New model is a lever for fundamental and comprehensive reform of specialised inspection

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The scheme on reform of specialised inspection in the direction that the Customs is the focal point for specialised inspection at the border gate (except for items related to security, defence, and quarantine), the specialised management ministry show post-check. In the photo: Customs officers check import and export goods with modern equipment on VILAS mobile inspection station. Photo: Hong Nu

The scheme on reform of specialised inspection in the direction that the Customs is the focal point for specialised inspection at the border gate (except for items related to security, defence, and quarantine), the specialised management ministry show post-check. In the photo: Customs officers check import and export goods with modern equipment on VILAS mobile inspection station. Photo: Hong Nuong

In the past time, with the Government's drastic direction, the efforts of the ministries and branches, the specialised inspection of imported goods has achieved some remarkable results such as many inspection items. food quality, safety inspection has been changed from before customs clearance to after customs clearance; the proportion of consignments of quality inspection and food safety inspection compared to declaration rates has fallen to 19.1% in 2019 compared to 30% in 2015; ministries have introduced risk management in the specialised inspection of import and export goods, while notably, 200 administrative procedures have been connected on the national single-window system.

Besides remarkable results, there are still some shortcomings and shortcomings, so there has not yet been a breakthrough change. There are still many imported goods subject to specialised examination; inspection order, procedures and methods are not consistent; inadequate and an overkill of regulations still exists; the principles of risk management have been applied but not fully, leading to a high inspection rate, very low rate of exemption or reduction applied to goods; the rate of specialised inspection is much but detecting violation is very low. In particular, there is overlap in specialised inspection.

With current shortcomings, specialised inspection procedures are still a burden for businesses, one of the factors that account for a large proportion of time for goods clearance, which has not been significantly improved according to the World Bank (WB), which leads to a decrease in the competitiveness of Vietnam in cross-border trade. From that fact, the Government has given directions to create a breakthrough in specialised inspection of imported and exported goods, specifically in Resolution No. 02/NQ-CP dated January 1, 2020 and Resolution No. 99/NQ-CP on November 13, 2019, the Government assigned the Ministry of Finance to lead the development of a project on specialised inspection reform in the direction that the Customs is the focal point for specialised inspection at border gates (except items related to security, defence, quarantine) and specialised management ministries perform post-inspection work.

With the responsibility, on the basis of assessing and analysing the current state of specialised inspection; research on quality control models of some countries in the world; implementing the Government's directive for many years on the comprehensive reform of specialised inspection of imported goods; Inheriting the achieved results, the Ministry of Finance with coordination and support from the Government Office, ministries, sectors, business community, related units and organisations, and independent research experts The establishment has organised many seminars, seminars, research and criticism to develop the project "Reforming the model of quality inspection, food safety inspection for imported goods".

The project aims to fundamentally and comprehensively reform the specialised inspection of imported goods according to Government guidelines and directions, thereby solving current shortcomings and shortcomings; reduce administrative procedures, cut resources, reduce costs, reduce customs clearance time; helping raise awareness of corporate responsibility in complying with the law on quality, food safety of goods and safety protection for communities and consumers.

According to the scheme model, many new inspection procedures are simplified thanks to the source of information and the importer's database is concentrated on one focal point, the Customs office. When goods are eligible for the exemption from quality inspection or reduced inspection, the electronic customs system automatically updates and the importer does not have to apply for exemption or reduction as currently, reducing many duplicates between customs records and quality inspection records.

Seven reforms

The project includes seven major reforms, specifically:

Firstly, to assign customs offices to be the focal point in the quality inspection and food safety inspection for imported goods. Customs offices should be the focal points to receive dossiers of quality inspection and food safety inspection for imported goods; conduct document inspection, perform inspection by machines and equipment at the field or solicit, inspect, test at the conformity assessment/inspection organisation designated by line ministries; notify the results of State inspection of food quality and safety for customs clearance; assume prime responsibility for, and coordinate with line ministries in, building a database, perfecting information technology systems and applying "integrated" risk management for quality control and food safety inspection, publicity, connection and information sharing with relevant agencies.

Secondly, applying three methods of inspection synchronously for food quality and safety to reduce the number of imported consignments that must be inspected, including: tight inspection (document inspection combined with sampling certification, inspection, testing); routine inspection (a registration of quality inspection, food safety inspection); reduced inspection (the random record inspection not more than 5% of the total number of consignments subject to reduced inspection in the preceding year). Goods that have three times in a row meeting import requirements under the tightened inspection method will be converted to normal inspection; goods with three consecutive times of meeting import requirements under the normal inspection method will switch to reduced inspection.

Third, simplify quality inspection and food safety inspection procedures for import goods. Under the new model, quality inspection procedures will be simplified, cutting procedure steps compared to the current process, specifically, for goods that have been certified for conformity, the Customs will keep the lead role in quality inspection cuts two procedure steps out of six steps compared to the current process.

For goods that have not yet been certified for conformity, the fact that the Customs agency plays the lead role in quality inspection cuts three procedures out of 10 compared to the current process.

Similarly, food safety inspection procedures are also simplified, cutting procedural steps compared to current procedures. For goods subject to normal inspections, the fact that the customs authority plays the role of the focal point to carry out food safety inspections cuts two steps out of a total of five steps compared to the current process.

For goods subject to tightened inspections, although the Customs agency's role as the focal point to carry out food safety inspections does not cut the number of procedure steps compared to the current process, it will achieve reform goals like food safety inspection procedures are simplified because information sources and databases on the level of legal compliance of importers are focused on one focal point, which is Customs, helping businesses proactively choose food safety inspection procedures suitable for their business conditions.

Thus, procedures for quality inspection and food safety inspection under the new model are simpler than at present. One-point transaction enterprise is the Customs office to carry out customs procedures and quality inspection and food safety inspection procedures at the same time; information technology system maximises application of test registration, test execution and test mode conversion.

Fourth, apply item-based inspection to cut the number of shipments subject to inspection. This is one of the important reform contents of the project. Specifically, the application of switching between quality inspection and food safety inspection from a tight inspection to a normal inspection, as well as from a normal inspection to a reduced inspection by items to minimise the need for shipment inspection. The change of mode of quality inspection and food safety inspection applies to identical goods, regardless of importers. The system will automatically determine goods to be converted to the inspection method on the basis of the registration dossier of the enterprise; information, data, and inspection history for identical items are both available.

Fifth, fully and substantially apply risk management in quality inspection and food safety inspection to imported goods to ensure the role of State management and improve the compliance of enterprises. The system automatically decides test method, changes test mode and test exemptions and the Customs authorities carry out random inspections of no more than 5% to assess compliance of enterprises importing goods subject to quality inspection and food safety inspection.

Sixth, object expansion is exempt from quality inspection and food safety inspection. The expansion of exempt subjects under the new model is proposed based on the principle of those eligible for exemption in this Decree (Decree No. 15/2018/ND-CP, Decree No. 132/2015/ND-CP, Decree No. 74/2018/ND-CP, Decree No. 85/2019/ND-CP) will be considered for exemption in the other decree and vice versa, and at the same time adding more cases and replicating for all both quality control areas will increase the subject matter and the shipment does not have to check quality.The project includes 18 cases which are exempt from quality inspection and food safety inspection.

Seventh, apply information technology systems in the new model to reduce time, support businesses and related agencies. Maximise application of information technology to ensure national single-window portal, automatic customs clearance system and risk management system perform the following features: identifying subjects to be inspected, exempted and reduced For investigation; decide the method of checking; providing instructions for businesses to carry out all stages of specialised inspection in conjunction with customs inspection; assisting firms in assisting businesses in declaring which standards/regulations their products meet; connect and share records and data for stakeholders; sharing existing information and sharing additional customs clearance information from the Customs to serve the state management of line ministries.

Businesses save more than 881 billion VND per year

With the reform solutions outlined in the project, the project funded by USAID will have a direct impact on import and export businesses. The new model will help the proportion of quality and food safety inspection declarations in one year be cut by 86,166 declarations (about 54.4%), from 158,424 declarations (declaration data for 2019 ) to 72,258 declarations.

The total number of days of quality inspection, food safety inspection that businesses save when applying the new model compared to the current one in a year are 2,484,038 days (down from 3,965,394 days to 1,481 .356 days).

The costs saved for the business in a year thanks to the number of days cut is more than 881 billion VND (approximately $37.8 million).

With an independent and objective assessment of the scheme's impact, the USAID-funded project assumes that, for the economy, when the new model is implemented, it will reduce the number of inspection lots and lead to lower trade costs by reducing inventory and capital requirements, allowing for more efficient production of the business. Accordingly, it will encourage growth especially for manufacturers and distributors boost exports and increase final output, providing more efficient opportunities for the economy. Based on the percentage of specialised inspection data in 2019 provided by the General Department of Customs, the Trade Facilitation Project funded by USAID is calculated based on data in the World Business Environment Report of the World Bank, saving value for the economy when applying the new model is up to 9,285 billion VND (approximately $399 million) annually.

The unification of the inspection point with the implementation of customs procedures is an international trend, contributing to better integration, increasing the prestige of the Government, improving the administrative reform index, contributing to raising ranking the position of Vietnam in the world rankings of competitiveness and business environment. The Government saves money through reducing administrative procedures, cutting resources, reducing costs for a cumbersome quality inspection, food safety inspection, and decreasing clearance time for goods.