RESTRICTEDWORLD TRADE
ORGANIZATIONWT/ACC/VNM/20/Rev.1
4 November 2003
(03-5871)
Working Party on the
Accession of Viet NamOriginal:  English
ACCESSION OF VIET NAM
Action Plan for the WTO Agreement on Implementation of
Article VII of GATT 1994 (Customs Valuation Agreement – CVA)
Revision
The Government of the Socialist Republic of Viet Nam has submitted the following revised
Action Plan for the implementation of the WTO Agreement on Implementation of Article VII of
GATT 1994 (Customs Valuation Agreement – CVA), with the request that it be circulated to the
members of the Working Party.
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The Roadmap on Implementation of the Agreement on
Implementation of Article VII of GATT 1994
(Customs Valuation Agreement – CVA)
Introduction
1. At the 5th meeting of the Working Party on Vietnam’s accession to WTO, Vietnam submitted
to the WP and members the Action Plan on implementation of the Agreement onImplementation of Article VII of GATT 1994 (Customs Valuation Agreement – CVA). The
Action Plan was prepared in the context that Vietnam was exploring options for the transition
from her own valuation system which generally based on prices list predetermined by
Customs to a system compatible with fundamental principles of CVA which basically rely on
transaction value by importers. In the face of challenges posed by complexity and the
technical and technological requirements in the implementation CVA as well as by limited
management, implementation capacity of the Government of Vietnam, the Action Planindicated certain concerns from the Government of Vietnam, particularly in regard of a time
period for the system to be in full compliance with the CVA.
2. After the 6
th WP meeting, Vietnam has received questions from WTO members on the
specific timing for her Customs valuation syst em to be in full compliance with the CVA
obligations.
Objective
3. In order to enhance transparency and to reaffirm the Government of Vietnam’s determination
in the implementation of the CVA, in this pa per, Vietnam wishes to inform the WP and
members on developments in the implementation of the afore-mentioned Action Plan and
provides a detailed program comprised of steps in transition from her own system to a CVAcompliant system. Vietnam wishes to reach agreement with members on a transition period
which is in line with Vietnam’s implementati on capacity. The Government of Vietnam again
reaffirms its commitment to CVA and wish to, during the negotiation for accession, its
implement steps to this effects.
Development in the transition to CVA-based system
- Adopting domestic legal framework
4. Though the valuation system in Vietnam is mainly based on price list provided by
Vietnamese Customs, since 2001, Viet Nam has initiated steps to prepare for the
implementation of CVA by promulgating  Law on Customs , which creates legal framework
for CVA implementation. Provisions of this Law allow importer to clear imported goods bypaying deposit or ensure the ability to pay import duty for those goods, in cases where
valuation is not completed. Vietnam current legislation has required that Customs should
notify the amount of tariff payable within 8 working hours from the submission of Customs
declaration for such imported goods.
5. Customs Law has laid the foundation for the post clearance inspection, which is basically
supportive of the implementation of CVA action plan. Under Customs Law, the Decree
No. 102/2001/ND-CP dated 31 December 2001 promul gated by Government had regulated in
details procedures and processes to conduct post-clearance examination for exported and
imported goods.WT/ACC/VNM/20/Rev.1
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6. A draft Circular which provides guidelines to implement Government Decree No.102 by
regulating detailed professional process and procedures of Customs officers, is in final stage
before issuance (expected to issue by the end of 2003).
7. In terms of dispute and complaint settlement, the Customs Law provides for the right to bring
cases to court and administrative complaint which is in conformity with Vietnam’s general
rules, that is, only a single option to select either administrative procedures or to courtsettlement is available. In order to comply with provision of Article 7 of CVA, Vietnam plans
to revise the general rules to afford importers right to lodge appeal to court as well as
settlement by administrative procedures in Legislative Program.
8. Domestic legislation for Customs valuation system of imported goods in accordance to
regulation of The Agreement on implementation Article 7 of GATT 1994 is basically
completed with the promulgation of the Gove rnment’s Decree No. 60/2002/ND-CP dated
6 June 2002. The Government’s Decree No.60/ 2002/ND-CP is drafted on the basis of The
Agreement on implementation  Article 7 of GATT 1994, which provides in details methods of
determining customs value and others adjustment clause in Article 1- Article 8 and Annex I of
Agreement.
9. A draft Circular to provide guidelines for Customs procedures in details to implement  Decree
No. 60 is in the final stage so that the provis ions of Government Decree 60 will take effect
from 1 January 2004 on a pilot basis for certain target groups before an improved system will
take full effect on importers at Vietnam’s accession to WTO.
- Reservations
10. Because of current limitations in capability and information database resources of Customs
offices, there is currently provision in De cree No.60/2002/ND-CP on the non-application of
the computed value method (Article 6 of CVA) and the deductive method for processed
goods (Paragraph 2 of Article 5 of the Agreement mentioned in Annex III.4). Vietnam w ill try
to improve the capacity of Customs officers in a short period of time to fully implement all of
methods of customs value determination. Viet Nam wishes to reach agreement through
negotiations with WP members on the phasing-out of these reservations as provided for inArticle 20.2 and Annex III.4, respectively.
11. Given current budget revenue structure that co mprises of high proportion from import duties
(18-20%) and frequent trade frauds through prices, a swift transition to CVA-based system in
Vietnam in full would create a real difficulty to Vietnam’s budget. Thus, Decree
No.60/2002/ND-CP provides for the applicatio n of minimum price on a limited number of
products in initial stage of implementation. Al ong with the strengthened capacity of Customs
administrations, particularly its capability in trade frauds detection and prevention and
adjustment of revenue structure, Vietnam will gradually phase out reservation in this regard
so that valuation of import goods is to be based on  transaction value (the time-bound
phasing-out schedule presented in the last part of this paper). Vietnam wishes to have
endorsement by WP members on this reservation and the phasing-out schedule.
- Organizations and deployment:
12. In transition from current valuation system to a CVA based system, Vietnam needs to focus a
considerable human resources on the implementation, a difficult and decisive factor of
success. Vietnam had reorganized the Customs administration, specifically: the General
Customs Department is directly under the Ministry of Finance, General Customs DepartmentWT/ACC/VNM/20/Rev.1
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is restructured and strengthened with the establishment of new department and bureau to be in
charge of valuation, post-clearance inspection and supervision management.
13. In order to improve capability of Customs officers in valuation, professional training and
reinforced Customs structure in all levels have been conducted simultaneously and rapidly so
that CVA implementation capacity is strengthened at all levels. A manual on CVA
implementation for Customs officers is being compiled.
14. In 2003, Viet Nam has established teams and groups to give advice and help enterprises in
Customs declaration and determination of value in line with new method. Customs procedure
is basically completed. Seminars, workshops on CVA implementation and technical issues
were organized, with attendance by import, export enterprises, forwarding agencies, and legal
consulting firms.
15. Customs tools and machines have been provided to facilitate the valuation and on the other
hand, forming of part of the whole program to modernize Vietnam Customs. However,financial constraints is hindering this process. Vietnam is seeking technical and financial
assistance to overcome difficulties to this endeavour from bilateral and international donors.
16. Viet Nam is building up price database and in the first stage, finalizing software and test
running at certain Customs bureaus. However, th is process has been slower than planned due
to fiscal constraints and limited international cooperation in this regard.
Commitment on schedule to phase-out reservation on minimum price
17. At the accession, Viet Nam will apply an uniform Customs valuation system, which is based
on CVA (as provided for by Viet Nam Gove rnment’s Decree No.60/2002/ND-CP) with only
remaining reservation relates to minimum Price List applicable to a limited number of
products.  This list applies on non-discriminatory basis regardless of origins and will beprovided to WTO at the earliest instances as the current list is under review to remove
possible measures on origins and brands.
18. This reservation on Minimum price List will be gradually phased-out  as follows:
- 1 January 2004: pilot implementation of De cree No. 60/2002/ND-CP on  valuation of
imported goods in accordance with the principles of Agreement on implementationArticle 7 of GATT 1994 principle, with the reservations on application of minimum
price list on selected items.
- 1 July 2004: Transaction value will be used for valuation of imported products
regardless of origin to be used as inputs for domestic production; those inputs
exempted from Customs duties or entitled to Customs duties refund.
- 1 January 2005: Transaction value applicable to importers which have good
compliance record (minimum price will not apply to importers which have good
compliance record)
- 1 January 2006: Transaction value applicable to imported products for which tariff
rates are lower than 10% (minimum price will not apply to imported products, for
which tariff rate are lower than 10%).WT/ACC/VNM/20/Rev.1
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- 1 January 2007: Assessment and stock-taking of experiences from implementation of
transaction valuation; streamlining legal framework to prepare for full
implementation CVA for all import export transactions.
- 1 July 2007 Transaction valuation applicable to all imported goods (termination of
Minimum price List use)
19. At the same time, Viet Nam will promote management and supporting activities to establish a
favorable external environment to assist to CVA implementation, including:
- Strengthening independent audit organizations to enhance reliability of documents
and enterprise account records in tandem with promulgation regulations on
documentation of payment regime related to importation and exportation.
- Establishing and improving a monitoring system of payments carried out through
banks while minimizing both domestic and international cash-hand-over transactions,
which are at times illegal.
- Strengthening sanction system against fraudulent activities which is currently yet to
be strict or clear or specifically designed to fight fraudulent activities and just heavily
administrative in nature.
- Improving co-ordination, co-operation between relevant authorities in transaction
Customs valuation as well as post-clearance supervision.
- Organizing information and PR campaign to encourage business community
improving self-compliance practices with the new regulations.
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