August 11, 2020 04:52

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Violations of origin of 16 enterprises exposed

19:24 | 08/07/2020

VCN - All 16 enterprises in the project of the Post-Clearance Inspection Department have made violations of the origin of Vietnamese goods. Customs is working with the Ministry of Public Security to investigate a case with signs of counterfeiting certificate of origin.


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violations of origin of 16 enterprises exposed
All components of a bicycle imported from China, the enterprise only brings them to Vietnam to assemble to disguise the goods as "Made in Vietnam".

Only simple assembly to disguise Vietnamese goods

Trade wars between major countries, especially the US-China trade war, have led to a big difference in tariffs between goods exported from China and goods exported from Vietnam to major markets, especially the US.

To avoid tariff and technical barriers in such markets, Chinese goods have been disguised as Vietnamese goods to find ways to export to the US.

Facing such a situation, under the guidance of leaders of the Ministry of Finance, the leaders of the General Department of Customs have directed the Post-Clearance Inspection Department and the Anti-Smuggling Investigation Department to collect information, analyse and assess the risks of origin fraud and conduct investigations and verification.

The Post-clearance Inspection Department is the chair

As a result, the Customs office discovered emerging common frauds such as enterprises invest in simple production lines, perform simple assembly and processing stages in simple production stages specified in Article 9, Decree 31/2018 / ND-CP.

Or, enterprises in the first phase have not completed investment in assembling machinery lines but have exported products. In fact, theyimport semi-finished products and only put them in simple assembly or import finished products and change the packaging and labels.

In other cases, enterprises have machinery chains but export products are not eligible to meet Vietnamese origin standards.

violations of origin of 16 enterprises exposed
The factory is almost empty but the enterprise still produces a series of bicycle products "Made in Vietnam"

All enterprises investigated have violations

From physical inspection of three commodity groups, the Post-Clearance Audit Department showed evidence for the above-mentioned violation tactics.

In addition to the above-mentioned results, the customs office also collected VND 33 billion to the State budget (including revenue from illegal benefits gained from violations; fines for administrative violations and the value of confiscated goods).

Notably, Customs is working  with the Ministry of Public Security to investigate a case with signs of counterfeiting certificate of origin.

For bicycles, electric bicycles, post clearance audit were conducted for four enterprises assembling bicycles and electric bicycles for export to the US. All four enterprises committed violations of Vietnamese origin.

The violations of enterprises are to import parts and components of bicycles and electric bicycles in unassembled or disassembled forms to Vietnam to subsequently assemble them into complete bicycle and electric bicycle products.

Imported parts and components do not undergo any other processing or manufacturing stages or only undergo simple processes that do not change the nature of the products (such as painting frame,  handlebar, and label printing for some products) to make complete products.

The office assessed that all components directly transformed into complete bicycles and electric bicycles which are not eligible for Vietnamese origin according to the criteria of change in chapter, change in tariff heading (CTC) and change in tariff of sub-heading (CTSH) and the local value content(LVC) described in Decree 31/2018 / ND-CP and Circular No. 05/2018 / TT-BCT of the Ministry of Industry and Trade.

For solar energy battery products, five enterprises were audited after customs clearance and all violated Vietnamese origin.

In this group, enterprises exported solar module panels which are produced from the main source of photovoltaic panels bought from suppliers and manufacturers in Vietnam and imported directly from foreign countries.

In particular, solar module panels exported by the enterprise are produced from photovoltaic panels fully imported from abroad that do not meet criteria of origin CTSH to be recognized as goods originating from Vietnam according to regulations.

For wood products and wooden furniture, seven enterprises were conducted after post-clearance were and all of them violated Vietnamese origin.

Specifically, they import (or re-purchase imported goods) in the form of unassembled or complete components or import semi-finished products for simple processing (drilling holes, sanding and painting) to assemble into finished products (cabinets, bookshelves, beds, sofa tables, tea tables and cocktail tables).

Therefore, these finished products do not meet the criteria of Vietnamese originin Decree 31/2018 / ND-CP and Circular No. 05/2018 / TT-BCT of the Ministry of Industry and Trade.

violations of origin of 16 enterprises exposed
Components imported from China to Vietnam to assemble into a complete bicycle

Export groups to the US with sudden increase in turnover controlled

Motivated by direction from the Government, the Ministry of Finance and synchronous and drastic implementation of the General Department of Customs,  Vietnam has prevented acts of taking advantage of preferential treatment of free trade agreements Vietnam has signed with other countries, especially the US, to commit origin violation affecting Vietnam's commitments with other countries.

Groups of goods exported to the US with sudden increase in turnover such as bicycles, solar energy battery; seafood; wood and wooden products have been controlled, helping avoid bad impacts on the genuine exporters of Vietnam.

According to the Post-Clearance Audit Department, recent fights have spread in the business community, improved awareness and observance of law compliance in the import-export business community to prevent acts of violations; the business community is alert to the risks of potential violations to prevent and ensure compliance with Vietnam's regulations, which is reflected by the fact that after violations were discovered, enterprises have invested in complete machinery and equipment systems for production to meet the criteria of Vietnamese origin.

violations of origin of 16 enterprises exposed Electronic certificates of origin save businesses US$5.7 million

Since the country moved to apply the ASEAN Single Window mechanism, especially the exchange of electronic certificate ...

The General Department of Customs continues to implement the orientation plan to expand inspection and verification of fraudulent acts of origin for many other enterprises.

Representatives of the US Trade Agency in Thailand have thanked the Government, Ministry of Finance, and General Department of Customs for their efforts in fulfilling mutual trade commitments to carry out the Vietnam - US trade agreement.

From the results of anti-origin fraud of the Customs office, the US Embassy's Deputy Economic Attaché to Vietnam also offered to work with Customs to discuss the implementation of the next steps in the Prime Minister's action plan on trade with the US.

By Thai Binh/ Huyen Trang