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From August 1, product-specific rules under the VKFTA Agreement will apply

07/06/2022 10:04 AM
Item Specific Rules (HS version 2017) under the Chapter on Rules of Origin in the Vietnam-Korea Bilateral Free Trade Agreement (VKFTA) will be applied from August 1, 2022.

Also according to the Import-Export Department, the revised Appendix 3-A mentioned above has some new contents, including technical conversion of the list of Item Specific Rules (PSR) of 97 chapters at HS level with 6 words HS 2012 version to HS 2017 version.
Amendment of the corresponding origin criteria for a number of textile products of headings 61.01 – 61.17, 62.01 – 62.12 and 62.15 – 62.17.
The exchange note with the list of PSRs in Appendix 3-A, as amended above, will take effect from August 1, 2022 after Vietnam and Korea complete the necessary domestic legal procedures and notify each other through diplomatic channels.
Implement international commitments and adjust the process of issuing C/O form VK according to the Government’s Decree No. 31/2018/ND-CP dated March 8, 2018 detailing the Law on Foreign Trade Management on the origin of goods. Ministry of Industry and Trade signed and promulgated Circular No. 09/2022/TT-BCT amending and supplementing a number of articles of Circular No. 40/2015/TT-BCT dated November 18, 2015 providing for the implementation of Regulation Rules of Origin in the VKFTA Agreement.

Circular No. 09/2022/TT-BCT includes 2 articles and 1 Appendix, in which the content of the Appendix replaces the entire Appendix II (Item-specific rules), takes effect from 1/8/ 2022.
Signed on May 5, 2015 and officially effective from December 20, 2015, VKFTA is the first free trade agreement among bilateral FTAs ​​between Vietnam and economic partners. Especially, after nearly 7 years of implementing VKFTA, trade and investment between the two countries has made a strong leap.
Statistics show that, in 2021, the total import-export turnover of Vietnam with South Korea will reach 78.1 billion USD, an increase of 18.3% compared to 2020; in which, exports reached 21.9 billion USD, up 14.9%, imports from Korea reached 56.2 billion USD, up 19.7% compared to 2020.

Vietnam’s imports from Korea account for 16.9% of Vietnam’s total imports from the world. The trade deficit from Korea in 2021 is worth 34.2 billion USD, up 23% compared to 2020.
According to the Import-Export Department, in recent years, Korea has continuously been one of the leading markets for importing goods from Vietnam with the highest rate of using FTA preferences. In 2021, the Korean market has a preferential use rate of 50.82% with the export turnover to Korea using preferential C/O reaching USD 11.15 billion.

The group of goods exported to Korea with the best rate of using FTA preferences under VKFTA includes: seafood (94.78%), coffee (97.09%), pepper (96.02%), vegetables and fruits. (89.67%); wood and wood products (80.6%); textiles and footwear (nearly 100%).
Notably, the use of incentives from the AKFTA and VKFTA agreements is high because enterprises have mastered the rules of origin for goods exported to the Korean market; rules of origin of AKFTA and VKFTA are relatively flexible; manufactured goods for export can easily meet the criteria to be granted C/O form AK and VK.
In addition, Korean FDI enterprises in Vietnam import raw materials from Korea and apply the principle of origin accumulation for manufactured goods exported to Korea.

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