Aggressively Preventing Origin Fraud

2:05:50 PM | 2/8/2019

Vietnam has signed and joined many multilateral and bilateral free trade agreements (FTAs). In addition to a lot of benefits to the economy, Vietnam also faces numerous challenges, especially the control of origin of goods, said Mr. Au Anh Tuan, Acting Director of the Customs Supervision Bureau, at a press conference on prevention of origin fraud in Hanoi. Le Hien reports.

Could you please tell us the benefits and challenges to Vietnam in the globalization trend, especially after many FTAs have been enforced?

Currently, Vietnam has signed and participated in 14 FTAs, with the latest being EU - Vietnam Free Trade Agreement (EVFTA).

According to FTA commitments, goods exported from Vietnam will enjoy preferential tax rates. But, this also comes with the risk of goods from neighboring countries unentitled to preferential tax treatments entering into Vietnam and undergoing some simple processing steps such as labeling, packaging or simple assembling to then export to third countries where Vietnamese goods are entitled to preferential treatment. When the export value of these commodities increases sharply in comparison to the production capacity of enterprises, importing countries may take measures to initiate investigations to apply trade defense measures and this will impact manufacturing industries of Vietnam.

Would you tell us about C/O inspection and control results according to the functions and tasks of Vietnam Customs?

From 2016 to June 2019, customs authorities of countries sent 286 origin verification requests concerning goods imported from Vietnam, mainly from Taiwan (274 requests) that primarily asked about agricultural products such as mushrooms, onions and bamboo shoots. Vietnamese customs authorities sent 13 origin verification requests in relation to aluminum and agricultural products.

After verifying C/O fraud suspicions, the Anti-Smuggling Investigation Bureau delivered some notable remarks. As for commodities exported to Taiwan, mainly agricultural products and marbles, data-based verification results showed that most of export shipments of Vietnam found no wrongdoing and commodity information on Vietnam’s exports was identical to information on import declaration sent by Taiwan. However, Taiwanese customs authorities continued to have many verification requests for export information, especially traceability verification, because they suspected that commodities are not originated from Vietnam but from a third country (mainly China). Therefore, only after there is the verification result from Vietnamese customs authorities, can Vietnamese export shipments be cleared.

Currently, some transit shipments from Vietnam are issued the “Certificate of Export from Vietnam”, not Certificate of Origin, but to commit fraud, shippers explained to customs authorities in importing countries that the paper is the Certificate of Vietnam Origin.

Since customs authorities are not export C/O issuers, they often have to coordinate with other Vietnamese authorities for verification, for example, with the Ministry of Industry and Trade (for preferential C/O) and with VCCI (for normal C/O). It is very difficult for customs authorities to verify and determine the ratio and proportion of goods originated from Vietnam if there is no clear indication from relevant authorities. In fact, some kinds of goods (like solar batteries) only need a very small percentage of components made in Vietnam to have Vietnam C/O. Therefore, Vietnam Customs has seen this as one of cooperation priorities in customs control between Vietnam Customs and customs authorities of other countries in the coming time.

What origin contents have customs authorities proposed for amending?

Customs authorities will ask the Ministry of Industry and Trade to advise and submit to the Government amendments to Decree 31/2018/ND-CP and revise Circular 05/2018/TT-BCT on origin of goods, so as to introduce rules on rules of origin for goods produced in Vietnam for circulation in the domestic market in addition to rules of origin for import and export goods.

Besides, customs authorities will ask the Ministry of Science and Technology to advise and propose the Government to amend regulations on goods labeling specified in Decree 31/2017/ND-CP, especially supplementary labeling, to avoid the fact that enterprises may use the time of importing to stick supplementary labels on products before bringing them into circulation. If this issue is not controlled tightly, they may change information on origin and expiry date to deceive consumers.

Customs authorities will propose that the Ministry of Finance report to the Prime Minister to direct local governments to strengthen management and prevent the wrong certification of input materials used to make exports to defraud origin. They will promote communications on acts, tricks, harms, consequences of trade fraud in domestic production and in export to people and businesses. At the same time, they will raise the sense of responsibility of protecting interests of domestic consumers and protecting Vietnamese brands in the international market.

Thank you so much!