How is Istanbul Convention on Temporary Admission of goods nationalized?

	Enterprises take full advantage of benefits from ATA Carnet
	Kuwait joined the Revised Kyoto Convention and the Istanbul Convention

Nationalization of the Convention helps to facilitate trade and enhance investment attraction. Photo: N.L

Specifying international commitments

The draft decree guides contents, including general provisions and guidelines for customs procedures, inspection, supervision and procedures for issuing and returning ATA carnet, ensuring import duty, other taxes, fees and charges (if any) for temporarily admitted goodsunder the Istanbul Convention. The draft decree explained the terms: temporary admission of goods, ATA carnet, guarantee amount, guarantee association under terms of the convention, ATA carnet holder and events. Accordingly, the ATA carnet is a document for temporary importation and exportation of goods.The ATA carnet is accepted as a customs declaration form to carry out customs procedures and ensure payment for import duty, fines and other payables for goods temporarily imported for re-export and goods temporarily exported for re-import.

The decree also stipulates the temporarily admitted goodsfor use at events. Regulating temporary admission conditions such as temporarily admitted goods must comply with Vietnam’s policies on management of goods temporarily imported for re-export, goods temporarily exported for re-import; goods brought into Vietnam and vice versa must use ATA carnet which is still valid and in line with purpose of events.

The deadline for temporary import for re-export and temporary export for re-import is consistent with the deadline inscribed in the ATA carnet (ATA carnet is valid forone year from the date of issue). Upon the deadline, procedures for re-export, re-import or transferring goods for domestic consumption are required. Beyond the deadline, if re-export, re-import or procedures for transferring goods for domestic consumption are not implemented, enterprises must pay taxes and fees of the shipment and shall be handledaccording to regulations.

For regulations on the ATA carnet, the draft decree specifies documents for issuance. Because the ATA carnet is used to replace the customs declaration form. Thus, the application for an ATA carnet is basically similar to documents to register the customs declaration form for temporarily exported goods, the re-export permit and specialised inspection paper are not required. These documents shall be submitted at the time for carrying out temporary export procedures. This regulation shall be consistent with domestic law andreality because after being issued with the carnet, the carnet holder may not immediately implement temporary export procedures. The ATA carnet is issued by theVietnam Chamber of Commerce and Industry (VCCI).

Regarding customs procedures, the draft decree specifies regulations on places for conduction of customs procedures. To comply with regulations in Government Decree 59/2018/ND-CP dated April 20, 2018, the draft decree stipulates places for conduction of customs procedures for temporarily admitted goods. Specifically, goods carry out customs procedures at border gate customs branches. If temporarily admitted goods are sent via express delivery services, they shall conduct customs procedures at customs branches managing centralised inspection, customs inspection and supervision sites for express delivery goods.

The decree specifies each Customs procedure for temporarily admitted goods (procedures for temporary import, temporary export, re-export and re-import). Accordingly, customs files for temporarily admitted goods is similar to goods temporarily imported for re-export, goods temporarily exported for re-import for display or use at exhibitions, fairs andexhibitions prescribed in Decree No. 59/2018/ND-CP, except for the customs declaration form because it is replaced by ATA carnet.

Regarding customs procedures, the customs declarant shall comply with provisions of Customs law. Because the implementation of customs procedures by the ATA carnet (paper carnet), the customs declarant shall use ATA carnet to carry out customs procedures for temporarily admitted goods. Accordingly, to ensure that re-export goods are temporarily imported goods, re-import goods are temporarily exported goods, the draft decree stipulates that the customs files of all shipments of temporarily admitted goods shall be checked. For the physical inspection for temporarily admitted goods, it shall comply with regulations on risk management which are consistent with provisions of the Customs Law (Article 33 of the Customs Law).

Guiding policies to ensure customs taxes

According to provisions in Article 8, Appendix A in the Istanbul Convention and recurrent regulations on tax policy, tax administration at the draft Decree, VCCI is a guarantee association in Vietnam.

For the calculation of guarantee, according to the convention, the guarantee includes import duty and other taxes (excluding export duty). Accordingly, the draft decree stipulates that the customs declarant must have a letter of tax guarantee from the credit institution or pay a deposit to the guarantee association with an amount equal to 110 percent of the total import duty and other taxes oftemporarily admitted goods. The import duty rate and other tax rates are calculated according to the highest tax rates prescribed by the tax law of countries participating in temporary admission that goods pass through.

Regarding the fulfillment of guarantee obligations, the domestic guarantee association (VCCI) shall pay import duty, taxes and otherarising amounts (if any) toforeign guarantee association if the customs declarant fails to comply with regulations on temporarily exported goods from Vietnam, upon temporary import time limitabroad but the customs declarant fails to re-export or fails to conduct procedures for changing the intended use andtransferring goods for domestic consumption.

For foreign guarantee association, VCCI shall send a request to the foreign guarantee association to pay customs taxes, late payment and fines (if any) if upon the deadline, goods are temporarily imported into Vietnam but the customs declarant fails to re-export or carry out procedures for changing intendeduse, transfers goods for domestic consumption, and send them to customs offices.

If the guarantee amount is insufficient to pay customs taxes,late payment and fines (if any), the guarantee association shall request the World Chambers Federation to make deductions from national guarantee amount under the provisions of the Istbanbul Convention, or in case of force majeure or dispute, VCCI shall not pay guarantee amount for national guarantee association of the country that goods have been temporarily imported.If the guarantee association and customs declarant provide evidence that goods have been re-exported or canceled ATA carnet according to regulations, customs taxes, late payment and fines (if any) are not required.

Tax reduction and tax administration are clarified

Regarding taxes, tax reduction and tax administration, according to current provisions of tax law, goods temporarily imported for re-export and temporarily exported for re-import are subject to exemption from import and export duties and not subject to Special Consumption Tax, Value Added Tax and Environmental Protection Tax.

Pursuant to provisions of the convention and to be in line with domestic law, the draft decree specifies that tax policies for temporarily admitted goods is similar to the current tax law for normal goods temporarily imported for re-export and goods temporarily exported for re-import. The draft decree also stipulates the tax reduction, refund of paid amounts similar to those for goods temporarily imported for re-export and temporarily exported for re-import within a time limit according to current provisions of tax law.

The draft decree specifies responsibilities of relevant agencies. Accordingly, as the leading authority in negotiating, joining and developing the Decree, Minister of Finance is responsible for performance according to its functions and tasks.

VCCI is responsible for issuing the carnet, revoking the carnet and handling guarantee amounts in case of goods have been re-imported after temporarily exporting or presented documents proving the fulfillment of tax obligations in the country that goods owner completed import procedures; coordinates with foreign guarantee agencies in paying taxes and amounts arising in cases where goods are temporarily exported but not re-imported.