In response to complaints from exporters of a high rate of Yellow channel declarations (documentary check), the General Department of Customs consulted with competent authorities and offered solutions.

Most pepper exporters register exported pepper as a agricultural product

Reason for Yellow channelling by Customs

According to the Vietnam Pepper Association (VPA) and pepper exporters, the rate of Yellow channel declarations for exported pepper has increased from 8% to 60% and mainly on black pepper products, causing many difficulties for exporters due to increasing costs, especially amid the Covid-19 pandemic.

On July 21, 2021, the General Department of Customs (Risk Management Department) issued a written response to VPA's complaint.

Article 92 of Decree 54/2017 of the Government dated May 8, 2017 stipulates:

A copy of the Certificate of eligibility for pharmacy business which bears the exporter’s seal if the exporter is a pharmacy business establishment (the original copy or certified true copy shall be produced for comparison) must be presented.

In addition, Article 5 of Circular 03/2016 of the Ministry of Health dated January 21, 2016 stipulates that Vietnamese establishments exporting herbal ingredients must satisfy all conditions that it has been granted the certificate of eligibility for a drug business that covers herbal ingredient trading.

Regarding the List of imported and exported herbal ingredients, Circular 48/2018 of the Ministry of Health dated December 28, 2018 stipulates that pepper has HS code 0904.11.20.

Circular 03/2021 of the Ministry of Health amending and supplementing Circular 48/2018 of the Ministry of Health removes a number of items listed in Appendix 1 issued together with Circular 48, including pepper.

However, Article 3 of Circular 03 stipulates: In case the exported or imported goods specified in the Appendix issued together with this Circular are used for the purpose of making medicines and medicinal ingredients, the legal documents on pharmacy will be applied.

On May 25, 2021, the Agency of Traditional Medicine Administration under the Ministry of Health issued Official Letter 461/YHCT-QLD requesting the General Department of Customs to comply with Circular 03/2021 as follows: In case imported and exported goods specified in the Appendix issued together with Circular 03/2021/TT-BYT are used for the purpose of making drugs and medicinal ingredients, the legal documents on pharmacy will be applied.

Therefore, Customs shall apply the Yellow channelling criteria to check the dossiers and the export conditions for exported goods used to make medicines and medicinal ingredients according to the above-mentioned documents on pharmacy.

Facilitating businesses

The representative of the Risk Management Department said regarding customs procedures, the Customs authorities is now deploying e-customs procedures, enterprises make declarations and send dossiers online, and the Customs authorities shall inspect the customs dossiers on the online system and conduct online customs clearance, contributing to supporting import and export enterprises.

Regarding the VPA’s proposal on reducing the Yellow channel rate, the General Department of Customs has removed pepper from the list of items subject to Yellow channelling.

Regarding problems when implementing Circular 03/2021 and Official Letter 461, the General Department of Customs sent an official dispatch to the Agency of Traditional Medicine Administration on June 15, 2021.

Accordingly, the General Department of Customs proposed the Agency of Traditional Medicine Administration to study and review the List in Circular 48/2018 and the List in Circular No. 03/2021 to unify the list of medicinal ingredients. However, the General Department of Customs has not yet received any feedback.