Prevention of fraud on origin and illicit transshipment has continued to be a key inspection topic of the Post-Clearance Audit Department (General Department of Customs) in 2021 and has achieved many positive results.

A shipment of handbags suspected of fraud of Vietnamese origin seized
by the Saigon port area 1 Customs Branch

Many positive results

According to the Post-Clearance Audit Department, the orientation throughout 2021 is to focus on implementing the project on origin in the direction of advising the leaders of the General Department of Customs on inspection and combat against origin fraud, fake brands and illegal transshipment amid increasing workload and limited human resources.

The department has focused on inspecting enterprises exporting goods to three markets, namely the US, the EU and India, and using imported raw materials. Thereby, the department will continue to advise on the development of the State's policies and regulations on the origin of exported goods.

In the first quarter of this year, the Post-Clearance Audit Department issued 39 inspection decisions, finished inspection for 29 enterprises and discovered 17 enterprises violating the rules, forcing them to return the illegal profits and imposing fines of VND23.5 billion for administrative and other violations.

In the 2nd and 3rd quarters when the Covid-19 pandemic spread to cities and provinces nationwide, the inspection had to be halted, and the inspection work of the Post-Clearance Audit Department was also affected. However, during the social distancing period under Directive 16 nationwide, the department strengthened information collection and analysis, and developed an inspection plan, which still focuses on inspecting goods exported to the US, the EU and India.

Accordingly, the department directed the development of a plan that must be close to the actual situation and effective to identify and settle violations in a timely fashion.

It is expected that when entering the new normal state, the Post-Clearance Audit Department will conduct inspections and advise the leaders of the General Department to assign local customs departments to inspect businesses showing signs of fraud on origin and illicit transshipment into the US, EU, and Indian markets.

Necessary to remove policy-related problems

According to the Post-Clearance Audit Department, despite positive results, the process of handling violations has many difficulties and problems such as: the legal regulations have not specified what goods are of Vietnamese origin; product labels; the Decree replacing Decree 43/2017/ND-CP on labeling of goods, drafted a long time ago but has not yet issued; under Decree 128/2020/ND-CP on the sanction of administrative violations in the customs field, effective from the end of 2020, acts of forging origin will be sanctioned (in Article 17) but the sanctions has not been applied in practice. The reason is that there is no specific regulation and consensus on how to understand "forgery of origin", which leads to disputes, complaints and lawsuits.

In order to effectively prevent fraud, forgery of origin, and illegal transshipment of Vietnamese exported goods, it is requested that relevant authorities soon report to the Prime Minister for promulgation of a Decree to replace Decree 43.

At the same time, the competent authorities must report to the Government to amend Article 17 of Decree 128/2020/ND-CP in accordance with reality, ensuring strict handling of acts of origin fraud and illegal transshipment and minimizing complaints and lawsuits.

The Post-Clearance Audit Department has requested local customs departments to completely finish the inspections assigned as planned for the project of inspection of the origin of exports and the project of inspection of cashew nuts after the pandemic is brought under control. Moreover, it is necessary to report specifically and promptly the results to the General Department of Customs to summarize analyze and evaluate the effectiveness of the projects to serve the development of inspection orientations for the new period.