Long An Customs: Preventing fraud in export processing and production

Long An Customs officers coordinated with HCM City Customs to inspect the infringing processing shipment. Photo: T.H

Detecting violation timely

According to Long An Customs Department, in three provinces assigned to perform customs management, including Long An, Tien Giang and Ben Tre, as of December 31, 2022, there are 2,167 enterprises registered to carry out customs procedures. In particular, there are 604 enterprises operating in export processing and production. The number of this type of business is increasing annually.

In the past, most enterprises have been assessed as having high customs law compliance. In particular, many foreign direct investment enterprises have high management levels and large and long-term capital investments, so the sense of law observance is high. However, creating favorable conditions for processing, export production, and processing enterprises has been taken advantage of by some dishonest businesses. They took advantage of loopholes in management policies for this type of business to profiteer. For example: declaring a higher quota than actual production, cheating on origin, exchanging raw materials and accessories fraudulently, and illegally consuming raw materials and accessories. These violations have caused damage to domestic production, revenue loss, creating an unfair competitive environment, and causing discontent in the business community. By applying professional measures, Long An Customs Department has coordinated with relevant authorities to promptly detect and strictly handle violations of this type of enterprise.

Typically, through information collection, in collaboration with the Economic Police Department (Tien Giang Provincial Police), Long An Customs Department discovered a foreign-invested enterprise in Cho Gao district (Tien Giang province) committed fraud, so competent forces checked the use and inventory of raw materials, supplies, machinery, equipment and exported goods at the enterprise's headquarters. As a result, Customs authorities detected and handled acts of consuming imported raw materials for processing goods in the Vietnamese market improperly. The seizure exhibits included 8,491 kg of fabric and 803 kg of cotton, with a total value of over VND1.3 billion; collection and payment to the state budget with a total amount of over VND184 million; handling administrative fines of VND60 million.

By grasping information from the business area, Long An Customs Department has directed its subordinate branches to actively review and invite company representatives to work and determine the number of raw materials. Inventories, machinery and equipment subject to tax exemption, and determine treatment plans to avoid loss of tax revenue for the state budget.

For example, the case of two enterprises in Long Hau commune, Can Giuoc district, Long An province. When Long An Customs Department received information that the company liquidated the factory lease contract, stopped operating, and owed domestic tax, by professional measures, in coordination with the authorities, the unit avoided tax revenue losses for the state budget of nearly VND1.2 billion.

Improve management efficiency

Although there are effective methods of managing processing, export production and export processing activities, in the context of limited human resources, large geographical areas, and potential risks of trade fraud, leaders of Long An Customs Department have directed their affiliated units to implement well solutions such as raising the sense of responsibility of customs officers, preventing and limiting mistakes. In particular, the stage of checking the final settlement report needs to be implemented regularly.

Simultaneously, capturing information about the operation scale of enterprises, difficulties and limitations. From that, the development of inspection plans is more effective. Or when detecting that an enterprise has made a mistake, customs authorities must collect information about the cause of the violation and determine the limitations (from state policy or the management); then, they will develop more effective solutions for trade fraud prevention.

In addition, in the coming time, to ensure the management of export processing and production activities achieving high efficiency, according to Long An Customs Department, it is necessary to build a legal basis for connecting and exchanging information with the Industrial Park Management Authority, the competent unit related to land to provide official information, identify obligation to provide information when enterprises show signs of evasion.

The unit also proposed the Customs IT and Statistics Department (General Department of Vietnam Customs) build, supplement and complete features such as looking up the final settlement report, information on production facilities based on the management unit code, exporting the final settlement report... of the Export Processing and Production Management System to support customs officers to manage the business more effectively.