Background
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 on 03/03/2015. The two governments have been encouraged full cooperation since 1996 which shown in increased export and import for both countries.
Since 2005, Ministry of Industry and Commerce of both countries had signed to accepted List of tariff reduction 50% and 0%. The reduced import tax for each other results to promote trade value between the two countries.
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 parts, Beer Lao, tobacco, coffee, rice, corn and mines.
Under the agreement, all products that are originating from Lao PDR will receive tariff free from Vietnam except products that fall in reduction 50% list and Sensitive list which are 27 goods items (HS 10 digits).
For sensitive products such as rice and tobacco, Vietnam provides some import quotas for Lao PRD with tariff exemption. Those include rice quotas for 70,000 tons per year with HS Code as follow: 1006.10.00.90; 1006.10.19.00, 1006.20; 1006.20.10, and 1006.20.90.
In addition, Lao PDR is also gained tobacco export quotas for 3,000 Ton per year. The export of these goods will be granted for tariff exemption once the export quotas are not exceeding total import quotas of Vietnam.
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
Transportation
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.
Website: http://www.laotradeportal.gov.la
Email: [email protected]
Contact: 021 450255
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