What is the concept of CO form B? Things to note when applying for CO form B

The demand for transportation and trade of goods between Vietnam and other countries around the world is increasing, not only in terms of quantity but also in terms of the value of goods. To export goods to other countries, enterprises need to have a certificate of origin of CO form B (form B). Although this document is very familiar to people in the import and export industry, there are still many people who do not know what a CO form B is and how it works. Today’s article will help us better understand the CO form B and the process of applying for this type of paper.

What is C/O Form B?

C/O Form B is one of the important certificates of origin (C/O) in international trade. This certification confirms the country where the goods are manufactured or originated. Specifically, Form B applies to goods exported from one country to another for the purpose of taking advantage of tariff preferences and minimizing trade barriers.

C/O Form B is not only a certificate of origin but also helps businesses prove that the product meets certain standards of origin, which is often a requirement for goods to enjoy preferential tax rates when importing. Obtaining a C/O Form B helps businesses increase their competitiveness in the international market by reducing import costs, while building credibility with international partners.

Features of C/O Form B

C/O Form B is applied to exports from Vietnam to a number of countries and regions that have bilateral or unilateral trade agreements with Vietnam. These countries agree to accept C/O Form B as a legal certification to reduce or exempt import duties for goods coming from Vietnam.

Currently, C/O Form B is accepted by many countries, including countries in the ASEAN region, China, Japan, and some countries in the Asia Pacific region. In addition, some countries in Europe and the Americas also apply C/O Form B for some specific groups of goods. This application not only helps Vietnamese businesses expand export markets but also promotes the flow of goods between countries.

One of the biggest benefits of a C/O Form B is the enjoyment of preferential tariffs. When the goods have this certificate of origin, the importer in the destination country will be applied a lower tax rate, or even exempt from import duties for some specific items. This creates favorable conditions for Vietnamese businesses to compete on prices in the international market.

C/O form B criteria

To apply for C/O Form B, businesses must meet one of the following three criteria

Classification Transition Criteria (CTSH)

The CTSH criterion requires that, in order to be recognized as originating from a certain country, the final product must have an HS code at the subgroup level (6 digits) that is different from the HS code of the input materials that have not yet originated from that country. This proves that the product has undergone a significant manufacturing or processing process in that country, which is sufficient to distinguish it from the original material.

Percentage of Value (LVC) Criteria

The LVC criterion requires that the product must have a certain percentage of the value created from domestic raw materials and domestic production processes. This percentage can vary depending on the commodity and regulations of each country or under trade agreements.

• LVC, or Value Percentage, is a criterion for determining the added value of a product after it has been manufactured, processed, or processed from raw materials of no origin
• It should be noted that this added value must account for at least 30% of the total value of manufactured goods, and can be calculated according to the formula directly or indirectly

The manufacturer or trader requesting a C/O may choose a direct or indirect formula for calculating the LVC and must agree to apply this formula throughout the financial year. The inspection and verification of LVC criteria for Vietnam’s exports must be based on the LVC formula used by the manufacturer or trader.

Pure Origin (WO) Criteria

The Pure Origin (WO) criterion states that the product must be of complete origin from a specific country. This means that all ingredients and stages of production must be carried out in that country, using no raw materials or ingredients from abroad. This is the most straightforward and stringent criterion of origin, and usually applies to products of natural origin or produced from domestic resources.

See more: Explanation of origin criteria when applying for HDG Logistics c/o

Requirements for goods when issuing C/O Form B

1. Origin requirements

In order for goods to be issued a C/O Form B, the product must meet the requirements for origin. This usually includes achieving a localization rate or the product must be manufactured from ingredients originating from the country that issued the certification. For example, a product can only be issued a C/O Form B if at least 40% of its value is generated in Vietnam.

2. Requirements on quality standards

Certain types of goods require specific quality standards to be eligible for a C/O Form B. This includes testing and evaluating the product according to national or international quality standards. For items such as food, medical devices, or industrial products, thorough quality inspection is crucial.

3. Testing and evaluation

Before issuing the C/O Form B, the authorities will conduct an inspection and evaluation of the product to ensure that the product fully complies with the standards of origin and quality. This includes checking the production process, raw material import records, and related documents.

C/O Form B application process

1. Prepare documents

The application for C/O form B is specified in Clauses 1 and 2, Article 15 of the Government’s Decree No. 31/2018/NDCP on “detailing the law on foreign trade management of the origin of goods”

• Certificate of Origin (C/O) Application: This form is usually provided by the Chamber of Commerce or the local C/O issuing authority and requires basic information about the shipment, products, and partners.
• Commercial Invoice: A commercial invoice that proves the value and details of the export items, including the name, quantity, value, and HS code of the product. The invoice needs to be complete, accurate and signed by the exporter.
• Bill of Lading or Certificate of Carriage: A bill of lading that proves that the goods have been transported from the exporting country to the importing country. Sea waybills, air bills of lading, or other shipping certificates can be used depending on the shipping method.
• Certificate of origin from the manufacturer (if applicable): For products originating from the manufacturer, proof of origin from the manufacturer or their dealer may be required.
• Product-related documents: Documents or documents confirming the production and processing process of the product, such as documents proving that the product is eligible for C/O according to the criteria of converting HS, LVC, CTSH, WO, etc.
• Purchase and sale contract: A copy of the purchase and sale contract between the exporter and the importer, specifying the terms of the product, value, quantity and conditions of delivery.
• Proof of payment (if applicable): Provide proof of payment such as a copy of bank transfer, letter of credit, or direct payment document.
• Documents proving the domestic production or processing process (if required): To prove that the product meets the requirements of origin or subgroup conversion, documentation of the domestic production or processing process can be requested.

2. Submission of dossiers and C/O issuing agencies

After completing the dossier, the enterprise submits an application for C/O Form B at the Vietnam Chamber of Commerce and Industry (VCCI) or authorized competent state agencies. Depending on the agency and type of goods, the process of processing documents and issuing certificates may have additional requirements.

3. Processing time and C/O issuance

Normally, the time from the submission of the application to the receipt of the C/O Form B lasts from 25 working days, depending on the complexity of the application and the workload at the issuing agency. In some exceptional cases, this period may be longer due to additional testing requirements.

How to declare CO form B

Below are the instructions for declaring CO form B that you need to pay attention to to follow the correct process. Accurate declaration from the beginning will help you save time and avoid unnecessary delays in the import and export process:

• Box 1: Specify the name, address and country of the exporter in Vietnam.
• Box 2: Specify the name, address, and country of the consignee.
• Box 3: Transport information: The information to be filled in in detail includes:
  • Shipping Methods
  • Vehicle Name
  • Flight number
  • Route
  • Bill of lading number and date of issue
• Box 4: Information of the C/O issuing agency: Clearly state the name and address of the agency that issued this document.
• Box 5: Notes of the C/O-issuing agency.

• Box 6: Goods details: The following information needs to be filled in:
  • Make, number and type of carton (if applicable)
  • Product name and description
  • Customs declaration number and declaration date (if any)
  • Container number and lead seal number (if identified)
• Box 7: Gross weight or other quantity of goods: Write the total weight or quantity of the entire shipment.
• Box 8: Invoice number and date: Write the exact number and date on the invoice. If there is no invoice, the reason should be clearly stated.

• Box 9: C/O issuance location and date: Make sure not to confuse the issuance date on holidays.
• Box 10: Country of export: Accurately write the name of the country of export of goods.

Notes when applying for CO form B

• Before carrying out the procedures for issuing a Certificate of Origin (CO) form B, it is necessary to master the origin criteria of form B.
• In case it is necessary to clearly prove the origin of the goods, VCCI, the agency competent to issue CO, may request additional documents such as: Official letter of explanation on specific issues, contract, L/C, samples or images of exported products or goods or physical inspection of the production process.
• Units applying for CO form B for the first time need to make and submit a CO unit dossier.
• The CO dossier form B needs to be fully preserved for at least 5 years and must keep a copy with the red seal of VCCI.

Impact of C/O Form B on businesses

Economic benefits: C/O Form B helps reduce import taxes, thereby reducing costs and increasing the competitiveness of products in the international market. Especially, for industries with high tax rates, tax reduction thanks to C/O Form B can create a great price advantage for businesses.

Improve reputation and brand: Products with C/O Form B are often more trusted by international customers, as this is a sign that the product has a clear origin and complies with quality standards. This helps businesses build a sustainable reputation and brand in the market.

Risks and challenges: In addition to the benefits, C/O Form B also poses a number of challenges, especially compliance with regulations on origin and quality. Failure to meet standards can lead to product rejection when imported, causing damage to businesses.

Important considerations when using C/O Form B in international trade

1. Update policy information: C/O regulations may change from year to year and each market, so businesses need to regularly update information to comply with current regulations and avoid risks when applying for C/O.
2. Contact experts: In case businesses encounter difficulties in the C/O issuance process, they can seek advice from experts or professional logistics companies. This will help minimize documentation errors and ensure that the process goes smoothly.
3. Manage documents and documents: Enterprises should store C/O documents carefully to serve future transactions as well as examinations and inspections from customs authorities and commercial partners.

C/O Form B plays an important role in supporting Vietnamese businesses to expand the international market and reduce export costs through preferential tariffs. However, applying for a C/O Form B also requires careful preparation and strict compliance with regulations on origin and quality. Therefore, businesses should master the process and prepare full documents to make the most of the benefits from C/O Form B.

Above is HDG Logistic’s answer about C/O form B, conditions and detailed declaration of this common type of certificate of origin. Hopefully, through the article, we have helped you more or less in preparing and applying for certification in the easiest and most convenient way.