Customs Priorities Programme: More Adjustment Required

Circular 63/2011/TT-BTC dated on 13 May 2011 of the Ministry of Finance pilots priority modes in State management of customs for eligible businesses. With some practical benefits that businesses get such as much reduction of customs procedures; quick clearance of goods, time efficiency, cost reduction, especially when Vietnam signed on Association of Event Organizers (AEO) with other countries, these businesses are also given priority in the countries with which Vietnam has signed commitments.

General Director of Customs Department, Mr Nguyen Ngoc Tuc, said that this recognition is also a form of recognition of the important contributions of the businesses to economic development, and expresses confidence in the future legal compliance of the businesses. At the same time, it expresses views on administrative reforms in the customs sector. He asserted that the domestic prioritized business programme will have many advantages, of which the largest is the reduction of customs procedures like reduction in documentation, testing, and periodical tax payment; being applied in advance - remission of taxes and later - inspection, the rapid clearance of goods through the implementation of electronic customs procedures 24 hours a day; 7 days a week, with a single customs declaration for multiple exports or imports.

A representatives of Vietnam Samsung Electronics Co., Ltd said that the Ministry of Finance, General Department of Customs has accredited prioritized businesses as a breakthrough in customs sector administrative reforms, as well as a favourable basis for businesses to develop in the future, to affirm its position and prestige, to implement well their obligations, and to contribute to national socio-economic development.

Many strict criteria
In spite of the advantages of the prioritized business programme under Circular 63, after the proclamation ceremony, the prioritized businesses said that the criteria are too strict and not consistent with reality, which reduces the efficiency of a major policy breakthrough in customs administrative reform.

Mr Nguyen Minh Thang, representative of Oil Refinery Company of Binh Son, one of companies given priority in the first phase, said there are many businesses who open many declaration forms and well comply with the law, but due to the particular features of the businesses, they cannot reach criteria of turnover, so they are not eligible to priority, which is a great disadvantage. Therefore, the programme should expand to other areas with specific features. On the other hand, the regulation about businesses with administrative violations less than three times should be reviewed. In fact, there are businesses making hundreds of the declarations in a day, so it is difficult to avoid rudimentary errors on administrative procedures.

 

Mr Pham Thanh Binh, Director of Department of Post-Clearance Inspection, said immediately after the publication of Circular 63, the General Department of Customs also recognised that the prioritized business programme in customs sector should be improved and supplemented. In his viewpoint, in fact businesses often make mistakes, but not the big ones without intention, rather mostly procedural errors such as on record, missing invoices, late payment records. The main mistakes belong to such procedures as profile saving, lacking of invoices or late submission of profiles, and penalty levels to these mistakes are often low, sometimes only a few hundred thousand VND. That foreign businesses that open up thousands of declarations every month make mistakes a few times is just unfortunate. Furthermore, based on Circular 63, the General Department of Customs has only 45 days to complete the evaluation process to recognize businesses for priority. Meanwhile, other countries specify a longer duration (such as in South Korea, the specified duration for evaluation process is three months). Therefore, the evaluation time should be lengthened. 

 

Having received the feedback of managers and businesses, recently, the Ministry of Finance issued Circular 105/2011/TT- BTC amending and supplementing to some articles of Circular 63, under the direction to re-specify criteria of turnover of imports and exports and the number of violations as well as penalties. Accordingly, the Ministry of Finance guidelines reduce turnover requirements of imports and exports for businesses to apply the pilot priority mode in the State management in customs. Specifically, businesses who are given priority in the export and import of all commodities and types of export and import (including imported and exported goods and services bought or sold in the country) have total import-export turnover requirements cut to US$350 million per year, instead of US$500 million per year as the previous regulation. At the same time, businesses given priority in exports of seafood, agricultural products, and crude oil which are wholly originated from Vietnam just reach the export turnover of US$70 million per year rather than US$100 million per year as the previous regulations can meet the conditions of turnover for participating in the pilot priority. This quick adjustment expresses the determination of the customs sector to reform administrative procedures.