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Vietnam: New regulations to stop temporary import frauds
The Hanoitimes – The government recently issued a new merchandizing decree regulating the temporary import and re-export of goods in a move to protect legal interests of domestic producers against violation cases.
Under Decree No. 69/2018/ND-CP, which details a number of articles of the Law on Foreign Trade Management, commodities that temporarily import to Vietnam for re-export are permitted to be kept in the country for no more than 60 days from the date of completion of customs procedures.
Upon expiry of the 60-day limit, firms are required to re-export the commodities out of Vietnam or destroy them. In case they want to import into Vietnam, they must obey the country’s legal regulations on the management of imported commodities and tax.
In cases where it is necessary to extend the time limit, businesses must send written requests for extension to the customs sub-departments which carry out the temporary import procedures. The duration of each extension shall not exceed 30 days and not more than two extensions may be granted per batch of goods temporarily imported for re-export.
The decree also specifies that the temporary import for re-export must be carried out on the basis of two separate contracts: an export contract and an import contract signed with the traders of the exporting country and the importing country. The export contract can be signed before or after the import contract.
To be qualified for temporarily importing frozen foods for re-export, firms must have warehouses and yards with a minimum capacity of 100 cold containers (40 feet each) on a minimum area of 1,500 square meters, according to the decree.
Firms are also required to have a deposit amount of VND10 billion at credit institutions in provinces or cities where they have warehouses and yards.
According to Deputy Minister of Agricultural and Rural Development Tran Thanh Nam, the temporary import and re-export of agricultural products has positive effects on border economic development, however, it also has shortcomings, sometimes causing damages to domestic production.
Nam said in many cases of temporary import for re-export, after being imported, goods were unloaded and divided into small packages to sell to the market.
Such consumption is not in accordance with international trade conventions, so the detection of violations will negatively affect the prestige of agricultural products from Vietnam, he said.
The storage period is long, while the enterprises are allowed to remove the goods from the customs control area and take responsibility for preservation of the status quo during the storage period. This is a loophole for enterprises to violate the regulations.
Many agro-forestry and fishery products temporarily imported for re-export are on the list of goods banned from import and domestic consumption. However, some of these products find their way to the market and end up being consumed. Their untaxed status means they are cheaper than general market prices, which has a negative impact on the domestic market and creates a price war for Vietnamese goods.
Nam said the Minister of Agricultural and Rural Development urged the Prime Minister in mid-2017 to temporarily suspend the temporary import and re-export of meat products and animal organs. In the long run, however, the ministry needed to come up with a comprehensive assessment of the impact of the temporary importation and re-export of frozen food items to the nation’s economic and social interests, he said.
It is also necessary to have an accurate view of the impact of this activity on the market to ensure food safety and production for Vietnamese consumers, Nam said.
In cases where it is necessary to extend the time limit, businesses must send written requests for extension to the customs sub-departments which carry out the temporary import procedures. The duration of each extension shall not exceed 30 days and not more than two extensions may be granted per batch of goods temporarily imported for re-export.
The decree also specifies that the temporary import for re-export must be carried out on the basis of two separate contracts: an export contract and an import contract signed with the traders of the exporting country and the importing country. The export contract can be signed before or after the import contract.
To be qualified for temporarily importing frozen foods for re-export, firms must have warehouses and yards with a minimum capacity of 100 cold containers (40 feet each) on a minimum area of 1,500 square meters, according to the decree.
Firms are also required to have a deposit amount of VND10 billion at credit institutions in provinces or cities where they have warehouses and yards.
According to Deputy Minister of Agricultural and Rural Development Tran Thanh Nam, the temporary import and re-export of agricultural products has positive effects on border economic development, however, it also has shortcomings, sometimes causing damages to domestic production.
Nam said in many cases of temporary import for re-export, after being imported, goods were unloaded and divided into small packages to sell to the market.
Such consumption is not in accordance with international trade conventions, so the detection of violations will negatively affect the prestige of agricultural products from Vietnam, he said.
The storage period is long, while the enterprises are allowed to remove the goods from the customs control area and take responsibility for preservation of the status quo during the storage period. This is a loophole for enterprises to violate the regulations.
Many agro-forestry and fishery products temporarily imported for re-export are on the list of goods banned from import and domestic consumption. However, some of these products find their way to the market and end up being consumed. Their untaxed status means they are cheaper than general market prices, which has a negative impact on the domestic market and creates a price war for Vietnamese goods.
Nam said the Minister of Agricultural and Rural Development urged the Prime Minister in mid-2017 to temporarily suspend the temporary import and re-export of meat products and animal organs. In the long run, however, the ministry needed to come up with a comprehensive assessment of the impact of the temporary importation and re-export of frozen food items to the nation’s economic and social interests, he said.
It is also necessary to have an accurate view of the impact of this activity on the market to ensure food safety and production for Vietnamese consumers, Nam said.
Source: http://www.hanoitimes.vn/economy/2018/05/81E0C749/new-regulations-to-stop-temporary-import-frauds/