Is Your Vietnam Supplier Transshipment-Proof? The Buyer-Side Origin Check

The rule people have in mind is section 3(a) of Executive Order 14326: goods that US Customs and Border Protection determined had been transshipped to evade the order's tariffs were charged an additional 40% ad valorem, effective 2025-08-07, under HTS heading 9903.02.01. Two details get lost in the retelling. The 40% applied in lieu of the origin country's reciprocal rate rather than stacking on top of it, and the heading is country-neutral — its text covers articles the product of any country, not Vietnamese goods specifically.

That penalty is no longer being collected. The Supreme Court ruled on 2026-02-20 that the International Emergency Economic Powers Act does not authorise the President to impose tariffs; Executive Order 14389 then terminated the tariffs imposed under it, and CBP has stated that the corresponding HTSUS headings became inactive in its entry system from 2026-02-24. The same date ended Vietnam's 20% reciprocal rate under heading 9903.02.69.

Here is the trap, and it is live for anyone checking today. The current HTS revision still prints heading 9903.02.01 with a rate column of the applicable subheading rate plus 40%, and carries no “provision terminated” note — unlike heading 9903.01.72, Vietnam's original 46% reciprocal rate, which is marked terminated. Look the heading up this afternoon and you will read a rate nobody is being charged. Broker emails, supplier decks and consultancy pages still quoting a 40% transshipment penalty as current should be dated before they are believed.

The interim measure was a 10% surcharge on all countries under Section 122 of the Trade Act of 1974, heading 9903.03.01, which ran from 2026-02-24 and expired automatically on 2026-07-23 at the statute's 150-day ceiling. Since 2026-07-24, Vietnamese goods carry a 12.5% Section 301 surcharge under heading 9903.05.84, with an in-transit exemption that ran to 2026-07-28. Goods already covered by Section 232 steel, aluminium, copper, vehicle and parts tariffs are carved out through heading 9903.05.90 rather than charged twice.

That 12.5% sits on top of each subheading's ordinary rate — it is not an all-in figure. There is no single Vietnam rate to quote, because the underlying rate varies by product, and a landed-cost model built on the surcharge alone will be wrong in both directions.

The current Section 301 schedule also contains no transshipment or origin-evasion heading at all. The 40% device belonged to the emergency-powers programme and disappeared with it. What did not disappear is the ordinary consequence of getting origin wrong: the duty owed is the duty of the true country of origin, and a declaration naming the wrong one is a false declaration — the 40% always sat alongside penalties under 19 U.S.C. 1592 and the origin country's own duties rather than replacing them. Which country is the true one is a legal test with a specific shape, and it is not settled by where the last invoice was issued.

Run this before the first purchase order. Every item on it is cheap to ask for while you are still choosing between factories, and expensive to ask for once a container is on the water.

The full document list, with what each one proves and what it leaves open, is worth having in front of you when you ask. Order matters more than completeness. A supplier that produces the bill of materials and the input import declarations within a day has effectively answered the question; a supplier that produces the certificate immediately and the underlying records slowly has answered a different one.

The reconciliation is the part nobody can improvise. If a factory imported components for a fraction of the volume it invoiced you, that gap exists in two independent record sets — its import declarations and its production logs — and no certificate reconciles them after the fact. This is also why a site visit that skips the document room is worth less than an hour spent in it.

According to the Vietnamese government gazette, Decree 169/2026/NĐ-CP on administrative penalties in customs was signed on 2026-05-15 and took effect on 2026-07-01, replacing Decree 128/2020/NĐ-CP in full and Article 2 of Decree 102/2021/NĐ-CP.

Article 18 penalises falsely claimed Vietnamese origin specifically, and it reaches exports, imports, temporary import for re-export, transit and transshipment. Fines run in five bands set by the value of the goods — the lowest band covers consignments worth under 30 million VND and carries a fine of 10 to 20 million VND, and the bands rise from there — with confiscation of the goods, forced destruction, or clawback of an equivalent amount on top.

For a buyer the practical consequence sits upstream of any US determination. Those penalties attach to the exporter and the goods, and the limitation periods run 5 years for tax-management violations in import and export and 2 years for other customs violations. A supplier whose origin story collapses does not merely cost you a duty reassessment — it stops being able to ship.

This rarely fails because a supplier refuses. It fails because nobody asked in writing at a moment when asking was normal. A right to request the bill of materials, the input import declarations and a current audit report — with a stated response window and a right to visit the site — costs nothing to include in a supply agreement and is close to impossible to add once a relationship has settled into reorders.

Sequence it with the rest of the market-entry work instead of treating it as a customs task that begins when the goods are ready. The same pattern runs through a Vietnam launch: the long-lead items are documentary, and they are the ones teams schedule last. The origin file is a long-lead item. Ask for it while two factories are still competing for the order, and the answer arrives as a fact about the supplier rather than as a negotiation.