EU-Vietnam Free Trade Agreement: Increased utilization rate of Special Preferential Import Tariffs

The EU–Vietnam Free Trade Agreement (EVFTA) has officially taken effect on August 1, 2020. In the first two years of implementation, companies have effectively exploited Special Preferential Import Tariffs set out in the EVFTA.

The utilization rate of such preferential tariffs set out in the EVFTA in the first half of this year increased by over 32 percent. Preferential tariffs available include the reduction/elimination of customs duties for many of Vietnam’s key commodities such as seafood, agricultural products, etc.

Beneficiaries

Notable beneficiaries of increased trade volumes include the agricultural, but also the steel sector, the growth being partly driven by increased commodity prices on global markets. The main requirements for companies – including foreign invested ones – to qualify for preferential tariffs include:

For goods exported from Vietnam:

They are imported into the territories under the EVFTA;
There are transport documents (copies) with the destination in the territories under the EVFTA;
There are import customs declarations proving that the goods exported from Vietnam are im-ported into the territories under the EVFTA.

Imported goods will be eligible for preferential import tariff rates under EVFTA if:

They are included in the Special Preferential Import Tariff Schedule;
They are imported to Vietnam from territories under the EVFTA;
They meet requirements pertaining the origin of goods and have proofs of origin as provided for in EVFTA.

Standards to observe

While preparing to export into the EU from Vietnam, companies should also take care of old and new standards and requirements applicable to the common market, an example of a new one being the German Supply Chain Due Diligence Act imposing certain labour and environmental standards on supply chains connected to Germany.