Technical Barriers to Trade and Sanitary and Phytosanitary Measures (Tbt/sps)

Box 2.1: Current regulations on customs valuation

The starting point for determining the customs value of imported goods is the “transaction value”, that is, “ the price actually paid or payable for the goods when sold for export to the country of importation” . However, in certain cases, the transaction value is not a reliable basis, for example when the transaction is between related parties. In such cases, the Agreement on Customs Valuation provides five alternative methods for determining the customs value of imported goods. In the WTO system of law, the provisions on customs valuation are contained in the following provisions:

- Article VII of GATT

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- Agreement on Implementation of Article VII of GATT 1994 (Customs Valuation Agreement).

- Decide on cases where the customs authority has reason to doubt the authenticity or accuracy of the declared value and

- Decisions on documents related to minimum values and imports of exclusive agents, exclusive distributors and exclusive franchisees.

For WTO members, the WTO Agreement on Customs Valuation replaces the Brussels Convention on Customs Valuation.

The above five methods are described in a “multi-tiered” system. This means that the method listed first takes precedence. Only the third and fourth methods can be interchanged at the request of the importer concerned. The five alternative methods for determining customs value are:

1. Use the transaction value of identical goods imported at the same time in the same country;

2. Use the transaction value of similar goods imported at the same time into the same country;

3. Use the selling price in the territory of the importing country of the imported goods or identical or similar imported goods, minus the costs incurred by the importer during the period from importation to resale;

4. Use a calculated value, based on the cost of production plus selling, general and administrative expenses and other costs incurred prior to importation, plus a reasonable profit margin;

5. Any other legal method.

Customs valuation procedures themselves must be transparent and respect the principle of confidentiality of the information provided. They must not create additional barriers to the importation of goods.

87/2004/TT-BTC dated August 31, 2004 and Vietnam has fully incorporated the provisions of the agreement on customs valuation and the notes into its regulations, especially in Decree No. 60/2002/ND-CP and Circular No. 118/2003/TT-BTC.

Due to technical difficulties and limitations in accessing information and data collection, Vietnam still faces difficulties in applying the computed value method (Article 6) and the deductive method (Article 5.2) (methods 3 and 4 in box 2.1) to some imported goods for processing. This is because determining this value requires investigating the very complex accounting systems of foreign companies. Vietnam currently does not have the necessary capacity, institutions, resources and procedures to carry out these tasks. This becomes a real problem in the context of the participation of many production units located in different countries in the same geographical area. Administrative management issues can also disrupt the seamless flow of inputs and raw materials to ensure efficient production.

Thus, the remaining important issue is not to develop legal documents to ensure WTO compliance. The most difficult aspect will be to implement customs valuation regulations in accordance with the WTO . We have also made many efforts to strengthen our capacity and upgrade equipment to overcome the above difficulties. However, Vietnam still needs more technical support to effectively implement customs valuation methods, fully complying with the requirements of the agreement.

b. Some problems in customs valuation in the post-WTO period:-

The first problem is that, although Vietnam has completely abolished the special consumption tax and value added tax regime that discriminates between domestically produced goods and imported goods, the current method of determining taxable value can still lead to the consequence that imported goods from some countries are subject to higher taxes. This poses a risk of giving rise to issues of non-most-favored-nation treatment of imported goods, violating the basic principles of the WTO on transparency and consistency with the agreement on customs valuation (for example, the regulation on taxing according to alcohol content of wine and spirits - for this issue, our direction of amendment according to the WTO commitment is to apply an absolute tax rate or a percentage tax rate).

The second issue is that Article 11 of the Customs Valuation Agreement requires an independent procedure for reviewing complaints regarding valuation decisions.

customs. Although it seems that Vietnam has a suitable legal framework for this work, Vietnam does not have an official administrative court. Therefore, complaints about administrative decisions are only resolved by the higher administrative level within the Ministry. According to Article 11, the issue of administrative disputes has always been a topic of interest to the members of the working group - According to current law, importers can file an appeal against administrative decisions causing disputes to the decision-making agency. If not satisfied or if the settlement period has expired, the importer can file an appeal to a higher administrative agency or bring the case to the Administrative Court according to Article 1.7 of Law No. 26/2004/QH11 of the Law on Complaints and Denunciations, as amended, and Article 1.1 of Ordinance No. 10/1998/PL-UBTVQH10 issued on December 25, 1998, on the amended Ordinance on procedures for resolving administrative disputes. Complaints will be submitted to the administrative court for resolution. The final and binding decision on appeals to higher customs authorities is that of the Ministry of Finance; in some exceptional cases, the Minister's decision will be submitted to the Prime Minister. However, in practice, to fully comply with Article 11 of the Agreement on Customs Valuation, Vietnam needs to make organizational changes and new supplements to the Ordinance on Procedures for Settlement of Administrative Disputes to be submitted to the National Assembly for consideration as soon as possible.

The third problem is that we currently do not have any specific regulations for a standard collateral system to ensure that imported goods can be released during customs disputes. According to current policy, in case of a dispute over the customs value of imported goods, the goods can be released when the tax payment is guaranteed by a credit institution or an organization authorized to conduct certain banking activities, or if the customs declarant is granted an extension of time to pay the tax (Article 25.2.b of the Customs Law No. 29/2001/QH10 issued on June 29, 2001). The possibility of delayed customs clearance at the border gate, the consequence of which is the encouragement of smuggling, suggests that not only the capacity of customs management needs to be improved, but also mechanisms for temporary detention of imported goods need to be established.

pending customs clearance, according to Article 13 of the Customs Valuation Agreement( 29 ). The issues of post-clearance audit, fraud detection and tax collection are already covered by Vietnamese law, and therefore also need to be capacity-built.

2.2.2.3. Issues regarding business rights (franchise)

(1). Management practices in Vietnam

One of the fundamental issues of Vietnam's non-tariff policy is the issue of business rights. In fact, business rights are closely linked to import-export rights and the right to offer and sell products in the market. Previously, business rights were only in the hands of a few state-owned monopoly enterprises. Only enterprises licensed by the Ministry of Trade had the right to import and export.

It can be said that the first innovation in Vietnam's trade is the issue of business rights. Vietnam's approach to liberalizing business rights is as follows: (1) Expanding export rights first, then import rights (2) Import-export business rights are expanded to state-owned enterprises and then to non-state-owned enterprises. (3) Manufacturing enterprises enjoy business rights first, then commercial enterprises (4) Enterprises with foreign investment capital enjoy business rights to serve the production and business sector (5) Expanding business rights in accordance with the business registration of enterprises. In recent times, there has been progress in expanding business rights for economic entities. Enterprises of all economic sectors have the opportunity to access the right to import many goods with quotas or focal points such as rice, fertilizers, textiles. Therefore, the liberalization of business rights is also accompanied by the abolition of quotas, focal points...

Government Decree No. 57/1998/ND-CP issued on July 31, 1998 abolished the requirement for import-export licenses and working capital requirements. From September 1, 1998, all Vietnamese companies - regardless of ownership, nature (commercial or manufacturing) and capital amount - were allowed to import and export goods.

29 Vietnam is not a party to the Istanbul Convention on Temporary Detention of Goods, signed on June 26, 1990 (entered into force on November 27, 1993) within the framework of the World Customs Organization.

However, business activities in some areas (such as weapons, anesthetics, etc.) are still prohibited or subject to conditions (mainly for the purpose of ensuring safety, human health and environmental protection). For imports by foreign-invested companies, the previous laws are still in effect (foreign investment law). Vietnam does not encourage foreign investment in pure trade without local production or manufacturing facilities.

In order to take a step forward in creating a level playing field between Vietnamese companies and foreign-invested companies, the Vietnamese government issued Decree No. 10/1998/ND-CP dated January 23, 1998. This Decree allows foreign-invested companies to purchase goods in the domestic market for direct export or export after processing, except for goods prohibited from export. According to Decree No. 45/2000/ND-CP issued on September 6, 2000, branches of foreign enterprises are allowed to purchase agricultural products, handicrafts and processed agricultural products (except rice and coffee), vegetables, consumer goods, meat, poultry and processed foods for export. These branches are also allowed to import certain types of goods for sale in the Vietnamese market, such as machinery, mining equipment, agricultural and aquatic product processing equipment, raw materials for the production of human and animal medicines, and raw materials for the production of fertilizers and pesticides, provided that these branches must use foreign currency earned from exports to pay for imports, and they must have a license from the Ministry of Trade.

Another significant step forward in policy is the birth of the Commercial Code (amended) and the Investment Law 2005, along with Decrees 12/2006/ND-CP and 108/2006/ND-CP guiding the implementation of these laws. The Vietnamese Government allows all traders to have the right to import and export, temporary import for re-export, temporary export for re-import, transit, processing, and agency in the purchase and sale of goods according to regulations and within the scope of Decree 12/2006/ND-CP, regardless of the business lines stated in the business registration certificate. In addition, branches of foreign traders in Vietnam and traders with foreign direct investment are also allowed to import and export, temporary import for re-export, temporary export for re-import, transit, processing, agency in the purchase and sale of goods and goods transit services according to current regulations.

The right to buy and sell goods between export processing enterprises and the domestic market (Article 15 of Decree 108). According to the commitment to join the WTO, some goods that State-owned enterprises have a monopoly on exporting will end at a certain time, such as rice (until 2009) and pharmaceuticals (2011). For pharmaceuticals, foreign enterprises and individuals are allowed to import them into Vietnam but do not have the right to distribute them.

(2) Inadequacies and issues affecting the post-WTO period

Trade rights include the right to import and distribute imported products. This is a remnant of the foreign trade monopoly policy that only China and Vietnam had when joining the WTO. Up to now, business rights continue to be a prominent issue in Vietnam's trade policy. Foreign-invested enterprises continue to wish to receive more complete business rights. Meanwhile, Vietnamese enterprises are also requesting clear regulations on changing business rights when changing registered business lines. In addition, there is the issue of agents and branches of foreign traders in Vietnam. These issues have been and are being resolved in the process of implementing laws recently passed by the National Assembly such as the 2005 Enterprise Law, the Commercial Law (amended), and the 2005 Investment Law to create all favorable conditions for domestic and foreign enterprises.

According to the author's research, import business rights have been significantly relaxed in recent years. Importing goods is no longer reserved for specialized companies, except for products including crude oil, refined oil, etc.products and fuel, aircraft and aircraft parts, feature films and magazines . This demonstrates our government's great effort in expanding business rights to non-state enterprises and foreign-invested companies in accordance with WTO regulations.

One drawback is that, under current law, foreign traders without a representative in Vietnam still do not have the right to import for resale or export. We are now being asked to eliminate this discriminatory system, which would allow

Domestic and foreign individuals and companies are free to import inputs and finished products for resale, and to export without any restrictions other than those in accordance with Articles 20 and 21 of the GATT. The process of adjusting the law is being completed and the National Assembly will approve its implementation in the near future. The next issue is that we are currently actively considering the issue of commercial rights in the direction of minimizing restrictions on 100% foreign-owned companies for products such as: rice, tobacco, gasoline, films, books, newspapers, brochures and leaflets, printers, tapes, discs, recording media. In any case, the restrictions on commercial rights are inconsistent with the requirements of the WTO, violating Article 11.1 and Article 3.4 of GATT 1994. The viewpoint of WTO members, as well as the will of our government, is to organize the implementation of the commitment that upon joining the WTO, legal entities or natural persons, domestic or foreign, have the right to become official importers or exporters of products permitted to be imported into or exported from Vietnam, and in the case of import, will have the right to sell those products to legal entities or natural persons , regardless of whether they are Vietnamese or foreign. In short, Vietnam needs to ensure that commercial rights will be managed in accordance with the relevant provisions of the WTO upon joining. This will be a rather sensitive issue that requires us to consider carefully, as well as avoid lawsuits.

Regrettably, due to failure to fully implement commitments in the period immediately after accession.

2.2.2.4. Issues on technical barriers to trade and sanitary and phytosanitary measures (TBT/SPS)

(1) TBT/SPS implementation status in Vietnam

Vietnam commits to fully implement the WTO Agreement on TBT upon joining the WTO without a transition period. On May 26, 2005, the Prime Minister issued Decision 444/2005/QD-TTg approving the project to implement the TBT Agreement. According to Decision 444, the project's objective is to ensure that Vietnam will fulfill its obligations under the agreement on technical barriers to trade after joining the WTO, and develop trade with other countries.

member countries of the WTO and achieve the country's goals of socio-economic development and international economic integration. In addition, the Prime Minister also directed agencies and ministries to develop and re-examine Vietnamese standards (TCVN) and industry standards (TCN) in accordance with international standards to ensure socio-economic benefits and at the same time enhance the competitiveness of Vietnamese enterprises when Vietnam becomes an official member of the WTO. Decision 444 took effect from June 17, 2005.

Similarly, animal and plant quarantine is a legal technical barrier to restrict the arbitrary import of agricultural products. Vietnam has had quite strict legal regulations on this issue according to international standards (CODEX, FAO/WHO standards) - to fully comply with the SPS agreement upon accession. However, due to a purely protectionist mentality, low trade volume, and a barely functioning apparatus, it is currently unsystematic, low-tech and ineffective. For plants, SPS measures are stipulated in Decree No. 36/2001/PL-UBTVQH10 dated July 25, 2001 on plant protection and quarantine, supplemented by Decree No. 26/2003/ND-CP of the Government dated March 19, 2003. For animals, quarantine policies and procedures are stipulated in Decree No. 18/2004/PL-UBTVQH11 dated April 29, 2004. Regarding food safety, the National Assembly passed the Decree on food safety and nutrition dated July 26, 2003, effective from November 1, 2003 (implementing Decree No. 163/2004/ND-CP dated September 7, 2004).

In the author's opinion, our country should thoroughly apply this measure in trade; build a system of mutually complementary policies aimed at a list of items requiring mandatory SPS inspection. Effective implementation of this measure will not only create an additional legal barrier to agricultural imports but also better protect agricultural production in particular as well as human health, animals and plants and the environment in general.

(2) Vietnam's difficulties in implementing TBT/SPS

+ Weakness in the legal system: In the field of TBT standards, Vietnam has passed the ordinance on measurement (October 6, 1999), the ordinance on quality (October 6, 1999), and the ordinance on

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