Vietnam recently announced that it would exit the European Union's Generalized System of Preferences (GSP), a program that allows developing countries to benefit from preferential customs duties for their exports to the EU.
This new regulation, effective since January 1, 2023, will have important implications for European importers of Vietnamese products.
What are the differences between the GSP and the EU-Vietnam Free Trade Agreement?
The Generalized System of Preferences (GSP), which was granted to Vietnam by the EU in order to ensure a smooth transition to the Vietnam-EU Free Trade Agreement (EVFTA ) which came into force in 2020, ended on December 31, 2022.
Between 2020 and 2022, these two systems therefore coexisted. They were both applicable, subject to compliance with the rules of origin justification provided by the chosen system.
The EVFTA provides the same or more favorable customs duties preferences than those provided under the GSP program.
Overall, the objective is to gradually eliminate these duties.
What changes in 2023?
On December 31, 2022, Vietnam officially exited the EU's Generalized System of Preferences (GSP).
As of January 1, 2023, only the Vietnam-EU Free Trade Agreement (EVFTA) will remain applicable.
It is important to note that the REX system, applied to imports under the GSP, does not work, at the moment, for imports under the EVFTA.
However, as the REX system is used in other free trade agreements, such as with Canada or Japan, it should be used with EVFTA in the coming months.
💡 What is the REX system?
The Registered Exporter system is a procedure for self-certification of the origin of products by the exporter themselves. In order to be entitled to make a declaration of origin, an exporter must be registered in a database to obtain an EU registered exporter REX number.
What are the implications for EU importers?
In order to benefit from the preferential customs tariffs, importers must provide the following documents:
- For shipments with a commercial value under €6000
Importers must provide the certificate of origin from the Vietnamese supplier's commercial document or a EUR1 stamped by Vietnamese Customs. - For shipments with a commercial value of more than €6000
The presentation of a EUR1 certificate stamped by Vietnamese customs is necessary, the certificate of origin on the commercial document of the Vietnamese supplier is no longer sufficient.
Note that this EUR1 certificate can be stamped after the declaration of exit from Vietnamese territory for products exported until 31/12/2022 and cleared after 01/01/2023.
💡 What is a EUR 1?
It is a certificate of preferential origin, i.e. a document proving the origin of goods, issued in the framework of preferential trade agreements between the European Community and certain countries or groups of countries.
Exports to Vietnam
On the other hand, the REX system is already available for exports to Vietnam. EU exporters can thus issue declarations of origin on their invoices, using the registered exporter system (REX).
