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Part 2: Customs declaration service overwhelms legitimate customs broker

14:47 | 23/09/2019

VCN- Customs brokers have become a “bridge” to help Customs and enterprises implement import and export procedures quickly and in accordance with regulations. However, the efficiency of Customs broker operation is still poor.  

part 2 customs declaration service overwhelms legitimate customs broker Consolidated two circular about customs brokers
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part 2 customs declaration service overwhelms legitimate customs broker
Customs officers of Vinh Phuc Customs Branch help customs declarants. Photo:N.L

Short-term benefits and long-term harm

Why are Customs brokers not trusted by many import and export businesses?

A survey by the General Department of Vietnam Customs has shown that the rate of declarations which Customs brokers are authorized to pay taxes for goods owners only accounts for 9.9%. The trust level of customs brokers is also low, accounting for less than 10%.

According to the Director of Customs Control and Supervision (under the General Department of Vietnam Customs) Nguyen Quang Son, one of the reasons for operations of Customs brokers not developing is the confusion of importers and exporters. There are enterprises that do not implement Customs procedures but they do not want to sign contracts with customs brokers. They believe that signing the contract will be more complicated in terms of procedures and raise costs. Therefore, import and export enterprises sign blank introduction letters. This means customs broker staff become their staff. This is a main problem affecting the development of customs brokers. This problem has occurred for many years, meaning that customs brokers only declare in the fastest and most beneficial way while the responsibility of the latter belongs to the import-export enterprises.

A member of staff at a customs broker said that he has used dozens of digital signatures of import-export enterprises to implement tax declaration services for many years. There are many companies doing this. This issue does not occur coincidentally, it originates from demands of importers and exporters. Enterprises do not understand the advantages and disadvantages of using services of customs brokers. Although they want to carry out customs procedures for import and export enterprises via the broker there is still confusion and enterprises have chosen solutions to give their digital signature to the customs broker for customs clearance, the member of staff said.

According to representatives of Minh Nhat Co., Ltd., for many years, there has not been a specific mechanism for the preferential treatment for customs brokers, even though the number of customers increases every year. However, while carrying out customs procedures, customs brokers have not yet been classified into preferential treatment. Therefore, import and export enterprises have not realized the benefits they will receive when conducting procedures through customs brokers.

Director of TRA-SAS Company, Nguyen Viet Huy, said that as a customs broker, currently, the company implements customs brokers under the form of authorization for an enterprise implementing customs declaration services. This enterprise does not need to apply for certificates to perform the service and is not subject to sanctions of any management agencies, while the customs broker must be subject to many sanctions and approved by management agencies and make periodic reports on its operation. Therefore, this enterprise has more benefits than the customs broker. From this fact, Mr. Huy said that to promote the development of customs brokers, legitimate customs brokers need the support of competent agencies, including Customs authorities.

Customs broker service should be improved

In fact, there are three main players implementing customs procedures for import and export goods, including customs brokers, goods owner and customs declarants, in which, customs declarants account for the largest proportion. Customs declarants work under the form of using an introduction letter to represent the goods owner to carry out customs procedures. This has developed more than official customs brokers because they have to perform fewer procedures. In order to compete with the declaration service, customs brokers have to operate in the same form which is offering customs declaration services in the form of using their staff and bringing the introduction letter thereby distorting the nature of a customs broker. This is the problem affecting the development of customs brokers.

According to Mr. Le Van Trien, Deputy Head of the Import and Export Tax Division under Ho Chi Minh City Customs Department, many companies have been recognized as customs brokers but currently they have not yet operated or only focused on transportation services and have not focused on consulting and guiding specialised operations for enterprises. Customs brokers often do not have equipment to transport goods and also do not regularly update information about import and export, forwarding or customs procedures, especially in tax declaration, tax assessment, applying HS codes, specialised techniques, intellectual property and goods origin. This means import-export enterprises, especially small and medium-sized enterprises, do not fully and properly understand customs brokers and do not yet trust them, so implement customs procedures by themselves.

In fact, non-compliance with the law leads to consequences that have been warned by the General Department of Customs against import and export enterprises in recent years. Some import-export enterprises give their digital signatures and accounts to log in to the VNACCS system to customs brokers or other organizations and individuals that are not customs brokers to make and send customs declarations. Then these accounts are used for the wrong purposes, such as making declarations for others or are abused to take information of the goods owner to open customs declarations. The lax management, allocation and use of introduction letters and powers of attorney have created opportunities for some people to commit acts of profiteering, causing potential risks for smuggling and trade fraud.

The lack of knowledge on customs broker operations and misplaced trust have led to violations of the law.

In a recent survey by the Vietnam Logistics Association (VLA) of a number of enterprises providing customs declaration service with the following parameters:

The operation area of customs broker in the North accounts for 40%, the Central region accounts for 26.67%, the South accounts for 33.33%. The average number of broker contracts signed in the year is 66.3. The number of declarations signed with customs brokers is 4,000. The rate of declaration classified in the Green Channel is 22%, Yellow Channel is 76%, Red Channel is 2%.

As a result, the VLA made some recommendations to improve the quality of the customs broker service. Specifically, there should be preferential mechanisms for enterprises when implementing customs procedures via customs brokers. The training program should be improved and granting customs broker cards must be separated into two parts, including: staff receiving dossiers and staff implementing procedures. The working process, qualifications and skills of the customs broker staff are limited, so it is necessary to improve and upgrade especially specialized English. Specialized English is required to be granted a customs broker card.

By Ngoc Linh/Ngoc Loan