835 tons of smuggled cashews detected by Customs

Unmask tax fraud through importing raw cashews

Director of Phuong Phi Trading Production One Member Co., Ltd was prosecuted and arrested on November 11. Photo: B.P Police

The Police Investigation Department of Binh Phuoc Province has decided to prosecute and arrest Hoang Van Phi, Director of Phuong Phi Trading Production One Member Co., Ltd, for smuggling. The Post Clearance Audit Customs Department investigated the case under the General Department of Vietnam Customs.

On November 14, speaking to Customs News, the Director of the Post-Clearance Audit Department said that the Department detected the cashew nuts imported from Cambodia surged, showing suspicious signs in the early year.

According to data from the General Department of Vietnam Customs, in the first 6 months of 2021, imports of raw cashew nuts from Cambodia hit more than 1 million tons, more than 5 times higher than the same period in 2020.

"Notably, the information analysis of the Department shows that Cambodia's raw cashew nut production capacity is only 300,000 to 400 thousand tons/year, much lower than the volume imported from this market in the first six months of 2021", the Director said.

The Department directed the South Post Clearance Audit Branch to assess, analyze, and conduct post-clearance audits of cashew nut importers.

Following the Decision 314/QĐ-KTSTQ dated July 7 of the Department's Director, the branch was inspected at the Company's headquarters.

On August 10, 2021, the Department's Director issued the conclusion of post-clearance audit No. 115/KL-KTSTQ on the violation of Phuong Phi Trading Production One Member Co., Ltd.

Through the inspection of the Department discovered signs of smuggling of the Company. As a result, from June 26 to September 5, 2020, the Company opened eight customs declarations at Chon Thanh Customs Branch (under Binh Phuoc Customs Department) to import more than 1,000 tons of dried cashew nuts in shells worth over VND25.4 billion under E31 regime (importing production materials for export, exempt from import tax, and not subject to Value Added Tax).

After Chon Thanh Customs Branch cleared the goods, Hoang Van Phi transported all the goods to the Company's warehouse at Phuoc Binh Ward, Phuoc Long Town.

From June to November 2020, the Company produced and processed 265 tons of cashew nuts and 53 tons of cashew kernels for export to the U.S. and China. In addition, Phi has sold the remaining volume of cashew nuts, about 835 tons, worth more than VND19 billion to customers inside and outside Binh Phuoc province without declaring to the Customs authority.

Phuong Phi Trading Production One Member Co., Ltd sold about 170 tons of cashew kernels, valued at more than VND24.6 billion to H. company, D. company and V Company about 99.2 tons, worth about VND 14.9 billion, 66.51 tons, worth more than VND9.2 billion to D. company, and about 3.9 tons, worth more than VND506 million, respectively.

Based on the violations committed by the Company and the provisions of law, the Department has identified that the Company violated Article 188 of the Penal Code 2015. According to the Department, when consuming cashew kernels imported under the E31 regime in the domestic market, the Company must open a declaration under the A42 regime and be approved by the Customs before selling the product.

After completing the record, In December 2021, the Post-Clearance Audit Customs issued a decision on prosecution for Phuong Phi Trading Production One Member Co., Ltd for smuggling and handed over the record to the local Police.