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Customs sector detects many cases of origin fraud

Form an ‘alliance’ to cheat

At a press conference about the fight against fraud in the Customs sector on July 19, Mr. Au Anh Tuan, Acting Director General of Customs Control and Supervision Department (General Department of Vietnam Customs) said through inspection and management when carrying out customs procedures for import and export and post-clearance inspection, customs authorities have discovered tricks of origin fraud, forgery and labeling goods.

"For goods origin, enterprises (including FDI enterprises) import raw materials, semi-finished products, components and spare parts for production, processing and assembly but the goods do not undergo processing, manufacturing or only undergo simple processing, manufacturing and assembly that do not meet the prescribed origin criteria. When exporting, enterprises declare Vietnamese origin on the goods label or legalize the dossier to apply for the Certificate of origin of Vietnam,” the Acting Director said.

In addition, there has been the establishment of many companies and each company imports a number of components, spare parts or disassembled parts for assembling or selling to other companies that perform simple processing and assembly stages that do not meet the required origin criteria but declare that they were produced in Vietnam for consumption in the domestic market in order to deceive consumers.

Customs authorities also discovered many cases of goods originating from foreign countries that were transferred to Vietnam to legalize the dossiers or apply for a certificate of origin and then exported to a third country.

In addition, there are cases of using false or invalid C/O, misrepresenting goods’ origin to apply special preferential tax rates under free trade agreements when carrying out customs procedures.

Regarding violations related to labeling of goods and infringement of intellectual property rights, Mr. Au Anh Tuan said that the goods are produced in foreign countries when importing into Vietnam, the words ‘Made in Vietnam’ or ‘origin of Vietnam’ are already available, or on product and packaging, a warranty card is displayed in Vietnamese with information about the brand, business address, website, warranty center in Vietnam for domestic consumption or export.

Moreover, goods imported from foreign countries, labeling of goods or origin of goods was abroad or not showing the country of origin on the goods, but when distributed for domestic consumption, the enterprises replace the new label ‘Made in Vietnam’, ‘produced in Vietnam’ or ‘origin of Vietnam’.

In addition, there is a evidence of abusing legal documents that are not required to attach additional labels at the stage of customs clearance to import goods with famous brands and then do not label them as prescribed but change labels, packaging or brand names for domestic consumption.

Customs authorities also discovered the import of counterfeit goods infringing on intellectual property rights; taking advantage of the transit form to transport fake goods and goods infringing intellectual property rights or Vietnamese origin.

Closely monitor irregular cases

According to Mr. Au Anh Tuan, countries in the region and worldwide have made major policy changes such as tax increases and applications of technical barriers to protect domestic production and commercial activities. The trade wars of the US-China, EU, Japan and South Korea have a great impact on Vietnam's economy.

Vietnam has signed a number of free trade agreements (FTAs), thus, goods from countries subject to high tax rates are likely to find ways to illegally transfer to Vietnam, counterfeiting Vietnamese origin then exporting to the US, European and Japanese markets to avoid high tax rates.

With the role of managing, supervising and controlling import and export goods, the Customs agency has proactively detected and prevented fraud, counterfeit origin, illegal labeling of goods and transport, protecting Vietnamese manufacturers, attracting the shift of investment flows into Vietnam to produce export products to meet the Vietnamese origin criteria, improving the legal compliance for businesses on trade defense measures.

Regarding the import and export in important markets such as the United States and Europe, the leaders of the Department of Customs Management Supervision said export to the US in the first five months of 2019 reached US$22.72 billion, increasing by 29% compared to the same period last year.

The strongest increase was in the group of telephones and spare parts with US$3.77 billion, increasing by 92%; computers and electronic products and components reached US$1.79 billion, increasing by 72%; machinery, equipment and spare parts reached US$1.69 billion, increasing by 54%; wood and wood products reached US$1.84 billion, increasing by 35%; footwear of all kinds reached US$2.61 billion, increasing by 13%; textiles and garments reached US$5.7 billion, increasing by 11%.

"High growth rate in the US market is likely to lead to the risk that Vietnamese goods are subject to trade defense measures by the US, if signs of fraud originating are detected," Mr. Au Anh Tuan said.

For unusual signs of turnover of some export products to the US market, Customs authorities have been closely following the developments and taking careful steps to analyze, evaluate and monitor enterprises.

Notably, following the direction of the Prime Minister, the Minister of Finance and the General Director of the General Department of Customs, the Anti-Smuggling Investigation Department conducted a review of the export value of plywood under HS Code 4412 from Vietnam to the US market in the period from January 2018 to March 2019.

According to statistics, there are 90 companies exporting plywood under HS Code 4412 from Vietnam to the US.

The total export turnover from January 2018 to March 2019 reached more than US$200 million, with a large number of exports from August 2018 to January 2019.

Notably, some businesses have Chinese owners or contribute capital to Chinese people and some other enterprises show signs of a sudden increase in exports.

Regarding timber enterprises, the Anti-Smuggling Investigation Department is investigating signs of violation in six enterprises based in many provinces and cities in the North.

Source: Customs News