Due to the spread of the Covid-19 pandemic from the beginning of 2020, travel activities between countries were restricted. In Vietnam, entry and exit activities have almost stopped. Meanwhile, the operation of duty-free shops completely are dependent on exit and entry customers, so the duty-free shops are almost "frozen".

A duty-free shop at Noi Bai International Airport. N. Linh 

Businesses must suspend operations

As of August 2021, out of 159 duty-free shops and warehouses that have been recognized by the General Department of Customs, 15 duty-free shops and 14 warehouses have suspended their operations under the notification from local customs departments. Of which, ten duty-free shops and nine duty-free warehouses have exceeded the deadline of six months of suspension and one duty-free shop which was recognized by the General Department of Customs for more than six months has not been put into operation.

As reflected by Jalux Taseco Duty Free Co., Ltd., the company was granted a certificate of eligibility for trading in duty-free goods by the General Department of Customs in mid-March 2021, at Phu Quoc international airport. The company was preparing to open duty-free operation when the Covid-19 pandemic started. Planned incoming and outgoing international flights to Phu Quoc International Airport were suspended. In this situation, the company believes that by mid-September 2021 (after six months when the company was granted the certificate) they do not operate. In fact, the duty free business of Jalux Taseco Duty Free Co., Ltd has not been able to open. Thus, Kien Giang Customs Department has to announce the suspension of the Company's duty-free business for six months.

Another duty-free business facing difficulties amid the pandemic, Lang Son Duty Free Joint Venture Company had to apply for an extension of operation for another 12 months (2nd time) for temporarily imported goods for sale at duty-free shops in three declarations. Due to the outbreak of the Covid-19 pandemic, trading in goods has been halted and travel and re-export of goods abroad cannot be performed.

Seek solutions

According to the Ministry of Finance (General Department of Customs), the suspension of operations of duty-free businesses is an objective and force majeure cause due to the impact of the Covid-19 pandemic. Therefore, to accompany and support businesses to overcome the crisis period, minimize damage and help business restart their operation after pandemic, local customs departments as well as duty-free businesses applied for an extension of the suspension of duty-free sales of businesses.

The Ministry of Finance said that the pandemic situation is still complicated in Vietnam and other countries around the world, so duty-free goods businesses will continue to face difficulties because travel activities will continue to be restricted. If the certificates of eligibility for business in duty-free goods are revoked for businesses which are suspending their operations or businesses which are granted the certificate but have not worked due to the pandemic, it will raise difficulties and costs for businesses.

Specifically, businesses must deal with the duty-free goods in the following forms: re-export, transfer for domestic consumption, and destruction. In any form, businesses will face difficulties. If they are re-exported, there are no foreign receivers because they are also facing difficulties due to the Covid-19 pandemic. If they are transferred for domestic consumption, it will be difficult because the goods in duty-free shops are usually special goods such as alcohol, cigarettes, while only licensed enterprises can carry out import of alcohol (repurchase from duty-free shops), and cigarettes are not allowed to be sold domestically. In addition, when entry and exit activities return to normal, those who want to continue trading in duty-free goods must apply for a certificate of eligibility for duty-free business.

Therefore, to remove difficulties for businesses, the Ministry of Finance has reported to the Prime Minister that during the Covid-19 pandemic (according to the announcement of the competent authorities), the revocation of the certificate of eligibility for duty-free business is as follows: duty-free shops that must be suspended or not put into operation due to the impact of the Covid-19 pandemic shall be automatically extended for the suspension period of operation and shall not be revoked the certificate of eligibility for duty-free business during the pandemic until no later than six months from the date the competent authority or person announce the end of the pandemic.