It is necessary to remove policies to meet the development needs of export processing enterprises

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	Need to supplement legal regulations to ensure the customs management for the export processing enterprises

Import and export goods at Hai Phong port. Photo: N.Linh

Additional policies needed

According to the Ministry of Finance (General Department of Customs), there are 1,135 EPEs currently operating and mainly located in industrial zones together with non-EPEs. So there is practically no separate area for EPEs. Meanwhile, in localities with rapid industrialization such as Hanoi, Ho Chi Minh City, Hai Phong, Binh Duong and Dong Nai, EPEs who want to expand production have no land funds in industrial parks, export processing zones, hi-tech parks and economic zones. However, due to the current unclear regulations, EPEs cannot rent external warehouses to store goods.

Offering specific analysis on this issue, the Ministry of Finance (General Department of Customs) said that, according to the Customs legislation, Article 60 of the Customs Law and Article 36 of Decree No. 08/2015 / ND-CP stipulatingthe cases of storage of imported raw materials, supplies, machinery and equipment for processing, export production and export products must be approved by the customs office. While EPEs are enterprises specializing in manufacturing products for export activities in industrial parks and economic zones, the operation of EPEs is in essence processing andexport production. When applying the law on customs, there is no limit on the location of storage and now the customs law has specific provisions on the conditions of the goods storage location of EPEs to ensure the conditions of inspection and supervision. The customs office is in Article 80 of Circular 38/2015 / TT-BTC but only in industrial parks, export processing zones, hi-tech parks and economic zones.

According to Investment Law No. 67/2014/QH13, Article 47 of Decree 118/2015 / ND-CP; Article 10, Article 30 of Decree 82/2018/ND-CP stipulates the operation of EPEs in the zones, not specifically providing whether EPEs are allowed to rent warehouses outside the zones.

Thus, the current law only regulates the operation of EPEs in industrial parks, export processing zones, hi-tech parks and economic zones, but there is no specific regulation on the operation of outsourced warehouse outside of these areas used to store materials, supplies, machinery, equipment and products of EPEs. Therefore, according to the Ministry of Finance, in order to solve problems for EPEs in localities with high occupancy rates of industrial parks, they would like to rent warehouses to store raw materials, supplies, machinery and equipment. Products (which are not organized in warehouses) need to supplement specific provisions in Decree 118/2015 / ND-CP or Decree 82/2018/ND-CP.

In addition, one of the problems is the licensing of EPEs, specifically on the inspection and supervision conditions of the Customs and related management agencies. Specifically, before July 10, 2018 (the effective date of Decree 82/2018/ND-CP), EPEs were established in accordance with the provisions of legal documents on investment and Decree 29/2008/ND-CP. Accordingly, it is not required that the customs authority must certify its ability to meet customs inspection and supervision conditions before establishing an EPE, so there are no problems arising in the licensing procedure.

From July 10, 2018, the implementation of the provisions of Clause 1, Article 30 of Decree No. 82/2018/ND-CP replaces Decree No. 29/2008/ND-CP.Accordingly, before issuing investment licenses for projects that investors propose to be licensed as EPEs, the Customs authorities' opinions must be obtained regarding the ability to meet customs inspection and supervision conditions. Therefore, in reality, when implementing this regulation, the Customs authority encounters obstacles because there is no specific regulation on conditions for customs inspection and supervision of EPEs (currently only Decree 68/2016 / ND-CP) providingconditions for customs inspection and supervision of a number of types of warehouses, yards, locations, bonded warehouses, tax suspension warehouses and duty-free shops. In addition, there are cases where the investment project is just an investment policy, applying for an investment license, factories and warehouses have not been formed, the customs office has received a request to confirm the ability to meet the inspection and supervisionconditions.This fact makes it difficult for the Customs authorities to implement the policy.

Ministry of Finance proposes a solution

In order to solve the current problems related to EPE activities, the Ministry of Finance has proposed to the Prime Minister a lot of contents related to outsourcing of EPEs and EPE licensing.

Specifically, regarding outsourced storage of EPEs, the Ministry of Finance (General Department of Customs) proposes a plan to assign the Ministry of Planning and Investment to preside over,review and assess regulations related to investors' activities. Investment in an EPE, a non-tariff enterprise in Decree 118/2015/ND-CP and Decree 82/2018/ND-CP report to the Government amending and supplementing provisions in accordance with specific provisions on activities of leasing warehouses outside industrial parks, export processing zones, hi-tech parks and economic zones of EPEs to store goods in service of production to synchronize with customs legislation and in accordance with the provisions of the first law.

The Ministry of Finance shall coordinate with the Ministry of Planning and Investment in formulating conditions to ensure the inspection and supervision activities of the customs offices at the goods storage places of EPEs at outsourced warehouses. While waiting for the amendment and supplement of Decree 118/2015/ND-CP, the Ministry of Finance strictly complies with the current regulations.

Regarding the issue of EPE licensing, the Ministry of Finance proposes to assign the Ministry of Planning and Investment to lead the revision and supplement of Decree 82/2018/ND-CP which specifies specific cases for licensing as EPEs. Specifically, in coordination with the Ministry of Finance, formulate regulations on conditions and standards of EPEs; regulating the procedures when licensing EPEs. Specifically, in case the investment licensing agency for a project is newly established, has not formed a factory or has not yet had production activities, it will only license the investment project according to the provisions of law and not yet been licensed to the EPE. By the time the investor completes the project, the factory is put into operation of the investment license agency to consult with the customs office about its ability to meet the conditions of customs inspection and supervision and the customs office has confirmed that they meet this condition, the investor is licensed as anEPE to enjoy tax policy in accordance with tax laws.

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In case the licensing agency has granted licenses for EPEs for investment projects that have been established, already have workshops, and already have production activities, the investment licensing agency shall consult with the customs office about the possibility of meeting the conditions for customs inspection and supervision, and the customs authority certifies that they meet this condition, the investor is licensed as an EPE to enjoy tax policy in accordance with tax laws.

In case enterprises were established as EPEs before the effective date of Decree 82/2018 / ND-CP, it is necessary to specify the time for enterprises to prepare and upgrade their facilities to meet the conditionsof customs inspection and supervision.

While waiting for the amendment and supplement of Decree 82/2018/ND-CP, the Ministry of Finance requests the Prime Minister to assign the Ministry of Planning and Investment to coordinate with the Ministry of Finance to guide the establishment of EPEs to avoid affecting investment attraction activities in localities.