Debunking the act of smuggling nearly 600 tons of raw cashew nuts

Binh Phuoc police execute a detention order for Phan Ba Hiep (second from left). Photo: CAND News

On November 22, 2022, Binh Phuoc Police issued a decision to prosecute the accused, arresting and detaining Phan Ba ​​Hiep (50 years old, living in Long Thuy ward, Phuoc Long town, Binh Phuoc province) and Ngu Ngoc Hung (51 years old, living in Binh Thanh District, Ho Chi Minh City) to investigate the crime of smuggling.

According to the case dossier, in 2017 and 2018, Phan Ba ​​Hiep and Ngu Ngoc Hung discussed and agreed to take advantage of the legal entity of Thao Vy Company (addressed in Phuoc Long town) to import more than 575 tons of raw cashew nuts, worth more than VND27.6 billion from abroad under the form of importing raw materials for export production.

However, this amount of cashew nuts was not put into production and exported according to the provisions of the law. Instead, it was transferred to domestic consumption to gain illicit profits.

After executing the arrest warrant for Phan Ba ​​Hiep and Ngu Ngoc Hung, the investigation police agency, the Binh Phuoc Provincial Police, executed the search warrant for the residence and workplace of the two suspects in Phuoc Long town and Ho Chi Minh City.

On November 28, 2022, talking to a reporter, a representative of the Post-Clearance Audit Department said that the prosecution and arrest of the two above subjects resulted from coordination between the unit and Binh Phuoc Police.

On July 7, 2021, the Director of the Post-Clearance Audit Department issued Decision No. 313/QD-KTSTQ on conducting post clearance audit at the headquarters of the customs declarant for Thao Vy Company (address: No.85 (now changed to No.105) Tran Hung Dao Street, Quarter 4, Thac Mo Ward, Phuoc Long Town, Binh Phuoc Province). Next, the Department set up an inspection team to conduct an on-site audit at the enterprise's headquarters.

Binh Phuoc police execute a detention order for Ngu Ngoc Hung (second from left). Photo: CAND News

The inspection contents include inspection for signs of violations in the management and use of imported goods subject to import duty exemption; checking the observance of policies and laws on customs, laws on tax and other laws related to the export and import goods of Thao Vy Company within the scope of inspection; inspect the management and use of imported goods; other contents if there are signs of violation.

Thao Vy Company was established under the Certificate of Business Registration dated June 22, 2015, registered for the first change on March 7, 2016; charter capital is VND5 billion; the business line is trading and processing cashew nuts for export.

The inspection results showed that there were many unusual signs related to the operation of Thao Vy Company. According to the confirmation of the local government, Thao Vy Company bought three machines and rented seven used machines for cashew production and processing. However, Thao Vy Company did not provide or present documents for renting machinery. At the time of inspection, these machines were no longer available. Furthermore, in the accounting books for the years from 2016 to 2019, Thao Vy Company did not account for fixed assets and depreciation of the above machines.

Regarding the number of employees, and workers serving production, through checking salary books for the years from 2016 to 2019, the number of employees and workers working at Thao Vy Company was about five people (monthly salary varies from VND 21.5 million to VND 22.5 million). However, when working with the inspection team, Thao Vy Company admitted that they had just signed a labor contract and a salary receipt with those employees to legalize it and provide it to the inspection team.

Notably, the Company's electricity use in production was very modest. In April 2018, Phuoc Long Electricity supplied 3-phase power to warehouses and factories as registered by Thao Vy Company. From the time of power supply until May 2019, the Company's average electricity consumption was about VND 3 million/month (March 2019 did not generate any electricity charge). The total electricity consumption of Thao Vy Company from December 16, 2018 to March 16, 2019, is about VND8 million.

Meanwhile, compared with the power consumption of some cashew companies, it showed that it consumed about VND400 of electricity to produce 1 kg of cashew kernels from raw cashew. Therefore, producing more than 100 tons of cashew kernels (the number of goods declared by the enterprise in this period) required electricity costs of up to VND41 million. Furthermore, the inspection team said that Thao Vy Company had not arisen production activities from raw cashew nuts for export.

Combined with the inspection results on the customs declaration dossiers, manage and use exported and imported goods in the form of importing raw materials for export production; inspecting/verifying to clarify acts of improper use of imported production and export goods without declaring to the customs authority of Thao Vy Company, the inspection team determined that Thao Vy Company had signs of improper use of shipments of imported raw materials for export production.

Based on the inspection results, the Post-Clearance Audit Department transferred the file to Binh Phuoc Police to investigate and clarify the criminal signs of Thao Vy Company. Through investigation, Binh Phuoc Police prosecuted and detained two subjects, as mentioned at the beginning of the article.