Recognized as "authorized economic operator ", FDI enterprises save billions of VND

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Samsung Group has many members recognized as priority businesses. In the photo: Samsung Electronics Vietnam Co., Ltd. Thai Nguyen. Photo: T. Binh

Saving billions of VND

As one of the first companies recognized as an authorized economic operator, Samsung Electronics Vietnam-SEV Co., Ltd. (Yen Phong Industrial Park, BacNinh,recognized in 2011) has a clear sense of the benefits of the program.

A representative of the enterprise assessed that this was a practical program in facilitating import-export activities and business production development of the enterprises. If before becoming an authorized economic operator, each month the company had about 360 to 600 declarations divided into the Yellow channel (check document details), Red channel (physical inspection of goods), with time procedure takes about one hour per declaration, but since becomingan authorized economic operator, the declarations are streamed Green (exempted from physical inspection of goods), goods are cleared immediately so businesses can save time corresponding to 360 to 600 hours a month.

On becoming a priority business, the company does not have to pay taxes before customs clearance, but is allowed to postpone the tax payment time limit in a certain period (no later than the 10th of the next month), thus helping businesses expeditecustoms clearance, especially on Saturdays and Sundays when banks are not working.

Thanks to the benefits of the program, SEV maintains a stable production and business plan with import-export turnover of more than US$13 billion in 2012 to nearly US$18.5 billion in 2019.

According to the company's representative, in 2014, Samsung Group put into operation aphone factory in Thai Nguyen, in recent years SEV has maintained a stable turnover of US$16 billion to over US$18 billion per year.

Feeling the benefits of the program, SEV always strives to comply with the conditions set out for priority businesses and has been checked, evaluated and extended by the General Department of Customs.

With the same assessment as SEV, Datalogic Vietnam Co., Ltd. (Ho Chi Minh City Hi-tech Park, recognized in 2014) also shows the specific effects from the reality of the business.

According to the company's assessment, since being recognized as a priority enterprise in the field of customs, businesses receive many benefits in production and business activities. In particular, each year, enterprises carry out more than 10,000 customs declarations and most of them are in the Green channel, especially from 2016 until now 100% of Datalogic Vietnam Co., Ltd.'s declarations are Green channeled. Thanks to the preferential procedures during customs procedures, the company saves a lot of time and costs due to the reduction of storage time and yards with an estimated figure of USD$500,000 (equivalent to VND$10 billion) per year.

Thanks to the application of the authorized economic operator system, the company has contributed to increase the rate of on-time delivery commitments with partners from 89% previously to 98% when becoming an authorized economic operator.

At the same time, the import-export turnover of Datalogic Vietnam Co., Ltd. also has a significant growth, reaching nearly US$420 million in 2018, an increase of US$65 million compared to the first year of being recognized (2014).

Also, from the experience of an enterprise with many years of being an authorized economic operator, UMC Electronics Co., Ltd. (Hai Duong, recognized as an authorized economic operator in 2014) reviews and provides a system of legal documents. Regarding authorized economic operators, it will be increasingly complete and comprehensive, ensuring strict requirements for businesses to be recognized.

At the same time, the Customs office continues to effectively implement the regulations on creating favorable conditions for authorized economic operators, so that UMC Electronics Co., Ltd. has stable development in production and business activities, especially instable import-export turnover.

For example, the cost of paper documents, UMC Electronics Co., Ltd. used about 12,000 sheets of paper, but became a priority business for businesses that no longer needs paper for printing.

Or the cost for customs agents to carry out the actual inspection of goods (transportation costs, labor costs) also saves billions of dong each year, because the company's declarations are mostly green, not and the declaration is divided into the Red channel.

There are also many other benefits such as helping businesses enhance efficiency, internal control capacity; improve credibility with credit institutions and customers; and especially, the delivery and receipt of goods are guaranteed according to the plan.

Therefore, from 2015 to 2019, the export turnover of UMC Electronics Co., Ltd. has grown more than 100%, from US$314.3 million in 2015 to US$683.3 million in 2019.

Benefits confirmed

According to arepresentative of the Post-Clearance Audit Department (the General Department of Customs) – the unit in charge of implementing the authorized economic operator program – there are currently 70 enterprises applying priority enterprise regime, including 48 FDI enterprises.

Through the information received by the department, authorized economic operators, including FDI enterprises, affirmed and highly appreciated the effectiveness of the program. That is, shortened clearance time for goods, thereby reducing labor time; saving on administrative procedure expenses (expenses on procedures, dossiers, vouchers and documents to be submitted to customs offices; expenses for simplifying and reducing customs procedures; reducing expenses for exemption from inspection of records and goods). The figure specified by the enterprise is from one to several billion dong a year, even in some cases over VND10 billion like Datalogic Vietnam Co., Ltd.

In particular, the program helps businesses increase their reputation and position with foreign partners, because authorized economic operators are being applied in more than 100 countries, so foreign partners are well aware of the program.

On the other hand, the implementation process has a focal point that the Post-clearance Audit Department provides direct and timely support when businesses encounter problems, while in the past, there were very small problems, businesses still had to make documents ask the Customs office and will receive a delayed reply.