You may not be able to save money by traveling through Southeast Asia!
In the context of Sino-US trade frictions from last year to this year, many export companies chose the “curve” “Save the country”, bypassing Southeast Asian countries to avoid additional U.S. tax increases. But evaluating the risks and costs, is it really a good deal?
The following is a comprehensive summary of some recent control measures in popular “borrowing” places for reference by export companies!
Vietnam
Vietnam is considered by many to be the biggest beneficiary of the Sino-US trade friction. At present, Vietnam has signed two heavyweight free trade agreements, namely the Vietnam-EU Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which will allow Vietnam to export to Canada, When entering markets such as Japan, Mexico, Peru, France, and Germany, it can enjoy more tariff preferences, giving it a huge export advantage.
In the first 11 months of this year, China’s exports to Vietnam surged by 22%; on the other hand, in the first 11 months of this year, Vietnam’s exports to the United States increased by 27.9% year-on-year to US$55.6 billion, including electronic products, Textiles, mobile phones and parts, and electromechanical equipment increased by more than 40% year-on-year. The United States has put pressure on Vietnam and repeatedly urged Vietnam to strictly inspect exports that “wash their origins”.
Since this year, Vietnam has repeatedly adjusted its rules on the confirmation of origin for import and export. The latest rules will take effect on October 21.
Previously, the draft standard for “Made in Vietnam” (origin) issued by the Ministry of Industry and Trade of Vietnam stipulated:
Product labels must indicate the place of origin. If a product is purely produced in Vietnam or is completely produced in Vietnam, it can be marked as “Made in Vietnam.”
If the product is made in the final processing stage in Vietnam, it must meet the relevant commodity code (HS) conversion regulations and the domestic new value ratio must exceed 30% before it can be marked. “made in Vietnam”.
Ou Anh Tuan, acting director of the Customs Administration and Supervision Bureau of the General Administration of Vietnam Customs, said that there are 15 categories of goods with a high risk of fraud and counterfeiting in origin, among which textiles, garments and leather shoes are noteworthy. industries and handbags; computers; electronic products and their parts; household appliances and their parts; aluminum and aluminum products; steel and steel products; wood and wood products.
The latest batch of 13 early warning products in Vietnam is as follows:
The Ministry of Industry and Trade of Vietnam recently notified the People’s Committees of various provinces and municipalities that 13 types of products are exported to the United States, the European Union and Canada. A list of products that may be subject to trade remedy measures and anti-avoidance investigations. The Ministry of Industry and Trade has divided the warning level into four levels. Export commodities listed in Level 4 and Level 3 need to be closely monitored and relevant corporate activities strictly inspected; commodities listed in Level 2 and Level 1 require attention and continuous tracking.
This time, plywood is listed at level 4 of the warning by the Ministry of Industry and Trade of Vietnam;
Plywood is listed at level 3. 7 types of products including artificial stone, iron cabinets, rubber mattresses, electric bicycles, truck and bus tires, and corrosion-resistant steel;
Stainless steel rings, hot-rolled steel plates, cast steel products, synthetic Four types including fibers are classified as Level 2;
Corrosion-resistant steel and ribbons are classified as Level 1.
The above 13 commodities are all products subject to trade remedy measures and anti-tax avoidance investigations by the U.S. Department of Commerce against China. Since the United States launched the investigation, the value of China’s exports of the above-mentioned goods to the United States has dropped significantly, while the value of Vietnam’s exports of similar goods to the United States has increased significantly. The U.S. Customs and Border Protection agency suspects that these goods are diverted to Vietnam for export to the United States to avoid anti-double and counter-tariffs. Therefore, Vietnam must strengthen monitoring and inspection of relevant export companies.
In addition, Vietnam Customs is developing a new procedure to better identify and punish companies that violate regulations and export Chinese products as Vietnamese products.
On October 29, the General Administration of Customs of Vietnam discovered and blocked a major commercial fraud case at Vung Tau Port in which local companies imported Chinese aluminum products disguised as Vietnamese origin and exported them to the United States. An estimated 1.8 million tons of aluminum profile products were seized and detained, with a value of approximately US$4.3 billion.
Vietnamese authorities stated that there are currently 10 containers of bicycles being detained at Binh Duong Customs, because these products are almost 100% imported from abroad, and even the labels are affixed abroad. Well, just shipped to Vietnam for assembly and then exported.
At the same time, in the Haiphong Port Area, the customs also temporarily detained many mechanical equipment imported from abroad. These products can be turned into Vietnamese products for re-export through simple assembly.
Ports in other parts of Vietnam such as Ho Chi Minh City and Dong Nai also detained many imported finished products such as clothes, shoes, hats, electronic accessories and other products. These products were labeled with Vietnamese domestic brands for supply For domestic consumption, customs authorities took swift action in port areas.
Vietnamese authorities stated that customs will continue to intensify its efforts against false practices of disguising the place of origin.
On December 6, Caryn McClelland, head of the U.S. Embassy delegation, and V. Thị Mai, Deputy Minister of Finance of Vietnam, signed an agreement in Hanoi.The Customs Mutual Assistance Agreement (CMAA) allows the United States and other countries to exchange information, intelligence, and documents to prevent and investigate customs violations.
CBP said each agreement is tailored based on the capabilities of each country’s customs authorities and national policies. This agreement may help the U.S. government more easily investigate the export of Chinese products to the United States through Vietnam.
Thailand
The International Trade Department of the Ministry of Commerce of Thailand has redeployed staff Surprise inspections were carried out on some factories to prevent Chinese goods from being passed off as Thai products and exported to the United States, and to prevent the United States from raising import taxes on Thai goods, which would affect the export of Thai goods to the United States.
Adun, the Minister of International Trade of Thailand, said that the department dispatched staff to set up an inspection team to conduct surprise inspections of major factories to determine whether the certificates of origin of goods exported to the United States by these factories were legality. If it is found that the goods exported to the United States are not genuine goods of Thai origin, the U.S. Customs will be notified and the Thai factory that violates the law will be punished.
The department hopes to establish a good reputation for Thailand’s exports of U.S. goods, protect the rights and interests of legal factory goods exported to the United States, further promote Thai-U.S. trade and open up the market for exported goods to the U.S., to replace affected goods. Chinese products affected by Sino-US trade friction.
In late October, the United States announced the suspension of Thailand’s GSP tariff treatment, involving seafood, juice and other Thai products exported to the United States.
Cambodia
The United States is also urging Cambodia to investigate Chinese companies’ detour exports United States, tariff avoidance behavior. In June, the United States fined several export companies for exporting goods through China’s Sihanoukville Special Economic Zone in Cambodia to circumvent U.S. government tariffs on Chinese goods.
According to data from the General Administration of Customs of China, China’s exports to Cambodia increased by 30.7% year-on-year in the first half of 2019, while Cambodia’s first quarter of this year Exports to the United States increased by 22.4% year-on-year.
Cambodia’s rules of origin only require 40% of its products to come from the country. Under the expanded trade deal in 2016, the Generalized System of Preferences (GSP) allows Cambodia to export travel items such as bags, suitcases and accessories duty-free to the United States.
Freight forwarders who export and re-export to Vietnam, Thailand, Cambodia and other Southeast Asian countries need to pay attention! </p
