What does the picture of customs broker show? Part 3: When customs broker abet for smuggling

	Part 2: Customs declaration service overwhelms legitimate customs broker
	Stopping a case of exporting timber for tax fraud
	Consolidated two circular about customs brokers

Import and export goods at Hai Phong port. Photo: N.Linh.

"Let wander" the digital signature

Ho Chi Minh City Customs Department has transferred a case of violation related to two import shipments of T.F single share-holder limited company (Long An) to investigate because there are signs of tax evasion.

Through checking the report of import and export of raw materials, imported materials and exported products in the form of processing in 2017 belonging to two import shipments of T.F single share-holder limited company, HCMC Customs Department found there were some violations of management of raw materials, machinery, equipment, processed products in this company, resulting in inadequate inventories of goods compared to the accounting vouchers and accounting books. The value of infringing goods was nearly VND 3 billion, the amount of tax imposed on raw materials was nearly VND 680 million. Along with that, company signed a processing contract but did not notify the customs authorities.

The problem is this company did not carry out procedures for importing two lots in October and November 2017. The incident was uncovered when the Ho Chi Minh City Customs Department verified the delivery of T.F single share-holder limited company was approved by Union Champion Transport Company Limited, but the company stopped operating. Verifying the shipment information at Cat Lai port, the shipment’s related information of single share-holder limited company passed the inspection and clearance area, so the company is responsible for that.

The above example shows the Customs brokers with violations does not occur in isolation, the lax management of digital signatures of import-export enterprises has created opportunities for the violations to occur. According to the investment-managing Customs Sub-Department - HCMC Customs Department, there are some cases which are organisations and individuals (customs broker services, customs agent’s staff) take advantage of using digital signatures of enterprises to perform customs declaration on the VNACCS system without the consent of import-export enterprises for smuggling and commercial fraud.

Previously, a foreign-invested enterprise hired Customs brokers, but due to bad management of digital signatures, this agent was abused by smuggling goods. Specifically, at the end of 2018, the Customs Sub-Department managing investment has issued a decision to check the shipment related to the customs declaration of imported goods of VietnamT.S LtdCo. The results show that there are no imported helmets according to the customs declaration on the customs declaration, the actual imported goods are consumer goods of all kinds, such as perfume, cosmetics, watches, pants and bags.

The above-mentioned importation of goods by M.L Co, Ltd was implemented by the Customs broker. Working with the Customs office, the representative of the Customs broker said the company signed an agency contract with TS Vietnam Co, Ltd. and on behalf of the goods owner to make the customs declaration with the account and digital signature of Customs broker. When the Customs agency requested M.L Co., Ltd. provide agency contracts with T.S Vietnam Co., Ltd., the representative of this company said they will provide later. However, the agent said TS Vietnam Co., Ltd. was not their customer, the use of the company's account and digital signature to make the declaration for the above shipment was due to a staff‘s implementation, not through the company as prescribed.

Based on the inspection’s initial information, the Customs Sub-Department of managing the investment goods stated the Customs broker did not strictly comply with the provisions on the Customs broker to make violations. The Customs Department of Ho Chi Minh City has reported to the General Department of Customs to consider and handle this agent.

Using the code of the Vietnamese Customs agents for smuggling

Not only Customs broker use digital signatures of import-export enterprises to conduct smuggling act, but also they use the code of Customs broker to carry out the violations. Using a code of Customs broker and a digital signature to declare on the customs declaration, HCMC Customs Department have found two big smuggling cases using the same code of a single Customs broker. The Customs Control Team - Ho Chi Minh City Customs Department has issued a decision No.02/QD-KSHQ on checking for the imported consignment of declaration form 101046804460/A11 registered at the Customs Branch of Tan Son Nhat International Airport. According to the declaration of the owner, the imported goods are rubber bands used to decorate the bag including nine packages, weighing 348 kg (roll 215m); 100 percent new goods, made in Malaysia. This declaration was classified into the yellow channelof (VNACCS/VCIS) electronic clearance system (check records).

The importer of this shipment is Nguyen Tan Thanh (Code:1401407972; address at An Hoa Hamlet, An Binh A Commune, Hong Ngu Town, Dong Thap Province. The exporter is YUAN WAI LEK TRADING (MALAYSIA). After checking, the actual imported goods are 1,000 pieces of leather, suspected to be dry python skin (weight 321 kg). The value of this item is estimated at seven billion dong. The above items must be licensed by CITES when they are imported.

Notably, on the customs declaration of the above-mentioned contraband shipment, the Customs office found in the box of Customs broker to be declared by the owner of the goods as F2375 Truong Cong Luan. Previously, this code has been used by a suspect to use digital signatures to declare on the customs declaration number 100987012710 for smuggling goods but impersonating as K Paper Limitedliability Company.

K. Paper Co., Ltd. is an enterprise invested in by firmsfrom Thailand and Japan, observing customs laws well. On the customs declaration No. 100987012710 dated August 10, 2016, it shows the imported item is Kraft Visy Liner paper used for printing. This was classified into the Green channel in the (VNACCS/VCIS) system. Through researching the import dossier of this shipment, the Customs Sub-Department of Investment Management found that in the box of Customs broker, it was declared F2375 Truong Cong Luan - showing this declaration was made through the Customs Agency.

When carrying out customs procedures, because there was not enough information to determine the accurate information on the code of Customs broker, especially for the Green channel declaration, the goods will be cleared immediately after the system classify channel. Therefore, the consignment was cleared by the name of Paper K Co., Ltd. and was seized by the police after the goods were cleared.

According to Ho Chi Minh City Customs Department, the violators are enterprises’s staffers, even outside enterprises, causing businesses to suffer a bad reputation. Facing the above situation, to prevent the suspects from continuing to use digital signatures and codes of Customs broker, the Customs Control Team - HCMC Customs Department issued a warning to all units in the Department.At the same time, the Customs office noted the enterprises that if the enterprises use Customs broker to carry out procedures for import and export of goods, the enterprises should coordinate to provide information about the Customs broker that the enterprises use for the Customs authorities to support the verification of the Customs broker. When Customs authorities detect agents that are different from the agents that enterprises have announced, the customs office will swiftly notify the enterprise to prevent the abuse of bad guys and indeed protect them.

Violations that occurred due to lax management of digital signatures of import-export enterprises, or the frauds in the use of agent codes were detected and warned by Customs authorities. In addition, to prevent this case, the Ministry of Finance's Circular No.22/2019/TT-BTC has supplemented the requirement that import and export goods owners after signing a contract with Customs broker they have toannounce to Customs authorities if they authorise a Customs broker to declare and carry out customs procedures for its goods.

Enhance the activeness of enterprises in customs brokers’ operation

The notification will be made via electronic customs data processing system, so it will facilitate customs authorities and businesses as well as protect shippers' businesses from information misuse. On the other hand, the new promulgated policy also created a legal basis for the management agency to carry out activities to support the Customs broker to develop in the direction of professionalisation and to properly play the role of the Customs broker.