"Fight against Vietnamese origin fraud is still very complicated."

10:26:47 AM | 7/14/2020

This is shared by Mr. Nguyen Tien Loc, Director of Post-clearance Audit Department, General Department of Vietnam Customs, with Vietnam Business Forum. Le Hien reports.

Could you please tell us the results of inspections on origin fraud?

In the trend of deep integration into the world economy, Vietnam has signed Free Trade Agreements (FTA) with many countries around the world. Some important trade agreements such as the U.S.-Vietnam Bilateral Trade Agreement; EU-Vietnam Free Trade Agreement have created a huge competitive advantage for Vietnam, contributing to attracting foreign investment while posing many challenges for authorities who are to ensure a favorable environment to attract foreign investment while preventing frauds that take advantage of the open policies of the country, including frauds of Vietnamese origin to enjoy tax incentives.

We have checked and verified 76 cases, detected 24 cases of origin violations of export goods; coordinated with the Ministry of Public Security in investigating one case showing signs of counterfeiting a certificate of origin. It has confiscated 3,590 complete bicycles, more than 4,000 sets of bicycle components and more than 12,000 sets of components to assemble kitchen cabinets as evidence. It has collected over VND33 billion (including the illegal proceeds gained from committing acts of violations; sanctioning administrative violations and the value of confiscated evidence).

What are typical types of origin fraud?

From the results of our inspection and verification, some common frauds include: Enterprises investing in simple production lines, performing simple assembly and processing stages of simplified production phases under Article 9, Decree 31/2018/ND-CP.

Enterprises, at the first stages, have not yet completed investment in assembly of machinery lines but already have export products (enterprises import in the form of semi-finished products and only perform simple assembly or import finished products and only change packaging or labels).

Enterprises that already have machinery lines but export products are not eligible for Vietnamese origin standards as prescribed by law.

Which products often face origin fraud?

They are bicycles, electric bicycles, wood and wooden furniture and solar batteries. When conducting post-clearance inspections in some businesses, most of them violate the origin rules.

What is the most difficult task of inspection on origin fraud and what are your recommendations?

In the face of increasingly complex and sophisticated Vietnamese origin fraud, our most difficult problem is handling violations. In fact, through inspecting, enterprise's origin fraud have been all detected, but penalties applied are not strong enough and there is a certain gap in the legal provisions between the ministries and agencies, so it is very difficult to handle decisively and create a strong deterrent effect. Therefore, there should be a specific coordination on regulation between the Ministry of Industry and Trade and the Ministry of Finance (Customs Sector) in implementing Clause 2, Article 28 of Decree 31/2018/ND-CP on origin inspection and verification of export and import goods.

At the same time, the remedy is to force the submission of illicit benefits gained from committing acts of violation specified in Circular 149/2014/TT-BTC, which only prescribes the calculation method for trading, manufacturing and export enterprises (the owner of infringing goods). It is necessary to supplement the provision of the method of calculating illegal profits for enterprises operating under commercial processing because the owners of goods (outsourcing unit) are usually outside the territory of Vietnam, but violations occur in Vietnam.

Source: Vietnam Business Forum