Introduction
\nThe European Union\u2013Vietnam Free Trade Agreement (EVFTA) has fundamentally changed the way European manufacturer\u2019s view Vietnam.
\nFor many companies, Vietnam is no longer simply a competitive manufacturing location. It has become a strategic gateway to the European market, offering significant preferential tariff treatment for products that satisfy the applicable rules of origin.
\nHowever, one misconception continues to surface in manufacturing projects.
\nMany companies believe that once a product is assembled in Vietnam, it automatically becomes a Vietnamese product for customs purposes.
\nUnfortunately, international trade law is considerably more sophisticated.
\nRules of origin determine whether preferential tariff treatment is available. They are among the most technically challenging areas of international trade law and should be analyzed before\u2014not after\u2014a manufacturing structure is implemented.
\nAfter advising multinational manufacturers in Vietnam for more than twenty-five years, I have found that every company should ask the following ten questions before relocating production.<\/p>\n
Question 1: What Is the Actual Product?
\nOrigin analysis begins with understanding the finished product.
\nThe legal analysis cannot start until the product itself is clearly identified.
\nIts composition, function, manufacturing process and tariff classification all influence the applicable origin rules.<\/p>\n
Question 2: Have We Correctly Classified the Product?
\nRules of origin are built upon tariff classification.
\nAn incorrect HS Code can invalidate the entire legal analysis.
\nIndependent classification should therefore always precede origin analysis.<\/p>\n
Question 3: Where Does Every Component Originate?
\nModern manufacturing rarely relies upon components from one country.
\nA complete origin map should identify:
\n\u2022\tChinese components
\n\u2022\tGerman components
\n\u2022\tJapanese components
\n\u2022\tKorean components
\n\u2022\tTaiwanese components
\n\u2022\tASEAN components
\n\u2022\tVietnamese materials
\nOrigin cannot be determined without understanding the origin of every major input.<\/p>\n
Question 4: What Manufacturing Actually Takes Place in Vietnam?
\nThis question is often decisive.
\nAssembly alone may not always satisfy applicable origin rules.
\nManufacturers should carefully document every production activity performed in Vietnam, including:
\n\u2022\tassembly
\n\u2022\tprogramming
\n\u2022\tcalibration
\n\u2022\ttesting
\n\u2022\tsoftware installation
\n\u2022\tquality control
\n\u2022\tpackaging
\n\u2022\tlabelling<\/p>\n
Question 5: Which Product-Specific Rule Applies?
\nThe EVFTA does not establish one universal origin rule.
\nDifferent products are subject to different legal requirements.
\nEach product must therefore be analysed individually.
\nQuestion 6: Can We Prove It Five Years From Now?
\nOrigin claims are only as strong as the documentation supporting them.
\nManufacturers should prepare documentation as production progresses\u2014not during a future customs audit.<\/p>\n
Question 7: Does Our Manufacturing Process Match Our Documentation?
\nProduction records, Bills of Materials, supplier declarations and customs documentation should all tell the same story.
\nConsistency is essential.<\/p>\n
Question 8: Does Our Corporate Structure Support Our Origin Strategy?
\nOwnership, contract manufacturing arrangements, import procedures and export documentation all influence practical implementation.
\nOrigin analysis should never be separated from corporate structuring.<\/p>\n
Question 9: Have We Considered European Customs Authorities?
\nCompliance does not end when goods leave Vietnam.
\nEuropean customs authorities may examine origin documentation years after importation.
\nCompanies should prepare accordingly.<\/p>\n
Question 10: Have We Designed the Entire Supply Chain Around Compliance?
\nThe strongest manufacturing projects are designed around compliance from the outset.
\nOrigin should not become an afterthought.
\nIt should become part of the manufacturing strategy itself.<\/p>\n
Conclusion
\nRules of origin are often viewed as a technical customs issue.
\nIn reality, they represent one of the most important commercial issues facing manufacturers exporting from Vietnam to Europe.
\nCompanies that invest time in analyzing origin before production begins are generally better positioned to benefit from the opportunities offered by the EVFTA while reducing customs risk in both Vietnam and the European Union.
\nUltimately, successful origin planning is not about completing paperwork.
\nIt is about designing a supply chain that is legally robust, commercially efficient and capable of withstanding customs scrutiny on both sides of the world.
\n***<\/p>\n
For more information on the above, please do not hesitate to contact the author Dr. Oliver Massmann under omassmann@duanemorris.com. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.<\/p>\n","protected":false},"excerpt":{"rendered":"
Introduction The European Union\u2013Vietnam Free Trade Agreement (EVFTA) has fundamentally changed the way European manufacturer\u2019s view Vietnam. For many companies, Vietnam is no longer simply a competitive manufacturing location. It has become a strategic gateway to the European market, offering significant preferential tariff treatment for products that satisfy the applicable rules of origin. However, one … <\/p>\n
Continue reading “Vietnam – Rules of Origin Under the EVFTA: Ten Questions Every European Manufacturer Should Ask Before Moving Production to Vietnam”<\/span><\/a><\/p>\n","protected":false},"author":24,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"ppma_author":[1007],"class_list":["post-2106","post","type-post","status-publish","format-standard","hentry","category-vietnam-general"],"authors":[{"term_id":1007,"user_id":24,"is_guest":0,"slug":"omassmann","display_name":"Dr. Oliver Massmann","avatar_url":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-content\/uploads\/sites\/19\/2014\/08\/massmannoliver-125x150.jpg","author_category":"","last_name":"Massmann","first_name":"Dr. Oliver","job_title":"","user_url":"http:\/\/www.duanemorris.com\/attorneys\/olivermassmann.html","description":"Read Oliver's bio.<\/a>"}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/posts\/2106","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/users\/24"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/comments?post=2106"}],"version-history":[{"count":1,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/posts\/2106\/revisions"}],"predecessor-version":[{"id":2107,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/posts\/2106\/revisions\/2107"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/media?parent=2106"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/categories?post=2106"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/tags?post=2106"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/vietnam\/wp-json\/wp\/v2\/ppma_author?post=2106"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}