At least three shipments of rice imported and exported through Cat Lai port showing fraudulent signs of Vietnamese origin were detected and seized by HCM City Customs Department for investigation and clarification to protect the Vietnamese rice brand.

Many suspicious rice shipments detained

Saigon port zone 1 customs under HCM City Customs Department said this unit is temporarily seized dozens of containers of rice imported from India suspected of fraud of Vietnamese origin. This shipment was declared in two import customs declarations by a company in Hanoi at Cat Lai port at the end of February and March 2021.

According to the customs declarations, the goods include rice originated from India. However, through physical inspection, the customs branch discovered that all imported rice was packed in 50kg/sack, but the packaging and labels show Vietnamese origin. Specifically, on the packaging of each sack, the brand name, factory address, and business address are clearly written in Vietnam; white rice 5% broken.

Accordingly, the unit made a record and temporarily seized the entire shipment for investigation.

Also related to the company mentioned above, in March 2021, the Saigon port zone 1 Customs Branch inspected and found signs of fraud of origin from the exported rice shipment in the declaration. No. 303815334340/B11 dated 4/3/2021. As declared by the company, the exported rice shipment originated from Vietnam. However, through inspection, detecting signs of origin fraud, the customs branch temporarily suspended the clearance of this shipment, made a record and seized it for verification.

Signs of fraud of Vietnamese white rice

According to rice exporters, the domestic rice price currently stands at a high level, even tending to increase, while the export price remains at a relatively low level.

According to Mr. Phan Van Co, Marketing Director of VRICE Co., Ltd., Vietnam's rice industry has recently shown signs of origin fraud of Vietnamese white rice.

Under Vietnam's Special Preferential Import Tariff to implement the ASEAN-India Trade in Goods Agreement, 5% broken and 100% broken rice imported from India enjoy a tax rate of 0%. Meanwhile, these two rice types in India are priced at only about US$400 per ton and US$280 per ton, about US$100 per ton lower than the Vietnamese rice price. Therefore, Indian rice imported to Vietnam is much more competitive.

He added that Vietnamese importers of Indian rice said the imported rice is mainly used to make cakes and vermicelli due to a shortage of domestic supply. However, some Vietnamese importers sell it in the domestic market and mix it with Vietnamese white rice for export abroad with Vietnamese origin. Recently, some buyers in the Middle East have complained that Vietnamese rice is bad and its quality is equal to Indian rice. Thus, they have stopped buying Vietnamese rice for fear of buying Indian rice counterfeiting Vietnamese rice. They also provided data on the amount of rice exported from India to Vietnam to support their decision.

Meanwhile, Mr. Co has received many offers to buy Indian rice at a very cheap price. Specifically, the CIF price for Indian Swarna 5% broken rice at Hai Phong port is US$426 per ton and at Cat Lai port is US$423 per ton. For Indian IR64 rice, the CIF price at Hai Phong port is US$318 per ton and at Cat Lai port is US$315 per ton.

In order to save the Vietnamese white rice market, Mr. Co suggested that there should be a supervision mechanism for imported rice to avoid origin fraud affecting the reputation of Vietnamese rice.

Similarly, Mr. Pham Thai Binh, Director General of Trung An High-Tech Agriculture Joint Stock Company, affirmed that mixing Indian rice with Vietnamese rice and then using Vietnamese origin to export is an action that needs to be condemned. Because Vietnam has taken many years to improve technology and varieties to build its reputation for rice grains, this action can ruin all those efforts.

In addition to the intervention at the border gate of the Customs force, businesses said that, as the governing body, the Ministry of Industry and Trade should have a solution to closely control the action to avoid the losses to the Vietnamese rice’s reputation.

Not only forging Vietnamese origin for export abroad, Indian rice is also modified to fake some types of Vietnamese rice. According to a rice company, Vietnam's Sa Mo rice is small and looks very similar to India's 5% broken Swarna rice. This rice is spongy, blooming, soft, lightly fragrant and suitable for fried rice, pancakes and has been favored by consumers for more than 15 years.

Accordingly, after importing Indian rice, importers will put it into a machine, then pack it in a new bag and name it Sa Mo rice of Vietnam to sell in the country. Many customers of this company have responded that some other units sell Sa Mo rice at a cheaper price of VND500-800 per kg. The current price of Sa Mo rice is VND13,000 per kg, while imported Indian rice is only about VND11,000 per kg. Thus, the difference in profit from selling "fake" Sa Mo rice is up to VND1,500-2,000per kg.

HCM City Customs Department has issued a plan to strengthen the inspection, origin identification, anti-fraud, counterfeiting of origin, labeling of goods, infringement of intellectual property rights (IP), illicit transshipment.

Accordingly, the customs department has directed the Supervision and Management Division to work with the Risk Management Division to share information related to key enterprises and items showing signs of or having committed fraudulent acts of origin, labeling of goods, infringement of intellectual property rights, illicit transshipment to serve the risk warning, risk analysis and assessment and identification of key subjects. Thereby, some cases with signs of origin violations were discovered.