Urban Development Law: Expanding the “green lane” for goods from non-tariff zones

The development of non-tariff zones is emerging as one of the notable elements in the formation of new economic spaces associated with trade, logistics, manufacturing and international market connectivity. Article 22 of the Urban Development Law has specified regulations on the development of non-tariff zones in a direction that facilitates the movement of goods and simplifies certain management procedures while maintaining the necessary inspection and supervision framework of competent authorities.

Simplifying procedures and facilitating the movement of goods

A worker at Lighting & Equipment (Vietnam) Co., Ltd. (Amata Industrial Park). File photo

Under Clause 1, Article 22, foreign trade management measures shall not apply to goods brought from abroad into non-tariff zones, except for import bans, temporary suspension of imports and quarantine measures. However, this provision shall not apply where a specialized ministry has issued warnings concerning food safety risks that could endanger human health or life, cause environmental pollution, affect social morality or traditional customs, harm the economy, or affect national defense and security, or where a competent authority has issued a written notice suspending the application of the exemption from specialized inspection.

Foreign trade management measures also shall not apply to goods purchased, sold or transported between enterprises within the same non-tariff zone or between different non-tariff zones.

The provision is aimed at creating more favorable conditions for the circulation and exchange of goods within non-tariff zones. Reducing the application of foreign trade management measures in cases stipulated by law could give businesses greater flexibility in organizing production, business operations, trading and the transportation of goods.

Dong Nai agricultural products. File photo

However, facilitating trade does not mean relaxing management. Clause 1, Article 22 clearly sets out exceptions concerning goods subject to import bans, temporary import suspensions and quarantine requirements, as well as goods posing potential risks to human health, the environment, social morality, traditional customs, the economy, national defense and national security. This mechanism is designed to ensure that economic development goes hand in hand with the protection of public and national interests.

Clause 2, Article 22 also stipulates that the exchange of goods between one non-tariff zone and another, as well as between non-tariff zones and foreign countries, constitutes goods transportation activities subject to inspection and supervision by customs authorities. Customs authorities shall apply inspection and supervision measures while simplifying notification and declaration procedures for these activities.

Thus, procedural simplification remains subject to the management and supervision of customs authorities. This is particularly important given the nature of non-tariff zones, where goods are exchanged with foreign countries and between areas subject to different management regimes. Facilitating trade therefore needs to be accompanied by the ability to monitor and supervise the flow of goods.

Clearly defining the relationship between non-tariff zones and the domestic market

A view of Phuoc An Port (Phuoc An Commune, Dong Nai City). File photo

Another matter addressed by Article 22 is the exchange of goods between non-tariff zones and the domestic market.

Under Clause 3, Article 22, the exchange of goods between non-tariff zones and the domestic market is regarded as an export-import relationship. Enterprises operating in non-tariff zones may follow simplified declaration procedures when exchanging goods with the domestic market.

The provision clearly defines the legal nature of goods exchanges between the two areas. On that basis, enterprises operating in non-tariff zones are provided with a mechanism for simplified declaration procedures. Clearly defining such transactions as export-import activities also helps establish a basis for delineating management responsibilities and organizing business operations.

Article 22 also provides a separate mechanism for goods temporarily taken outside a non-tariff zone to undergo specialized services. Under Clause 4, goods taken outside a non-tariff zone for a specific service for a limited period and subsequently returned to the non-tariff zone are not subject to customs procedures, provided that their nature, name and commodity code remain unchanged. Customs authorities shall apply simplified management and supervision measures based on declarations of goods entering and leaving the non-tariff zone. The period for goods to be taken out of and returned to the non-tariff zone must not exceed 30 days.

This provision is significant for activities requiring goods to be taken outside a non-tariff zone for a specified period to undergo specialized services before being returned. The conditions for applying this mechanism are that the nature, name and commodity code of the goods remain unchanged after the service is performed, and that the period outside the non-tariff zone does not exceed 30 days.

Import and export goods being transported at Phuoc An Port (Phuoc An Commune, Dong Nai City). Photo: Hai Quan

Notably, the law provides that customs procedures are not required for goods meeting the above conditions, however, such activities remain subject to a management and supervision mechanism based on declarations of goods entering and leaving the non-tariff zone. This approach reflects a combination of procedural streamlining and the need to maintain effective control over the flow of goods.

Clause 5, Article 22 further stipulates that used machinery and equipment in non-tariff zones may be imported into the domestic market if such machinery and equipment had not been used at the time they were brought into the non-tariff zone.

This provision establishes a legal basis for a specific case involving machinery and equipment after being used in a non-tariff zone. At the same time, the condition that the machinery and equipment “had not been used at the time they were brought into the non-tariff zone” is an important factor in determining the scope of application of the provision.

The provisions of Article 22 show that the Urban Development Law aims to establish a more favorable operating mechanism for non-tariff zones by reducing and simplifying certain management measures and procedures governing the movement of goods. At the same time, the law maintains necessary limits and inspection and supervision mechanisms, particularly in matters concerning safety, the environment, human health, economic interests, national defense and national security.

Clearly defining the relationships governing the exchange of goods between non-tariff zones and foreign countries, among non-tariff zones, and between non-tariff zones and the domestic market also provides a basis for organizing trade activities in a more transparent manner. This can be regarded as an important legal foundation for enabling non-tariff zones to operate in line with the development of trade, logistics and economic connectivity amid the emergence of new urban development spaces.

By Hai Thanh - Translated by Mai Nga, Thu Ha