Key takeaways
Decree 111 is expected to tackle the issues of origin fraud and tax evasion. One of the most notable changes is Decree 111's extension of regulating the scope of Decree No. 43/2017/ND-CP on Goods Labels ("Decree 43") to cover 'exported goods'. Among other things, Decree 111 introduces substantial modifications to Article 10 on mandatory content to be embedded in the label of goods in accordance with three restructured categories: locally circulated, imported and exported goods.
In more detail
- Scope of application
- Decree 111 broadens Decree 43's scope of application to cover 'exported goods'. In particular, Article 1.1 of Decree 111 provides that "This Decree prescribes content, presentation thereof and state management of labels of goods circulated in Vietnam and exported and imported goods". As a result, 'exporting organizations and individuals' become the subjects of application of this instrument.
- Decree 111 also amends the list of goods falling outside the regulating scope of Decree 43. Accordingly, imported goods stored in bonded warehouses for export to a third country will not be regulated by the decree.
- Mandatory content to be embedded in the goods label
Notably, Decree 111 introduces substantial modifications to Article 10 on mandatory content to be embedded in the label of goods in accordance with three restructured categories: goods circulated in the domestic market, imported goods and exported goods.
- For goods circulated in the domestic market: The goods origin can be replaced by the place where the final processing step is undertaken if the goods origin cannot be identified.
- For imported goods: A substantial change is that the original label must indicate — either in foreign language or Vietnamese — the goods name, goods origin and name/abbreviated name of the foreign manufacturer or the foreign entity responsible for the imported goods. While the regulation on supplementary label for imported goods remains unchanged, this regulation means that the aforementioned label information must not be supplemented by a supplementary label.
The name and address of importers are still required.
Similar to goods circulated in the domestic market, origin information of imported goods can be identified by the place where the final processing step is undertaken if the goods origin cannot be identified.
Decree 111 also clarifies that the supplementary label may be provided by importers after the customs clearance of imported goods is completed but before the imported goods are circulated in the market.
- For exported goods: According to Decree 111, exported goods shall be labeled according to the laws of the importing country. However, exporters are still required to comply with Vietnamese laws and regulation on goods origin, or international treaties to which Vietnam is a member.
The label shall not contain content or image regarding sovereign disputes as well as other sensitive content that may affect Vietnam's security, politics, economy, society, diplomatic relations and fine customs.
- Other amendments
In addition to the above, there are other amendments made to Decree 43:
- Decree 111 sets forth a labeling principle when the goods' origin cannot be identified. Particularly, the label shall present the place where the final processing step is undertaken. In this circumstance, the following phrases or a combination of the following phrases shall be presented together with the name of the country or territory where the mentioned final processing step is undertaken: 'assembled at', 'bottled at', 'mixed at', 'completed at', 'packed at', 'labeled at'.
- Regarding transitional provisions, Decree 111 prescribes that goods with labels in accordance with the provisions of Decree No. 43/2017/ND-CP that have been manufactured, imported or circulated in Vietnam before the effective date of Decree 111 are allowed to remain in circulation without any time limit, or until the expiration date, if any.
