Vietnam Customs: Determined to Shed 30% of Administrative Procedures

The Vietnamese customs sector has made impressive progress in the implementation of the Project 30, which was created to reduce administrative procedures. According to a report recently released by the Ministry of Finance, the first phase of reviewing simplified 42 procedures and abolished three procedures. Compliance costs have been reduced by 32.11 %, an equivalent to VND187 billion.

 

Generalising two phases, the workgroup for administrative procedure simplification review proposed to strip off 179 out of 239 administrative procedures, or 75 %. After preliminary calculations, the sector may reduce 30 % of administrative procedures. The simplification will help reduce significant time and paperwork for completing customs procedures. In 2011, the sector will shorten the necessary time for customs clearance and reduce the %age of goods subjected to inspection to the level in developed countries in the region (the current rate in Vietnam is twice as high as in the region and thrice as high as in EU countries).

Vietnam has reformed, developed and modernised the customs sector to meet the actual demand in accordance with the Project 30 on the simplification of administrative procedures initiated by the Government. According to provided requirements and roadmap, the customs sector has presented the list of customs procedures in line with the Decision 1904 dated August 10, 2009 issued by the Finance Minister. It has issued 239 procedures, including 15 procedures at the ‘General Department’ level, 27 at the ‘Department’ level and 197 at the ‘Branch’ level.

 

The implementation will be carried out in two phases. The first phase will announce the list of procedures and the second phase will determine the list of priority procedures. According to a leader of the General Department of Customs, the nature of the customs administrative procedure simplification includes the following contents: (1) eliminate unnecessary procedures; (2) simplify steps in completing procedures; (3) simplify procedures for IT application; (4) clarify definitions of procedures to help people understand easily and businesses implement easily. “We also combine procedures together to simplify and reduce paperwork, costs, forms and elements.

 

In this priority phase, the customs sector has chosen to deal with exported processed and manufactured commodities because this group accounts for a third of import - export declaration forms and uses a lot of labourers. The sector has proposed amendments to several circulars issued by the Ministry of Finance like the Circular 116 on places of customs procedure finalisation. Companies can select customs offices most convenient to them to carry out procedures: either customs offices at their head offices or at their branch locations. With respect to liquidity, many types of documents related to payment have been streamlined or rescinded, helping companies shorten time and cut costs for completing customs procedures. For example, according to previous regulations, companies had to register quotas - or limits - when they work out import contracts, but now the new rule provides that they only need to register when they send the first export shipment. According to an independent government workgroup, the simplification of only this regulation will save VND161 billion a year.

Electronic customs are deemed the key to the success of the aforementioned objectives of administrative procedure simplification. After five years of try-out, e-customs is very successful. Specifically, after 10 months implementing electronic customs according to the Decision 102/2009/QD-TTg at 13 provincial customs offices as of June 30, 2010, nearly 1,200 companies used e-customs to complete nearly 73,000 customs declaration forms with import and export turnover of about US$13.6 billion. These are relatively optimistic results.

 

To meet new requirements, the customs sector has accelerated the formation of a user-friendly mechanism and the investment for better infrastructure for economic development. For instance, the sector speeds up the construction of customs management and supervision processes for international seaports, regulations on international express freight delivery, regulations on central cargo inspection locations, and investments for modern surveillance instruments. At present, it installed container scanners at Cat Lai Port in March 2010 and Hai Phong Port in August 2010, invested in customs surveillance systems (cameras, electronic scales, cargo scanners, etc) at important checkpoints, carried out projects to upgrade and renew risk management systems (at the end of 2009, the volume of actual examinations on imported and exported goods was reduced to below 20 %. Specially, 70 % of actually checked goods were based on risk management functions).

 

The General Department of Customs upgraded software to match new requirements. E-customs software was also installed in customs offices and customs officers have been trained for using new systems. Besides, the General Department also sent workgroups to support implementing units to solve unexpected problems.

 

To prepare technical infrastructures for implementing e-customs procedures more effectively in the coming time, the customs sector is upgrading and supplementing equipment and transmission lines to ensure sufficient bandwidths for smooth operation. It will also install more e-customs software and train both customs and companies to use the software. Apart from expanding the application of e-customs, in 2011, it will upgrade IT application systems to adapt to new changes in customs processes and continue applying distance declarations for localities without e-customs systems. Last but not least, it will continue modernising joint tax collection mechanism for customs agencies, treasuries, and tax agencies in some localities. Doing so, the Vietnamese customs sector can enhance the competitiveness of the sector and strengthen the trust of investors.