April 02, 2020 11:15

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Difficulties in verifying counterfeit goods

15:08 | 13/07/2019

VCN - Trade fraud and fraudulent acts of origin are inreasing, not only for export goods but also for domestic goods. Origin verification to solve this problem is not easy.

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The situation of foreign firms forging Vietnam’s origin for consumption in the domestic market is increasing. Photo: internet

The more export growth, the greater the worry

At a meeting to implement the Project ’Strengthening State management over the circumvention of trade remedies, and fraudulent acts of origins‘ on July 9, Le Trieu Dung – Director of Trade Remedies Authority ( Ministry of Industry and Trade) said that the fraudulent acts of Vietnam’s origin to export to foreign countries to enjoy tariff preferences or avoid high tax rate are increasingly complicated.

"When there are signs of fraudulent acts of origin, we have asked issuers of certificates of origin (C / O) to strictly control commodities such as car tires, solar generators, cold rolled steel and more than. After inspections, we introduced solutions and proposed related units such as Market Surveillance, Public Security, etc as well as coordinated with investigating agencies to have information on the current frauds such as the US and the EU and contacted the EU, the US and China to propose cooperation for combat against fraudulent acts of origin," Dung said.

However, he said the risk of tax evasion and origin fraud has increased for both subjective and objective reasons

In implementing free trade agreements such as CPTPP, EVFTA, the US-China trade war, the risk of fraud is increasing. The reason for tax evasion is the difference between preferential tax rates and normal tax rates. Since many countries adopt a mechanism that allows enterprises to self-certify origin, compliance depends on the enterprise.

In terms of subjective reasons, many enterprises used sophisticated fraudulent acts. They can provide fake documents to apply for a C / O or make a fake C / O or establish a company to export in a short time and then dissolve it.

“The verification is difficult. If C/O is not checked carefully, it is difficult to detect violations,” said Dung.

Looking at the story of trade fraud from the export date of Vietnamese goods to the US, the representative of the European-American Market Department (Ministry of Industry and Trade) said export growth was an achievement in the reports of the Industry and Trade, but in the context of trade fraud, the change of the flow of trade and production investment is a concern rather than a happiness

"With such export growth, according to commodity groups, this growth should be noted if there are really exports of Vietnamese goods or signs of trade avoidance and fraudulent act of origin for exports," said the representative.

Huge amount of foreign goods forging Vietnam’s origin

In addition to origin fraud export goods, there is also goods forging Vietnam’s goods and labelled ’Made in Vietnam’.

General Director of Market Surveillance Department Tran Huu Linh said that through inspections, the Market Surveillance force discovered many commodities of unknown origin in the market contain toxic substances or excessive additives, especially additives outside the list and related to food. There are goods illegally transported across the border into Vietnam but printed with Vietnam’s origin on the package.

"In November 2018 there was a case that many construction materials and locks from abroad were imported to Vietnam but were labelled ‘Made in Vietnam’. At the same time of the end of 2018, there was also a case of Chinese potatoes forged as Da Lat potatoes. Last week we checked in Ninh Hiep market and discovered that almost all clothes and bags are labelled ,Made in Vietnam’,” Linh said.

Linh said this is because Vietnamese people prefer Vietnamese goods. Therefore, many enterprises abuse ‘Made in Vietnam’ origin to sell in the domestic market despite warnings.

Regarding legal difficulties, Linh said violations are only handled if they are caught in the act, if not, it needs inspection of quality but this is not easy.

For example, when inspecting potatoes, potatoes are still potatoes with the same contents and verification is impossible while the seller still says that their potatoes are Vietnamese potatoes, Linh shared.

Among a series of comments, Linh said the problem needs a long-term measure that is technology. For example, to determine whether agricultural products originated from Vietnam or not, traceability is required. We are expecting to propose to the Ministry on presiding over the project on supporting enterprises in applying technology to the traceability and combat against origin fraud.

Minister of Industry and Trade Tran Tuan Anh said that the story of foreign goods having forged Vietnamese origins is a new story and has many unusual points which are to reviewed assessed on nature and level and requires management; hampers the domestic market, national self-respect, sentiment and trends of consumers.

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"The story of agricultural products forging Da Lat origin is the story of taking advantage of the brand, consumer psychology for profiting. Clearly, this is posing a problem on improving the legal framework. Asanzo case is an example. The Ministry of Industry and Trade is developing a circular guiding the certification of production in Vietnam, for all products consumed in Vietnam. However, this is a very sensitive issue. Many countries in the world do not have regulations on what products are certified in that country. This must be done carefully, the Ministry has reported to the Prime Minister and will be more cautious,” Minister Tran Tuan Anh said.

By Thanh Nguyen/ Huyen Trang