Broadly speaking, Vietnam has been averse to importing secondhand goods. However, this may soon change with refurbished goods clauses in several next-generation free trade agreements. Here’s how local regulations on the import of refurbished goods are shaping up with respect to the CPTPP.
On November 2, the Government of Vietnam issued Decree No: 77/2023/ND-CP (Decree 77) governing the Management of Imports of Refurbished Goods Under the Comprehensive And Progressive Trans-Pacific Partnership Agreement (CPTPP).
The CPTPP, however, is not the only next-generation free trade agreement that allows for the import of refurbished goods. The European Union Free Trade Agreement (EVFTA) also has a similar clause.
Whereas the current decree only applies to the CPTPP, this will likely inform how similar decrees for other FTAs will be framed. In this light, the Vietnam Briefing unpacks this new decree and what foreign firms trading in refurbished goods should know.
How are goods subject to the decree defined?
Decree 77 defines two key types of refurbished and/or reconditioned imports. These are reconditioned materials and refurbished goods. These are defined as follows:
Reconditioned materials
Reconditioned materials are parts that have been removed from used goods and then cleaned, tested, inspected, and repaired as necessary to ensure they are safe, sturdy, and in good working condition.
Refurbished goods
For a product to be considered a refurbished good it must meet several key criteria. These are:
- It must be at least partially made up of recovered materials;
- It must have a shelf life similar to the same type of goods when not in use;
- It must be able to perform all the same functions as similar goods when not in use, with the quality and performance unchanged or similar to the quality and performance of the same type of goods; and
- It must have a warranty similar to that of the same type of goods when unused.
Goods that meet these criteria may be considered officially refurbished and can then be imported into Vietnam, however, there are several regulatory hurdles as well.
Import requirements for refurbished goods
After a particular product is confirmed as refurbished or a particular material is confirmed as conditioned, several additional steps must be taken.
Firms looking to import refurbished goods or reconditioned materials into Vietnam must:
- Have an import license (details below).
- Make sure goods meet the rules of origin outlined in the CPTPP.
- Fulfill any necessary regulatory requirements, for example: product quality, standardization, technical regulations, energy efficiency, radiation safety, network information security, measurement, environmental protection, intellectual property protection, and any other relevant regulations.
Labeling requirements
In order to import refurbished goods or reconditioned materials they must also be clearly labelled. Decree 77 requires labeling to clearly state in Vietnamese ‘refurbished goods’ (Hàng hóa tân trang). The label must also be in a position where it is visible and readable with the naked eye.
Registering as a refurbishment business
Businesses that wish to deal in refurbished goods or reconditioned materials in Vietnam must first register for a refurbishment code.
What is a refurbishment code?
A refurbishment code is an identification number issued by the Ministry of Industry and Trade (MoIT). It is issued to refurbishing businesses or trademark owners who can prove their ability to refurbish goods to meet the above-mentioned criteria. A refurbishment code has a maximum life span of five years from the date of issue.
How to apply for a refurbishment code
Enterprises that wish to apply for a refurbishment code must prepare an application dossier and submit it to the MoIT. The dossier should include:
- An application form (Appendix VI of Decree 77).
- An authenticated copy of the firm’s business registration certificate. If this is in a language other than Vietnamese it should be accompanied by a translated copy that has also been authenticated.
- Documents detailing the firm’s ability to meet the refurbished goods requirements outlined above. These should be prepared for each product a firm intends to import. There must be one copy in English and one copy in Vietnamese both signed by the individual who will sign the refurbishment code application form.
- Documents confirming refurbished goods meet the CPTPP rules of origin criteria. These should be prepared for each product a firm intends to import. There must be one copy in English and one copy in Vietnamese both signed by the individual who will sign the refurbishment code application form.
- A commitment to provide a warranty and maintenance regime for each refurbished good a firm registers to import into Vietnam. There must be one copy in English and one copy in Vietnamese both signed by the individual who will sign the refurbishment code application form.
- Permission from the trademark owner to use the trademark of the original goods. There must be one copy in English and one copy in Vietnamese both signed by an authorized representative of the trademark owner.
In the event a submitted document is incomplete, the MoIT will return the incomplete dossier with any necessary notes for improvement within seven days.
Outcomes from complete dossiers requesting refurbishment codes for products under the purview of the MoIT should be received within 90 days.
For products under the purview of other ministries firms need to allow for an additional 14 days. That is, one week at the beginning for the MoIT to confirm the documents are complete and refer them to the relevant ministry, 90 days for the relevant ministry to review the documents and return them to the MoIT, and then seven more days for the MoIT to review the documents before issuing an outcome.
Acquiring a license to import refurbished goods
In order to import refurbished goods into Vietnam, alongside a refurbishment code, firms must also obtain an import license. To acquire an import licence firms must complete a dossier. This should include:
- An application form (Appendix 10 of Decree 77).
- An authenticated investment, business, or enterprise registration certificate.
- Confirmation that the refurbished goods were listed in the firm’s refurbishment code application dossier. If this is in a language other than Vietnamese it should be accompanied by a translated copy signed by the individual who will sign the refurbishment code application form.
- Report on the import status of refurbished goods under any previously issued license.
In the event a submitted document is incomplete the ministry in charge will return the incomplete dossier with any necessary notes for improvement within seven days.
Outcomes from complete dossiers requesting import licenses for refurbished products should be received within 15 working days.
Implementation
Decree 77 divides refurbished products into five categories. Each category is administered by the most relevant government ministry. This ministry is consulted with respect to the refurbishment code and takes charge of issuing import licenses for products under its purview. Detailed lists are attached to Decree 77 but in general:
- The Ministry of Information and Communication handles goods like printers, fax machines, smartphones, and telecommunications hardware in general.
- The Ministry of Health handles medical equipment and devices, including things like x-ray machines and hearing aids.
- The Ministry of Transport handles vehicles and parts thereof. This includes planes, trains, and automobiles as well as tractors, helicopters, and airplanes.
- The Ministry of Agriculture and Rural Development handles fishing boats and vessels used in the processing and preservation of caught seafood.
- MoIT handles just about everything else from sunglasses to airconditioners to decorative lighting.
Refurbished goods moving forward
Historically, Vietnam has been weary of importing used goods, however, with a number of next-generation free trade agreements adding provisions for these goods, this may be about to change. The CPTPP is the first agreement to see Vietnam issue regulations on how imports of refurbished goods should be handled. This may also serve as a guide for other trade agreements moving forward.
Firms looking for assistance importing refurbished goods into Vietnam should contact the business advisory experts at Dezan Shira and Associates.
