Large-scale luxury goods smuggling, along with tax evasion and intellectual property rights (IPR) violation, tends to heat up Vietnam as smugglers utilise loopholes in import and export regulations and activities. In 2012, the IPR protection force affiliated with the Anti-smuggling Investigation Department under the General Department of Customs discovered many cases of illegal imports of luxury goods. In December 2012, the Vietnamese customs destroyed more than 10,000 counterfeited luxury brand items.
Obstacles in importing control
According to anti-smuggling forces, luxury import control has a lot of loopholes. First, taking advantage of trade facilitation policy on customs procedures, importers will ask customs authorities to annul their declarations if they are classified to yellow or red flows. Then, they apply declarations in other customs gates to get green-flows (free from check) and start to import goods.
Second, smugglers exploit loopholes in legal documents where import labelling is not compulsory. They also deliberately lower real import values.
Third, making most of lax coordination between customs authorities and state agencies in inspection on granting business establishment licences, accounting regime, invoices, records, etc, traffickers use duplicate import declaration documents where contents are falsified. If their violations are found, they escape and set up new businesses to continue their activities. Some inter-companies also trade together to evade import and corporate income taxes or aim at transfer pricing.
Increased control
According to the General Department of Customs, there is no ban on luxury importation. Companies are permitted to import luxury goods if they comply and observe the law. However, we need to think about the use of a huge amount of foreign currencies to import luxury items when our country is fraught with difficulties.
To prevent fraud, in 2013, customs authorities will strengthen control over smuggling, and intensify examination in cosmetics and mobile phone importation. Target destinations are northern border gates and international airports. They will double-check applications for annulment of declaration documents classified into yellow and red flows; and intensify taxable price reference and post-clearance information checks on key imports to prevent tax losses. Anti-smuggling investigation forces will increase inspections and exchange information with IPR owners to effectively thwart the importation of counterfeit goods.
Huong Ly
Vietnamese
