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Solutions to stop fake enterprises in Ho Chi Minh City

10:37 | 15/06/2019

VCN- Ho Chi Minh City has proposed to the Government mechanisms and policies for the management of post-registration enterprises in order to have measures to strictly manage post-licensing enterprises. Does this solution eliminate "ghost" enterprises?

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Aviolated shipment imported by a "ghost" enterprise. Photo: T.H.

Suffering "ghost" businesses

Recently, Customs authorities have seized many cases of imported goods that violate the law, but struggle to find real businesses registered at the provided address.

At the end of February 2019, checking a container of imported goods atCat Lai port, the Customs Control Team - Ho Chi Minh City Customs Department, in coordination with Saigon Port border gate Customs Department in the first area contained many smuggled consumer goods. The above container was imported to Cat Lai port in June 2018 and the consignee was Cat Loi Saitama Company Limited (1A Dong Nai, Ward 2, Tan Binh, HCMC). After opening the customs declaration, the representative of the goods owner did not come to clear the goods. The Customs Control Team has informed the business three times, but did not receive a reply.

To verify the business registration address of the enterprise, the Customs Control Team detected that the company no longer operates at the above address, but has not closed the tax code. The Director of the company does not reside at the permanent address.

Related to "ghost" enterprises, recently, the Customs Branch of SaiGon port border gate area 1 transferred the dossier of import ban of Phuc Tan Import - Export Transportation Service Trading Company to the police department. Investigations by police in Ho Chi Minh City investigated and prosecuted according to authority. The Customs Branch of Saigon Port Border Area 1 cooperated with the related forces to conduct a search of two containers, finding them full of electronic and refrigeration products banned from import, includingrefrigerators, electric fans, speakers and CD players, rice cookers, washing machines, gas cookers, ovens, and others.

Verifying at Thuan Giao Ward Police – Thuan An Town, BinhThuan Province, and the Customs Department discovered that there is no Phuc Tan Trading Transport Import Export Service Co., Ltd operating at the aforementioned address. Verifying the residence of the legal representative, the local police agency said, Mr. Le Van Quy Director of the company who is not in the household register in Ham Duc commune, Ham Thuan Bac district, Binh Thuan province.

Notably, whenenterprises have been found violations by customs authorities they change their names and change owners to continue importing goods. The case of NDT Service Trading Co., Ltd is oneexample. Through a search of four containers of imported goods of this enterprise, Ho Chi Minh City Customs Department found nearly 1,000 air-conditioners and used refrigerators in the list of goods banned from import. It is worth mentioning that this company has used the identity card of another person to establish a business. Expanding investigations and verification of cases to handle, HCMC Customs Department worked with Ho Chi Minh City Department of Planning and Investment.

Based on the business registration dossier of NDT Trading Service Co., Ltd. provided by the Department of Planning and Investment of Ho Chi Minh City found this enterprise to have changed its name continuously.Accordingly, from April 25, 2012 to April 11, 2017, the legal representative of NDT Trading Service Co., Ltd is Mr. Nguyen Van Dinh; from April 12, 2017 to July 9, 2017, the legal representative was Mr. Dang Duc Dai; and from 10/7/2017 to now, the legal representative is Mr. Le Thao.

In fact, there are smuggled enterprises and owing enterprises of tax, directors flee but Customs cannot find them due to lack of information about enterprises. To limit the establishment of inactive enterprises in accordance with the business registration license for the purpose of illegal operation, Ho Chi Minh City Customs Department has proposed, in addition to strengthening post-licensing inspection, the licensing authority should have a personal status management information page which is legal representative of enterprises.

Suspension works if repeated violations

The shortcomings in management of enterprises after licensing, in early June2019, Ho Chi Minh City People's Committee proposed to the Government mechanisms and policies for the management of enterprises after establishment registration. One of the contents of Ho Chi Minh City proposed to manage the enterprise after the license is to suspend operation if the enterprise violates continuously.

Accordingly, Ho Chi Minh City People's Committee proposed to the Government to issue a Decree on inspection of enterprises, in which clearly defined types of inspection and supervision of enterprises' activities; Regulating penalties for cases which enterprises deliberately avoid or do not cooperate, do not receive inspection teams, do not appoint authorized representatives to receive inspection teams, to timely provide the records, documents related to inspection work.

The Ministry of Planning and Investment needs to advise on the amendment of Enterprise Law and Investment Law in the direction of regulating enterprises changing owners, members and shareholders; division, separation, merger and consolidation of enterprises. Advising the Government to revise the existing Decree or issuing a new Decree regulating the suspension of business activities of enterprises, suspending infringing business activities, and not conducting business for violations of definite terms.

The Ministry of Justice should advise revisions to the Law on Handling of Administrative Violations, Decree No. 81/2013 / ND-CP and Decree No. 97/2017 / ND-CP of the Government detailing a number of articles and measures to enforce the Law on handling administrative violations in the direction of supplementing the regulations on suspending business activities of enterprises that fail to abide by the decisions on sanctioning administrative violations, suspending the operation of the violations of the business lines and the business lines for with a time-limited violation address. Suspending the operation of the enterprise if the enterprise or the legal representative of the enterprise regularly causes an administrative violation in the operation of the enterprise. Suspension of production and business, compulsory relocation and revocation of business registration certificates when enterprises conduct operations withoutobeying the provisions of the Land Law, Housing Law and Law planning, Law on environmental protection, urban planning.

In particular, Ho Chi Minh City proposed to increase penalties for organizations, businesses, individuals and business households violating many times; suspending business for a definite time for organizations, businesses, business households and individuals who do not implement the decision on sanctioning administrative violations but continue to repeat the same behavior. Proposals to closely manage the following enterprises. The approval of Ho Chi Minh City People's Committee will limit the situation of people hiding "ghost" businesses to do illegal business.

By LeThu/Bui Diep