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GOVERNMENT OF VIETNAM
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SOCIALIST REPUBLIC OF VIETNAM
Independence – Freedom – Happiness
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No. 07/2020/ND-CP
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Hanoi, January 5, 2020
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DECREE
SCHEDULES
OF SPECIAL PREFERENTIAL IMPORT TARIFFS OF VIETNAM FOR IMPLEMENTATION OF ASEAN –
HONG KONG, CHINA FREE TRADE AGREEMENT DURING 2019 - 2022
Pursuant to Law on Government Organization dated
June 19, 2015;
Pursuant to Law on Export and Import Duties
dated April 6, 2016;
Pursuant to Law on Customs dated June 23, 2014;
Pursuant to Law on Treaties dated April 09,
2016;
In implementation of ASEAN – Hong Kong, China
Free Trade Agreement coming into effect from June 11, 2019;
At the request of Minister of Finance;
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Article 1. Scope
This Decree prescribes special preferential import
tariff rates of Vietnam for implementation of ASEAN – Hong Kong, China Free
Trade Agreement during 2019 – 2022 and conditions for benefits thereof
according to the Agreement.
Article 2. Regulated entities
1. Tax payers according to Law
on Export and Import Duties.
2. Customs authorities and
customs officials.
3. Organizations and
individuals whose rights and obligations are related to import and export
goods.
Article 3. Special preferential import tariffs
Attached to this Decree are special preferential
import tariff rates of Vietnam for implementation of ASEAN – Hong Kong, China
Free Trade Agreement during 2019 – 2022 (special preferential import tariff
rates hereinafter referred to as “AHKFTA tariff rates”).
Goods classification shall comply with Vietnamese
regulations and law.
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3. Symbol “*”: import goods
that do no benefit from AHKFTA tariff rates at the time.
4. With respect to goods under
effect of tariff quota, special preferential import tariff rates applied to
number of import goods included in tariff quota shall be specified in special
preferential import tariffs of Vietnam for implementation of ASEAN – Hong Kong,
China Free Trade Agreement during 2019 – 2022 attached hereto. Outside tariff
quota rates shall be applied according to regulations and law of Government at
the time of import and amount of annual import tariff quota prescribed by
Ministry of Industry and Trade.
Article 4. Eligibility for adoption of special
preferential import tariff rates
Import goods shall benefit from AHKFTA tariff rates
if they simultaneously satisfy following conditions:
1. The import goods are
specified in special preferential import tariffs attached hereto.
2. The import goods are
imported from members of ASEAN – Hong Kong, China Free Trade Agreement,
including following countries and territories:
a) Brunei Darussalam;
b) Kingdom of Cambodia;
c) Republic of Indonesia;
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dd) Malaysia;
e) Republic of the Union of Myanmar;
g) Republic of the Philippines;
h) Republic of Singapore;
i) Kingdom of Thailand;
k) Hong Kong Special Administrative Region of the
People's Republic of China;
l) Socialist Republic of Vietnam (including goods
domestically imported from non-tariff zones).
3. The import goods are
transported directly from countries of manufacture specified in Clause 2 of
this Article according to AHKFTA and regulations of Ministry of Industry and
Trade, to be specific:
a) The goods are transported directly from an
exporting member state to an importing member state; or
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- Transit of goods is
necessary due to geographical reasons or transportation requirements;
- The goods are not traded or
sold in said countries;
- The goods do not undergo any
process or further manufacture except for unloading and loading or other
necessary act ivies to preserve the goods in pristine conditions.
4. The import goods satisfy
regulations on goods origin and possess certificates of origin using AHK form
according to AHKFTA and Ministry of Industry and Trade.
Article 5. Entry into force
1. This Decree comes into
force from February 20, 2020.
2. With respect to customs
declarations of import goods declared from June 11, 2019 up to before the
effective date hereof, if the eligibility for benefitting from the special
preferential import tariffs specified in this Decree are satisfied and
declarants have submitted a higher tariff rate, customs authorities shall deal
with excess duties according to tax administration laws.
Article 6. Responsibilities for implementation
Ministers, heads of ministerial agencies, heads of
Governmental agencies, Chairpersons of People’s Committees of provinces and
central-affiliated cities, and relevant organizations and individuals are
responsible for implementation of this Decree./.
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PP. GOVERNMENT
PRIME MINISTER
Nguyen Xuan Phuc
ANNEX I
ON AHKFTA TARIFF
SCHEDULE CONVERSION FROM AHTN 2012 TO AHTN 2017
(Attached to Decree No. 07/2020/ND-CP dated January 5, 2010 of Government)
The AHTN 2017 consists of 10,813 tariff line items
expressed in 8 digits. Compared to the AHTN 2012, the AHTN 2017 has risen in
1,255 tariff line items, retained description and code of 7,810 tariff line
items and merged 682 items; subdivided codes, changed codes and started new
lines with new article description of 2,321 tariff line items. According to
which, schedules of special preferential import tariffs also undergo similar changes
in tariff item lines and tariff commitments due to merging tariff item lines,
changing codes and starting new tariff item lines.
Conversion and incorporation of the AHTN 2017 are
implemented by Ministry of Finance via issuance of Circular No. 09/TT-BTC dated
February 15, 2019 on amendments to Circular No. 65/2017/TT-BTC of Minister of
Finance on nomenclature of exports and imports of Vietnam. As a result,
Ministry of Finance has converted schedules of special preferential import
tariffs according to the AHTN 2017 based on principles of selecting tariff
rates according to guide to tariff schedule conversion under free trade
agreements and guide to tariff schedule conversion of WTO.
Methods/General principles of converting tariff
schedules:
- Case 1 (Retain or
subdivide tariff line items):
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- Case 2 (Merge tariff line
items sharing the same commitments according to the AHTN 2012):
In case a new tariff line item (in AHTN 2017) is
merged from old tariff line items (in AHTN 2012) that share the same tariff
commitment: Apply principle No. 2 which is to recognize the tariff commitment
shared by the tariff line item in AHTN 2012.
- Case 3 (Merge tariff line
items with different commitments according to the AHTN 2012):
In case a new tariff line item (in AHTN 2017) is
merged from old tariff line items (in AHTN 2012) with different tariff
commitments: Apply following principles:
+ Principle No. 3.1: In case merged tariff line
items witness considerable difference among tariff rates and have high
turnovers that will impact domestic manufacture and state budget revenue,
subdivide into new tariff line items and retain the original tariff commitments
prior to the conversion;
+ Principle No. 3.2: Merge tariff line items
and apply the lowest tariff rate among the tariff line items in AHTN 2012 to
tariff line items in AHTN 2017;
+ Principle No. 3.3: Merge tariff line items
and apply tariff rates of tariff line items in AHTN 2012 which account for the
majority of import turnover (according to FTA and world’s import turnovers);
+ Principle No. 3.4: Merge tariff line items
and apply weighted-average tariff rates based on turnovers of tariff line items
in AHTN 2012;
+ Principle No. 3.5: In case of failure to
determine accurate commercial distribution, merge tariff line items and apply
average tariff rates of tariff line items in AHTN 2012.
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1. 0301.93.10:
2. 0301.93.90:
- Subheading 0301.93 in HS
2017 has included Catla catla and Labeo rohita in carp section, thus collected
partially from the subheading 0301.99.40 and led to difference in tariffs of
merged line items: Code 0301.93.10 is merged from 2 codes of AHTN
2012, Code 0301.93.90 is merged from 4 codes of AHTN 2012. Both
of the codes merged from shall observe differences of 0% and 16% (in 2019) in
tariff rates. Import turnover from Hong Kong in recent time of subheadings
above are unidentified.
Ministry of Finance shall choose to merge tariff
line items and apply the low rate of 0% due to 2 reasons: (i) according to
explanation of WCO experts, added carp species are rarely encountered ones;
(ii) import turnover primarily comes from China and subheading 0301.93 merged
from has tariff rate of 0%. This method agrees with conversion methods
specified in issued Decrees on FTA tariff schedules.
3. 0302.99.00:
- Subheading 0302.99.00
includes edible products of raw fish and frozen fish except fillet and a
portion of 56 tariff line items due to addition of fins, heads, tails, maws and
other edible fish offal (MFN tariff observes differences of 10%, 12%, 15% and
20%, AHK tariff rate observe differences of 8%, 10%, 12% and 16%). World’s
turnover in 2017 (at around USD 38.4 million) is mainly generated from
0302.14.00 which are Atlantic salmon and Danube salmon, with Norway as primary
import partner (import turnover in 2017 reaches USD 30.3 million). Ministry
of Finance shall choose to apply tax of tariff line item 0302.91.00 (in AHTN
2017) at 16% (during 2019-2020) and down to 12% (during 2021-2022) in order to
agree with fish products in subheadings 0302.9x. This method agrees with
conversion methods specified in issued Decrees on FTA tariff schedules.
4. 0303.99.00:
5. 0307.49.30:
- Subheading 0307.49.30 includes
smoked cuttle fish and squid and due to elimination of scientific names in
round brackets, the subheading includes all species cuttle fish and squid. This
subheading is merged from 2 subheadings in AHTN 2012 which observe differences
in tariff rates of 8% and 20% (in 2019), this item is not included in world’s
import turnover in 2017. Ministry of Finance shall choose to split into 2
tariff line items: 0307.49.30.10 - - - - Cuttle fish (Sepia officinalis, Rossia
macrosoma, Sepiola spp.) (correlates with subheading 0307.49.30, with tariff
rates of 20% during 2019 – 2020 and 15% during 2021 – 2022) and squid
(Ommastrephes spp., Loligo spp., Nototodarus spp., Sepioteuthis spp.) and
0307.49.30.90 - - - - Others (correlate with subheading 0307.99.20, with tariff
rates of 8% in 2019 - 2020 and 6% during 2021 – 2022). This method agrees with
conversion methods specified in issued Decrees on FTA tariff schedules.
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6. 1211.20.00
7. 1211.40.00
8. 1211.50.00
9. 1211.90.11
10. 1211.90.12
11. 1211.90.13
12. 1211.90.15
13. 1211.90.16
14. 1211.90.19
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16. 1211.90.92
17. 1211.90.94
18. 1211.90.95
19. 1211.90.97
20. 1211.90.98
21. 1211.90.99
According to the HS 2017, heading 12.11 is expanded
to include chilled and frozen items of headings 1404 and 2008 thus lead to
difference in tariff commitments after merging of 16 line items of following
items: Ginseng roots, Coca leaf, Poppy straw and types/parts of other plants
under 12.11 heading. Differences in tariffs range from 0% to 32% in 2019.
Ministry of Finance shall choose to split following 16 subheadings into line
items of 10 digits based on article description in AHTN 2012: 1211.20.00,
1211.50.00, 1211.90.11, 1211.90.12, 1211.90.13, 1211.90.15, 1211.90.16,
1211.90.19, 1211.90.91, 1211.90.92, 1211.90.94, 1211.90.95, 1211.90.97,
1211.90.98, 1211.90.99; 1211.40.00. This method agrees with
conversion methods specified in issued Decrees on FTA tariff schedules.
❖
Chapter 13
22. 1302.14.00
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- Subheading 1302.14.00
includes natural gum and extracts of ephedra and subheading 1302.19.90
includes natural gum and extracts of other plants and types are both merged
from 2 line items in AHTN 2012 with differences in tariff rate of 3% and 4%.
Tariff rate in most of other FTA is 0% (except VC and AJ which are 5% and AI is
1%). World’s import turnover in 2017 reached around USD 6.7 million, mainly
from China, Vietnam does not import said items from Hong Kong in 2017. Ministry
of Finance chooses to merge and apply the lower tariff rate (tariff rate of 3%
during 2019 - 2020 and 0% from 2021) since import from Hong Kong is
insignificant, tariff rates in current FTA are relatively low and ACFTA is
currently applying tariff rate of 0% to these items.
❖
Chapter 15
24. 1508.90.00
- Subheading 1508.90.00 includes
ground-nut oil and its fractions, whether or not refined, but not chemically
modified, except for crude oil; is merged from 1508.90.10 and 1508.90.90 (in
AHTN 2012) which are “fractions of unrefined ground-nut oil” and “other” with
differences in tariff rate of 3% and 20%. No record on import turnover from
Hong Kong in 2017.
During negotiation on AHTN, member states have
agreed to exclude fractions of unrefined ground-nut oil (subheading
1508.90.10), the ASEAN Economic Minister Meeting has reached a consensus to
merge line items. At the 10th session on correlation tables, the
Meeting has agreed to add separate annexes for tariff line items on which
Vietnam’s opinion differs from the Meeting’s. According to Vietnam, subheading
1508.90.00 (AHTN 2017) only correlates with subheading 1508.90.90 (AHTN 2012).
General Department of Customs request Department of International Cooperation
to utilize this fact in negotiation with FTA partners. Thus, Ministry of Finance
chooses to apply tariff commitment of subheading 1508.90.90 (AHTN 2012). This
method agrees with conversion methods specified in issued Decrees on FTA tariff
schedules.
❖
Chapter 16
25. 1604.18.10
- Subheading 1604.18.10
includes shark fins prepared for instant use under “-Fish, whole or in pieces,
but not minced”. Merged from 4 line items, 2 of which are 1604.19 under “-Fish,
whole or in pieces, but not minced” and a portion of 2 line items under “-Other
prepared or preserved fish”. No record on import turnover from Hong Kong in
2017.
Due to changes in HS 2017, the item “shark fins,
prepared for instant use” is restructured: instead of being specified in “Other
prepared or preserved fish” according to HS 2012, has been relocated and
combined with other types under “Fish, whole or in pieces, but not minced” in
HS 2017. Because subheadings in AHTN 2012 have low import turnover (under USD 1
million) due to the line items “Other prepared or preserved fish” have the
highest turnover, Ministry of Finance chooses not to add another 10-digit
line item but to retain policies of the item “Shark fins, prepared for instant
use” and apply tariff rate of subheading 1604.20.11 (AHTN 2012). This method
agrees with conversion method specified in issued Decrees on FTA tariff
schedules.
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26. 1806.31.00
27. 1806.32.00
Subheadings 1806.31.00 and 1806.32.00
include food preparations from chocolate in blocks, slabs or bars and
are merged from 2 subheadings in AHTN 2012. Subheading 1806.31.00 observes
differences in tariff rate of 13% and 35% (in 2019); subheading 1806.32.00
observes differences in tariff rate of 20% and 30% (in 2019). Import turnover
from Hong Kong in 2017 is insignificant. Due to difficulty distinguishing the 2
merged line items, exact definitions of “chocolate confectionery” and “other”
are unidentified. Thus, Ministry of Finance chooses to merge and apply the
lower tariff commitments. This method agrees with conversion methods specified
in issued Decrees on FTA tariff schedules.
❖
Chapter 21
28. 2103.90.21
- Subheading 2103.90.21 includes
fermented shrimp paste (prawn sauce) including belacan is merged from 3 line
items in HS 2012 of 1605.21.10, 1605.29.10 and 2103.90.40 with differences in
tariff commitments. Import turnover of the 2 subheadings 1605.21.10 and
1605.29.10 from Hong Kong is absent; import is primarily performed by other FTA
members with import turnover of around USD 9.1 million, in which revenues from
ASEAN accounts for around USD 6.6 million. Following principle No. 32, Ministry
of Finance chooses to merge and apply tariff commitment of subheading
2103.90.40 (AHTN 2012), with tariff rate of 24% in 2019 – 2020 and 18% in 2021
– 2022, tariff rate applied to the subheading under ACFTA is currently at 0%.
29. 2106.90.20
- Subheading 2106.90.20 includes
powdered alcohol, which are other items of food preparations that are not
specified or detailed elsewhere; is merged from 4 other subheadings in AHTN
2012 that observe tariff differences of 15% and 20% (in 2019). Import turnover
from Hong Kong in 2017 is insignificant. According to General Department of
Customs, adding 2 more line items in 10-digit level will trouble customs
officers due to potential false declaration as a result of difficulty in
distinguishing concocting method. Ministry of Finance chooses to merge and
apply tariff rate of subheading 2106.90.67 (AHTN 2012). This method agrees with
conversion methods specified in issued Decrees on FTA tariff schedules.
❖
Chapter 29
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- Subheading 2939.80.00 includes
Alkaloids, natural or reproduced synthetically and their salts, ethers, esters
and derivatives. This item is created by partially merging 2 subheadings of
2933.99.90 and 2934.99.90 in AHTN 2012. World’s import turnover of the 2
subheadings is USD 24.2 million and USD 12.1 million respectively, mainly
imported from China with differences in tariff rate of 0% and 5% (in 2019). No
record on import turnover from Hong Kong in 2017. MFN tariff rate of subheading
2939.80.00 in 2017 is being proposed by the Department of Tax Policy to be 0%
and placed under line management. Thus, Ministry of Finance chooses to merge
and apply the lower tariff commitment. This method agrees with conversion
methods specified in issued Decrees on FTA tariff schedules.
❖
Chapter 30
31. 3004.60.90
- Subheading 3004.60.90 includes
others, containing antimalarials specified under subheading notes No. 2 of
Chapter 30, apart from the type containing artemisinin in combination with
other active pharmaceutical ingredients and types containing artesunate or
chloroquine. Merged from 2 specific line items of AHTN 2012 that are “herbal
medicaments” (3004.90.63) and “other” (3004.90.69). World’s import turnover of
2 subheadings under AHTN 2012 is insignificant (under USD 1 million), no record
on import turnover of Hong Kong in 2017. MFN tariff rate is at 5%, differences
in tariff rate are at 0% and 5% (in 2019). The items observe differences in
tariff due to being placed under sensitive item category, thus, in order to
prevent erosion of commitments under FTAs, Ministry of Finance chooses to
split line items similar to the AHTN 2012, namely “herbal medicaments” and
“others” and apply the lower tariff rate. This method agrees with conversion
methods specified in issued Decrees on FTA tariff schedules.
❖
Chapter 34
32. 3402.11.90:
- Subheading 3402.11.90 includes
organic surface-active ingredients (other than soap); surface-active
preparations, washing preparations (including auxiliary washing preparations)
and cleaning preparations, whether or not containing soap, other than those of
heading 34.01. The subheading observes differences in tariff of 5% and 6% (in
2019). Merged from 2 subheadings of 3402.11.91 and 3402.11.99.
Import turnover primarily generated from the
subheading 3402.11.99 (in AHTN 2012) at around USD 28.7 million in 2016 and USD
28.6 million in 2017, mostly from Thailand and Indonesia. Vietnam did not
import this item from Hong Kong in 2017.
Following principle No. 3.2, Ministry of Finance
chooses to merge and apply tariff commitment of subheading 3402.11.99 (AHTN
2012), tariff rate of the subheading applied in AC, AI and AJ Agreements is
currently at 0%.
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- Subheading 3402.12.00 includes
organic surface-active agents, whether or not put up for retail sale, cationic
merged from 2 subheadings of 3402.12.10 and 3402.12.90 in the AHTN 2012,
differences in tariff rate of 5% and 6% (in 2019). Import turnover is mainly
generated by subheading 3402.12.90 (import turnover at USD 6.5 million in 2017),
primarily from China, Vietnam did not import this item from Hong Kong in 2017.
Following principle No. 3.2, Ministry of Finance
chooses to merge and apply tariff commitment of subheading 3402.12.90 (AHTN
2012), tariff rate of the subheading applied in AC, AI and AJ Agreements is
currently at 0%.
❖
Chapter 37
34. 3705.00.90
- Subheading 3705.00.90 includes
photographic plates, and film, exposed and developed, other than
cinematographic film, x-ray and microfilm. Heading 3705 is reformed compared to
the AHTN 2012, according to which, the type for offset reproduction is included
in other type thus lead to merging of line items. World’s import turnover of
the 2 subheadings in the AHTN 2012 is insignificant (under USD 1 million),
differences in tariff rate are at 2% and 4% in 2019, primarily imported by
South Korea. Import turnover from Hong Kong in 2017 is insignificant. Ministry
of Finance chooses to split into 2 10-digit subheadings retaining description
and commitments in the AHTN 2012 and apply the lower tariff rate. This method
agrees with conversion methods specified in issued Decrees on FTA tariff
schedules.
❖
Chapter 38
35. 3808.52.90
36. 3808.59.10
37. 3808.59.21
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- Subheading 3808.59.10 includes
other insecticides, other than DDT (ISO), packed with net weight not exceeding
300g. Heading 3808.59 is reformed compared to the AHTN 2012, according which,
insecticides in the AHTN 2017 shall not be itemized into intermediate
preparations for the manufacture of insecticides, mosquito coils and mosquito
mats as done in the AHTN 2012 but merged instead. World’s import turnover of
the 9 merged line items is at around USD 42.8 million, import from Hong Kong in
2017 is insignificant, import primarily comes from China, import from Hong Kong
in 2017 is insignificant, differences in tariff are at 0%, 2% and 4% (in 2019).
Ministry of Finance chooses to split into 3 10-digit line items of:
“Intermediate preparations for production of insecticides”; “Mosquito coils,
mosquito mats and other insecticides in aerosol containers”; and “Other” with
commitments similar to subheadings fitting the same commitments in the AHTN
2012. This method agrees with conversion methods specified in issued Decrees on
FTA tariff schedules.
- Subheading 3808.59.21 includes
other fungicides in aerosol containers, other than DDT (ISO), packed with net
weight not exceeding 300g. Meanwhile, fungicides in aerosol containers in the
AHTN 2017 shall not be itemized into “with a validamycin content not exceeding
3% by net weight” and “other” as done in the AHTN 2012 but merged instead.
Subheading 3808.59.21 is merged from 3 line items in the AHTN 2012 with world’s
import turnover at around USD 4.4 million in 2017, import primarily comes from
China and Thailand, import from Hong Kong in 2017 is insignificant, differences
in tariff rate are at 0% and 2% (in 2019). Ministry of Finance chooses to
split into 2 10-digit line items with commiments similar to those of line items
having the same description in the AHTN 2012. This method agrees with
conversion methods specified in issued Decrees on FTA tariff schedules.
38. 3808.61.40
- Subheading 3808.61.40
includes other type, in form of liquids, other than mosquito coils, mosquito
mats and aerosol container form of the type that is packed with net weight not
exceeding 300g and of items specified in subheading notes No. 2 of Chapter 38.
This subheading is merged from 4 line items in AHTN 2012 with average turnover
at around USD 31.5 million in 2017, import primarily comes from China, import
from Hong Kong in 2017 is insignificant, differences in tariff are at 0% and 2%
(in 2019). Ministry of Finance chooses to split into 2 10-digit line items
in order to agree with methods set forth under VC, AJ, VJ and AI FTAs:
“Intermediate preparations for production of insecticides” and “Other”.
39. 3808.61.90
- Subheading 3808.61.90 includes
other than mosquito coils and mosquito mats, aerosol container form, liquid
form and having deodorising function of the type packed with net weight not
exceeding 300g of items specified in subheading notes No. 2 of Chapter 38. This
subheading is merged from 3 line items of the AHTN 2012 with world’s import
turnover at around USD 31.5 million in 2017, import primarily comes from China,
import from Hong Kong in 2017 is insignificant and differences in tariff rate
are at 0% and 2% (in 2019). Ministry of Finance chooses to split into 2
10-digit line items: “Intermediate preparations for production of insecticides”
and “Other”. This method agrees with conversion methods specified in issued
Decrees on FTA tariff schedules.
40. 3808.62.10
- Subheading 3808.62.10
includes powder for production of mosquito coils, specified in subheading notes
No. 2 of Chapter 38. The subheading is merged from 2 line items in AHTN 2012
that are 3808.91.11 and 3808.91.19. World’s import turnover is primarily
generated by 3808.91.19 which in 2017 is USD 18 million, import from Hong Kong
in 2017 is insignificant. Differences in tariff rate are at 0% and 3% in 2019. Ministry
of Finance chooses to merge and apply tariff rate of subheading 3808.91.11
(leading down to 0% in 2019) due to insignificant tariff differences and
gradual reducing to 0% of tariff of the line items in 2021.
41. 3808.62.50
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42. 3808.62.90
- Subheading 3808.62.90 includes
other type, other than mosquito coils and mosquito mats, in aerosol container
form and liquid form of the type that is packed with net weight exceeding 300g
but not exceeding 7.5 kg of the items specified in subheading notes No. 2 of
Chapter 38. This subheading is merged from 4 line items in AHTN 2012 with
world’s import turnover at around USD 31.5 million in 2017, import primarily
comes from China, import from Hong Kong is insignificant, differences in tariff
are at 0% and 2% in 2019. Ministry of Finance chooses to split into 2
10-digit line items: “Intermediate preparations for production of insecticides”
and “Other”. This method agrees with conversion methods specified in issued
Decrees on FTA tariff schedules.
43. 3808.69.10
44. 3808.69.90
- Subheadings 3808.69.10
and 3808.69.90 include powder for production of mosquito
coils and other, packed with net weight exceeding 7.5 kg of the items specified
in subheading notes No. 2 of Chapter 38. This subheading is merged from 4 line
items in AHTN 2012 with world’s import turnover at around USD 23.6 million in
2017, import primarily comes from China, import from Hong Kong in 2017 is
insignificant, differences in tariff are at 0% and 3% in 2019. Ministry of
Finance chooses to split into 2 10-digit line items: “Intermediate preparations
for production of insecticides” and “Other”. This method agrees with conversion
methods specified in issued Decrees on FTA tariff schedules.
❖
Chapter 39
45. 3907.61.00:
- Subheading 3907.61.00
includes poly(ethylene terephthalate) with viscosity of 78 ml/g or higher.
Poly(ethylene terephthalate) in AHTN 2012 is divided into dispersion, granule
and other forms; while in AHTN 2017, poly(ethylene terephthalate) is reformed
to create the type whose viscosity is 78 ml/g or higher and other; thus
portions of the subheadings 3907.60.10 and 3907.60.90 are merged. World’s
import turnover in 2017 is around USD 209.5 million with import primary
originates from China and ASEAN. MFN 2018 tariff rate observes differences at
0% and 3%, tariff rates in VJ, AJ and VC observe differences (method of
converting the 3 schedules with a lower tariff rate) and other FTAs do not
observe differences in tariff. With respect to the AC, despite having 0% tariff
rate after conversion, China shall not receive preferential treatment for this
subheading in a principle of reciprocity. Thus, Ministry of Finance chooses
to merge and apply the lower tariff commitment in AHTN 2012. This method agrees
with conversion methods specified in issued Decrees on FTA tariff schedules.
46. 3909.31.00
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47. 3916.90.70
48. 3916.90.80
49. 3920.30.99
- Subheading 3920.30.99 includes
other than plates and sheets of other types, other than Acrylonitrile butadiene
styrene (ABS) sheets of a kind used in the manufacture of refrigerators, of
polymers of styrene. Heading 3920.30 according to AHTN 2017 has been reformed,
not specified as “a kind used as an adhesive by melting” and further specified
as “plates and sheets, rigid” and “other, plates and sheets”, thus subheading
3920.30.99 is merged from “a kind used as an adhesive by melting” and a portion
of “other”. This subheading is merged from subheading 3920.30.10 (import
turnover from Hong Kong is USD 1.4 million without tariff commitment) and
subheading 3920.30.90 (import turnover from Hong Kong is USD 31 thousand,
committed to cut tariffs after 3 years). Since import turnover primarily
focuses on 3920.30.10 with higher commitments, Ministry of Finance chooses
to apply method No. 3.3, according to which, merge line items and apply tariff
rate of the line item in AHTN 2012 (3920.30.10) which accounts for the majority
of trade. Tariff rate applied in FTAs is currently at 0%.
❖
Chapter 40
50. 4011.70.00
- Subheading 4011.70.00 includes
new pneumatic tyres, of rubber, of a kind used on agricultural or forestry
vehicles and machines. Heading 4011 according to the AHTN 2017 has been
reformed, according to which, “of a kind used on agricultural or forestry
vehicles and machines” shall not be itemized any further thus leading to
merging of 4 AHTN 2012 subheadings. World’s import turnover in 2017 is
approximately USD 3.8 million, tariffs under VC and EAEU observe differences.
Tariff differences are at 12% and 16% in 2019. Ministry of Finance chooses
to split into 3 10-digit line items: subheading 4011.70.11.10: - - Of a kind
used on tractors, machinery of heading 84.29 or 84.30, or wheel-barrows,
subheading 4011.70.11.20: - - Other, having a “herring-bone” or similar tread;
subheading 4011.70.11.90: - - Other; this method agrees with methods applied in
the 2 FTAs above to ensure continuity of original commitments.
51. 4011.80T11
- Subheading 4011.80.11 includes
new pneumatic tyres, of rubber, of a kind used on tractors, mechinery of
heading 84.29 or 84.30, forklifts, wheel-barrows or other industrial handling
vehicles and machines, having a rim size not exceeding 61 cm. Heading 4011.80
according to AHTN 2017 has been reformed according to rim size. Subheading
4011.80.11 according to AHTN 2017 is expanded in order to include a kind for
wheel-barrows, thus leading to merging of 3 AHTN 2012 subheadings. Tariffs
under VC and EAEU observe differences. World’s import turnover in 2017 is
approximately USD 3.8 million, import turnover from Hong Kong in 2017 is
insignificant. Tariff differences are at 12% and 16% in 2019: Ministry of
Finance chooses to split into 2 10-digit line items: subheading 4011.80.11.10:
- - - - Of a kind used for wheel-barrows, subheading 4011.80.11.90: - - - -
Other; this method agrees with methods applied in the 2 FTAs above to ensure
continuity of original commitments.
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- Subheading 4011.80.21 includes
new pneumatic tyres, of rubber, of a kind used on tractors, mechinery of
heading 84.29 or 84.30, forklifts or other industrial handling vehicles and
machines, having a rim size exceeding 61 cm. Heading 4011.80 according AHTN
2017 has been reformed according to rim size, according to which, subheading
4011.80.21 according to AHTN 2017 is merged from 3 subheadings in AHTN 2012.
Tariffs under VC, VJ and EAEU observe differences. World’s import turnover in
2017 is approximately USD 5.9 million. Tariff differences are at 12% and 16% in
2019. Ministry of Finance chooses to split into 3 10-digit line items: -
subheading4011.80.21.10: Other, having a “herring-bone” or similar tread;
subheading 4011.80.21.20: Other, for machinery of heading 84.29 or 84.30,
subheading 4011.80.21.90: Other; this method agrees with methods applied in the
5 FTAs above to ensure continuity of original commitments.
53. 4011.90.10
- Subheading 4011.90.10 includes
new pneumatic tyres, of rubber, for vehicles in Chapter 87, other than kinds
used on motor cars (including station wagons and racing cars), kinds used on
buses (1) or lorries, kinds used on aircraft, kinds used on motorcycles, kinds
used on bicycles kinds used on agricultural or forestry vehicles and machines
and kinds used on construction, mine or industrial handling vehicles and
machines. This subheading is merged from 2 subheadings of AHNT 2012. Despite
insignificant world’s import turnover, tariff in 2019 observes differences of
8% and 20%. Ministry of Finance chooses to split into 2 10-digit line items:
subheading 4011.90.10.10: - - - Having a “herring-bone” or similar tread;
subheading: 4011.90.10.90: - - - Other; this method agrees with methods applied
in the 5 FTAs above to ensure continuity of original commitments.
54. 4011.90.20
- Subheading 4011.90.20 includes
new pneumatic tyres, of rubber, for machines in heading 8429 or 8430. This
subheading is merged from 2 subheadings in AHTN 2012. Despite insignificant
world’s import turnover (under USD 1 million), tariff differences are at 8% and
12% in 2019. Ministry of Finance chooses to split into 2 10-digit line items:
subheading 4011.90.20.10: - - - Having a “herring-bone” or similar tread,
subheading 4011.90.20.90: - - - Other; this method agrees with methods applied
in the 2 FTAs above to ensure continuity of original commitments.
❖
Chapter 44
55. 4412.31.00
- Subheading 4412.31.00 includes
plywood made from other than bamboo, consisting solely of sheets of wood (other
than bamboo), each ply not exceeding 6 mm thickness, with at least one outer
ply of tropical wood. Merged from 3 subheadings in AHTN 2012: 4412.31.00,
4412.32.00 (no tariff commitments), 4412.39.00 (tariff cut after 3 years, from
3% to 0% during 2019 – 2022), average world’s import turnover is approximately
USD 15 million, primary import comes from the US and China, MFN tariff rate is
5%. Import turnover in 2017 of subheadings above from Hong Kong is
insignificant. Due to difficulty distinguishing tropical wood, Ministry of
Finance chooses to merge and apply the lower tariff rate. This method agrees
with conversion methods specified in issued Decrees on FTA tariff schedules.
❖
Chapter 51
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- Subheading 5112.11.00 includes
items having description “- - Of a weight not exceeding 200 g/m2”
(under Woven fabrics of combed wool or of combed fine animal hair containing
85% or more by weight of wool or of fine animal hair), merged from 2 line items
in HS 2012: 5112.11.10 and 5112.11.90. Primary import comes from South Korea
and China. Tariff differences are at 8% and 12% in 2019. Splitting method is
proposed. Ministry of Finance chooses to split as follows: subheading
5112.11.00.10: - - - Printed by the traditional batik process, subheading
5112.11.00.90: - - - Other; this method agrees with conversion methods
specified in issued Decrees on FTA tariff schedules:
❖
Chapter 58
57. 5803.00.90
- Subheading 5803.00.90 contains
description – Other (Gauze, other than narrow fabrics of heading 58.06), merged
from 2 line items in HS 2012: 5803.00.91 and 5803.00.99. Primary import comes
from Thailand and Taiwan. World’s import turnover in 2017 is approximately USD
3 million, import from Hong Kong in 2017 is insignificant. Tariff differences
are at 8% and 10% in 2019. Ministry of Finance chooses to merge and apply
the lower tariff commitments. This method agrees with conversion methods
specified in issued Decrees on FTA tariff schedules.
❖
Chapter 72
58. 7211.90.12
- Subheading 7211.90.12 includes
flat-rolled products of iron or non-alloy steel, of a width of 600 mm or more,
not clad, plated or coated, not further worked than cold-rolled (cold-reduced),
containing by weight 0.6 % or more of carbon, hoop and strip, of a width
exceeding 400 mm. The subheading is merged from 2 line items in HS 2012:
7211.90.90 and 7211.90.30. Due to insignificant world’s import turnover of this
subheading in 2017 (approximately USD 1 million), import from Hong Kong in 2017
is insignificant. Tariff differences are at 4% and 6% in 2019. Ministry of
Finance chooses to merge and apply the lower tariff rate.
59. 7211.90.14
- Subheading 7211.90.14 includes
items having description of Other, of a thickness of 0.17 mm or less under
heading 7211.90 is merged from 2 subheadings in AHTN 2012 of 7211.90.10: Hoop
and strip, of a width not exceeding 400 mm and 7211.90.30: Other, of a
thickness of 0.17 mm or less under heading 7211.90. World’s import turnover in
2017 is insignificant (under USD 1 million in 2017). Tariff differences are at
4% and 6% in 2019. Ministry of Finance chooses to merge and apply the lower
tariff rate. This method agrees with conversion methods specified in issued
Decrees on FTA tariff schedules.
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- Subheading 7211.90.91 includes
items having description of Other, of a thickness of 0.17 mm or less under
heading 7211.90 is merged from 2 subheadings in AHTN 2012 which are 7211.90.10:
Hoop and strip, of a width not exceeding 400 mm and 7211.90.30: Other, of a
thickness of 0.17 mm or less under heading 7211.90. Primary import comes from
China. World’s import turnover in 2017 is insignificant (under USD 1 million in
2017), import from Hong Kong in 2017 is insignificant. Ministry of Finance
chooses to merge and apply the lower tariff rate. This method agrees with
conversion methods specified in issued Decrees on FTA tariff schedules.
❖
Chapter 84
61. 8409.99.72
- Subheading 8409.99.72 includes
“Cylinder blocks; crank cases”, is merged from 2 subheadings in AHTN 2012:
8409.99.72 (Cylinder blocks) and 8409.99.79 (other components), observes tariff
differences compared to AJ ((B16, 20) and no commitments). World’s import turnover
in 2017 is approximately USD 2.8 million, import turnover from Hong Kong in
2017 is insignificant. Ministry of Finance chooses to split according to
description of AHTN 2012 subheading. This method agrees with conversion methods
specified in issued Decrees on FTA tariff schedules.
62. 8428.20.90
- Subheading 8428.20.90 includes
Pneumatic elevators and conveyors, of kinds not used for agriculture. At the
8th AHTN negotiation session, ASEAN states have discussed “Automated machines
for the transport, handling and storage of printed circuit boards, printed
wiring boards or printed circuit assemblies” in 4 headings of AHTN 2012 which
are 8428.20, 8428.33, 8428.39 and 8428.90. ASEAN states and consulting experts
acknowledge that in the 3 headings of 8428.20, 8428.33 and 8428.39, the items
cannot have such functions thus the Meeting has agreed that the items are only
available in heading 8428.90. This heading is merged from 8428.20.90
8428.20.20. World’s import turnover in 2017 is USD 2.9 million, no record on
import turnover from Hong Kong in 2017. Ministry of Finance chooses to merge
and apply the lower tariff rate due to insignificant tariff differences (3% and
0% in 2019) and tariff rate of this subheading will be reduced to 0% in 2021.
63. 8460.12.00
- Subheading 8460.12.00 includes
Flat-surface grinding machines, numerically controlled is merged from 2
subheadings in AHTN: 8460.11.00 and 8460.90.10. Import turnover in 2017 is
mainly generated from subheading 8460.11.00 (USD 13.5 million), import turnover
from Hong Kong in 2017 is insignificant, tariff differences are at 0% and 2%. Ministry
of Finance chooses to merge and apply tariff rate of subheading 8460.11.00.
64. 8460.19.00
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65. 8460.22.00
66. 8460.23.00
67. 8460.24.00
- Subheadings
8460.22.00, 8460.23.00 and 8460.24.00 include respectively Other
grinding machines: Centerless grinding machines, numerically controlled; Other
die grinders, numerically controlled and Other, numerically controlled. The subheadings
are merged from 2 subheadings of AHTN 2012: 8460.21.00 and 8460.90.10. World’s
import turnover of each subheading in 2017 is approximately USD 6 million,
import turnover from Hong Kong in 2017 is insignificant. Tariff differences are
at 0% and 1% in 2019. Ministry of Finance chooses to merge and apply the lower
tariff rates.
68. 8460.29.10
- Subheading 8460.29.10 includes
Other grinding machines, Electrically operated is merged from 2 subheadings in
AHTN 2012: 8460.29.10 and 8460.90.10. Import turnover in 2017 of 2
corresponding subheadings is USD 15.5 million and USD 3.9 million, import
turnover from Hong Kong in 2017 is insignificant. Tariff differences are 0%
and 2% in 2019. Ministry of Finance chooses to merge and apply the lower tariff
rates until 2021 when the tariff rates reach 0% and tariff differences are
insignificant.
69. 8460.29.20
- Subheading 8460.29.20 includes
Grinding machines, Other, Not electrically operated is merged from 2
subheadings in AHTN 2012: 8460.29.20 8460.90.20. World’s import turnover in
2017 is insignificant (USD 1 million), no record on import turnover from Hong
Kong in 2017. Tariff differences are 0% and 1% in 2019. Ministry of Finance
chooses to merge and apply the lower tariff rate until 2021 when the tariff
rates reach 0% and tariff differences are insignificant.
❖
Chapter 85
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- Subheading 8503.00.90 includes
Parts suitable for use solely or principally with the machines of heading 85.01
(Electric motors and generators (except generator sets)) or 85.02 (Electric
generating sets and rotary converters), Other and is merged from 2 subheadings
in AHTN 2012: 8503.00.10 and 8503.00.90. World’s import turnover in 2017 of the
2 subheadings is USD 59.2 million and USD 121.6 million respectively. Tariff
differences are at 3% and 4% in 2019. Ministry of Finance chooses to merge
according to principle No. 3.3 (apply the higher tariff rate) to maximize
national benefits.
71. 8528.42.00
72. 8528.52.00
73. 8528.62.00
- Subheadings 8528.42.00
and 8528.52.00 include screens capable of connecting
directly and designed to use with automatic data processing machines under
heading 84.71; subheading 8528.62.00 includes projectors capable
of connecting directly and designed to use with automatic data processing
machines under heading 84.71. This is a case of merging line items under AHTN
2012 with different tariff commitments in most of FTAs. General Department of
Customs previously stated (according to Official Dispatch No. 342/TXNK-PL dated
August 31, 2017) that splitting data processing systems under heading 84.71
based on kinds used primarily is difficult and the subheadings 8528.42.00,
8528.52.00, 8528.62.00 are being proposed to obtain MFN tariff rates of 0% by
Department of Tax Policy. Ministry of Finance chooses to merge and apply the
lowest tariff rate. This method agrees with conversion methods specified in
issued Decrees on FTA tariff schedules.
74. 8542.31.00
75. 8542.32.00
76. 8542.33.00
77. 8542.39.00
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78. 9608.30.90
- Subheading 9608.30.90 includes
stylograph pens and other pens, is merged by 2 subheadings in AHTN 2012:
9608.30.10 (Indian ink drawing pens, tariff rate of 20% in 2019, insignificant
import turnover) and 9608.30.90 (Other, no tariff commitment, import turnover
in 2017 is approximately USD 770 thousand). Due to turnover primarily generated
by subheading 9608.30.90 which has high tariff, thus tariff commitment of
subheading 9608.30.90 shall be applied. Ministry of Finance chooses to merge
and apply principle No. 3.3 (apply tariff of line items with high turnover) to
maximize national benefits. This method agrees with conversion methods
specified in issued Decrees on FTA tariff schedules.
❖ Chapter
96
79. 9620.00.10
80. 9620.00.20
81. 9620.00.30
82. 9620.00.40
83. 9620.00.90
- Subheadings 9620.00.10,
9620.00.20, 9620.00.30, 9620.00.40 and 9620.00.90 include monopods
bipods tripods and similar articles made with following materils: plastic;
carbon and graphite; iron and steel; aluminum; other materials. Merged from 10
subheadings in AHTN 2012 and all items can be used for video capture devices,
cameras and phones. Thus, Ministry of Finance chooses not to split into
10-digit subheadings to simplify the tariff schedule and apply the lowest
tariff rates. This method agrees with conversion method specified in issued
Decrees on FTA tariff schedules.
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ANNEX II
IMPACT ASSESSMENT
REPORT OF DECREE ON SCHEDULES OF SPECIAL PREFERENTIAL IMPORT TARIFFS OF VIETNAM
FOR IMPLEMENTATION OF ASEAN – HONG KONG
(Attached to Decree No. 07/2010/ND-CP dated January 5, 2010 of Government)
I. OVERALL ASSESSMENT
According to assessment of Ministry of Finance, the
draft Decree has satisfied following requirements:
- Compliance with policies
and guidance of the Communist Party, constitutional compliance and legitimacy: The
draft Decree conforms to policies and guidance of the Communist Party, which
includes socio-economic development policies of the Communist Party. Development
of draft Decree on schedules of special preferential import tariffs of Vietnam
for implementation of AHKFTA is to promote commercial activities, investment
and manufacturing activities between Vietnam and Hong Kong.
The draft Decree conforms to the Constitution dated
2013, Law on Export and Import Duties dated 2016 and Law on Customs dated 2014.
- Consolidation in legal
system: Decree on schedules of special preferential import tariffs of
Vietnam for implementation of AHKFTA during 2019 - 2022 has been examined and
ensured in terms of consistency and compatibility with relevant laws and
decrees namely Commercial Law, Law on Investment, Law on Tax Administration,
Decree on elaborating to Law on Investment and Decree on elaborating to Law on
Investment and Commercial Law.
- Consistency with
international agreements to which Vietnam is a signatory: Contents of draft
Decree have been guaranteed to conform to the AHKFTA and relevant international
agreements to which Vietnam is a signatory.
II. IMPACT ASSESSMENT
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According to research of the ASEAN Secretariat,
since service sector accounts for the majority of the economy sectors of Hong
Kong (95% of GPD), developed and modern infrastructure, innovative
administrative basis, high quality personnel with presence of multinational
enterprises leading in banking, finance, insurance, maritime, aviation, etc.,
the AHKFTA shall partly reduce barriers, promote trade and investment, thus,
the majority of ASEAN (except for Laos) shall witness the rise of GDP thereof.
Therefore, cooperation with Hong Kong in the AHKFTA may positively influence
economic development of Vietnam, assist economic transformation and
implementation of industrialization and modernization of Vietnam.
Up to now, agriculture products of Vietnam except
for fishery products, vegetables and rice exported to Hong Kong yet to achieve
notable figures. Implementation of the AHKFTA is expected to further promote
export of agriculture products, fishery products and processed food from
Vietnam to Hong Kong in the time to come. With respect to import, reducing tax
according to the AHKFTA is to diversify imported products.
The AHKFTA also attracts investment from Hong Kong
as well as increases opportunity of Vietnamese products and services gaining
access to international market.
2. State budget revenue impact
a) Regarding products imported from Hong Kong:
Overall, after converting the AHTN 2012 to AHTN
2017, Vietnam provides Hong Kong with preferential tariff treatment in approximately
72% of total tariff line items. Statistical report of commitments on reduction
of special preferential import tariffs of Vietnam in the AHKFTA according to
the AHTN 2017 is as follows:
Table 1:
Commitments on special preferential import tariff of Vietnam in the AHKFTA
Commitments
Number of line
items
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Import turnover
of Hong Kong in 2017 (million USD)
%/total import
turnover in 2017
Import turnover
of Hong Kong in 2018 (million USD)
%/total import turnover
in 2018
Tariff elimination after 3 years (NT1)
5160
47,5%
570,7
34,4%
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33,6%
Tariff elimination after 10 years (NT2)
2658
24,5%
88
5,3%
96,1
6,3%
Sensitive (SL)
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4,2%
37
2,3%
29,4
2%
Highly sensitive (HSL)
536
4,94%
9
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8,8
0,6%
No commitment (EL)
2045
16,71%
955,2
57,5%
886,2
57,7%
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10856
100%
1660
100%
1537
100%
Regarding import turnover from Hong Kong: customs
statistical report reveals: in 2017, import value increased by 11% compared to
the same period in 2016, from approximately USD 1.495 billion to USD 1.660
billion. In 2018, import from Hong Kong reached USD 1.537 million. In general,
import turnover from Hong Kong accounts a very low percentage in world’s total
import turnover (approximately 1%).
Primary import products from Hong Kong (at least
USD 20 million): Among imported goods in 2017, import from Hong Kong focused on
sewing and knitting materials and supplies, leather and footwear (approximately
USD 400 million); Machinery, equipment, tools and parts; metal scraps; phones
and components; computers, electronic products, parts and other products
(figures in Table 2).
Table 2: Primary
import products from Hong Kong
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Import value in
2016 (million USD)
Import value in
2017 (million USD)
Import value in
2018 (million USD)
Machinery, equipment, tools and parts
306,2
275,5
180,6
Fabric of all kinds
227,3
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23,14
Sewing, knitting materials and supplies, leather
and footwear
207,9
215,1
369,7
Metal scraps
118,2
201,3
192,3
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165,8
193,2
89,2
Other products
137,6
173,3
114,2
Computers, electronic products and components
93,4
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294,2
Paper-based products
47,5
46,6
42,5
Jewels, precious metal and products thereof
51,8
43,7
64
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1.355,7
1.632,8
1.369,8
b) Regarding state budget revenue:
During the period of 2019 – 2022, average tariff
rate in the AHKFTA shall reduce from 6.97% in 2019 to 4.98% in 2022. The
greatest change in average tariff rate shall take place in 2021 as 6.52% in
2020 reduces to 4.98% in 2021 – 2022.
Table 6: Import
duty rate reduction
MFN 2018
2019
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2021
2022
Average tariff rate
12,06
6,97
6,52
4,98
4,98
Due to insignificant import value from Hong Kong
(only accounts for 1% of world’s total import throughout the years), tariff
reduction within the AHKFTA shall not impact state budget revenue dramatically.
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Assume rate of utilizing preferential treatment of
C/O Form under the AHKFTA is 35%, which is the average level of utilizing
preferential treatment under free trade agreements in 2017 and 2018. Import
turnover increases by 2% due to tariff reduction, state budget revenue is
expected to remain unchanged or rise slightly. According to which, import
tariff revenue in the last 6 months of 2019 is expected to be VND 506.5
billion, in 2020 is USD 1,136 billion, in 2021 is VND 1,042 billion and
continue to rise in the following years. Up to 2022, import tariff revenue is
expected to increase from VND 114 billion (corresponding to 10% increase
compared to 2020) to VND 1,250 billion.