Self-certification of origin underway

Along with issuing certificates of origin (C/Os) via the internet, the Ministry of Industry and Trade (MoIT) has applied a mechanism that allows export businesses to certify by themselves the origin of goods. Self-certification will maximize business benefits from export activities

Global trade trend According to the MoIT’s Agency of Foreign Trade, giving businesses the right to self-certify the origin of goods is a trend that many other countries follow in modern trade.

Authorized businesses will certify the origin of goods by themselves instead of submitting their applications and company profiles to state management authorities. Self-certification will help businesses save even more time and money compared with issuing C/Os via the internet. Bui Kim Thuy, Deputy Director of the Origin of Goods Division of the Agency of Foreign Trade, said that under existing mechanisms, C/Os are issued for goods, and businesses have to apply for the certificate for each export consignment. It takes state officials a certain amount of time to consider the application and issue the certificate. But under the self-certification mechanism, self-certification licenses are issued for businesses. These licenses allow import and export businesses to self-certify the origin of goods. Eligible businesses will be authorized to self-issue C/Os for goods which they import or export.

They can apply for these licenses only once for use during a certain period of time but not for each consignment. Therefore, the time required for self-certification will be minimized. Vietnam Dairy Products Joint Stock Company (Vinamilk) is the first Vietnamese business allowed to self-certify the origin of their exports to ASEAN, including powdered, liquid and condensed milk, yoghurt, beverages and ice cream.

A representative of the company said that self-certification will create impetus for its exports to Southeast Asian countries. Vinamilk has exported and will continue to boost exports to Thailand, the Philippines and other ASEAN countries, making the most of the self-certification mechanism. After Vinamilk, Nestle has become the second company allowed to self-certify the origin of goods. The MoIT is considering the granting of self-certification licenses for some other companies.

Maximizing business benefits

Agency of Foreign Trade Deputy Director Tran Thanh Hai said that domestic businesses still know very little about self-certification of origin, as well as the benefits this mechanism can bring them, although it is a global trend of modern trade. Moreover, the regulation that allows only companies with the latest annual export value of more than US$10 million to apply for self-certification licenses is also a hindrance to businesses, especially agricultural produce exporters. In a talk with Vietnam Economic News’ reporters, a representative of the Tinh Loi Garment Company Limited, based in Hai Duong Province’s Nam Sach District, considered this regulation as a big hindrance as 90 percent of Vietnamese export businesses are small to medium in size. Agricultural, forest and aquatic product exporters can hardly meet this requirement. Tran Thanh Hai also indicated the dark side of self-certification.

Specifically, this mechanism will facilitate fraudulent trade if the state applies sanctions which are not strict enough, and if those who are involved in enforcing the mechanism lack knowledge and information about it. Implementing the mechanism is also a challenge to businesses.

Not every business is capable of applying this mechanism. Moreover, many companies still lack self-confidence in their capability to be responsible for the certification This is another hindrance as importing countries apply strict inspection mechanisms, and if they find any sign of fraudulent certification of the origin of a product, it will be very difficult for that product to come back their markets. In the future, according to experts, the self-certification mechanism will be applied widely in Vietnam as it is already applied by all countries which have free trade agreements with Vietnam.

Therefore, the MoIT will organize training courses to improve business awareness of self-certification and assist them in implementing this mechanism. It will also consider suitable adjustments to the US$10 million annual export value regulation to enable more businesses to self-certify the origin of goods, especially agricultural product exporters.

Circular 28/2015/TT-BCT of the MoIT stipulates that self-certification licenses will be granted to businesses which do not violate rules of origin regulations over two years until their submission of applications, and achieve the latest annual export value of at least US$10 million.