Drastically handling origin fraud of goods

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Officers of Moc Bai Border Gate Customs Branch inspect imported goods. Photo: T.D

Many tricks for origin fraud

Some enterprises have abused preferential policies on investment and trade facilitation, and legal loopholes in import and export activities to commit origin fraud of goods.

Recently, Tay Ninh Customs Department has detected that PANGLORY Enterprises Co., Ltd. used self-certification of Vietnam origin of goods on the declaration and printed “made in Vietnam” on goods labels and packages of finished products, which was not in accordance with the provisions of the Government’s Decree 31/2018/ND-CP dated March 8, 2018 and Circular 05/2016/TT-BTC dated April 3, 2018 of the Ministry of Industry and Trade.

The local customs department has made a record of administrative violations and transferred the case to the Tay Ninh Provincial People's Committee. On January 27, 2022, the local government issued a decision to fine the company VND140 million and force the company to pay over VND2.9 billion for committing violations. The department has also requested the company to correct the origin of the goods.

Earlier, Moc Bai Border Gate Customs Branch discovered many violations related to the false declaration of goods origin and transporting fake goods. For example, the Customs branch seized a shipment of fake Gucci, Louis Vuitton products transited by SH Logistics Co., Ltd across Moc Bai Border Gate. The Branch fined the company VND93 million.

In the domestic market, Market Surveillance Team No. 2 under the Market Surveillance Department of Tay Ninh province and other competent forces discovered over 2,352 goods of unknown origin and smuggled products such as cosmetics, clothing, and household appliances.

According to the department most of these products are traded via livestream, zalo, and Facebook. During inspection, the owner of the establishment could not submit invoices and documents proving the origin of these products.

Goods imported from China but are labeled “Made in Vietnam” or written in Vietnamese on the packaging to export to a third country or trade in the domestic market. In addition, the import of semi-finished products and then simply processing them to bring Vietnamese origin and export to foreign countries occurs.

Closely controlling

To prevent and control origin fraud, Tay Ninh Customs Department has planned and executed solutions to closely control customs operations, such as risk management, post-clearance audit, customs supervision for targeted suspects and products.

Accordingly, customs will strengthen inspection and supervision for enterprises that invest in simple production lines, import full components and implement some simple processing stages and then assemble them into finished products.

Customs will also perform post-clearance audit for products in the list of items that are investigated, applied anti-dumping and anti-subsidy tax rates by foreign countries to detect offenses in a timely fashion.

Notably, the local customs department will investigate and implement post-clearance audit for cashew nut importers and exporters to discover fraud of African cashew nuts with Cambodian cashew nuts to enjoy a 5% tax rate, and report to the General Department of Vietnam Customs.

However, the handling offenses related to origin fraud, illicit transshipment of goods still face difficulties because the current regulations on goods bearing Vietnamese origin have not yet been specified.

For example, when customs detects violations on Vietnamese goods origin stated in the declaration form of the enterprise. Through a physical inspection, the customs discovered offenses on the packaging of goods showing “Made in China to Vietnam”. However, the regulations on the false declaration on goods origin have not yet been stipulated in Government Decree 128/2020/ND-CP, so Customs cannot handle the violation.

The local Customs Department discovered signs of violation related to the origin of the goods by an enterprise exporting iron shelves to the US. Currently, the handling for this enterprise has also suffered from problems because the origin of the goods shown on the product labels was "Made in Vietnam".

In addition, some enterprises have abused the exemption from physical inspection of goods for failing to declare the labels of imported goods, transited goods, goods smuggled across border crossings; mixing illicit goods and legal goods for smuggling.

According to Customs, the Government needs to issue strict regulations to handle these violations.