Tens tonns of copper scrap is “under the cloak” of export aluminum

The shipment of copper scrap was seized by HCM City Customs. Photo: T.H

Declaring as aluminum, exporting copper

In early April 2019, L.E.L. Co., Ltd. (located at Binh Chanh District, Ho Chi Minh City) opened export customs declaration at Chon Thanh Customs Branch- Binh Phuoc Customs Department. They declared to export some 25 tonnes of aluminum slab scrap (collected in the manufacturing process). The shipment was exported through Cat Lai port - Ho Chi Minh City.

Through intelligence sources, the Customs Enforcement Unit - Ho Chi Minh City Customs Department chaired the specialised project of monitoring and fighting. Therefore, when the goods were transported to the export border gate, the Customs Enforcement Unit worked with the Saigon Port area 1 Customs Branch to stop transferring goods through the supervision area and conduct a physical inspection. Through the inspection, customs officials identified the goods were not "aluminum slab scrap". It was "white metal scrap" with the actual weight was 27,580 kg (larger than the declared amount by 2.5 tonnes).

Through the inspection results of the Quality Assurance and Testing Centre 3 (Quatest 3) verified goods as "scrap of copper (copper - nickel - zinc alloys)". This item has a unit price of $3.33/kg, nearly 10 times higher than the unit price of aluminum scrap.

With the above unit price, the customs authority determined the value of infringing goods in the consignment was more than 2.1 billion; the total amount of export tax paid by the enterprise for the shipment was over 467 million VND. Meanwhile, when completing export procedures for this shipment, L.E.L Company declared aluminum slab scrap, it was worth only over 290 million VND, the declared tax amount was nearly 64 million VND. Therefore, by making improper declaration of export goods, the company has defrauded by over 403 million VND.

Considering for criminal prosecution

To clarify the violations of this enterprise, the Customs Enforcement Unit worked with representatives of L.E.L. Company, Le Huy Trung - Deputy Director of L.E.L. (authorised by the director to come to work with Customs authority), said L.E.L. company was only to perform customs declaration services for the shipment and enjoyed a service fee of 5 million VND/container, and they were not benefitting from the value of the shipment. Trung was the one using digital signature of L.E.L. Co., Ltd. to register with the Customs authority to transfer the customs declaration data of the shipment.

Trung added that the goods in the containers were packed by partners and provided information to the L.E.L company to create export customs clearance dossiers. The company didn't know where the container was packed. Trung and L.E.L. company did not know anything about the goods packed in containers until the customs authorities conducted physical inspection of goods and verification of specialised agencies.

Regarding the origin of the above shipment, Trung said by talking to his partner, the goods was scrap which had been collected by his partner at a scrap depot, buying bottles and scrap so it did not have contacts and invoices, it was only bought and paid for in cash. Therefore, Trung and L.E.L. company did not know who was the buying partner and there were no invoices and documents related to the purchase to provide to the Customs authority.

L.E.L. Company has headquarters in Ho Chi Minh City, but the goods were actually exported through Cat Lai port, Ho Chi Minh City but L.E.L. did not register to do customs procedures at Ho Chi Minh City Customs. They registered at the Binh Phuoc Customs Department so it was intentional because if the goods had to face physical inspection, there would be a cost for transporting goods to Binh Phuoc to implement inspection goods then take back goods to Ho Chi Minh City for export.

According to a leader of the Customs Enforcement Unit, the representative of L.E.L. Co., Ltd. said that he did not know anything about the goods packed in container No. TEMU7847311 for export, the place of packing, who is packing and had no documents proving the origin of goods. However, the documents of the customs dossier (foreign trade contract, commercial invoice, packing list) were issued by L.E.L. The director of this company was the person who signs and submits to the Customs authority to carry out export procedures. Therefore, it was impossible that the director of L.E.L. company did not know anything relating to the shipment.

If the Customs authority did not detect the violation and apply preventive measures in time, the shipment would have been exported from Vietnamby L.E.L. Compnay and the State would have lost tax of more than 400 millionVND.

Therefore, L.E.L. Compay took advantage of the risk management policy of customs authority. They intentionally declared wrong name item, weight, and value to reduce the amount of tax payable, resulting in a loss of 403,820,914 VND. Therefore, Ho Chi Minh City Customs Department is considering and completing documents to prosecute this criminal case.