Title
FREE TRADE AGREEMENT BETWEEN THE EUROPEAN UNION AND THE SOCIALIST REPUBLIC OF VIET NAM
Preamble
PREAMBLE
The European Union, hereinafter referred to as "the Union",
and
the Socialist Republic of Viet Nam, hereinafter referred to as "Viet Nam",
hereinafter jointly referred to as "the Parties" or individually referred to as "Party",
RECOGNISING their longstanding and strong partnership based on the common principles and values reflected in the Partnership and Cooperation Agreement, and their important economic, trade and investment relationship;
DESIRING to further strengthen their economic relationship as part of, and in a manner coherent with, their overall relations, and convinced that this Agreement will create a new climate for the development of trade and investment between the Parties;
RECOGNISING that this Agreement will complement and promote regional economic integration efforts;
DETERMINED to strengthen their economic, trade and investment relationship in accordance with the objective of sustainable development, in its economic, social and environmental dimensions, and to promote trade and investment under this Agreement in a manner mindful of high levels of environmental and labour protection and relevant inter- nationally recognised standards and agreements;
DESIRING to raise living standards, promote economic growth and stability, create new employment opportunities and improve the general welfare and, to this end, reaffirming their commitment to promote trade and investment liberalisation;
CONVINCED that this Agreement will create an expanded and secure market for goods and services and a stable and predictable environment for trade and investment, thus enhancing the competitiveness of their firms in global markets;
REAFFIRMING their commitment to the Charter of the United Nations, signed in San Francisco on 26 June 1945, and having regard to the principles articulated in The Universal Declaration of Human Rights, adopted by the General Assembly of the United Nations on 10 December 1948;
RECOGNISING the importance of transparency in international trade to the benefit of all stakeholders;
SEEKING to establish clear and mutually advantageous rules governing their trade and investment and to reduce or eliminate the barriers to mutual trade and investment;
RESOLVED to contribute to the harmonious development and expansion of international trade by removing obstacles to trade through this Agreement and to avoid creating new barriers to trade or investment between the Parties that could reduce the benefits of this Agreement;
BUILDING on their respective rights and obligations under the WTO Agreement and other multilateral, regional and bilateral agreements and arrangements to which they are party;
DESIRING to promote the competitiveness of their companies by providing them with a predictable legal framework for their trade and investment relations,
HAVE AGREED AS FOLLOWS:
Body
Chapter 1. Objectives and General Definitions
Article 1.1. Establishment of a Free Trade Area
The Parties hereby establish a free trade area, in conformity with Article XXIV of GATT 1994 and Article V of GATS.
Article 1.2. Objectives
The objectives of this Agreement are to liberalise and facilitate trade and investment between the Parties in accordance with the provisions of this Agreement.
Article 1.3. Partnership and Cooperation Agreement
For the purposes of this Agreement, "Partnership and Cooperation Agreement" means the Framework Agreement on Comprehensive Partnership and Cooperation between the European Union and its Member States, of the one part, and the Socialist Republic of Viet Nam, of the other part, signed in Brussels on 27 June 2012.
Article 1.4. WTO Agreements
For the purposes of this Agreement:
(a) "Agreement on Agriculture" means the Agreement on Agriculture contained in Annex 1A of the WTO Agreement;
(b) "Agreement on Government Procurement" means the Agreement on Government Procurement contained in Annex 4 of the WTO Agreement;
(c) "Agreement on Preshipment Inspection" means the Agreement on Preshipment Inspection contained in Annex 1A of the WTO Agreement;
(d) "Agreement on Rules of Origin" means the Agreement on Rules of Origin contained in Annex 1A of the WTO Agreement;
(e) "Anti-Dumping Agreement" means the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 contained in Annex 1A of the WTO Agreement;
(f) "Customs Valuation Agreement" means the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 contained in Annex 1A of the WTO Agreement;
(g) "DSU" means the Understanding on Rules and Procedures Governing the Settlement of Disputes contained in Annex 2 of the WTO Agreement;
(h) "GATS" means the General Agreement on Trade in Services contained in Annex 1B of the WTO Agreement;
(i) "GATT 1994" means the General Agreement on Tariffs and Trade 1994 contained in Annex 1A of the WTO Agreement;
(j) "Import Licensing Agreement" means the Agreement on Import Licensing Procedures contained in Annex 1A of the WTO Agreement;
(k) "Safeguards Agreement" means the Agreement on Safeguards contained in Annex 1A of the WTO Agreement;
(l) "SCM Agreement" means the Agreement on Subsidies and Countervailing Measures contained in Annex 1A of the WTO Agreement;
(m) "SPS Agreement" means the Agreement on the Application of Sanitary and Phytosanitary Measures contained in Annex 1A of the WTO Agreement;
(n) "TBT Agreement" means the Agreement on Technical Barriers to Trade contained in Annex 1A of the WTO Agreement;
(o) "TRIPS Agreement" means the Agreement on Trade-Related Aspects of Intellectual Property Rights contained in Annex 1C of the WTO Agreement; and
(p) "WTO Agreement" means the Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994.
Article 1.5. General Definitions
For the purposes of this Agreement, unless otherwise specified:
(a) "day" means a calendar day;
(b) "domestic" means, with regard to legislation, law or laws and regulations for the Union and its Member States and for Viet Nam (1), respectively, legislation, law or laws and regulations at central, regional or local level;
(c) "goods" means products as understood in GATT 1994, unless otherwise provided for in this Agreement;
(d) "Harmonized System" means the Harmonized Commodity Description and Coding System, including all legal notes and amendments thereto (hereinafter referred to as the "HS");
(e) "IMF" means the International Monetary Fund;
(f) "measure" means any measure by a Party, whether in the form of a law, regulation, rule, procedure, decision, administrative action or any other form;
(g) "natural person of a Party" means a national of one of the Member States of the Union or of Viet Nam, according to their respective legislation (2);
(h) "person" means a natural person or a legal person;
(i) "third country" means a country or territory outside the scope of territorial application of this Agreement as defined in Article 17.24 (Territorial Application);
(j) "UNCLOS" means the United Nations Convention on the Law of the Sea, done at Montego Bay on 10 December 1982;
(k) "WIPO" means the World Intellectual Property Organization; and
(l) "WTO" means the World Trade Organization.
Chapter 2. National Treatment and Market Access for Goods
Article 2.1. Objective
The Parties shall progressively liberalise trade in goods and improve market access over a transitional period starting from the entry into force of this Agreement in accordance with the provisions of this Agreement and in conformity with Article XXIV of GATT 1994.
Article 2.2. Scope
Except as otherwise provided for in this Agreement, this Chapter applies to trade in goods between the Parties.
Article 2.3. Definitions
For the purposes of this Chapter:
(a) "agricultural export subsidies" means subsidies as defined in paragraph (e) of Article 1 of the Agreement on Agriculture, including any amendment of that Article;
(b) "agricultural good" means a product listed in Annex 1 to the Agreement on Agriculture;
(c) "consular transactions" means the procedure of obtaining from a consul of the importing Party in the territory of the exporting Party, or in the territory of a third country, a consular invoice or a consular visa for a commercial invoice, certificate of origin, manifest, shipper's export declaration or any other customs documentation in connection with the importation of the goods;
(d) "customs duty" means any duty or charge of any kind imposed on or in connection with the importation of a good, including any form of surtax or surcharge imposed on or in connection with such importation, and does not include any:
(i) charge equivalent to an internal tax imposed in accordance with Article 2.4 (National Treatment);
(ii) duty imposed in accordance with Chapter 3 (rade Remedies);
(ii) duties applied in accordance with Articles VI, XVI and XIX of GATT 1994, the Anti-Dumping Agreement, the SCM Agreement, the Safeguards Agreement, Article 5 of the Agreement on Agriculture, and the DSU; and
(iv) fee or other charge imposed in accordance with Article 2.18 (Administrative Fees, Other Charges and Formalities on Imports and Exports);
(e) "export licensing procedures" means administrative procedures (3) used for the operation of export licensing regimes requiring the submission of an application or other documentation, other than that required for customs purposes, to the relevant administrative body as a prior condition for exportation from the territory of the exporting Party;
(f) "import licensing procedures" means administrative procedures (4) used for the operation of import licensing regimes requiring the submission of an application or other documentation, other than that required for customs purposes, to the relevant administrative body as a prior condition for importation into the territory of the importing Party;
(g) "non-automatic export licensing procedures" means export licensing procedures where approval of the application is not granted for all legal and natural persons who fulfil the requirements of the Party concerned for engaging in export operations involving the products subject to export licensing procedures;
(h) "non-automatic import licensing procedures" means import licensing procedures where approval of the application is not granted for all legal and natural persons who fulfil the requirements of the Party concerned for engaging in import operations involving the products subject to import licensing procedures;
(i) "originating" refers to the origin of a good as determined in accordance with the rules of origin set out in Protocol 1 (Concerning the Definition of the Concept of "Originating Products" and Methods of Administrative Cooperation);
(j) "performance requirement" means a requirement that:
(i) a given quantity, value or percentage of goods be exported;
(ii) goods of the Party granting an import licence be substituted for imported goods;
(iii) a person benefiting from an import licence purchase other goods in the territory of the Party granting the import licence, or accord a preference to domestically produced goods;
(iv) a person benefiting from an import licence produce goods in the territory of the Party granting the import licence, with a given quantity, value or percentage of domestic content; or
(v) relates in whatever form to the volume or value of imports, to the volume or value of exports or to the amount of foreign exchange inflows; and
(k) "remanufactured good" means a good classified in HS Chapter 84, 85, 87, 90 or heading 94.02, except those listed in Appendix 2-A-5 (Goods Excluded from the Definition of Remanufactured Goods), which:
(i) is entirely or partially comprised of parts obtained from goods that have been used beforehand; and
(ii) has similar performance and working conditions as well as life expectancy compared to the original new good and is given the same warranty as the original new good.
Article 2.4. National Treatment
Each Party shall accord national treatment to the goods of the other Party in accordance with Article II of GATT 1994, including its Notes and Supplementary Provisions. To that end, the obligations contained in Article III of GATT 1994, including its Notes and Supplementary Provisions, are incorporated into and made part of this Agreement, mutatis mutandis.
Article 2.5. Classification of Goods
The classification of goods in trade between the Parties shall be in accordance with each Party's respective tariff nomenclature in conformity with the HS.
Article 2.6. Remanufactured Goods
The Parties shall accord to remanufactured goods the same treatment as that accorded to new like goods. A Party may require specific labelling of remanufactured goods in order to prevent deception of consumers. Each Party shall implement this Article within a transitional period of no longer than three years from the date of entry into force of this Agreement.
Article 2.7. Reduction or Elimination of Customs Duties
1. Except as otherwise provided for in this Agreement, each Party shall reduce or eliminate its customs duties on goods originating in the other Party in accordance with its respective schedule included in Appendices 2-A-1 (Tariff Schedule of the Union) and 2-A-2 (Tariff Schedule of Viet Nam) to Annex 2-A (Reduction or Elimination of Customs Duties).
2. For the calculation of the successive reductions under paragraph 1, the base rate for customs duties of each good shall be the one specified in the schedules included in Appendices 2-A-1 (Tariff Schedule of the Union) and 2-A-2 (Tariff Schedule of Viet Nam) to Annex 2-A (Reduction or Elimination of Customs Duties). The tariff elimination established under Appendix 2-A-2 (Tariff Schedule of Viet Nam) does not apply to used motor-vehicles under HS headings 87.02, 87.03 and 87.04.
3. Ifa Party reduces an applied most-favoured-nation customs duty rate below the rate of customs duty applied in accordance with its respective schedule included in Appendices 2-A-1 (Tariff Schedule of the Union) and 2-A-2 (Tariff Schedule of Viet Nam) to Annex 2-A (Reduction or Elimination of Customs Duties), the good originating in the other Party shall be eligible for that lower duty rate.
4. Except as otherwise provided in this Agreement, a Party shall not increase any existing customs duty applied in accordance with its respective schedule included in Appendices 2-A-1 (Tariff Schedule of the Union) and 2-A-2 (Tariff Schedule of Viet Nam) to Annex 2-A (Reduction or Elimination of Customs Duties), or adopt any new customs duty, on a good originating in the other Party.
5. A Party may unilaterally accelerate the reduction or elimination of customs duties on originating goods of the other Party applied in accordance with its respective schedule included in Appendices 2-A-1 (Tariff Schedule of the Union) and 2-A-2 (Tariff Schedule of Viet Nam) to Annex 2-A (Reduction or Elimination of Customs Duties). When a Party considers such an acceleration it shall inform the other Party as early as possible before the new rate of customs duty takes effect. A unilateral acceleration shall not preclude the Party from raising a customs duty to the prevailing rate at each stage of reduction or elimination in accordance with its respective schedule included in Appendices 2-A-1 (Tariff Schedule of the Union) and 2-A-2 (Tariff Schedule of Viet Nam) to Annex 2-A (Reduction or Elimination of Customs Duties).
6. Upon request of a Party, the Parties shall consult to consider accelerating or broadening the scope of the reduction or elimination of customs duties applied in accordance with their respective schedules included in Appendices 2-A-1 (Tariff Schedule of the Union) and 2-A-2 (Tariff Schedule of Viet Nam) to Annex 2-A (Reduction or Elimination of Customs Duties). If the Parties agree to amend this Agreement in order to accelerate or broaden such scope, any agreed amendment shall supersede any duty rate or staging category for such good determined pursuant to their schedules. Such an amendment shall come into effect in accordance with Article 17.5 (Amendments).
Article 2.8. Management of Administrative Errors
In the event of an error by the competent authorities in the proper management of the preferential system at export, and in particular in the application of Protocol 1 (Concerning the Definition of the Concept of "Originating Products" and Methods of Administrative Cooperation), where this error leads to consequences in terms of import duties, the importing Party may request the Trade Committee established pursuant to Article 17.1 (Trade Committee) to examine the possibilities of adopting appropriate measures with a view to resolving the situation.
Article 2.9. Specific Measures Concerning the Preferential Tariff Treatment
1. The Parties shall cooperate on combating customs violations relating to the preferential tariff treatment granted under this Chapter.
2. For the purposes of paragraph 1, each Party shall offer the other Party administrative cooperation and mutual administrative assistance in customs and related matters as part of the implementation and control of the preferential tariff treatment, which shall include the following obligations:
(a) verifying the originating status of the product or products concerned;
(b) carrying out the subsequent verification of the proof of origin and providing the results of that verification to the other Party; and
(c) granting authorisation to the importing Party to conduct enquiry visits in order to determine the authenticity of documents or accuracy of information relevant to the granting of the preferential treatment in question.
3. Where, in accordance with the provisions on administrative cooperation or mutual administrative assistance in customs and related matters referred to in paragraph 2, the importing Party establishes that a proof of origin was unduly issued by the exporting Party because the requirements provided for in Protocol 1 (Concerning the Definition of the Concept of "Originating Products" and Methods of Administrative Cooperation) were not fulfilled, that importing Party may deny a preferential tariff treatment to a declarant who claimed it with regard to goods for which the proof of origin was issued.
4. If the importing Party considers that the denial of preferential tariff treatment for individual consignments referred to in paragraph 3 is insufficient to implement and control the preferential tariff treatment of a given product, that Party may, in accordance with the procedure laid down in paragraph 5, temporarily suspend the relevant preferential tariff treatment of the products concerned in the following cases:
(a) when that Party finds that there has been a systematic customs violation regarding claims for preferential tariff treatment under this Agreement; or
(b) when that Party finds that the exporting Party has systematically failed to comply with the obligations under paragraph 2.
5. The competent authority of the importing Party shall, without undue delay, notify its finding to the competent authority of the exporting Party, provide verifiable information upon which the finding was based and engage in consultations with the competent authority of the exporting Party with a view to achieving a mutually acceptable solution.
6. If the competent authorities have not achieved a mutually acceptable solution after 30 days following the notification referred to in paragraph 5, the importing Party shall, without undue delay, refer the matter to the Trade Committee.
7. If the Trade Committee has failed to agree on an acceptable solution within 60 days following the referral, the importing Party may temporarily suspend the preferential tariff treatment for the products concerned.
The importing Party may apply the temporary suspension of preferential tariff treatment under this paragraph only for a period necessary to protect its financial interests and until the exporting Party provides convincing evidence of its ability to comply with the obligations referred to in paragraph 2 and to provide sufficient control of the fulfilment of those obligations.
The temporary suspension shall not exceed a period of three months. If the conditions that gave rise to the initial suspension persist after the expiry of the three-month period, the importing Party may decide to renew the suspension for another period of three months. Any suspension shall be subject to periodic consultations within the Trade Committee.
8. The importing Party shall publish, in accordance with its internal procedures, notices to importers of any notification and decision concerning the temporary suspension referred to in paragraph 4. The importing Party shall, without undue delay, notify the exporting Party and the Trade Committee of any such notification or decision.
Article 2.10. Repaired Goods
1. A Party shall not apply a customs duty to a good, regardless of its origin, that re-enters its territory after the good has been temporarily exported from its territory to the territory of the other Party for repair, regardless of whether such repair could be performed in the territory of the Party from which the good was temporarily exported.
2. Paragraph 1 does not apply to a good imported in bond, into a free trade zone, or in similar status, that is exported for repair and is not re-imported in bond, into a free trade zone, or in similar status.
3. A Party shall not apply a customs duty to a good, regardless of its origin, imported temporarily from the territory of the other Party for repair.
4. For the purposes of this Article, the term "repair" means any processing operation which is undertaken on a good to remedy operating defects or material damage and entailing the re-establishment of a good to its original function, or to ensure its compliance with technical requirements for its use, without which the good could no longer be used in the normal way for the purposes for which it was intended. Repair of a good includes restoring and maintenance. It shall not include an operation or process that:
(a) destroys the essential characteristics of the good or creates a new or commercially different good;
(b) transforms an unfinished good into a finished good; or
(c) is used to improve or upgrade the technical performance of a good.
Article 2.11. Export Duties, Taxes or other Charges
1. A Party shall not maintain or adopt any duties, taxes, or other charges of any kind imposed on, or in connection with, the exportation of a good to the territory of the other Party that are in excess of those imposed on like goods destined for domestic consumption, other than in accordance with the schedule included in Appendix 2-A-3 (Export Duty Schedule of Viet Nam) to Annex 2-A (Reduction or Elimination of Customs Duties).
2. Ifa Party applies a lower rate of duty, tax or other charge on, or in connection with, the exportation of a good, and for as long as it is lower than the rate calculated in accordance with the schedule included in Appendix 2-A-3 (Export Duty Schedule of Viet Nam) to Annex 2-A (Reduction or Elimination of Customs Duties), that lower rate shall apply. This paragraph shall not apply to more favourable treatment granted to any third country pursuant to a preferential trade agreement.
3. At the request of either Party, the Trade Committee shall review any duties, taxes, or other charges of any kind imposed on, or in connection with, the exportation of goods to the territory of the other Party, when a Party has granted more favourable treatment to any third country pursuant to a preferential trade agreement.
Article 2.12. Agricultural Export Subsidies
1. In the multilateral context, the Parties share the objective of the parallel elimination and prevention of the reintroduction of all forms of export subsidies and disciplines on all export measures with equivalent effect for agricultural goods. To that end, they shall work together with the aim of enhancing multilateral disciplines on agricultural exporting state enterprises, international food aid and export financing support.
2. Upon the entry into force of this Agreement, the exporting Party shall not introduce or maintain any export subsidies or other measures having equivalent effect on any agricultural good which is subject to the elimination or reduction of customs duties by the importing Party in accordance with Annex 2-A (Reduction or Elimination of Customs Duties) and which is destined for the territory of the importing Party.
Article 2.13. Administration of Trade Regulations
In accordance with Article X of GATT 1994, each Party shall administer in a uniform, impartial and reasonable manner all its laws, regulations, judicial decisions and administrative rulings pertaining to:
(a) the classification or the valuation of goods for customs purposes;
(b) rates of duty, taxes or other charges;
(c) requirements, restrictions or prohibitions on imports or exports;
(d) the transfer of payments; and
(e) issues affecting sale, distribution, transportation, insurance, warehousing inspection, exhibition, processing, mixing or other use of goods for customs purposes.
Article 2.14. Import and Export Restrictions
1. Except as otherwise provided for in this Agreement, a Party shall not adopt or maintain any prohibition or restriction on the importation of any good of the other Party or on the exportation or sale for export of any good destined for the territory of the other Party, in accordance with Article XI of GATT 1994, including its Notes and Supplementary Provisions. To that end, Article XI of GATT 1994, including its Notes and Supplementary Provisions, are incorporated into and made part of this Agreement, mutatis mutandis.
2. Paragraph 1 prohibits a Party from adopting or maintaining: