Check and reorganise the operation of bonded warehouses

The bonded warehouse at Bac Thang Long Industrial Park (Hanoi). Photo: N.Linh

Preventing fraud from bonded warehouse operation

According to the assessment of the General Department of Vietnam Customs, the laws and professional processes on the management of goods sent to bonded warehouses are basically adequate and the units have been proactive in implementing customs inspection and supervision, prevention of smuggling and trade fraud within their functions, tasks and management areas. However, through the customs management of goods stored in bonded warehouses, the General Department of Vietnam Customs recognized that some enterprises still take advantage of the open policy of bonded warehouses to smuggle goods and commit commercial fraud.

Some acts of violations included: failing to declare or incorrectly declaring goods names, HS codes, quantities and volume of goods which aimed to smuggle goods inland, tax fraud, evading regulations on goods management policy. Suspects did not declare sent goods to bonded warehouses were not permitted to be deposited; taking advantage of the form of sending goods to bonded warehouse for temporarily import and re-export in order to avoid the regulations on temporary import and re-export; transporting on improper routes, arbitrarily turning off GPS systems, breaking seals, illegally loading goods during transportation, registering to send goods into bonded warehouses but actually not putting goods into warehouses.

In order to ensure the work of customs management, the General Department of Vietnam Customs leaders directed the Customs Departments of provinces and cities to intensify the work of inspection, supervision and control of the operation of sending goods to bonded warehouses for exporting to foreign countries via road border gates to ensure the management and supervision of goods. At the same time, checking and evaluating the operation of bonded warehouses in the area, proposing to suspend or terminate the operation of bonded warehouses which did not meet the conditions as specified in Decree 68/2016/ND-CP.

By deploying the directives of the General Department of Vietnam Customs, the local customs units have quickly come up with specific solutions.

Hanoi Customs Department issued a document to direct the Customs Branches: Bac Thang Long, Gia Thuy, Noi Bai International Airport border gate to check the conditions, evaluate the operation of the bonded warehouses in management areas, propose temporarily suspension or termination of operation of bonded warehouses which did not meet the conditions as specified in Decree 68/2016/ND-CP. The units under the Department should strengthen inspection and control over the types of goods stored in bonded warehouses, focusing on coordination between customs units in controlling the process of transportation, delivery and receiving goods; identify a number of key shipments to conduct physical inspections, irregular inspections of books and bonded warehouse management systems to assess compliance; strengthening the application of surveillance by sealing, GPS navigation devices, cameras, and strictly handling cases of taking advantage of smuggling or trade fraud.

Nghe An Customs Department has also quickly issued a letter to direct the Customs Branch to strictly comply with the regulations on customs procedures for goods stored in bonded warehouses.

In order to evaluate the management situation, Quang Binh Customs Department has implemented inspections on the books and bonded warehouse management system of Duc Toan Co. Ltd., the bonded warehouse managed by the unit. The results showed that the bonded warehouses had fully met the conditions as specified in Decree 68/2016/ND-CP of the Government; bonded warehouse owners had fully update data into the management software of the bonded warehoused and ex-warehoused goods and books to keep track of goods receiving, goods delivering exports and backlogged goods; to strictly comply with the provisions on bonded warehouse lease contracts; maintain the conditions on facilities and equipment, ensure the performance of customs officials in managing and supervising goods brought into and out of bonded warehouses.

Set the operation of bonded warehouse in order

The review of operation of bonded warehouse has been actively implemented by customs units across the country. Recently, the Da Nang Customs Department had proposed the General Department of Customs to terminate the operation of bonded warehouses which did not meet the prescribed conditions after reviewing the situation. Da Nang Customs Department currently manages two bonded warehouses in operation. Specifically, the bonded warehouse of Da Nang International Trading and Logistics Co., Ltd. in Hoa Cam Industrial Park was managed by the Investment and Processing Customs Branch and the bonded warehouse of Da Nang Port Logistics Joint Stock Company managed by the Da Nang Port Customs Branch. In particular, the bonded warehouse of Da Nang International Trading and Forwarding Co., Ltd. still has not built a data connection with the Customs authority; no warehouses for storing exhibits; the working office of the Customs authority had not met the requirements in terms of area and equipment. The data storage capacity of the company's surveillance camera had not guaranteed the image retention for at least 12 months in accordance with law. Pursuant to Article 10, Section 2 of Decree No. 68/2016/ND-CP of the Government on business conditions for operating duty-free goods, warehouses and places for carrying out customs procedures, gathering, customs inspection and supervision, thus, Da Nang Customs Department suggested the General Department of Vietnam Customs to consider terminating the operation of bonded warehouse of Danang International Trading and Logistics Co., Ltd.

In parallel with strengthening management, the units also proposed solutions to not only ensure the management of the Customs authorities but also facilitate the operation of bonded warehouses. According to Hai Phong Customs Department, the unit has currently managed 39 bonded warehouses, of that 37 bonded warehouses were in operation, two bonded warehouses were temporarily suspended. The unit actively urged bonded warehouse enterprises to complete facilities in order to comply with the provisions of Decree 68/2016/ND-CP and Circular 84/2017/TT-BTC. In the management of bonded warehouses, the Hai Phong Customs Department recommended the General Department of Vietnam Customs to remove problems related to the conditions of operating bonded warehouses. For example, regarding the surveillance camera system, the Hai Phong Customs Department proposed the General Department of Vietnam Customs to issue data exchange standards between the customs authorities and enterprises operating warehouses, yards and locations about surveillance camera systems used for monitoring goods receiving and goods delivery in order to be implemented consistently. Accordingly, the data was directly connected to the system of the customs authority in order to ensure that the stored data is backed up to the system of the customs authority for avoiding loss of data.

Regarding the termination of warehouse operation, Hai Phong Customs Department proposed to clearly stipulate over 6 months from the date of issuance the decision of recognizing the operation of warehouse enterprise but there were no goods receiving or delivery in that warehouse, then the operation would be shut down.

Not only the above units, currently, the local customs that have managed bonded warehouses have simultaneously reviewed and strengthened management measures in order to ensure the operation of bonded warehouse as prescribed by law.