June 02, 2020 15:59

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Anti-origin fraud is a vital element of economic activity

10:07 | 21/09/2019

VCN - Talking to Customs Newspaper, trade expert Pham Tat Thang (pictured) said that with a large open economy like Vietnam, the fight against origin fraud and tax avoidance is a vital element of economic activity. Wanting this ‘war’ to achieve the best results requires the more drastic and synchronized participation of ministries, branches and enterprises from the central to local levels, to handle violators.

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How do you assess the current level of origin fraud, especially Chinese goods faking Vietnamese origin for export to other markets?

First of all, it must be said that in international economic integration, rules of origin, certificates of origin, and determination of origin of goods is particularly important for Vietnam's exports. Having Vietnamese origin under the standards of different free trade agreements (FTAs) in different markets, Vietnamese goods are exempted, reduced, and benefited from partners in such FTAs.

Warnings over origin fraud have been issued for a long time. The fact that China has found ways for Chinese goods to ‘hide’ behind Vietnamese goods to avoid US taxation has also happened. There are even cases of Chinese goods arriving at the border gate with "Made in Vietnam" printed on the package. We have anticipated this. The State management agencies have taken action, but it seems that some enterprises still collaborate with China deliberately for immediate benefit.

Origin fraud leads to the risk that exported Vietnamese goods will be investigated due to tax evasion, which will cause great damage to Vietnam. In the case of the US market alone, when the US-China trade war is increasing on a large scale, Chinese goods are stagnant, China will find ways to consume them, and the risk is greater.

There are many ways such as exporting to consume in Vietnam. If Vietnam needs Chinese goods can compete with domestic products, they can be imported. However, if Chinese goods ‘hide’ behind Vietnamese goods for export, especially to the US, it is an unacceptable fraud, which is on alert.

In your opinion, what is the key reason increasing risks and level of origin fraud, especially Chinese goods faking Vietnam's goods for export?

There are many tricks employed by Chinese merchants in the trade. Currently, with the pressure of stagnant goods when being taxed by the US, the Chinese side seeks every way to take their goods to other markets for consumption. Besides, it must be added that the vigilance and barriers of Vietnam have not been prompt and not strong enough. We should learn immediately because if Vietnamese exports are taxed, export goods may be included in the list of application of trade remedies like Chinese goods, and it will have unpredictable consequences. This needs the centralized and unified direction of the Government to get the consensus of the management agencies as well as localities, especially Customs.

Besides Chinese goods flowing into Vietnam, origin fraud and exporting to other markets, there is also a situation of hiding investment to get C/O from Vietnam. Many experts said that the form of hiding investment also causes worries and dangers in the longer-term. What is your opinion?

With the form of "hiding" investment, the Law on Investment has regulations to prevent it. However, in fact, many Chinese investors are also looking for ways to "hide" investment to take advantage of the origin of Vietnamese goods to benefit when exporting to markets with which Vietnam has FTAs. I think this form is quite worrying because it is stable and longer lasting. This reality requires vigilance and caution in FDI attraction strategies.

In extensive economic integration, investment is very important. Recently, Vietnam has officially signed a free trade agreement with the EU (EVFTA). Besides, Vietnam and the EU also signed a separate agreement related to investment. There are many reasons to do that, including the factor to prevent "hiding" investment to benefit from FTAs that Vietnam has signed.

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VCN- On August 27, Deputy Director General of Vietnam Customs Mai Xuan Thanh had a working session ...

In order to solve the problem of combating tax evasion and origin fraud, the Prime Minister has recently promulgated the Project "Strengthening the State management on the avoidance of trade remedies and origin fraud". In your opinion, in the implementation of the project, what factors should be emphasized to bring high efficiency?

Combating origin fraud and tax evasion are vital elements of Vietnam's economic activity in the current period. Regarding the project of the Prime Minister, I think that the implementation is not enough, it needs to be checked and controlled more strictly in import-export activities, especially origin. Therefore, it is necessary to have a resolute attitude, unified direction of the Government, and strict sanctions against State agencies, enterprises and individuals who act in abetting Chinese goods or goods of any country that fakes origin and hides Vietnamese goods.

Thank you, Sir!

Recently, the Import-Export Department (Ministry of Industry and Trade) has worked, exchanged and proposed commodity associations and enterprises strengthen coordination and implementation of a number of tasks to implement measures to combat origin fraud and tax evasion. Specifically, the units need to closely monitor the market so that they can work out plans promptly and proactively to coordinate to cope with, minimize risks and negative impacts on the goods.

Besides, promoting propaganda and recommendations for enterprises to be alert, cautious in business cooperation, in receiving investment flows from abroad; towards doing business methodically and honestly, avoiding ways of doing business with snatches, following immediate benefits, avoiding fast-buck business, following the immediate benefits, abetting abuses, hiding, trade frauds, affecting prestige, even damage to domestic manufacturing industries.

Research carefully and comply strictly with the regulations on goods origin; focus on training professional staff in charge of activities of certificates of origin (C/O) so that staff members of enterprises know declarations and the procedures for C/O issuance.

Invest appropriately in the study of export commodity structure, study the requirements and standards of origin of each specific market area, grasp clearly information about exported goods and markets with preferential tax policies.

Promote the expansion of business and trade relationships with partners of countries entitled to preferences that allow the use of origin standards of sponsorship country or other preferential countries in ASEAN to increase domestic content of regional countries are given preferential treatment by the application of cumulative origin standards.

The Import and Export Department stated: During the implementation process, when noticeable issues are detected, the local Departments of Industry and Trade, industry associations and enterprise associations should be urged to discuss actively with the Department to unify the handling plan, avoiding adverse impacts on the industry.

By Thanh Nguyen / Binh Minh