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UK tariff preferences benefit Vietnam
Vietnam has saved US$151 million in tariffs under the UK-Vietnam Free Trade Agreement (UKVFTA) that took effect in May 2021, while the UK stands to save around US$36 million, according to the British Embassy in Vietnam.
Exporters are allowed to self-certify the origin of export and import shipments with a value of less than EUR6,000
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On June 11, 2021, the Ministry of Industry and Trade issued Circular 02/2021/TT-BCT guiding the implementation of UKVFTA rules of origin. The circular took effect on July 26, 2021. Accordingly, for export value exceeding EUR6,000, exporters must obtain a certificate of origin authorized by the Ministry of Industry and Trade. Exporters are allowed to self-certify the origin of export and import shipments valued at less than EUR6,000 between the UK and Vietnam. For imports worth more than EUR6,000 into Vietnam, exporters registered in an electronic database authorized by the UK customs authorities are allowed to self-certify.
Proof of origin must be submitted to Vietnamese customs within two years of imports. Customs authorities may require a translation if not in English. Certificates of origin are valid for 12 months and must be submitted to customs authorities of either country within the validity period.
Garments and textiles are Vietnam’s key exports to the UK
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The Vietnamese government promulgated Decree 53/2021/ND-CP dated May 21, 2021 on Vietnam’s preferential export tariff and special preferential import tariff schedules to implement the UKVFTA for the 2021-2022 period. The decree includes two appendices detailing the products that qualify for preferential tariffs. Specifically, goods exported from Vietnam to the UK will be eligible for preferential tariffs if they include commodity codes, commodity descriptions, transport documents with destinations, preferential tariffs for each commodity, and customs declarations declaring that goods originate from Vietnam. Products imported into Vietnam must meet rules of origin and originate from the UK or from non-tariff zones.
The trade deal is contributing to strengthening the UK-Vietnam relationship by trade liberalization, legal regulation and alignment in global standards. Vietnam has also pledged to support the UK in joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The UK’s participation in the CPTPP will serve as a vivid testament to Vietnam’s commitment towards free trade amid the protectionism trend in many countries.
Vietnam is currently the second largest Southeast Asian exporter to the UK after Thailand, with the main exports being mobile phones, garments and textiles and seafood. The UK is also looking to invest in education, renewable energy, technology, infrastructure and healthcare in Vietnam. In fact, the UK is the largest foreign investor in the Vietnamese education sector.
| In 2021, there were 48 direct investment projects from the UK into Vietnam with newly registered capital of more than US$53 million, a year-on-year increase of 157 percent, helping maintain total UK direct investment in the Southeast Asian nation at US$4 billion. The UK is currently among 12 countries with the largest foreign direct investment in Vietnam. |
VietNam Economic News
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