Classification of green and red lanes in granting certificates of origin of goods

The Minister of Industry and Trade has just signed and issued Circular 15/2018/TT-BCT regulating the classification in the process of granting certificates of origin of preferential goods, effective from August 15, 2018.

Notably, the Circular has divided the preferential certificate of origin (C/O) issuance process into 3 different streams, including the green stream, the red stream and the regular stream.

Traders and businesses subject to the red channel regime will have to submit documents proving the origin of goods for all shipments.

Specifically, the green channel is a priority regime in the preferential C/O issuance process, traders are given priority in exemption, reduction, late submission of documents, reduction of time for C/O issuance and exemption from physical inspection of goods during the C/O application process.

For the green lane, traders are exempted from or have their documents reduced in the application for preferential C/O; are exempted from physical inspection of goods and production facilities during the application for preferential C/O; have their processing time for C/O application shortened; and are allowed to extend the time for late submission of documents within 45 working days for documents that are allowed to be submitted late.

The processing time for preferential C/O applications in case traders applying for the green channel submit their applications in paper form is a maximum of 6 working hours from the time of receiving complete and valid documents. Traders applying for the green channel are also exempted from physical inspection of goods and production facilities during the process of requesting preferential C/O.

The red channel is a mode that requires control in the preferential C/O issuance process. Accordingly, traders must submit documents proving the origin of goods for all shipments and may be required to physically inspect the goods during the C/O application process.

For the red channel, traders are required to comply with strict regulations on C/O documents, review time and production capacity inspection. Items subject to the red channel regime are determined according to criteria that are items with a high risk of origin fraud to evade trade defense measures of the importing country or benefit from preferential tariff commitments that the importing country grants to Vietnam.

Or the quantity of C/Os subject to investigation to verify the origin of goods has increased significantly and abnormally at the request of the importing country.

The normal stream is the current regime in the preferential C/O issuance process as prescribed in Decree No. 31/2018/ND-CP dated March 8, 2018 of the Government detailing the Law on Foreign Trade Management on origin of goods and related guiding documents.

Also according to Circular 15, to be eligible for the green channel regime in the preferential C/O issuance process, traders need to be recognized by the Ministry of Industry and Trade as reputable exporting enterprises, or traders need to be recognized by the Ministry of Finance as priority enterprises in the field of state management of customs.

Or the trader meets the conditions such as not violating the regulations on origin in the last 2 years before the time of requesting approval for the cold flow regime; having a complete record storage system (paper records and electronic records) to ensure proving the authenticity of C/O and origin of goods within the storage period as prescribed in Decree No. 31/2018/ND-CP; implementing the electronic C/O declaration process through the Electronic Certificate of Origin Management and Issuance System (www.ecosys.gov.vn) and having a frequency of requesting the issuance of at least 30 sets of preferential C/O/year.

Meanwhile, traders and enterprises will be considered in the red channel regime if they violate the acts specified in Article 29 of Decree No. 31/2018/ND-CP within the last 2 years up to the time of channelization. Traders do not meet the requirements for verifying the origin of goods or have a conclusion on the non-attachment of the origin of goods by the customs authority of the importing country within the last 2 years up to the time of channelization.

Or traders applying the green channel or normal channel regime export goods applying the red channel regime (goods with high risk of origin fraud; goods with C/O quantity subject to investigation and verification of origin of goods) but do not have a production facility or production capacity does not meet the requirements for producing export goods.

The classification in the preferential C/O issuance process is carried out automatically. The Import-Export Department (Ministry of Industry and Trade) and the agencies and organizations issuing preferential C/O publicly announce the cases applying the green channel, normal channel or red channel regime in the Electronic Certificate of Origin Management and Issuance System.