801310000 — Coconuts, Brazil nuts and cashewnuts, fresh or dried, whether or not shelled or peeled: Cashew nuts: Cashew nuts, fresh or dried, In shell Exported from Viet Nam to China

Tariff year: 2023 (HS Rev.2022)

Preferential tariff for ASEAN countries @ 0% Trade agreement details V Source : ITC (Market Access Map)

Below are the regulations on trade agreements and rules of origin of RCEP and FTA for

our company's products:

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Preferential tariff (RCEP) for ASEAN countries @ 0% 0% Trade agreement details &

RCEP

Customs Administration IN FoRCE (i)

Free trade agreement SCOPE

Plurilateral,Country-Country

MEMBER STATES (i)

Australia, Brunei Darussalam, Cambodia, China, India, Indonesia, Japan, Korea, Republic of, Lao, People's

Democratic Republic, Malaysia,

Myanmar, New Zealand, Philippines, Singapore, Thailand, Viet Nam

Agreement information Rules of origin Certificate of origin

FTA, ASEAN-China

Chapter On Rules Of Origin IN FORCE

Free trade agreement

SCOPE

Plurilateral,Country-Group

MEMBER STATES (i)

Brunei Darussalam, Cambodia, China, Indonesia, Lao, People’s Democratic Republic, Malaysia, Myanmar, Philippines, Singapore, Thailand, Viet

Nam

fi The different import tariff rates of our product

In more detail, we will explain each type of tariff regime

the same treatment to all members of the organization.The purpose of this clause is to promote equal treatment and prevent discrimination among trading partners

Note that there is no requirement under MFN that the trade concession be reciprocal: countries benefiting from a lower tariff are not required to automatically drop theirs in return

In global trade, the non-discriminatory principle enshrined in the most-favored-nation clause extends the benefits of trade liberalization measures as widely as possible, while protecting smaller exporters against preferential terms secured by larger ones

b ASEAN-China Free Trade Area (ACFTA)

The ACFTA stands for the ASEAN-China Free Trade Area It is a free trade area among the member countries of the Association of Southeast Asian Nations (ASEAN) and China Which aims to promote trade and economic cooperation between ASEAN member countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) and China

ACFTA aims to gradually reduce and eliminate tariffs on a wide range of goods traded between ASEAN countries and China This reduction covers various sectors, promoting freer trade and making products more competitive in each other's markets To be able to use ACFTA preferential rates, the company must provide C/O

c Regional Comprehensive Economic Partnership (RCEP)

RCEP is a Free Trade Agreement ( FTA) between China, Japan, South Korea, Australia, New Zealand, and the 10 ASEAN member states of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam When RCEP enters into force it will be the world’s largest FTA Plus six countries with existing FTAs with ASEAN: Australia, China, Japan, New Zealand, South Korea, and India (India was initially part of the negotiations but withdrew before the final agreement was signed)

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RCEP aims to create a comprehensive and mutually beneficial economic partnership among its member countries It covers various aspects of trade and economic cooperation

Table 1: The most difference between ACFTA & RCEP

Participating countries: Specifically focuses on trade

between ASEAN countries and China

RCEP involves a_ broader

group of countries

Scope and coverage: primarily emphasizes trade in

goods, meaning the agreement's central focus is on reducing tariffs and other trade barriers for the exchange of physical products However, it also includes provisions for trade in services to a lesser extent compared to its emphasis on goods trade

Covers many aspects beyond trade in goods Which includes trade in goods, trade in services, investment, economic cooperation, intellectual property and other areas of economic cooperation between participating countries

2 The best tariff rate for our product:

The best tax rate for exporting Cashew Nuts in shell, with the 6HS code O80fi3fi, is 0%, according to MacMap The preferential tax rate of 0% will be applied in the two agreements: Preferential tariff (RCEP) for ASEAN countries and Preferential tariff for

ASEAN countries (FTA), more specifically ASEAN - CHINA (ACFTA)

In Free Trade Agreements (FTA), rules of origin (ROO) serve as pivotal conditions to

ascertain whether goods qualify for preferential customs duties under a specific FTA The crux lies in defining the source of goods within the FTA region, excluding those originating from a third party outside the FTA territory This distinction is critical for companies seeking tariff benefits in their export operations

Within the landscape of FTA regulations, each Agreement delineates its unique set of ROO Compliance with these ROO designates a product with a specified "origin," rendering it eligible for the preferential customs duties outlined in the respective FTA Taking the example of a Vietnamese company exporting Cashew Nuts with HS code 080131 to China, the product, incorporating some non-originating materials, qualifies for a0% preferential customs duty under the Regional Comprehensive Economic Partnership

(RCEP) Under the RCEP, the Product Specific Rules (PSR) serve as the benchmark for

determining the origin of goods These rules encompass familiar criteria such as Conversion of Tariff Heading (CTC) at the Chapter, Heading, Subheading levels, and

Regional Value Content (RVC)

Additionally, the RCEP introduces innovative criteria like Chemical Reaction (CR) applicable to certain chemical products falling under Chapters 29 and 38 To be deemed of origin under the RCEP, goods must also satisfy additional provisions such as Minimal Operations and Processes, Treatment of Packing and Packaging Materials, Containers, Accessories, Spare Parts, Tools, and Direct Consignment Contrastingly, the ASEAN- China Free Trade Agreement (ACFTA) stipulates its ROO criteria under Circular No 12/2019/TT-BCT According to these regulations, a product can attain a Certificate of Origin if the total value of non-originating materials from outside the ACFTA territory is at most 60% of the FOB value, with the final production process conducted within Vietnam Consequently, the aggregate ACFTA content of the end product must stay within 40% Both agreements recognize the principle of cumulation, wherein goods originating from one member country are used as inputs in another country's production process and retain their origin status in the final product However, in the future, RCEP's cumulation rules may be expanded in scope Specifically, according to RCEP, member

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countries will review their commitments on cumulation rules after the Agreement takes effect, intending to consider expanding the application of cumulation rules not only to raw materials but also to the production stage (cumulative by production stage) and adding up any added value of the goods created in the Agreement member countries (full

cumulation)

In the comparative analysis of the rules of origin between RCEP and ACFTA for importing cashew nuts in shell (HS code 080131) to China, it becomes evident that the RCEP provisions offer a more accessible pathway to apply the rules of origin The RCEP's nuanced and expanding powers, notably the commitment to reviewing cumulation rules post-implementation, position it favorably for companies seeking to benefit from the 0% preferential customs duty when exporting to the Chinese market

3 Company’s Preparations:

What do we need to do next to achieve this preferential tax rate? In this part, our company has researched and analyzed more closely the requirements and rules of origin set out by the RCEP agreement to ensure that we follow it According to the RCEP Agreement, with cashew nuts in the shell, our company needs to make sure that it fully meets certain rules of origin to be eligible for a C/O The specific things our company needs to do to have this preferential tariff which is:

1 Meets Chapter Conversion (CC): According to the agreement, our product is listed in the list of partially non-originating items Therefore, we need to meet the origin criteria specified in the Product Specific Rules (PSR) List Specifically, we need to ensure that the product meets the Commodity Code Conversion (CTC) criteria - with cashews nut in shell, it must comply with the Chapter Conversion (CC) level 2 Follow up on Minimal Operations and Processes: Our company will ensure that

the following actions are not violated to avoid the goods being considered substandard: preserving operations for transport or storage; packaging or

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