Related to a violation of more than 44,000 tonnes of raw raw bauxite ore of Bao Nguyen Trading Joint Stock Company (Bao Nguyen Company), the Anti-Smuggling and Investigation Department (under the General Department of Vietnam Customs) recentlyissued a decision to prosecute the case for smuggling. The prosecution decision was approved by the Supreme People's Procuracy.

Deputy Director of the Anti-Smuggling and Investigation Department Nguyen Van Lich
spoke about the prosecution of the case and violations of Bao Nguyen Company. 

Many violations

On December 14, arepresentative of the Anti-Smuggling and Investigation Department spokeabout the case.

Deputy Director of the Anti-Smuggling and Investigation Department Nguyen Van Lich said, pursuant to the provisions of law, the investigation results, and inspection results of authorities, Bao Nguyen Company is identified with theviolations as follows:

Firstly, there is a violation of commodity policy, because the company’s actually exported goods are raw bauxite ore (which is not allowed to be exported) but in the process of customs procedures, the company declared as bauxite concentrate (which can be exported).

The second, the company made a false declaration on goods codes, the actual goods are raw bauxite ore, HS code 2606.00.00.10 and export tax rate of 30%. However, when carrying out export procedures, the firmdeclared goods as bauxite concentrate, HS code 2606.00.00.90, and export tax rate of 20%. The false declaration of HS code led to insufficient tax payable.

Third, there is a violation of false declaration of export quantity. According to the company’s declaration, the quantity of exported goods is 42,000 tonnes but the actual quantity is more than 44,000 tonnes.

“Facing the violations of the company, the Anti-Smuggling and Investigation Department prosecuted the case. The prosecution decision has been approved by the Supreme People's Procuracy,” Lich said.

Sample of ore including tree roots in the shipment declared as ore concentrate
by Bao Nguyen Company.

Falsely declare exported goods

According to the case dossier, on October 17, 2019, Bao Nguyen Company registered the export declaration at Cam Pha Border Gate Customs Branch under QuangNinh Customs Department.

The quantity of declared goods is 42,000 tonnes of bauxite concentrate with an export tax rate of 20%.

However, notingsuspicious signs, the Anti-Smuggling and Investigation Department worked with QuangNinh Customs Department to stop customs clearance for the shipment and clarify whether the goods werebauxite concentrate as declared by the company or not.

The Anti-Smuggling and Investigation Department sent all the samples to Vietnam Institute of Geosciences and Mineral Resources for verification. On September 15, the department worked with Vietnam Institute of Geosciences and Mineral Resources on verification results of these samples. At the working session, Vietnam Institute of Geosciences and Mineral Resources provided information, documents and a basis to conclude the35 samples of bauxite ores are raw ores.

Specifically, Vietnam Institute of Geosciences and Mineral Resources worked with Geological Test and Analyse Centreunder the General Department of Geology and Minerals of Vietnam (Vilas No.032) to analyse samples according to threemethods: Mineral analysis method, Ronghenanalysis method and chemical analysis method.

Analysis under the electron microscope showed the structure of the ore wasstill preserved and the minerals wereoften impregnated and dyed with dense clay and iron hydroxide on the surface.

The results of mineral analysis and Ronghen analysis showed all samples not only containedtypical minerals of bauxite such as diaspor, gipxite but also contain many other minerals with high content, especially the mineral group of clay, quartz, and feldspar.

Chemical analysis results showed the average Al2O3 content was48.7%. This content waslower or equivalent to the average content of the raw bauxite ore of the north of Vietnam as diaspor bauxite of the late Perminan age, which usually reaches 50-61% in the world. This is in accordance with the investment certificate showing quality of raw bauxite ore at the Leo Cao mine of Bao Nguyen Company, when it is unprocessed, it has an AL2O3 content of 48.61-52. 59%.

The samples have tree roots and are in the form of chips and lumps with different sizes from small size such as clay, powder and grit to block of more than 20 cm with clay. The surface of the blocks and chips iscovered with clay minerals.

The Vietnam Institute of Geosciences and Mineral Resources said this is raw bauxite ore.

For test result sheet No. 19V02kk4551 dated October 18, 2019 issued by Vinacontrol which was presented by Bao Nguyen Company during customs procedures, the Anti-Smuggling and Investigation Department said the sample was taken by Bao Nguyen Company without the witness of the Customs authority, so the sampling did not comply with provisions in Clause 1, Article 5 of Circular 41/2012/TT-BCT (amended and supplemented in Clause 3 andArticle 1 of Circular 12/2016/TT-BCT), so it is not valid for carrying out customs procedures for the above exported goods.

With the test result of the export shipment as raw bauxite ore, the shipment of Bao Nguyen Company shall haveHS code 2606.00.00.10 and export tax rate of 30% instead of HS code 2606000090 and anexport tax rate of 20% (payable tax is VND 2,040,948,000) as declared by the company.

Directive No.03/CT-TTg dated March 30, 2015 of the Prime Minister on the enhancement of the effect of the legislation on minerals states “the exportation of raw minerals shall be prohibited”.

Document 2017 issued by the Ministry of Industry (now as the Ministry of Industry and Trade) quoted by Bao Nguyen Company to respond to the Customs authority to distinguish ores and concentrates according to Circular No.02/2006/TT- BC is an invalid document. As per Circular No. 41/2012 / TT-BCT dated December 21, 2012 of the Ministry of Industry and Trade (amended and supplemented in Circular No.12/2016/ TT-BCT dated July 5, 2016), items processed from bauxite oresmust meet the quality standards for aluminum hydroxide - Al (OH) 3 as AL2O3> = 64%; Alumin as AL2O3> = 98%.

The case is being investigated and handled by competent authorities.