Hanoi (VNA) - ‘Made in Vietnam’ products are required to have a localisationrate of 30 percent and be partly produced in Vietnam.

This isone of the criteria set by the Ministry of Industry and Trade (MoIT) in a draftcircular providing criteria for products eligible to be classified as ‘made in Vietnam’.

The draftcircular said that ‘made in Vietnam’ products should originate or be whollyproduced in Vietnam, including agricultural products or minerals. Otherwise,products should undergo final processing or manufacturing in Vietnam tofundamentally change the essential qualities of the products to be labelled assuch. 

Inaddition, products that do not originate or are totally produced in Vietnam butmeet HS code transformation and have a certain amount of added-value would beconsidered Vietnamese products. HS code is a set of internationalstandards of names and numbers to classify traded products.

There aretwo ways to clarify added-value in products. In the direct way, if the goodshave the price of raw materials in Vietnam accounting for 30 percent of theex-factory price, then it is considered “made in Vietnam”. The indirect way isthe ex-factory price minus the price of non-Vietnamese input materials.

Forexample, with plywood products, enterprises now apply criteria to define therules of origin as HS code transformation because it is difficult to retrievethe types of wood in plywood panels purchased from which source and providers.Therefore, in case of applying the criteria for HS code transformation,enterprises that buy domestically or import materials to make plywood boardsand undertake simple processing would still satisfy the rules of origin.

The draftdecree states that goods temporarily imported into Vietnam for re-export andgoods shipped through or transiting Vietnam are not regarded as Vietnameseproducts.

Accordingto the ministry, firms will not incur extra costs under the new decree, asrequirements on labelling goods and determining the country of origin have longbeen mandatory, in line with the Government’s Decree 43/2017 on the labellingof goods.

The MoITexpects the criteria set in new circular to be vital in tackling the growingtrend of foreign goods forging Vietnam’s origin. Genuine businesses thereforewould not face the risk of being accused of origin fraud and avoiding thethreat of litigation and the erosion of consumer trust.

Undercurrent regulations, manufacturers are allowed to label their products as madein Vietnam themselves.

Recently,many enterprises have taken advantages of this loophole to self-proclaimproducts as “Made in Vietnam” such as Khaisilk, a premier Vietnamese silkbrand, found mislabelling its scarves imported from China or Asanzo which hasbeen under investigation as they assemble TV sets from components imported fromChina and declare them Vietnamese products.-VNA