Consultation on the scheme of cross-border e-commerce management

E-commerce issues

Speaking at the seminar, Nguyen Anh Tuan, Deputy Director of Customs Control and Supervision department under the General Department of Customs, said e-commerce is an inevitable trend in the fourth industrial revolution and Vietnam cannot stand outside this development.

According to statistics, e-commerce for import and export goods contributes 21 percent of global e-commerce revenue and benefits both buyers and sellers. In 2018, there were 1.6 billion people engaging in online shopping around the world. It is expected that in 2019, the global e-commerce market is estimated at US$3.4 trillion and this figure will increase to US$4.06 trillion in 2020.

E-commerce is developing strongly all over the world, therefore, international organizations cannot stand outside to study and introduce concepts and solutions related to e-commerce activities.

In June 2018, the World Customs Organization launched the Framework of Standards on Cross-Border E-Commerce. Accordingly, e-commerce is understood as the activity of buying, selling and exchange conducted online and the payment can be implemented online or offline while tangible goods are transported across borders.

In Vietnam, after 20 years, the internet has had a profound and comprehensive impact on the economy and society. After the formation and universalization period, since 2016, e-commerce in Vietnam has moved to the development stage. According to statistics published by Statista (German market research firm), in 2018, Vietnam's e-commerce revenue reached US$2,269 billion and ranked in the top six e-commerce platforms.

Viet Nam currently has e-commerce platforms such as Lazada, Tiki, Shopee and Adayroi. The growth rate of these e-commerce sites is high, which shows that Vietnamese consumers are no longer strangers to buying goods online.

The development of e-commerce is indispensable. Thus, State agencies need to have specific regulations to manage and avoid the situation that the parties involved in e-commerce transactions want to comply with regulations but there are no regulations to comply with, Nguyen Tuan Anh said

The Seminar. Photo: H.Nu

Currently, Vietnam has no separate regulations on state management of e-commerce for imported and exported goods. State agencies manage e-commerce activities for imported and exported goods like ordinary goods. Accordingly, e-commerce goods are subject to specialized inspection procedures, customs procedures and tax policies as if they were normal imported and exported goods.Felipe Garcia, an international expert of the USAID Trade Facilitation Program, said that the strong development of e-commerce has posed challenges on customs management to both developed and developing countries. Customs authorities in each country must research and develop a new approach to ensure customs management and facilitate trade. Goods at the border will be subject to customs inspection when required regardless of e-transactions or not. However, some developed countries offer policies to support customs clearance to facilitate e- transactions and strictly control cross-border e-commerce goods.

The management of state agencies for e-commerce goods shall be implemented from the time the declarant declares to the State management agencies. Meanwhile, the time of declaration and the time of goods arriving at the border gate is very close, resulting in great pressure for Customs to analyse information to decide an appropriate control measure.

Comprehensive management solutions

The outstanding feature of cross-border e-commerce is quick transactions and convenient payment and receipt of goods, so the management agencies also need to change towards simplification, consistency, transparency and introduce management measures to quickly release goods while ensuring compliance with the law.

The Ministry of Finance realized that the strong development of cross-border e-commerce posed many problems for State management agencies. Specifically, Customs will need appropriate resources to ensure processing time while still ensuring fast clearance for small shipments with low value. Customs will also face the lack of information, inaccurate declarations and the lack of compliance records of buyers because they are irregular buyers. Customs will face difficulties in prevention of goods prohibited or restricted from imports and exports and smuggled goods due to the goods being divided into small volume while the quality of information and data on goods is lacking, and difficulties in issues related to tax rates and incentives.

E-commerce management agencies will face many difficulties if there are no measures to manage e-commerce and to control information on goods on the transaction platforms. Payment and guarantee agencies will find it impossible to control the compatibility between transactions and payments and the compatibility between actual payment and orders. Specialized management agencies will lack resources to conduct specialized inspections of all small shipments.

Realizing the necessity and urgency of researching and proposing management solutions and building a legal framework for e-commerce activities for imported and exported goods, in Decision 1254 / QD-TTg on promoting NSW, ASW, reforming specialized inspection for import and export goods and trade facilitation for the period 2018-2020, the Prime Minister assigned the Ministry of Finance to assume the prime responsibility for a scheme on e-commerce management for imported and exported goods with the goal of finding the best solutions for e-commerce activities.

Accordingly, the scheme offers solutions for e-commerce management for imported and exported goods to ensure the comprehensive management of the State in the field of e-commerce; improve the operational efficiency of state management agencies to ensure strict control and compliance with the law and avoid abusing e-commerce activities to evade taxes and violate commodity policies, intellectual property, origin, or transport of banned goods into Vietnam and vice versa.

The scheme also aims to facilitate the development of e-commerce activities, thereby simplifying customs procedures and specialized inspection procedures, protecting the interests of legitimate enterprises and Vietnamese consumers.

In particular, to realize the objectives of the scheme, it needs to implement solutions, such as completing the legal basis, promoting the application of IT, applying risk management to subjects involved in e-commerce transactions; socialize the building, maintenance and operation of the e-commerce management system.