December 17, 2018 12:54

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The Customs will provide tools for the business to check level and reason for business classification

18:09 | 06/12/2018

VCN- It was stated by Mr. Quach Dang Hoa, Director of Risk Management Department (Under the General Department of Vietnam Customs) at the consultation seminar on “the draft circular regulating criteria for compliance assessment and the organization in charge of legal compliance assessment of businesses in import, export and transit of goods.

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Deputy Director General of Vietnam Customs Hoang Viet Cuong gave a statement at the seminar. Photo: X.T

The seminar was held by the Vietnam Chamber of Commerce and Industry (VCCI) in cooperation with the General Department of Vietnam Customs on 4th December in Hanoi.

There will be 4 types of business

At the seminar, Vice President of the Vietnam Chamber of Commerce and Industry said that the Customs mangment is facing great challenges.

The first challenge is that the workload will increase when the imported and exported goods sharply rise in volume and variety. Thus, the risk management method based on the legal compliance assessment of businesses needs to be applied. This is considered as the key stage ensuring the effectiveness of state management and raising the awareness of legal compliance for importers and exporters, and thereby the economy will gain great benefits.

“Therefore, we highly appreciate the General Department of Vietnam Customs for its proposal on the establishment of the circular regulating criteria for compliance assessment and the organization in charge of legal compliance assessment of businesses in import, export and transit of goods. This is an essential legal framework to achieve key goals. This Circular will be the most specific evidence and example on great efforts in the renovation of the State management method and the symbol of administrative procedure reform in the Customs sector” Mr. Phong said.

According to Mr. Hoang Viet Cuong, Deputy Director General of Vietnam Customs, over the past year, the Ministry of Finance and the General Department of Vietnam Customs have reformed administrative procedures through reducing procedures, applying the automated system for Customs management at seaports and airports, implementing IT application management program and e-tax payment via banks and etc. However, in order to effectively perform these tasks, the Customs sector has reviewed legal normative documents to ensure that the Customs regulations are transparent.

Currently, the Customs sector has applied the risk management method that is adopted by most of the Customs offices in the world. This is also the method to optimize human resources and effectively manage the Customs inspection and control. Accordingly, the risk management method which is based on the legal compliance assessment of businesses for management shall be transferred from pre-inspection into the post-inspection. The pre-inspection is applied to the minimum level and the remaining shall be subject to post clearance audit.

Currently, Vietnam Customs has classified 3 channels for inspection including Green, Yellow and Red channels. Each channel shows the risk assessment level of the Customs authority for goods in the risk management.

Specifically, the Green Channel is the channel that dossier and goods are exempted from inspection (accounting for 60%), the Yellow channel is that only dossier is checked (accounting for 35%) and the Red channel is physical inspection (accounting for 5%). Currently, the rate is consistent with international practice and is applied by Customs authorities in other countries.

“Vietnam Customs is expected to classify businesses into 4 types instead of 3 types as current time including high-compliant business, medium- compliant business, low- compliant business and non-compliant business. Basing on the level of legal compliance assessment of businesses, the Customs will apply the preferential policies and management measures to achieve two targets that are facilitation for businesses, and control and prevention of smuggling and trade fraud” - the Deputy Director General Hoang Viet Cuong added.

Specify criteria for business assessment

According to the assessment by many businesses, the criteria set in the third draft of the circular on compliance assessment and the organization in charge of legal compliance assessment of businesses in import, export and transit of goods, is expected to be a great impact on businesses engaged in import and export activities.

Commenting on the draft, Mr. Vu Chu Hien, the arbitrator of Vietnam International Arbitration Center (VIAC) said that the five attached appendixes in the draft has specified criteria for compliance assessment, the list of behavior, the list of information for compliance assessment as well as indicators of information on business’s dossier and forms.

However, Article 2 of the draft stipulates that the assessment is led by the Customs with the participation of competent agencies and units under the Ministry of Finance and other individuals and organizations related to the imports and exports. “The names of agencies need to be specified to avoid the comments from many competent agencies but these agencies are not specialized agencies in a particular field for assessment” Mr. Hien proposed.

As a tax consultancy company, Ms. Dang Thi Binh An, Director of C&A Tax Consultancy Company highly appreciated this draft. The draft has expressed the businesses’ desire when the Customs assesses and ranks businesses in Customs law compliance. The criteria for the classification and assessment also aim to assist businesses to better comply with Customs law.

Ms. An commented that the Customs needs to implement the pilot classification of criteria to identify the classification method in accordance with the management capacity of the Customs authority to avoid the situation that if many businesses are classified into type 3 and type 4, the Customs cannot manage them.

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Also, the representative of C& A Tax Consultancy Company said that the criteria to assess the actual operation of the businesses need to be selected. Too criteria are established so that the businesses face difficulties in identifying criteria that they violated, while the time for overcoming these violation is too long (365 days). The criteria need to be established in the simple manner to facilitate businesses.

Closing the seminar, the Deputy Director General Hoang Viet Cuong concluded that the information collection is the most important task in assessing the legal compliance of businesses. Regarding the proposals by some businesses that the criteria need to be established in the direction of a few criteria, simple, easy to understand, Mr. Cuong said that if few criteria are established, we cannot assess accurately. Therefore, it is necessary to consider strictly but try to establish a certain number of criteria for the classification according to each level.

By Xuan Thao/ Ngoc Loan