Warning against Commercial Fraud: Foreign Goods Labeled "Made-in-Vietnam"

11:29:40 AM | 3/29/2019

Foreign goods cloaked as Vietnamese goods have increased in presence and popularity. Labelled “Vietnamese origin”, they will get illegitimate profits from FTA preferences that Vietnam has joined and avoid trade barriers imposed by importing countries.

Goods of unknown origin labelled “Made-in-Vietnam” and sold on the market have stained the reputation of Vietnamese products and weakened consumer confidence. This has also caused loss of the State Budget.

Consumer goods, foodstuffs and agricultural products are frequently violated. Recently, the Trade Remedies Authority of Vietnam (TRAV) under the Ministry of Industry and Trade recently unearthed foreign electric bicycles faked as Vietnamese origin for export to Europe. This once again showed the sophistication and urgency of this commercial fraud.

Hard to stop

Agricultural products sold in traditional markets can be sold without brand, without origin certificate and without traceability.

Decree 43/2017 on goods labelling stipulates that goods circulated in Vietnam, including imports, must have a label stating the origin. However, this regulation does not apply to fresh food, agricultural products, unpacked seafood directly sold to consumers.

The Government issued Decree 43/2017/ND-CP dated April 14, 2017 on goods labeling, which specifies how to label goods and imported goods in Vietnam. However, it does not stipulate criteria for goods to be labeled in Vietnam.

On sanctions, countries like Canada and Italy impose very serious sanctions against individuals and organizations deliberately misleading origin labels. Meanwhile, the Vietnamese legal system does not have specific regulations on penalties on goods found to be labeled in Vietnam. Current regulations only govern labels, geographical indications and trademarks.

Solutions from legal perspective

With the advent of Government Decree 31/2018/ND-CP dated March 8, 2018 detailing the Law on Foreign Trade Management on origin of goods, Vietnam has a legal framework on origin of goods. Above rules govern labeling, geographical indication and Vietnamese branding requirements. However, current regulations do not have criteria to determine what goods are labeled “made in Vietnam”.

In more than one year since the decree was enforced, regulations on labeling goods manufactured in Vietnam helped shape social perception. State bodies will summarize, analyze and make a report to the Government for compulsory labeling of goods made in Vietnam to protect Vietnamese consumers, manufacturing sectors, and build up brands for food, apparel and footwear products.

Recently, the Ministry of Industry and Trade together with the Ministry of Science and Technology, the Ministry of Justice, the Central Institute for Economic Management (CIEM), the Vietnam Chamber of Commerce and Industry (VCCI) and some industry associations, have completed legal institutions on “Made in Vietnam” labelling. In the near term, made-in-Vietnam labeling should be applied on the principle of voluntariness and self-declaration.

The Ministry of Industry and Trade issued Decision 334 on strictly managed transportation and trading of agricultural products and foodstuffs in order to detect and handle items of unknown origin.

For the case of electric bicycles, the Ministry of Industry and Trade also discussed with VCCI about strengthening inspection and supervision of C/O certification for electric bikes.

Huong Giang