In recent years, there have been various cases where manufacturers of goods using imported components in Vietnam are held to have violated the rules of origin when using the phrase “Made in Vietnam” (e.g., Asanzo, KhaiSilk, and Seven.am). Therefore, it is important to understand the rules of origin applicable for goods sold in Vietnam market. In this post, we will discuss the rules of origin under Vietnam domestic law and the rules of origin under the ASEAN Trade in Goods Agreement (ATIGA).

The rules of origin applicable to imported and exported goods between ASEAN countries (including Vietnam) (ASEAN Goods) are provided under ATIGA. Whereas, under Vietnamese laws, there is no legal framework for determining the origin of goods manufactured and sold within Vietnam territory (Vietnam Domestic Goods). In particular, it is not clear which conditions or standards Vietnam Domestic Goods must satisfy so that they can be labelled “products of Vietnam”, “made in Vietnam” or the like.

According to Article 2(d) and Article 3(c) of WTO’s Agreement on Rules of Origin, WTO members must ensure that the rules of origin that they apply to imports and exports are no more stringent than the rules of origin they apply to determine whether or not a good is domestic. This means that Vietnam Domestic Goods are always subject to equal or more stringent rules of origin than those applicable to imports and exports (currently provided in Decree 31 of the Government dated 8 March 2018 detailing the Law on Foreign Trade Management on product origin (Decree 31/2018)).

After years of existence, it is still arguable whether e-cigarette (thuốc lá điện tử) should be regarded as actual tobacco (thuốc lá). Accordingly, it is not clear how e-cigarette business should be regulated under Vietnamese law.

Under the Law on Tobacco Prevention 2012, tobacco is defined to be “a product wholly or partly manufactured from tobacco ingredients, processed in the form of cigarettes, cigars, tobacco shreds, pipe tobacco and other forms”. The word “other forms” could broadly cover many forms of product. However, from the definition, the key when identifying whether a product is a tobacco product is not its form, but its ingredients.

In most cases, e-cigarettes are battery-operated devices that work by heating a liquid solution (e-liquid), from which vapor is then produced. This e-liquid usually contains nicotine – a stimulant typically made from tobacco plants. Meanwhile, the definition of tobacco ingredients under the Law on Tobacco Prevention 2012 includes multiple forms of tobacco leaves, tobacco shreds, tobacco stalks and other substitute ingredients used for tobacco production.