FREE TRADE AGREEMENT (EVFTA) AND INVESTMENT PROTECTION AGREEMENT BETWEEN EU AND VIETNAM

The notable points of the Free Trade Agreement (EVFTA)

For Vietnamese exports, once the Agreement takes effect, the EU will eliminate import duties on about 85.6% of tariff lines, equivalent to 70.3% of Vietnam’s export turnover to the EU. After 7 years from the effective date, the EU will eliminate import duties on about 99.2% of tariff lines, equivalent to 99.7% of Vietnam’s export turnover. For the remaining 0.3% of the export turnover, the EU pledged to give Vietnam the tariff quotas of the import tax rate is 0%.

For EU exports, Vietnam commit to eliminate tariffs as soon as the Agreement takes effect with 48.5% of tariff lines (equivalent to 64.5% of import turnover). After 7 years, 91.8% of tariff lines equivalent to 97.1% of import turnover from the EU will be eliminated import duties by Viet Nam. After 10 years, the tariff elimination level is about 98.3% of tariff lines (accounting for 99.8% of import turnover). For the remaining 1.7% of the EU’s tariff lines, Vietnam will apply a roadmap to eliminate import duties for more than 10 years or apply tariff quotas under WTO commitments.
Other contents related to trade in goods: Vietnam and EU also agreed on the contents related to customs procedures, SPS, TBT, trade defense, etc., creating a legal framework for the two parties to co-operate and facilitate the export and import of enterprises.

IPA agreement

Two parties commit to giving National treatment and Most Favored Nation for the investors of the other, with some exceptions, and also the fair, satisfactory treatment, safe and adequate protection, allowing to transfer capital and profits from offshore investment freely, commitment to not acquire, nationalize investors’ assets without adequate compensation, pledge to compensate for damages to the investor of the other party similar to domestic or third party investors in case of damage caused by war, riots, etc. ..
In the case there is the dispute between a party and the investor of the other, two parties prioritize to solve this dispute in good faith by negotiation and mediation. In the case that a dispute cannot be solved by negotiation and mediation, it is possible to use the dispute settlement mechanism specified in this Agreement.

Note: The content of advice and legal provisions referenced in the article is at the time of consulting and may no longer be effective at the time readers read this article. Therefore, for detailed advice and implementation support, please contact Law Plus via email info@lawplus.vn or phone number +84 2862 779399.

LawPlus

  1. Tax commitment program in EVFTA
  2. What’s new in Incoterms 2020?
  3. Investing into Vietnam

 

 

 

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