Nguyen Duc Le, Deputy Director of Market Surveillance Department under the Vietnam Directorate of Market Surveillance,spoketo Customs Newspaper.

Nguyen Duc Le Deputy Director of Market Surveillance Department under
the Vietnam Directorate of Market Surveillance.

Could you tell us about the massive trade of foreign goodsin the market?

The Law on Export and Import Tax does not include the phrase “foreign goods brought by individuals without invoices and customs procedures”,but only the phrase “duty free norms”.

Decree No.134/2016/ND-CP detailing a number of articles and measures to implement the Law on Import and Export Tax stipulates gifts and donations shall be exempt from tax according to Clause 2, Article 16, of the Law on Export and Import Tax, which are items not onthe list of goods banned from import, export, temporarily suspended from export or import, not subject to special consumption tax (except for gifts or donations subject to special consumption tax for security and defense purposes).

Accordingly, gifts and donations valued at less than VND2 million or valued by customs of more than VND2 million with a total amount of tax payable of less than VND200,000 shall be exempt from tax no more than four times per year.

Thus, products carried inthis way shall depend on immigration issues, so their quantity will be very low.

However, due to the taste of foreign goods and limited quality of domestic products, consumers have further believed in foreign products. Peoplehave abused this to use the phrase "foreign goods” to matchconsumers' taste and then mixed them with contraband goods and goods with false origin goods to sell to consumers.

To fully handle acts of violating and abusing legal loopholes to trade in these goods, could you tell us about solutions implemented by local market surveillance forces?

Currently, these goods are widely traded in the market, especially on social networks such as Facebook and Zalo. Goods labeled as “foreign goods” are mainly food, cosmetics, footwear, clothes, home appliances, functional foods and originate from different countries such as the UK, USA, Germany, Russia, Korea, Japan and Thailand.

Most of these products have foreign labels and packages without any auxiliary labels or instructions in Vietnamese, no invoices or documents, without being tested for product quality, expiry date, which contains risks about quality, origin, affecting the health of consumers.

Therefore, Decree No. 98/ND-CP will be a strong policy to tackle theabuse oflegal loopholes togain illicit profits from the trade of these items.

Before the effective date of the Decree, the Vietnam Directorate of Market Surveillance directed the market surveillance force acrossthe country to strictly implement the plan on inspecting items traded on e-commerce sites to prevent smuggling, fake goods, banned goods, non-originating goods and goods infringing intellectual property rights.

People subject to inspection according to the plan include owners of websites, e-commerce applications trading goods on websites, e-commerce applications, and e-commerce service providers showing signs of abusinge-commerce activities to trade in smuggled goods, counterfeit goods, banned goods, non- originating goods, and goods infringing intellectual property rights, thereby, promptly detecting and preventing this situation by the end of 2020.

At the same time, consider, handle and transfer records of cases to competent agencies to conduct criminal proceedingsin accordance with the law for organizations and individuals who have committed acts of violation, signs of crime with alarge nature, scale and quantity,and rings and gangs, as well as recidivism.

Officers of Market Surveillance Team No.5 (under Ha Noi Market Surveillance Department)
inspect seized goods without C/O. Photo:T.V

It is hoped that the new provisions of the Decree will create a healthy business environment for legitimate individuals and organizations, contributing to stabilizing the domestic market and attracting foreign partners to develop brands in Vietnam.

Could you tell us more about some provisions in Decree 98 that are considered strong policies to tackle theabuse of the sale of foreign goods to illegallytrade? 

According to Decree 98, all imported goods that do not have import permits, do not go through checkpoints as prescribed and do not go through customs procedures or falsely declarequantity and categories when carrying out customs proceduresand are circulated on the market without invoices or documents, are all classified as smuggled goods.

Thus, the sale of "foreign goods" without invoices or documents, fail to go through customs procedures are also identified as smuggled goods.

The fine for individuals trading smuggled goods will be up to VND50 million, depending on the value of the smuggled goods.Organizations trading in smuggled goods will be fined up to VND100 million. In particular, this fine will double to VND100 million for individuals and VND200 million for organizations if they directly smuggle food, food additives, food preservatives, medical equipment, preventive medicine and medicine with a value of less than or from VND100 million.

To put Decree 98 into practice, what will Vietnam Directorate of Market Surveillance do?

Decree 98 stipulates that the level of administrative penalties for illegal trading of smuggled goods and non-originating goods is furtherimproved, which is also a channel for amore effective fight against for the violations of organizations and individuals in the trading of smuggled goods and "foreign goods".

The Market Surveillance force will develop programs, plans and coordinate with units such as Customs, Tax, and other competent units to strengthen prevention of illegal transportation of goods across the border as well as control business establishments selling"foreign goods" from Japan, the US, France and Australia in the domestic market. It is also one of the key tasks of the force from now to the end of the year.