With a leading role in the fight against origin fraud, the Post-Clearance Audit Department (General Department of Vietnam Customs) has collected information and identified signs of risk at 150 enterprises.

The journey for disguising Chinese silk into Vietnamese origin for exporting to India.
Graphics by: T.Bình.

Collecting arrears and sanctions of VND7 billion

Recently, the General Department of Vietnam Customs has taken drastic measures in the fight against origin fraud and illegal transshipment of goods. The Post-Clearance Audit Department, the Anti-smuggling and Investigation Department and the Customs Departments of provinces and cities carried out inspections and imposed penalties in accordance with regulations for violations.

As for the Post-Clearance Audit Department, as the unit assigned the main task in this work, due to the influence of the Covid-19 pandemic, the unit has advocated to improve the quality of inspections by focusing on collecting and analyzing information, only conducting inspections when there are signs of high risk or obvious signs of violation.

With the right policy mentioned above, the fight against fraud of Vietnamese origin continues to achieve positive results.

In particular, the Post-Clearance Audit Department has collected information and identified signs of risk at 150 enterprises. Since the beginning of 2021, 31 enterprises have been conducted post clearance audit, collecting tax arrears and fines of nearly VND7 billion.

According to Post-Clearance Audit Department, from the inspection results, it showed that there are emerging forms and tricks of fraud and typical cases such as: enterprises committed illegal transshipment, that is imported goods from other countries into Vietnam, labelling goods with Vietnamese origin. The Post-Clearance Audit Department has inspected and handled enterprises importing silk and silk fabrics from abroad, labeling Vietnamese origin and exporting them to the Indian market.

The second most common method is that enterprises do not have or have an industrial line, but the exported products do not meet the standards of Vietnamese origin as prescribed by law.

A typical case is that the Post-Clearance Audit Department inspected and detected violations of Excel Bicycle Co., Ltd., an enterprise with 100% investment capital from China.

This company imported 100% of components for bicycles, electric bicycles, and e-scooters from China to Vietnam for assembling at the final stage to make complete bicycles, electric bikes, and electric scooters, but does not guarantee Vietnam origin.

Through inspection, the Post-Clearance Audit Department has sanctioned administrative violations due to violations of origin totalling VND100 million, applied the additional sanction of confiscation of exhibits with a total value of VND9 billion, and recovered 1 C/O Form B.

15 key commodity groups

Despite the positive results, the Customs authority also faced many challenges in detecting and handling violations.

The biggest challenge now is that businesses have many methods and acts of fraud, while the legal regulations are not uniform, especially the description of behavior is not consistent or specific, leading to difficulties in handling because of the lack of a legal basis for Customs authority.

The representative of the Post-Clearance Audit Department said that, at present, the concepts of origin labeled on the goods are not consistent such as: made in Viet Nam, made by Viet Nam, of Vietnam origin, product of Vietnam.

It is necessary to unify regulations on the understanding of goods of Vietnamese origin.

Regarding this issue, the Customs authority requested the General Department of Standards, Metrology and Quality to pay attention to include it in the Decree amending and supplementing Decree No. 43/2017/ND-CP on goods labels.

In addition, the authorities need to describe more clearly the act of "forgery of origin" in Decree 128/2020/ND-CP on sanctioning administrative violations in the field of customs in order to have appropriate regulations and sanctions.

Regarding the plan to fight against fraud of origin in the future, a representative of the Post Clearance Audit Department said that with the goal of promoting the development of domestic production, and protecting Vietnamese manufacturers from the risk of being applied trade remedies measures; protect the legitimate market share of enterprises in the world market; while maintaining sustainable turnover growth, on February 24, 2021, the General Department of Vietnam Customs issued the plan 906/TCHQ-GSQL on combating fraud, forgery of origin, and illegal transshipment in 2021.

Accordingly, the General Department of Vietnam Customs assigned a number of units in the General Department and the Customs Departments of provinces and cities to investigate, verify and clarify violations and handle in accordance with regulations for a number of groups of key traffickers and 15 key export commodity groups.