DECISION

PROMULGATING THE REGULATION ON ISSUANCE OF CERTIFICATES OF ORIGIN, FORM I), FOR PREFERENTIAL TREATMENT UNDER THE AGREEMENT ON THE COMMON EFFECTIVE PREFERENTIAL TARIFFS (CEPT) SCHEME FOR THE ASEAN FREE TRADE AREA (AFTA)

THE MINISTER OF INDUSTRY AND TRADE

Pursuant to the Agreement on the Common Effective Preferential Tariffs (CEPT) Scheme for the ASEAN Free Trade Area (AFTA );

Pursuant to the Government's Decree No. 189/2007/ND-CP of December 27, 2007, on the function, tasks, powers and organizational structure of the Ministry of Industry and Trade;

At the proposal of the director of the Export-Import Department,

DECIDES:

Article 1.- To promulgate together with this Decision the Regulation on issuance of certificates of origin. Form D, for preferential treatment under the Agreement on the Common Effective Preferential Tariffs (CEPT) Scheme for the ASEAN Free Trade Area (.AFTA), which was officially signed in Singapore on January 28. 1992 (referred to as the Regulation on issuance of C/O Form D in this Regulation and attached appendices).

Article 2.- This Decision takes effect 15 days after its publication in "CONG BAO."

This Decision replaces the Trade Minister's Decision No. 1420/2004/QD-BTM of October 4. 2004, promulgating the Regulation on issuance of certificates of origin. Form D. for preferential treatment under the Agreement on the Common Effective Preferential Tariffs (CEPT) Scheme for the ASEAN Free Trade Area (AFTA) (below referred to as Decision No. 1420/2004/QD-BTM) and decisions amending and supplementing Decision No. 1420/2004/QD-BTM.

Article 3.- The Office, the Import-Export Department and concerned agencies shall implement this Decision.

REGULATION

ON ISSUANCE OF CERTIFICATES OF ORIGIN. FORM D
(Promulgated together with the Industry and Trade Minister's Decision No. 19/2008/QD-BCT of July 24, 200S. promulgating the Regulation on issuance of certificates of origin Form D for preferential treatment under the Agreement on the Common Effective Preferential Tariffs (CEPT) Scheme for the ASEAN Free Trade Area (AFTA)

Chapter I

GENERAL PROVISIONS

Article 1.- Definitions

1. The Agreement on the Common Effective Preferential Tariffs (CEPT) Scheme for the ASEAN Free Trade Area (AFTA) between the Southeast Asian nations (below referred to as the CEPT Agreement) was officially signed in Singapore on January 28, 1992.

2. Certificates of origin. Form D (below referred to as C/O Form D) are certificates issued by issuing authorities to exports satisfying the requirements set out in this Regulation for preferential tariff treatment under the CEPT Agreement.

3. Vietnamese authorities issuing C/O Form D (below referred to as issuing authorities) are Import-Export Management Sections of the Ministry of Industry and Trade and other organizations authorized by the Ministry of Industry and Trade. The list of issuing authorities is shown in Appendix 13, which may be modified and supplemented by the Ministry of Industry and Trade at each specific time.

4. Applicants for C/O Form D (below referred to as applicants) include exporters, producers and lawfully authorized representatives of exporters or producers.

The eCOSys is an electronic certificate of origin issuance and management system in Vietnam at http://www.ecosys.gov.vn.

Article 2.- Goods to be issued C/O

Goods to be issued C/O are those that fully satisfy the origin conditions prescribed in this Regulation.

Article 3.- Responsibilities of applicants

Applicants shall:

1. Submit trader dossiers to issuing authorities, for traders applying for C/O for the first time;

2. Submit dossiers of application for C/O to issuing authorities;

3. Prove that exports meet all origin requirements and facilitate the verification of goods origin by issuing authorities;

4. Take responsibility before law for the accuracy and truthfulness of declarations related to C/O application, including cases of authorization by exporters;

5. Promptly report to issuing authorities at which traders have filed C/O applications on C/ O issued by Vietnamese issuing authorities which are rejected by importing countries (if any);

6. Create conditions for issuing authorities to conduct physical inspection at establishments producing or raising, growing, harvesting and processing exports;

7. Notify in writing issuing authorities with which traders have registered trader dossiers of the reasons for non-application for C/O there, and the names of the new issuing authorities at which traders have filed C/O applications;

8. Upon request of the Ministry of Industry and Trade, issuing authorities, customs authorities of Vietnam or importing countries, prove the authenticity of the origin of exported goods.

Article 4.- Responsibilities of issuing authorities

Issuing authorities shall:

1. Give guidance to applicants upon request:

2. Receive and examine trader dossiers and C/O application dossiers:

3. Verify the actual origin of products, when necessary:

4. Issue C70 when the goods satisfy the origin requirements set out in this Regulation and the applicants observe all the provisions of Article 3 of this Regulation;

5. Send specimens of signatures of persons authorized to sign C/O and their seals to the Ministry of Industry and Trade (the Import-Export Department) according to the Ministry's regulations for registration with customs authorities of importing countries;

6. Settle complaints related to C/O issuance according to their competence;

7. Re-verify the origin of exported goods at the request of the Ministry of Industry and Trade and customs authorities of importing countries;

8. Exchange information relating to the registration of trader dossiers in case traders have registered their trader dossiers with two or more issuing authorities and other matters related to C/ O issuance;

9. Implement the reporting regime and other requirements set by the Ministry of Industry and Trade.

Chapter II

PROCEDURES FOR C/O ISSUANCE

Article 5.- Registration of trader dossiers

1. Applicants may be considered for C/O issuance only at the places with which they have registered their trader dossiers and after they have completed trade dossier registration procedures. A trader dossier comprises:

a/Registration of the specimen of the signature of the person authorized to sign the application for C/O and the specimen of the seal of the trader

(Appendix 12. nor printed herein):

b/The business registration certificate of the trader (a copy with the true copy mark);

c/ The certificate of the tax identification number (a copy with the true copy mark);

d/ A list of production establishments (if any) of the trader (Appendix 11, not printed herein).

2. Any change in the trader dossier must be notified to the issuing authority with which the dossier has been registered before application for C/O. Trader dossiers must be updated twice a year.

3. In case of application for a C/O at an issuing authority different from that with which the applicant has registered the trader dossier, the applicant shall supply a written plausible reason for the non-application at the issuing authority with which the applicant has registered the trader dossier and shall register the trader dossier with the new issuing authority.

4. In all cases in which C/O applications have been filed but trader dossiers have not yet registered, trader dossiers must be registered at the time of applying for C/O under this Regulation.

Article 6.- C/O application dossiers

1. A C/O application dossier consists of:

a/The application for C/O (Appendix 10, not printed herein), which have been duly completed;

b/The C/O form, already completed;

c/ The export customs declaration for which customs procedures have been completed (this declaration is not required for exported goods for which submission of export customs declarations is not required by law);

d/The commercial invoice;

dd/The bill of lading.

Pending the availability of the export customs declaration for which customs procedures have been completed and the bill of lading (or any document equivalent to bill of lading), the applicant may submit these documents later within 15 (fifteen) working days from the date of receipt of C/O.

2. When finding it necessary, the issuing authority may request the applicant to supply additional documents related to the exports such as import customs declarations for materials and accessories; export permits (if any); purchase and sale contract; value added invoices on the purchase and sale of domestic materials and accessories: samples of materials and accessories or exports, and other documents proving the origin of exports.

3. The papers specified at Points c. d and e, Clause 1 and Clause 2 may be copies bearing the signatures and true copy marks of the head or authorized person of the unit or organization, of the signature and stamp of a public notary, together with the originals for comparison.

4. For traders participating in the eCOSys, the persons authorized to sign C/O applications shall declare data through the eCOSys, give e-signatures and transmit them to issuing authorities. After examining the dossiers on the eCOSys, if agreeing to issue C/O. the issuing authorities shall notify through the eECOSys to traders to submit complete dossiers on paper to the issuing authorities for comparison before issuing C/O.

Article 7.- Receipt of dossiers

When applicants submit dossiers, officers in charge of receipt shall receive them. Officers in charge of receipt shall notify written specific requests, make dossier receipts and hand one copy of the receipt to applicants when the issuing authorities request presentation of additional documents specified in Clause 2. Article 6 of this Regulation or at the request of the applicants. In case further verification is needed, a time limit should be stated under Clause 2. Article 8 of this Regulation.

Article 8.- Issuance of C/O

1. C/O must be issued as soon as possible within three (03) working days from the time applicants submit complete and valid dossiers, except for the cases specified in Clause 2 of this Article.

2. Issuing authorities may conduct physical inspection at production establishments when they see that documentary inspection is not enough for issuing C/O or detect signs of law violation with respect to previously issued C/O. Inspectors of issuing authorities shall make written records of inspection results and request applicants and/or exporters to sign in the written records. In case the applicant and/or exporter refuse to sign, the inspector shall write the reason for such refusal and sign in the written record for certification.

The time limit for handling the issuance of C/ O in this case must not exceed five (OS) working days from the date the applicants submit complete dossiers.

3. The time limit for verification must not obstruct the delivery of goods or payment by the exporters, unless it is due to the fault of the exporters.

4. The time limit for re-issuance of C/O stated in Article 11 of Appendix 7 must not exceed five (05) days from the date issuing authorities receive applications for re-issuance of C/O.

Article 9.- Refusal to issue C/O

1. Issuing authorities may refuse to issue C/O in the following cases:

a/ Applicants fail to register trader dossiers under Article 5 of this Regulation;

b/ C/O application dossiers are inaccurate and incomplete under Article 6 of this Regulation;

c/ Applicants have not yet submitted documents which are allowed to be submitted later under Article 6;

d/ Dossiers contain contradictory contents;

dd/ C/O application dossiers are presented at places other than those with which trader dossiers have been registered;

e/ C/O declarations are filled in by handwriting, contain erasures or contents which are too dim to read, or printed in different colors;

g/ There are lawful grounds to prove that products are non-originating under this Regulation or applicants commit fraudulent or dishonest acts in proving, the origin of products.

2. When refusing to issue C/O, issuing authorities shall notify in writing the applicant of the reason for refusal within three (03) working days from the date of refusal.

Chapter III

ORGANIZATION OF MANAGEMENT OF C/O ISSUANCE

Article 10.- Competence to sign C/O

1. Only persons who have completed procedures for signature specimen registration with the Ministry of Industry and Trade for forwarding to the ASEAN Secretary may sign and issue C/O.

2. C/O bearing the signatures of those who do not meet the requirement in Clause 1 of this Article shall be rejected by customs authorities of exporting countries for preferential treatment.

Article 11.- Sole coordinating agency

The Import-Export Department of the Ministry of Industry and Trade shall act as the sole coordinating agency in:

1. Guiding and inspecting the issuance of C/ O.

2. Carrying out procedures for registering specimens of signatures of persons competent to sign C/O and specimens of seals of issuing authorities of Vietnam with the ASEAN Secretariat and send specimens of signatures of persons competent to sign C/O and specimens of seals of issuing authorities of Member States to the CEPT Agreement to Vietnamese customs authorities;

3. Assisting the Minister of Industry and Trade in settling matters related to the implementation of the Regulation on issuance of C/O Form D.

Article 12.- Reporting regime

1. Issuing authorities that have been connected to the eCOSys shall update on a daily basis information (even when they do not issue any C/ O on the day) on the issuance of C/O. The information updating must comply with regulations of the Ministry of Industry and Trade.

2. Issuing authorities which have not yet been connected to the eCOSys shall implement the monthly reporting regime. Reports shall be sent to the Ministry of Industry and Trade on the 5th day of the subsequent month at the latest, based on the date shown in the postmark or the date of sending e-mail. The presentation and forms of reports shall be specified by the Ministry of Industry and Trade.

3. Past five (05) working days from the latest reporting deadline, if the Ministry of Industry and Trade has not yet received the said reports, it shall send the first reminder. After ten (10) working days from the latest reporting deadline, if the Mlinistry of Industry and Trade has not yet received the said reports, it shall send the second reminder. After fifteen (15) working days after the latest reporting deadline, if the Ministry of Industry and Trade has not yet received the said reports, it shall issue decisions to terminate the issuance of C/O by the violating authorities and publicly post such decisions on the Ministry's website.

Article 13.- Issuance of C/O

1. The Office of the Ministry of Industry and Trade shall coordinate with the Import-Export Department in printing C/O and distributing them to issuing authorities.

2. Issuing authorities shall directly sell C/O to applicants and make finalization of such sale according to regulations.

Article 14.- C/O issuance fee

Applicants shall pay C/O issuance fees to issuing authorities. C/O issuance fees shall be set by issuing authorities according to current regulations of the Ministry of Finance on charges and fees. C/O issuance fee rates shall be publicly posted up at places of issuance.

Chapter IV

SETTLEMENT OF COMPLAINTS AND HANDLING OF VIOLATIONS

Article 15.- Complaint-settling agencies

Exporters and applicants may lodge complaints with concerned issuing authorities, which shall issue replies within three (03) working days. If dissatisfying with these replies, applicants may lodge complaints with the Minister of Industry and Trade or initiate a lawsuits at an administrative tribunal in accordance with the law on complaints and denunciations.

Article 16.- Handling of violations

All C/O-related fraudulent acts shall be handled under Decree No. 06/2008/ND-CP of January 16. 2008. on sanctioning administrative violations in commercial activities, and its related amending and supplementing documents and guiding documents. If causing. serious consequences, depending on their seriousness, violators shall be examined for penal liability. If causing damage to the interests of the State or agencies, organizations or individuals, violators shall pay damages in accordance with law.

If detecting wrongdoings committed by issuing authorities, the Ministry of Industry and Trade shall, depending on the seriousness of such acts, handle them in accordance with law and may terminate the C/O issuance by these issuing authorities.

Article 17.- Withdrawal of C/O

Issuing authorities will withdraw issued C/O in the following cases:

1. Exporters or applicants forged any documents in the submitted dossiers Besides, issuing authorities shall put the names of exporters or applicants that have forged documents and made false declarations in the list of those subject to stricter inspection upon C/O issuance, and at the same time notify competent agencies for handling such forgery.

2. Issued C/O do not comply with origin criteria.

Article 18.- Implementation of the Regulation

In the course of implementation, any arising problems should be promptly reported to the Ministry of Industry and Trade for settlement at the following address:

The Import-Export Department, the Ministry of Industry and Trade

54 Hai Ba Trung. Hoan Kiem. Hanoi

Tel.: 04.2205444

Fax: 042205444

Email: co@moit.gov.vn

APPENDIX 1

RULES OF ORIGIN

(Issued together with the Regulation on issuance of C/O Form D)

In determining the origin of products eligible for preferential tariffs pursuant to the Agreement on the Common Effective Preferential Tariffs Scheme for the ASEAN Free Trade Area (below referred to as the CEPT-AFTA Agreement), the following shall be applied:

Article 1. Definitions

1. "MemberState" means the individual parties to the CEPT-AFTA Agreement, including Brunei Darussalam. the Kingdom of Cambodia, the Republic of Indonesia, the Lao People's Democratic Republic. Malaysia, the Union of Myanmar. the Republic of the Philippines, the

Republic of Singapore, the Kingdom of Thailand, and the SocialistRepublic of Vietnam:

2. "Materials" means raw materials, ingredients, parts, components, sub-assembly and/ or goods that are physically incorporated into another good or are subject to a process in the production of another good;

3. "Goods" include materials and/or products, which can be wholly obtained or produced in a MemberState, even if they are intended for later use as materials in another production process. For the purposes of this Appendix, the terms "goods" and "products" can be used interchangeably;

4. "Originating goods" means products or materials that meet origin criteria specified in this Appendix;

5. "Production" means methods of obtaining goods including growing, mining, harvesting, raising, breeding, extracting, gathering, collecting, capturing, fishing, trapping, hunting, manufacturing, producing, processing or assembling a good;

6. "Product-specific rules" means rules that specify that the materials have undergone a change in tariff classification or a specific manufacturing or processing operation, or satisfy the regional value content criterion (also referred to as an ad valorem criterion) or a combination of any of these criteria;

7. "Identical and interchangeable materials" means materials being of the same kind and commercial quality, possessing the same technical and physical characteristics, and which after being incorporated into the finished product cannot be distinguished from one another for origin purposes by virtue of any markings;

8. "Packing materials and containers for transportation" means the goods used to protect a good during its transportation, different from those containers or materials used for its retail sale.

Article 2. Origin criteria

Goods imported into the territory of a Member Slate shall be regarded as being originating goods which meet all conditions for preferential tariff treatment if they conform to the origin requirements under any of the following conditions:

1. A good which is wholly obtained or produced in the exporting MemberState as defined in Article 3;

2. A good not wholly obtained or produced in the exporting MemberState, provided that it is eligible under Article 4 or Article 5.

Article 3. Wholly obtained or produced goods

Products defined in Clause 1 of Article 2 shall be considered as wholly obtained or produced in the exporting MemberState in the following cases:

1. Plant and plant products grown and harvested, picked or gathered there;

2. Live animals born and raised there;

3. Goods obtained from animals referred to in sub-paragraph (b) above;

4. Goods obtained from hunting, trapping, fishing, aquaculture, gathering or capturing conducted there:

5. Minerals and other naturally occurring substances, not included in Clauses 1 to 4, extracted or taken from its soil, waters, seabed or beneath its seabed:

6. Products of sea-fishing taken by vessels registered with a Member State and entitled to fly its flag and other products taken from the waters, seabed or beneath the seabed outside the territorial waters: of that Member State, provided that that Member State has the rights to exploit such waters, seabed and beneath the seabed in accordance with international law[4]

7. Products of sea-fishing and other marine products taken from the high seas by vessels registered with a Member State and entitled to fly the flag of that Member State;

8. Products processed and/or made on board factory' ships registered with a Member State and entitled to fly the flag of that Member State, exclusively from products referred to in Clause 7 of this Article;

9. Articles collected there which can no longer perform their original purpose nor are apable of being restored or repaired and are fit only for disposal or recovery of parts of raw materials, or for recycling purposes;

10. Waste and scrap derived from:

a) production there; or

b) used goods collected there, provided that such goods are fit only for the recovery of raw

11. Goods obtained or produced in a MemberState from products referred to in Clauses 1 to 10 of this Article.

Article 4. Not wholly obtained or produced goods

1. A good specified in Clause 2 of Article 2 shall be regarded as originating in the Member State where the working or processing of the good has taken place if:

a) at least 40 percent of its regional value content (also referred to as ASEAN Value Content or RVC) originates from that Member State, which is calculated according to the formula provided in Clause 2 of this Article; or all non-originating materials used for producing the good have undergone a change in tariff classification at four-digit level (change in tariff heading- CTH);

b) Without considering Point a, Clause 1 of this Article, a good specified in Appendix 2 shall be regarded as originating in that Member State if it satisfies the relevant criteria set out for that good in Appendix 2.

2. The formula for calculating RVC:

a) Direct method

b) Indirect method

3. For the purpose of calculating the regional value content provided in Clause 2:

a) The value of imported non-originating materials, parts or produce is:

- The CIF value at the time of; importation of the products: or

- The earliest ascertained price paid for the products of undetermined origin in the territory of the MemberState where the working or processing takes place;

b) Labor cost includes wages, remuneration and other employee benefits associated with the manufacturing process;

c) Overhead cost includes real property items associated with the production process (insurance, factory rent and hire-purchase, depreciation on buildings, repair and maintenance, taxes, interests on mortgage); hire-purchase of and interest payments for plant and equipment; factory security; insurance (plant, equipment and materials used in the manufacture of the goods); utilities (energy, electricity, water and other utilities directly attributable to the production of the good); research, development, design and engineering; dies, molds, tooling and the depreciation, maintenance and repair of plant and equipment; royalties or licenses (in connection with patented machines or processes used in the manufacture of the good or the right to manufacture the good); inspection and testing of materials and the goods; storage and handling in the factory; disposal of recyclable wastes; and cost elements in computing the value of raw materials, i.e. port and clearance charges and import duties (if any) and other similar costs;

d) FOB price means the free-on-board value of the good, inclusive of the cost of transport to the port or site of final shipment abroad. FOB price shall be determined by adding the value of materials, production cost, profit and other costs:

dd) Other costs refer to the costs incurred in placing the goods in the ship for export, including but not limited to. domestic transport costs, storage and warehousing, port handling, brokerage fees, service charges, etc.

a. Member States shall determine and adhere to only one method of calculating the regional value content. Member States shall be given the flexibility to change their calculation method provided that such change is notified to the AFTA Council at least six (6) months prior to the adoption of the new method. Any verification to the ASEAN value content calculation by the importing MemberState shall be done on the basis of the method used by the exporting MemberState.

5. Vietnam uses the indirect method for calculating the ASEAN value content.

6. In determining the costs specified in Clause 3 of this Article, Member States shall closely adhere to the guidelines for costing methodologies set out in Appendix 5.

7. Locally procured materials produced by established licensed manufacturers, in compliance with domestic regulations, will be regarded as having fulfilled the origin requirements set out in this Appendix; locally procured materials from other sources will be subjected to the origin test in accordance with the regulations in this Appendix.

Article 5. Accumulation

1. A good originating in a Member State, which is used in another Member State as materials for a finished good eligible for preferential tariff treatment, shall be considered to be originating in the latter Member State where working or processing of the finished good has taken place.

2. If the ASEAN value content of the material is less than 40 per cent, the qualifying ASEAN value content will be cumulated to the local content provided that it is equal to or more than twenty (20) percent. The implementing guidelines are provided in Appendix 6.

Article 6. Minimal operations and processes

1. Operations or processes undertaken, by themselves or in combination with each other for the purposes listed below, are considered to be minimal and shall not be taken into account in determining whether a good has been originating in one MemberState:

a) ensuring preservation of goods in good condition for the purposes of transport or storage;

b) facilitating shipment or transportation;

c) packaging or presenting goods for sale.

2. A good originating in the territory of a MemberState will retain its initial originating status, when exported from another MemberState, where operations undertaken have not gone beyond those referred to in Clause 1 of this Article.

Article 7. Direct consignment

1. Preferential tariff treatment shall be applied to a good fully satisfying the requirements set out in this Appendix and which is consigned directly between the territories of the exporting Member State and the importing Member State.

2. The following shall also be considered as consigned directly from the exporting MemberState to the importing MemberState:

a) If the goods are transported by passing through the territory of any other MemberState;

b) If the goods are transported without passing through the territory of any non-ASEAN Member State;

c) The goods whose transport involve transit through one or more intermediate non-ASEAN Member State with or without transshipment or temporary storage in such countries, provided that:

- The transit entry is justified for geographical reason or by consideration related exclusively to transport requirements:

- The goods have not entered into trade or consumption there; and

-The goods have not undergone any operation there other than unloading and reloading or any operation required to keep them in good condition.

Article 8. De Minimis

1. A good that does not undergo a change in tariff classification shall be considered as originating if the value of all non-originating materials used in its production that do not undergo the required change in tariff classification does not exceed ten (10) percent of the FOB value of the good and the good meets all other applicable criteria specified in this Appendix for qualifying as an originating good.

2. The value of non-originating materials referred to Clause 1 shall, however, be included in the value of non-originating materials for any applicable ASEAN Value Content requirement for the good

Article 9. Provisions on packages and packing materials

1. Packaging and packing materials for retail sale:

a) If the good is subject to the ASEAN value content criterion for origin determination, the value of the packaging and packing materials for retail sale shall be taken into account in its origin assessment, where the packaging and packing materials are considered to be forming a whole with the good.

b) In case Point a. Clause I of this Article is not applicable, the packaging and packing materials for retail sale, when classified together with the packaged good shall not be taken into account in considering whether all non-originating materials used in the manufacture of a product fulfils the criterion corresponding to a change of tariff classification of the said good.

2. The containers and packing materials exclusively used for the transport of a good shall not be taken into account for determining the origin of the said good.

Article 10. Accessories, spare parts and tools

The origin of accessories, spare parts, tools and instructional or other information materials presented with a good shall not be taken into account in determining the origin of the good, provided that such accessories, spare parts, tools and information materials are classified with the goods and their customs duties are collected with the good by the importing MemberState.

Article 11. Neutral elements

In order to determine where a good originates, it is not necessary to determine the origin of the following which might be used in its production and not incorporated into the good:

1. Fuel and energy;

2. Tools, dies and molds;

3. Spare parts and materials used in the maintenance of equipment and buildings:

4. Lubricants, greases, compounding materials and other materials used in production or used to operate equipment and buildings:

5. Gloves, glasses, footwear, clothing, safety equipment and supplies;

6. Equipment, devices and supplies used for testing or inspecting the good;

7. Catalyst and solvent:

8. Any other goods that are not incorporated into the good but of which use in the production of the good can reasonably be demonstrated to be a part of that production.

Article 12. Identical and interchangeable materials

1. For the purpose of establishing the origin of a good, when the good is manufactured utilizing originating and non-originating materials, mixed or physically combined, the origin of such materials can be determined by generally accepted accounting principles of stock control applicable/ inventory management practiced in the exporting MemberState.

2. Once a decision has been taken on the inventory management method, that method shall be used throughout the fiscal year.

Article 13. Certificate of origin. Form D

A claim that a good shall be accepted as eligible for preferential tariff treatment shall be supported by a certificate of origin. Form D issued by a government authority designated by the exporting MemberState and notified to the other Member States to the CEPT-AFTA Agreement in accordance with the Operational Certification Procedures, as set out in Appendix 7.

Article 14. Review and modification

This Appendix may be reviewed and modified as and when necessary upon request of a MemberState and may be open to such reviews and modifications as may be agreed upon by the AFTA Council.

APPENDIX 4

EXPLANATORY NOTES TO APPENDIX 1

(Issued together with the Regulation on issuance of C/O Form D)

Article 1. Formula for calculating the regional value content

Pursuant to Point b, Clause 1 of Article 4 of Rules of Origin in Appendix 1. the regional value content (RVC) of a good listed in Appendix 2 shall be calculated in accordance with the formula provided for in Clause 2, Article 4 of Appendix 1.

Article 2. Substantial transformation criterion

1. A country of origin is that in which the last substantial transformation or process was performed resulting in a new product. Thus, materials which underwent a substantial transformation in a country shall be a product of that country.

2. A product in the production of which two or more countries are involved shall be regarded as originating in the country in which the last substantial transformation or process was performed, resulting in a new product

3. A product will be considered to have undergone a substantial transformation or process if it has been transformed by means of substantial manufacturing or processing into a new and different article of commerce.

4. A new and different article of commerce will usually result from manufacturing or processing operations if there is a change in:

a) Commercial designation or identity:

b) Fundamental character: or

c) Use purpose.

5. In determining whether a product has been subjected to substantial manufacturing or processing operations, the following will be considered:

a) The physical change in the material or article as a result of the manufacturing:

b) The time involved in the manufacturing or processing operations in the country in which they are performed;

c) The complexity of the manufacturing or processing operations in the country in which they are performed;

d) The level or degree of skill and/or technology required in the manufacturing process or processing stages.

Article 3. Specific rules applicable for textile and textile products

1. Textile and textile products covered under these Rules are set out in Appendix 3.

2. Textile material or article shall be deemed to be originating in a Member State, when it has undergone, prior to the importation to another Member State, any of the following:

a) Petrochemicals which have undergone the process of polymerization or polycondensation or any chemicals or physical processes to form a polymer;

b) Polymer which has undergone the process of melt spinning or extrusion to form a synthetic fiber;

c) Spinning fiber into yarn;

d) Weaving, knitting or otherwise forming fabric:

dd) Cutting fabric into parts and the assembly of those parts into a completed article;

e) Dyeing of fabric, if it is accompanied by
any finishing operation which has the effect of rendering the dyed good directly usable;

g) Printing of fabric, if it is accompanied by any finishing operation which has the effect of rendering the printed good directly usable;

h) Impregnation or coating when such treatment leads to the manufacture of a new product falling within certain headings of customs tariffs:

i) Embroidery which represents at least five percent of the total area of the embroidered good.

3. An article or material shall not be considered to be originating in the territory of a MemberState by virtue of merely having undergone any of the following:

a) Simple combining operations, labeling, pressing, cleaning or dry cleaning or packaging operations, or any combination thereof;

b) Cutting to length or width and hemming, stitching or overlocking fabrics which are readily identifiable as being intended for a particular commercial use;

c) Trimming and/or joining together by sewing, looping, linking, attaching of accessory articles such as straps, bands, beads, cords, rings and eyelets:

d) One or more finishing operations on yams, fabrics or other textile articles, such as bleaching, waterproofing, decating. shrinking, mercerizing, or similar operations; or

dd) Dyeing or printing of fabrics or yarns.

4. The following items made of non-originating textile materials shall be considered as originating good if it has undergone the processes identified in Clause 2 but not merely performing the processes identified in Clause 3:

a) Handkerchiefs:

b) Shawls, scarves, veils, and the like;

c) Traveling rugs and blankets:

d) Bed linen, pillow cases, table linen, toilet linen and kitchen linen;

e) Sacks and bags, of a kind used for packing of goods;

f) Tarpaulins, awnings and sunblinds;

g) Floor cloths, and dish cloths and other similar articles simply made up.

Article 4. Specific rules applicable for wood-based products

1. Wood-based products covered under these rules are products classified under:

a) Harmonized System Chapter 44 headings

b) Harmonized System headings 94.01 thru 94.03 and 94.06

2. An article or material shall not be considered to be originating in a MemberState by virtue of merely having undergone any of the following:

a) Trimming, cutting-to-size, sanding, attaching accessory article such as decorative upholstery material; or

b) Over-laying and/or coated either by chemical material or natural material.

APPENDIX 5

PRINCIPLES FOR CALCULATING ASEAN VALUE CONTENT

(Issued together with the Regulation on issuance of C/O Form D)

I. PRINCIPLES FOR DETERMINING COST FOR ASEAN VALUE CONTENT

1. Materiality: all cost material to the evaluation, assessment and determination of origin:

2. Consistency: costing allocation method should be consistent unless justified by commercial reality.

3. Reliability: costing information must be reliable and supported by appropriate information;

4. Relevance: costs must be allocated based on objective and quantifiable data;

5. Accuracy: costing methodology should provide an accurate representation of the cost element in question;

6. Application of General Accepted Accounting Principles of the exporting MemberState: costing information must be prepared in accordance with the general accepted accounting principles and this includes the avoidance of double-counting of cost items;

7. Currency: updated costing information from existing accounting and costing records of companies should be used to calculate origin.

II. PRINCIPLES FOR COSTING METHODOLOGIES

1. Actual Costs: The basis for actual costs should be defined by the company. Actual costs should include all direct and indirect costs incurred in producing the product.

2. Projected and Budgeted Costs projected costs may be used if it is justified. Companies should provide variance analysis and proof during the period origin is claimed to indicate accuracy of projections.

3. Standards Costs: the basis for standards costs should be indicated. Companies should provide evidence that the costs are used for accounting purposes.

4. Average/Moving Average Costs: average costs may be used if justified: the basis for calculating average costs, including time period, etc. should be highlighted. Companies should provide variance analysis and proof during the period origin is claimed to indicate accuracy of average costs.

5. Fixed Costs - fixed costs should be apportioned according to sound cost accounting principles. They should be a representative reflection of unit costs for the company in the particular period in question. The method for apportionment should be indicated.

APPENDIX 6

IMPLEMENTING GUIDELINES FOR PARTIAL CUMULATION

(Issued together with the Regulation on issuance of C/O Form D)

For the purpose of implementing Clause 2, Article 5 of Appendix 1:

1. A good shall be regarded to be eligible for partial accumulation, if at least 20 percent of the regional value content (RVC) of the good is originating in the MemberState where the working or processing of the good has taken place;

2. RVC of the good specified in Clause 1 of this Appendix shall be calculated in accordance with the formula provided in Clause 2 of Article 4 of Appendix 1;

3. A good exported under this arrangement is not eligible for CEPT preference of the importing MemberState;

4. A good exported under this arrangement shall be accompanied by a valid Certificate of Origin Form D duly and prominently marked "Partial Accumulation";

5. The relevant sections of the Operational Certification Procedures, including Article 17 on verification, are applicable to certificate (s) of origin Form D issued for partial accumulation purposes.

APPENDIX 7

PROCEDURES FOR THE ISSUANCE AND VERIFICATION OF C/O

(Issued together with the Regulation on issuance of C/O Form D)

For the purpose of implementing the Rules of Origin for the CEPT-AFTA Agreement, the following procedures for the issuance and verification of C/O Form D and the other related administrative measures, shall be observed.

DEFINITIONS

Article 1.

"Back-to-back C/O" means a C/O issued by an intermediate exporting MemberState based on the C/O issued by the first exporting MemberState:

"Customs authority" means the competent authority that is responsible under the law of a MemberState for the administration of customs laws and regulations4[5];

"Exporter" means a natural or legal person located in the territory of a MemberState where a good is exported from by such a person:

"Importer" means a natural or legal person located in the territory of a MemberState where a good is imported into by such a person;

"Issuing authority" means the Government authority of the exporting MemberState designated to issue a C/O Form D and notified to all the other Member States in accordance with this Appendix;

"Producer" means a natural or legal person who carries out production as set out in Article 1 of Appendix 1 of this Regulation

ISSUING AUTHORITIES

Article 2.

1. Each Member State shall provide a list of the names, addresses, specimen signatures and specimen of official seals of its issuing authorities, in hard copy and soft copy format, through the ASEAN Secretariat for dissemination to other Member States in soft copy format. Any change in the said list shall be promptly provided in the same manner.

2. The specimen signatures and official seals of the issuing authorises, compiled by the ASEAN Secretariat, shall be updated annually. Any C/O Form D issued by an official not included in the list referred to in Clause 1 shall not be honored by the receiving MemberState.

Article 3.

For the purpose of determining originating status, the issuing authorities have the right to request supporting documentary evidence or to carry out check(s) considered appropriate in accordance with respective domestic laws and regulations of a MemberState.

Article 4.

1. The producer and/or exporter of the good.

or its authorized representative, shall apply to the issuing authority, in accordance with the MemberState's domestic laws and regulations, requesting pre-exportation examination of the origin of the good. The result of the examination, subject to review periodically or whenever appropriate, shall be accepted as the supporting evidence in determining the origin of the said good to be exported thereafter. The pre-exportation examination may not apply to the good of which, by its nature, origin can be easily determined.

2. For locally procured materials, self-declaration by the final manufacturer shall be used as a basis when applying for the issuance of the C/O Form D.

C/O APPLICATIONS

Article 5.

At the time of carrying out the formalities for exporting the products under preferential treatment, the exporter or his authorized representative shall submit a written application for the C/O Form D together with appropriate supporting documents proving that the products to be exported qualify for the issuance- of a C/O Form D.

PRE-EXPORTATION EXAMINATION

Article 6.

The issuing authority shall carry out proper examination, in accordance with the domestic laws and regulations of its country, upon each application for a C/O Form D to ensure that:

1. The application and the C/O Form D are duly completed and signed by the authorized signatory;

2. The origin of the product is in conformity with the Rules of Origin provided in Appendix 1;

3. The other statements of the C/O Form D correspond to supporting documentary evidence submitted;

4. Description, quantity and weight of goods, marks and number of packages, number and kinds of packages, as specified, conform to the products to be exported;

5. Multiple items declared on the same C/O Form D shall be allowed provided that each item qualifies separately in its own right.

ISSUANCE OF C/O FORM D

Article 7.

1. The C/O Form D must be on A4 size white paper in conformity to the specimen shown in Appendix 8 (not printed herein). It shall be made in English.

2. The C/O Form D comprises one original and two carbon copies.

3. Each C/O Form D bears a reference number separately given by each office of issuance.

4. The Original copy shall be forwarded by the exporter to the importer for submission to the customs authority at the port or place of importation. The duplicate shall be retained by the issuing authority in the exporting MemberState. The triplicate shall be retained by the exporter.

5. In case a C/O Form D is rejected by the customs authorities of the importing Member State, the subject C/O Form D shall be marked accordingly in Box 4 and the original C/O Form D shall be returned to the issuing authority within a reasonable period not exceeding sixty (60) days. The issuing authority shall be duly notified by the customs authorities of the importing MemberState of the grounds for the denial of tariff preference.

6. In case C/O Form D are not accepted, as stated in Clause 5. the importing MemberState should accept the clarifications made by the issuing authorities to accept the C/O Form D and reinstate the preferential treatment. The clarifications should be detailed and exhaustive in addressing the grounds for denial of preference raised by the importing MemberState.

Article 8.

To implement the provisions of Article 2 of Appendix 1, the C/O Form D issued by the final exporting MemberState must indicate the relevant applicable origin criterion in Box 8.

Article 9.

Neither erasures nor superimpositions shall be allowed on the C/O Form D. Any alteration shall be made by:

1. Striking out the erroneous materials and making any addition required. Such alterations shall be approved by an official authorized to sign the C/O Form D and certified by the issuing authorities. Unused spaces shall be crossed out to prevent any subsequent addition; or

2. Issuing a new C/O Form D to replace the erroneous one.

Article 10.

1. The C/O Form D shall be issued by the issuing authorities of the exporting Member State at the time of exportation or soon thereafter whenever the products to be exported can be considered originating in that Member State within the meaning of Appendix 1.

2. The issuing authority of the intermediate Member State may issue a back-to-back C/O if an application is made by the exporter, provided that:

a/ A valid original C/O Form D is presented. In the case where no original C/O Form D is presented, its certified true copy shall be presented:

b/ The back-to-back C/O issued should contain some of the same information as the original C/O Form D. In particular, every column in the back-to-back C/O should be completed. FOB price of the intermediate MemberState in Box 9 should also be reflected in the back-to-back C/O;

c/ For partial export shipments, the partial export value shall be shown instead of the full value of the original C/O Form D. The intermediate MemberState will ensure that the total quantity re-exported under the partial shipment does not exceed the total quantity of the C/O Form D from the first MemberState when approving the back-to-back C/O to the exporters;

d/ In case the information is not complete and/ or circumvention is suspected, the final importing Member State(s) could request that the original C/O Form D be submitted to their respective customs authority;

dd/ Verification procedures as set out in Article 17 are also applied to MemberState issuing the back-to-back C/O.

3. In exceptional cases where a C/O Form D has not been issued at the time of exportation or no later than three (3) days from the declared shipment date, due to involuntary errors or omissions or other valid causes, the C/O Form D may be issued retroactively but no longer than one year from the date of shipment and shall be duly and prominently marked "Issued Retroactively"'

Article 11.

In case of theft, loss or destruction of a C/O Form D. the exporter may apply in writing to the issuing authorities for a certified true copy of the original and the triplicate to be made out on the basis of the export documents in their possession bearing the endorsement of the words "CERTIFIED TRUE COPY" in Box 12. This copy shall bear the date of issuance of the original C/O The certified true copy of a C/O Form D shall be issued no longer than one year from the date of issuance of the original C/O Form D.

SUBMISSION OF C/O FORM D

Article 12.

For the purpose of claiming preferential tariff treatment, the importer shall submit to the customs authority of the importing Member State at the time of import, a C/O Form D including supporting documents (i.e. commercial invoices and the through Bill of Lading issued in the territory of the exporting Member State) and other documents as required in accordance with the domestic laws and regulations of the importing Member State.

Article 13. The following time limit for the presentation of the C/O Form D shall be observed-

1. C/O Form D must be submitted to the customs authorities of the importing MemberState within one (01) year from the date of issuance by the issuing authorities of the exporting MemberState.

2. In case the C/O Form D is submitted to the customs authorities of the importing Member State after the expiration of the time limit for its submission specified in Clause 1 of this Article, such C/O Form D is still to be accepted when failure to observe the time limit results from force majeure or other valid causes beyond the control of the exporter: and

3. In all cases, the customs authorities in the importing MemberState may accept such C/O Form D provided that the products have been imported before the expiration of the time limit of the said C/O Form D.

Article 14.

In the case of consignments of products originating in the exporting Member State and not exceeding USD 200 (two hundred US dollars) FOB, the production of C/O Form D shall be waived and the use of simplified declaration by the exporter that the products in question have originated in the exporting Member State will be accepted Products sent through the post not exceeding USD 200 FOB shall also be similarly treated.

Article.15.

1. Where the origin of the product is not in doubt, the discovery of minor discrepancies, such as tariff classification differences between the issuing and receiving authorities, or between the statements made in the C/O Form D and those made in the documents submitted to the customs authorities of the importing Member State for the purpose of carrying out the formalities for importing the products shall not ipso-facto invalidate the C/O Form D, if it does in fact correspond to the products actually imported.

2. In case the exporting MemberState and importing MemberState have different tariff classification for a good subject to preferential tariffs, the goods shall be released at the higher CEPT rate and no penalty or other charges shall be imposed. Once the classification differences have been resolved, the correct CEPT rate shall be applied and any overpaid duty shall be refunded, in accordance with relevant rules and regulations of the importing MemberState, after the issue has been resolved.

3. For multiple items declared under the same C/O Form D. a problem encountered with one of the items listed will not affect or delay the grant of preferential treatment and customs clearance of the remaining items listed in the C/O Form D. Point c. Clause 1 of Article 17 may be applied to the problematic items.

RECORD KEEPING

Article 16.

1. For the purposes of the verification process pursuant to Article 17, the producer or exporter applying for a C/O Form D shall, subject to the domestic laws and regulations of the exporting Member State, keep its supporting records for application for three (3) years from the date of issuance of the C/O Form D.

2. The application for C/O Form D and all documents related to such application shall be retained by the issuing authorities for three (3) years from the date of issuance.

3. Information relating to the validity of the C/O Form D shall be furnished upon request of the importing MemberState by an official authorized to sign the C/O Form D and certified by the appropriate Government authorities.

4. Any information communicated between the Member States concerned shall be treated as confidential and shall be used for the validation of C/O Form D purposes only.

Article 17.

1. The importing MemberState may request the issuing authority of the exporting MemberState to conduct a retroactive check at random and/or when it has reasonable doubt as to the authenticity of the document or as to the accuracy of the information regarding the true origin of the products in question or of certain parts thereof. Upon such request, the issuing authority of the exporting Member State shall conduct a retroactive check on a producer/exporter's cost statement based on the current cost and prices, within a six-month timeframe, specified at the date of exportation subject to the following conditions:

a) The request for retroactive check shall be accompanied with the C/O Form D concerned and shall specify the reasons and any additional information suggesting that the particulars given on the said C/O Form D may be inaccurate, unless the retroactive check is requested on a random basis;

b) The issuing authorities receiving a request for retroactive check shall respond to the request promptly and reply within ninety (90) days after the receipt of the request;

c) The customs authorities of the importing MemberState may suspend the provisions on preferential treatment while awaiting the result of verification. However, it may release the products to the importer subject to any administrative measures deemed necessary, provided that they are not held to be subject to import prohibition or restriction and there is no suspicion of fraud:

d) The issuing authority shall promptly transmit the results of the verification process to the importing MemberState which shall then determine whether or not the subject good is originating. The entire process of retroactive check including the process of notifying the issuing authority of the exporting MemberState the result of determination whether or not the good is originating shall be completed within 180 days.

While awaiting the results of the retroactive check. Point c. Clause 1 of this Article shall be applied.

2. If the importing MemberState is not satisfied with the outcome of the retroactive check stated in Clause 1 of this Article, it may. under exceptional cases, request verification visits to the exporting MemberState.

a) Prior to the conduct of a verification visit, an importing MemberState, shall:

i) Deliver a written notification of its intention to conduct the verification visit to:

- The exporter or producer whose premises are to be visited:

- The issuing authority of the MemberState in whose territory the verification visit is to occur;

- The customs authority of the MemberState in whose territory the verification visit is,to occur:

- The importer of the product subject of the verification visit.

ii)The written notification mentioned at Point a(i), Clause 2 of this Article is as comprehensive as possible including, among others:

- The name of the customs authority issuing the notification;

- The name of the exporter or producer whose premises are to be visited;

- The proposed date for the verification visit;

- The coverage of the proposed verification visit, including reference to the product subject of the verification:

- The names and designation of the officials performing the verification visit;

iii) Obtain the written consent of the exporter or producer whose premises are to be visited.

b) When a written consent from the exporter or/producer is not obtained w ithin thirty (30) days upon receipt of the notification pursuant to Point a (i), Clause 2 of this Article, the notifying Member State, may deny preferential treatment to the product that would have been subject of the verification visit.

c) The issuing authority receiving the notification may postpone the proposed verification visit and notify the importing MemberState of such intention. Notwithstanding any postponement, any verification visit shall be carried out within sixty days (60) days from the date of such receipt, or for a longer period as the concerned Member States may agree.

d) The Member State conducting the verification visit shall provide the exporter/ producer whose product is the subject of the verification and the relevant issuing authority with a written determination of whether or not the subject product qualifies as an originating product

dd) Any suspended preferential treatment shall be reinstated upon the written determination referred to at Point d. Clause 2 of this Article that the good qualifies as an originating good.

e) The exporter or producer will be allowed thirty (30) days, from receipt of the written determination, to provide in writing comments or additional information regarding the eligibility of the product. If the product is still found to be non-originating, the final written determination will be communicated to the issuing authority within thirty (30) days from receipt of the comments/additional information from the exporter/producer.

g)The verification visit process, including the actual visit and determination of whether the subject product is originating or not. shall be carried out and its results communicated to the issuing authorities within a maximum of 180 days.

While awaiting the results of the verification visit. Point c. Clause 1 of this Article on the suspension of preferential treatment shall be applied.

3. Member States shall maintain, in accordance with their laws, the confidentiality of classified business information collected in the process of verification and shall protect that information from disclosure that could prejudice the competitive position of the person who provided the information. The classified business information may only be disclosed to those authorities responsible for the administration and enforcement of origin determination.

SPECIAL CASES

Article 18.

For the purpose of implementing Point c, Clause 2, Article 7 of the Appendix 1, when transportation is effected through the territory of one or more non-MemberState, the following shall be produced to the customs authorities of the importing MemberState:

1, A through Bill of Lading issued in the exporting MemberState:

2. A C/O Form D issued by the relevant issuing authority of the exporting MemberState;

3. A copy of the commercial invoice;

4. Supporting documents in evidence that the requirements at Point c, Clause 2, Article 7 of Appendix 1 are complied with.

Article 19.

1. Products sent from an exporting Member State for exhibition in another Member State and sold during or after the exhibition for importation into a Member State may benefit from the CEPT Scheme on the condition that the products meet the requirements of the Rules of Origin in Appendix 1 provided that it is shown to the satisfaction of the customs authorities of the importing Member State that:

a) An exporter has dispatched those products from the territory of the exporting MemberState to the MemberState where the exhibition is held and has exhibited them there:

b) The exporter has sold the goods or transferred them to a consignee in the importing MemberState:

c) The products have been consigned during the exhibition or immediately thereafter to the importing MemberState in the state in which they were sent for the exhibition.

2. For the purpose of implementing the provisions in Clause 1 above, the C/O Form D must be produced to competent authorities of the importing MemberState. The name and address of the exhibition must be indicated. The competent authorities of the MemberState where the exhibition took place may provide evidence together with supporting documents prescribed in Clause 4 of Article 18 for the identification of the products and the conditions under which they were exhibited.

3. Clause 1 of this Article applies to any trade, agricultural or crafts exhibition, fair or similar show or display in shops or business premises with the view to the sale of foreign products and where the products remain under customs control during the exhibition.

Article 20.

Relevant customs authorities in the importing MemberState shall accept CO Form D in cases where the sales invoice is issued either by a company located in a non-MemberState or by an ASEAN exporter for the account of the said company, provided that the product meets the requirements set out in Appendix 1.

ACTION AGAINST FRAUDULENT ACTS

Article 21.

1. When it is suspected that fraudulent acts in connection with the C/O Form D have been committed, the Government authorities concerned shall cooperate in the action to be taken in the respective MemberState against the persons involved.

2. Each Member State shall provide legal sanctions for fraudulent acts related to-the C/O Form D.

SETTLEMENT OF DISPUTES

Article 22.

1. In the case of a dispute concerning origin determination, classification of products or other matters, the Government authorities concerned in the importing and exporting Member States shall consult each other with a view to resolving the dispute, and the result shall be reported to the other Member States for information.

2. In the case where no settlement can be reached bilaterally, the issue concerned shall be decided by the Senior Economic Officials Meeting.

3. The ASEAN Protocol on Enhanced Dispute Settlement Mechanism shall apply in relation to any dispute arising from, or any difference between Member States concerning the interpretation or application of the CEPT Rules of Origin and its Operational Procedures for Issuance and Verification of C/O Form D.

APPENDIX 13

LIST OF ISSUING AUTHORITIES

(Issued together with the Regulation on issuance of C/O Form D)