Economic Sector

Last updated: Wednesday, February 20, 2019


Businesses Pay Much for Cross-sectoral Inspection Testing

Posted: Wednesday, January 24, 2018

A report on the implementation of Resolution 19 of 2017 released by the Ministry of Planning and Investment showed that actual expenses of enterprises just increased, not declined, because of excessive cross-sectoral inspection expenses.

430 documents on cross-sectoral inspection management
According to statistics of the General Department of Vietnam Customs cited by the Ministry of Planning and Investment in the report, as of April 2017, there were 414 legal documents on specialised inspection and management. If regulations issued after April 2017 were counted, the total would be 430.

In fact, the scope of items subject to specialised inspection is too broad and expansive. Overlapping cross-sectoral specialised inspection (among the Ministry of Industry and Trade, the Ministry of Agriculture and Rural Development, the Ministry of Health, Border Guards, and Vietnam Customs. etc.) has not been eased (except for positive changes in decentralised responsibility of State management in food safety in a draft decree that will replace Decree 38). Even, technical inspection procedures for occupational safety, safety training, occupational health and environmental monitoring are being administered by 10 ministries according to Decree 44/2016/ND-CP.

According to the Ministry of Planning and Investment, although the time spent on specialised inspection and management procedures has decreased, it is still long, thus leading to many risks for enterprises. The rate of import shipments subject to specialised inspection at the stage of customs clearance has not been reduced, still standing at 30-35 per cent, while the goal of Resolution 19 was to bring it down to 15 per cent in 2017. Quality test of animal feeds needs 14 days at the Animal Husbandry Department and at least three weeks at the Directorate of Fisheries. The time required to register energy label at the General Directorate of Energy (Ministry of Industry and Trade) is three weeks or so.

And excessive expenses
According to the Ministry of Planning and Investment, the cost of specialised inspection is so much that it harms business performance of enterprises, which is contrary to the Prime Minister's instructions on “cutting costs for businesses”. Specifically, the total cost for specialised inspection procedures for an imported refrigerator model is about VND70 million, which does not take into account the value of destroyed samples.

The company must carry out the following works for this shipment: Electromagnetic compatibility (EMC) test: VND16 - 20 million per sample product; informal charge: VND4 million per result sheet; energy efficiency test: VND16 million / per sample product; compliance inspection and CR stamp: VND6 million per sample product; and informal charge: VND2 - 3 million per result sheet. With code registration procedures applied by the General Directorate of Energy (Ministry of Industry and Trade), to be labelled energy in batches, the company must pay an official cost of VND500,000 per document set and an unofficial expense of VND2 million per document set. If a shipment consists of a few bridges, the company will earn no profit or even run a loss.

The following are some examples. In order to fulfill procedures for food safety compliance for the import of six meat grinders at the Ministry of Health, the company must have their products tested at a unit designated by the Ministry of Health for a fee of VND22.9 million. The total cost for specialised inspection of a shipment of 28,500 tonnes of soybean oil imported via Cai Lan Port (Quang Ngai province) by 29 companies is VND157 million, including VND123 million of quality test fee and VND34 million of plant quarantine fee. The fee for feed quality test for a shipment of 60 - 70 tonnes at the Directorate of Fisheries is VND40 - 50 million. The fee for animal feed quality test at the Department of Livestock Production is VND500,000 - 700,000 per product while a batch usually consists of a lot of products, resulting a big total sum of fee.

The report said, according to Circular 285/2016/TT-BTC of the Ministry of Finance, the new fee for veterinary quarantine is very high, much higher than the old rate. For example, in 2016, the cost of a specialised inspection of a business in Ho Chi Minh City was about VND300 million per month but it is now VND700 million as a result of this new fee.

“As the implementation of specialised management is not based on the principle of risk management and disallowed for continuation of results with the same model passed by other enterprises and disallowed for the acceptance of famous brands, it causes huge waste for enterprises and society. The specialised inspection fee is excessively high because of regulations on quarantine and inspection fees specified in four circulars, namely Circular 230/2016/TT-BTC, Circular 279/2016/TT-BTC, Circular 285/2016/TT-BTC and Circular 286/2016/TT-BTC of the Ministry of Finance.”

In addition, a bulk shipment, a liquid cargo, a identical cargo, a cargo of the same origin or the same seller, and cargos shipped by the same vessel for many different importers, each importer must perform all specialised inspection procedures. This way of doing is unnecessarily cumbersome, and wasteful, said the Ministry of Planning and Investment.

In order to speed up the implementation of Resolution 19 on improving the business environment and enhancing national competitiveness, the Ministry of Planning and Investment recommended ministries to urgently review and propose cutting investment conditions in their jurisdiction. At the same time, the target of reducing the rate of goods subject to specialised inspections from 30-35 per cent to 15 per cent will be achieved in the second quarter of 2018.

Nguyen Thanh

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