Based on special relationship between two governments Lao PDR and Vietnam, two governments had signed Free Trade Agreement (Amended Version) at Vientiane Capital, Lao PDR, and Dated 09/03/1998. Two governments had encourage the special relation together from 1996-2000 which shown in increased for Export and Import for both countries that increased from 188 million Dollars in 1996 to 359 million Dollars in 1999.
Since July 2005 until now, Ministry of Industry and Commerce of both countries had signed to accepted List of tariff reduction 50% and 0% by based on reduced import tax for each other and resulted to push trade between two countries to grown up to be 1 billion in 2010.
Generalized Preferential System
Generalized Preferential on import tax cover many products from Lao PDR that export to Vietnam which are Rice Cookers, Fans, Blenders, Motorbike’s spare parts, Beer Lao, Tobacco, Coffee, Rice, Corn and Mines.
Under that agreement, all products that have originating from Lao PDR will receive tariff free from Vietnam except products that fall in reduction 50% list and Sensitive list which are 155 goods items.
For sensitive products such as Rice and Tobacco Vietnam provide quota for Lao PRD in same amount to export to Vietnam without import tax. For Rice received export quota 70,000 Ton per year with cover HS Code as follow: 1006.10.00.90; 1006.30.19.00; 1006.30.30.00 and 1006.30.90.00 and Tobacco received export quota 3,000 Ton per year.
In addition, there are some items that still need quota to export to Vietnam such as Eggs and poultry (HS 0407.00.91, HS 0407.00.92, HS 0407.00.99), Salt (HS 2501), Raw Sugar and Sugar (HS 1701) all of these items can export to Vietnam but not exceed the limitation from Vietnam.
In 2013 Lao PDR made negotiation with Vietnam to require quota for Sugar and expect to get permit within 2014.
Rules of Origin: ROO
Products from Lao PDR that can obtain preferential to export to Vietnam have to fulfill criteria as follows:
1. Wholly obtained Products which are Agricultures products and mining.
2. Products have to pass process Substantial Transformation as follow:
a. Change in Tariff Heading: CTH
b. Value added 40%
c. Product specific Rule such textile, Chemical products, electric products and etc…
Certificate of Origin
Products that can obtain preferential have to be products that meet originating criteria and have Certificate of Origin as reference document. Certificate of Origin use under Lao – Vietnam called From S.
Form S can obtain from Department of Industry and Commerce from provincial and Capital or Special Economic Zone Vientiane – Nonethong. Document needed for request Certificate of Origin:
1. Application letter
2. Printed of Certificate of Origin
3. Invoices and Packing List
4. Custom Declaration
5. Copy of Bill of Lading
6. Domestic invoices (In Case of buying)
7. Cost Statement and Working Process
To obtain trade preferential, transportation is one criteria that must be met. Under form S the transportation have to be Direct Consignment mean goods have to send directly to import country.
In case of geographical goods can be send through third country but have to be under custom control and seal must be close.
Conclusion: to obtain trade preferential from Vietnam, Exporters have to follow origin criteria as follow: 1. Goods must have originating 100% from Lao PDR such agriculture products and mining; or 2. If there is any import raw material, good have to gone through Substantial transformation and also have to be Direct Consignment for the transportation.
More information: Certificate of Origin Division, Department of Import and Export, Ministry of Industry and Commerce.
Contact: 021 450255
Agreement between Ministry of Industry and Commerce of the Lao PDR and Ministry of Industry and Trade of the Socialist Republic of Vietnam on Rules of Origin for goods granted for Preferential Import-Export Duty Scheme (Lao version)