Piloting support for enterprises voluntarily complying with Customs Law

Professional activities at Lao Bao Customs Branch, Quang Tri Customs Department. Photo: Quang Hùng

Concentrate on enterprises complying with Customs Law

According to the General Department of Vietnam Customs (GDVC), in the process of building a pilot program to support and encourage enterprises to comply with customs laws, the Risk Management Department (under GDVC) has studied the standards of the Customs-Enterprise pillar (SAFE Framework) and experts’ recommendations from the United States Agency for International Development (USAID). The unit also studied the experience of Customs of countries such as the United States, China, Australia, Indonesia, and India to launch the pilot.

According to the compliance model of the World Customs Organization (WCO), the compliance assessment of enterprises is classified into four groups; groups of businesses that obey (apply measures to encourage compliance); groups of enterprises that will comply if receiving support (applying compliance support measures); groups of enterprises which comply when given the opportunity (applying educational and control measures); and non-compliant enterprises groups (applying strict control measures).

On the basis of studying the recommendations of the WCO, Customs authorities of different countries have developed support programs to help enterprises to achieve and maintain a high level of compliance, enjoying preferential policies and facilitation of Customs authorities in accordance with the law.

In addition, based on the development situation of each country, these programs also aim to make enterprises a reliable partner of the Customs, as well as help the Customs to perform the function of managing import and export activities, preventing and stopping customs law violations more effectively.

In Vietnam, the level of law compliance of enterprise is an important basis for the Customs to apply preferential policies, facilitate customs procedures, and is an essential factor for the application of risk management and making decisions on the classification of goods inspection flows of customs authority.

Accordingly, Article 10 of Circular 81/2019/TT-BTC stipulates the classification of legal compliance for customs declarants is followed five levels, corresponding to recommendations from 1 to 5. In particular, except level 1 (priority enterprises), the number of times of being sanctioned for administrative violations is the criterion that mainly affects the results of the assessment (the impact is about 80 %). Basically, if the import-export business does not violate and fully fulfills its tax obligations, meets the operating time and the number of registration declarations, the compliance level of the enterprise will be assessed by the system (level 2- high compliance and level 3- moderate compliance).

What are the benefits?

On July 15, 2022, the GDVC issued Decision No. 1399/QD-TCHQ on promulgating a pilot program to support and encourage enterprises to voluntarily comply with the Customs Law.

Accordingly, the GDVC has set an objective that, after two years of implementation, 100% of enterprises participating in the Program which do not handle violations of the customs law under Appendix VI of Circular 81 will be assessed the level of legal compliance at level 2 (high compliance) and level 3 (medium compliance). At the same time, the data and information indicators related to the management, monitoring and reporting of the implementation of the program, as well as interactive activities with enterprises participating in the program are basically implemented on a digital platform, meeting the requirements of digital transformation of the Customs sector (according to Decision No. 707/QD-TCHQ on approving the Plan for digital transformation of Customs sector up to 2025 and orientation to 2030). And after five years of implementing the Program, through support activities and voluntary compliance of enterprises, it has reached 20% of the total number of enterprises engaged in import and export activities assessed at levels 2 and level 3.

Within the framework of the program, enterprises participating the program will be facilitated, supported and guided by the Customs authority on contents related to the fields of application of risk management, compliance with customs laws and carrying out customs procedures for imports, exports and transit goods. Accordingly, enterprises are supported and guided by the Customs authority for free, following the commitments in the memorandum of understanding to enterprises upon request. Enterprises will be recognized by the Customs authority as a member with the participation process on the enterprise file and the professional systems of the Customs authority, to ensure the effective and correct implementation of support activities.

At the same time, the Customs authority will arrange officers and experts at all levels to directly support, consult, and contact enterprises to solve problems in the process of carrying out customs procedures; warn of factors that reduce compliance levels of enterprises, and provide warning information, risk trends in supply chain security, intellectual property infringement in the field of import and export and internal risks in import and export activities.

According to a representative of the Risk Management Department, in the first stage of implementing the pilot program, the Customs authority will focus on the group of enterprises engaged in import and export activities in the field of export processing and production at six Customs Departments. They are Hanoi, Hai Phong, Bac Ninh, Ho Chi Minh City, Binh Duong and Dong Nai. Customs will accompany and support enterprises to recover production after the pandemic. After that, the program will be expanded to all businesses.