Certificates of Origin and Rules of Origin: Why “label cleaning” cannot turn goods into Vietnamese origin

From allegations to a 40% transshipment clause: why Vietnam is being scrutinized

A widely circulated investigation has described Mong Cai as a hotspot for “detoured” cargo flows and alleged tactics such as container switching, removing Chinese characters, and rebranding goods before shipments move onward to the U.S. Each specific case requires verification by competent authorities, but the larger point is that “transshipment/redirected exports” has moved beyond media narratives into trade-policy risk.

In 2025, international reporting and policy analysis documented a U.S. framework that explicitly distinguishes between general tariffs and a higher penalty tied to “transshipped” goods - often described as 20% for certain Vietnamese exports and 40% for goods identified as transshipped (goods originating elsewhere but routed through Vietnam to evade duties). Even if the practical determination of “transshipment” can be complex, the existence of a 40% clause alone forces a strategic shift: firms must compete not only on price and quality, but also on compliance evidence.

Certificates of origin and rules of origin: “label cleaning” does not create origin

As a baseline principle, rules of origin revolve around “substantial transformation.” The WTO notes that this requirement is widely recognized, while governments may operationalize it through criteria such as “change of tariff classification” or other methods depending on the agreement and product. Similarly, the U.S. Department of Commerce explains substantial transformation as a fundamental change in form, appearance, nature, or character - normally resulting from processing or manufacturing in the claimed country of origin.

The key word is transformation. If goods only undergo relabeling, repackaging, cosmetic removal of markings, or container switching, the product typically has not experienced value-creating processing sufficient to become a new origin. These tactics may mislead consumers, but they do not satisfy legal origin tests when authorities examine documentation, input sourcing, production processes, factory capacity, and the full supply chain.

In practice, origin requirements differ by agreement and by product. Some rely on change in tariff heading/subheading; others require a regional value content (RVC) threshold; many use product-specific rules (PSR) with detailed constraints. The WTO’s legal texts and technical materials illustrate how substantial transformation is translated into operational rules and verification logic. This is why simplistic claims that “origin switching is easy” often collapse once verification begins: the real question becomes whether the product was genuinely made or transformed in Vietnam - and whether the evidence can prove it.

Vietnam’s C/O issuance framework: digitalization, delegated authority, and stronger traceability

Vietnam’s legal and administrative framework for C/O has been updated toward standardization and stronger traceability. Circular 40/2025/TT-BCT sets out rules on issuing certificates of origin and written approvals for exporters’ self-certification under delegated authority described in Decree 146/2025/ND-CP. In parallel, the Ministry of Industry and Trade’s ecoSys portal provides an official repository of legal documents and forms related to C/O, serving as a reference point for compliance requirements and procedures.

This also explains why “C/O package services” advertised informally in the market - if they exist - represent an extreme risk to exporters. When scrutiny shifts from labels to evidence and capacity, weak points surface quickly: input invoices, bills of materials, production norms, factory capability, and the consistency of the documentary trail. And once a 40% transshipment penalty becomes a plausible policy instrument in trade discussions, the cost of non-robust documentation is often unaffordable.

Does not deny that fraud risks exist; it re-centers the discussion on the technical truth to avoid two extremes - panic (“anyone can do it”) or complacency (“it can’t happen”). Vietnam and its exporters need a strong compliance discipline: understand origin rules by market and product, build coherent documentation from inputs to finished goods, and treat C/O as an operational standard rather than paperwork. When international narratives place Vietnam under suspicion, the most durable response is not emotion, but verifiable process and verifiable data.