Handling of discarded materials and waste products of export processing and production

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Officials of North Thang Long Industrial Park Customs Branch inspect import and export goods. Photo: N.Linh.

According to the provisions of Clause 4, Article 44, Decree 69/2018/ND-CP of the Government, the destruction of discarded materials, waste products and waste (if any) is only allowed under the permit by Department of Natural Resources and Environment and must be controlled by Customs authorities. In case of failure to destroy the items in Vietnam, they must be re-exported according to designation of the party that ordered the processing.

Since the implementation of this regulation, the Customs agency has faced many problems. The regulations on the Customs agency controlling all cases of destruction of discarded materials, waste products of processing contracts make it difficult for the Customs agency and enterprises because discarded materials and waste products are often removed during production. For large enterprises, the destruction is frequent, so the Customs agency does not have enough forces to supervise the destruction of all enterprises; if the enterprises implement the supervision, it will cause costs for enterprises.

At the recent conference on consulting enterprises about customs procedures related to the management of goods processed and produced for exports, many enterprises have raised this concern. In fact, enterprises do not take charge of destruction. In order to handle the issue, enterprises have signed contracts with units specializing in destroying discarded materials and waste products in accordance with environmental protection requirements. However, according to Decree 69/2018/ND-CP, enterprises must apply for a destruction permit from the Department of Natural Resources and Environment even though they do not directly carry out the destruction. Enterprises proposed that if they signed with units specializing in the destruction, they must not apply for the permit by the Environment Agency. Because this regulation is now redundant and unnecessary.

Director of Customs Control and Supervision Department, Au Anh Tuan, said that in the past, according to Circular 38/2015/TT-BTC and Circular 39/2018/TT-BTC, the destruction was very simple. Organizations and individuals only sent a document on the destruction plan to the customs branch where the raw materials and supplies were imported and take responsibility for the destruction according to the environmental law. The Customs agency supervised the destruction on the principle of risk assessment. This means that the Customs agency did not directly supervise the destruction of raw materials, supplies and machinery after the processing contracts were performed. In addition, Circular 38/2015/TT-BTC also stipulated that for redundant raw materials, supplies machinery and equipment worth less than VND 1 million VND, the Customs agency did not supervise. The supervision by the Customs agency did not require the permit by a local Department of Natural Resources and Environment.

However, on May 15, 2018, the Government issued Decree 69/2018/ND-CP guiding the Law on Foreign Trade Management, of which Clause 4, Article 44 makes difficulties by requirement on the permit by a local Department of Natural Resources and Environment before the destruction. Tuan said the General Department of Customs discussed with the Ministry of Natural Resources and Environment. The Ministry of Natural Resources and Environment responded that there is no regulation on the permit issued by the Environment Agency for destruction of discarded materials, waste products of export processing and production enterprises.

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Tuan said, the General Department of Customs acknowledged the problems of enterprises and will report to the Government to allow the Customs agency to carry out the procedures for the destruction of discarded materials and waste products obtained from export processing and production similar to Circular 38/2015 / TT-BTC and Circular 39/2018 / TT-BTC rather than Clause 4 Article 44 of Decree 69/2018 / ND-CP.