Applying risk management: Creating trust for enterprises to comply with regulations

VCN - Thanks to transparency of information in the application of risk management, Customs authorities have created trust for firms on law compliance that will be facilitated in import and export activities.
5307-4923-11-1853-img-1338
Professional activities at Hon Gai port Customs Branch - Quang Ninh Customs Department. Photo: Quang Hùng

Pioneering in reform

According to the General Department of Vietnam Customs (GDVC), in 2011, among the total of more than 4.6 million customs declarations, the number of red channel declarations accounted for 12.62%. By 2015, the number of declarations increased to more than 8.3 million and red channel declarations accounted for 7.55%, down 5.07% compared to 2011.

Along with the development of the economy, the number of declarations is also constantly increasing. In 2020, customs authorities processed customs clearance for 14.1 million import and export declarations and total turnover reached $545.36 billion, increasing by 5.4% compared to 2019. In particular, there are 7.4 million declarations in the green channel, accounting for 52.48%, 6 million of yellow channel declarations, accounting for 42.55% and 700,000 declarations of red channel, accounting for 4.97%.

Although the number of declarations has increased greatly, thanks to a renovation in customs management, the import-export activities of firms are run smoothly. Up to now, the legal corridor and business process system have been formed basically and firmly, meeting automated channel classification for inspection decisions based on the application of criteria and professional customs information system. In 2019, the Ministry of Finance issued Circular 81/2019/TT-BTC stipulating risk management in customs operations in accordance with the requirements of reform, modernisation and facilitation for import-export enterprises and control of legal compliance in management of import-export and immigration activities (hereinafter referred to as Circular 81).

To further facilitate the enterprises and the Customs authorities in the inspection and control of imported and exported goods, the GDVC has set up a compliance management programme, voluntary compliance enterprises, helping to facilitate businesses in import and export. The result of the compliance assessment of firms will serve as basis for customs authority to focus on applying customs inspection and supervision measures to enterprises' goods and means of transport. Customs authority will reduce the rate of direct document inspection and physical inspection of goods for enterprises that voluntarily comply and many other priorities and incentives. However, if firms do not obey, they will be directly inspected by the Customs authority.

Compliance management, which has been implemented recently, has helped build a transparent environment, complete full legal procedures in customs operations. This has helped reduce the rate of physical inspection over the years. Therefore, firms that are eligible under the regulations need to contact and provide full information and dossiers to Customs authorities for compliance assessment; improve the compliance capacity of firms; especially, businesses must actively and voluntarily cooperate fully with the Customs authorities in implementing customs procedures.

According to Nguyen Minh Thao, Director of the Business Environment and Competitiveness Department, the Central Institute of Economic Management (CIEM), the Ministry of Planning and Investment, the Customs sector was the first in Vietnam to apply the modern management method based on risk management application and compliance management in import and export activities.

Help businesses reduce resources

Nguyen Minh Thao added that the reform of the Customs authorities would create motivation, opportunities, and a good precedent for ministries and sectors to adjust policies and apply risk management measures, compliance management for management. With the management measures being implemented by the Customs sector, especially, more transparent groups of criteria and information, firms having access to information would create confidence and motivate them to comply with the law. Therefore, it is necessary to be more transparent in applying criteria so businesses know how their shipments are classified into green, yellow, and red channels. Thereby, creating information transparency, as well as creating confidence for businesses that comply with the law, will be facilitated in import and export activities.

The director of Delta International Company Tran Duc Nghia said the issuance of Circular 81 was a step forward for the Customs sector, bringing benefits not only to the business community and also to Customs authorities. In 2018, businesses registered more than 11 million import and export declarations. With this large number of declarations, if risk management was not applied to classify channels for goods, the social resources spent on customs procedures would be very large. Every year, firms make from 35,000 to 40,000 declarations and devote too many human resources to this activity. On the other hand, the revenue collected from customs brokers was only less than 10%, corresponding to about 30-40 people performing this work. This means that 100 declarations per day would be carried out. Therefore, when customs authorities transformed from paper customs declaration to electronic customs declaration based on effective risk management and accurate channel classification (Green-Yellow-Red), enterprises reduced human resources force, Nghia said.

Nghia cited if the consignment was classified to red channel, enterprises would incur many costs. To conduct physical inspection by the Customs authority, enterprises must work with warehouses and yards to prepare goods, accompanied by a lot of administrative work and costs.

Nguyen Minh Thao said when participating in import-export activities, enterprises are affected by the regulations of specialised management authorities. If specialised management agencies did not apply risk management, then unintentionally, the reforms and changes of the Customs agency would only be a very small step forward. Because if risk management was not applied in specialised management, all shipments subject to specialised inspection would be classified in the yellow or red channel.

By Quang Hùng/Thanh Thuy

Related News

Customs handles a daily trade volume of over US$2 billion

Customs handles a daily trade volume of over US$2 billion

VCN - With the increasing scale of import and export turnover, currently the Customs sector handles procedures for import and export goods with a turnover of more than US$2 billion per day on average.
Businesses reduce costs by complying with customs laws

Businesses reduce costs by complying with customs laws

VCN - Customs authorities assess enterprises with good compliance levels, thereby reducing the implementation work of Customs authorities and devoting more resources to manage enterprises that are assessed as having poor compliance or not complying with the law.
Enterprises should proactively comply with customs laws

Enterprises should proactively comply with customs laws

VCN - At the online talk show with the topic "Enterprises voluntarily comply with customs laws: Perspectives from both sides", Mr. Duong Quoc Phi, Head of Import-Export Division of Vietnam Precision Industrial No. 1 Co., Ltd, said that to comply with customs laws, enterprises themselves must be proactive in complying with the law, which will bring benefits to them.
Ho Chi Minh City Customs seize infringing goods worth nearly VND2,700 billion

Ho Chi Minh City Customs seize infringing goods worth nearly VND2,700 billion

VCN - Over 1,000 cases of customs law violations, with a total value of infringing goods estimated at nearly VND 2,700 billion were seized by the Ho Chi Minh City Customs Department in the first half of 2024.

Latest News

Ha Nam Ninh Customs gathers feedback from the business community

Ha Nam Ninh Customs gathers feedback from the business community

VCN – According to Ha Nam Ninh Customs Department, considering enterprises as cooperative partners not only facilitates import and export activities but also contributes to improving the investment and business environment, meeting integration requirements.
Facilitating trade and bolstering customs enforcement at Vinh Xuong border crossing

Facilitating trade and bolstering customs enforcement at Vinh Xuong border crossing

VCN - With the characteristics of managing international border gates with both waterways and roads, Vinh Xuong International Border Gate Customs Branch (An Giang Customs Department) always has flexible solutions to ensure both convenience and strict control of import and export goods.
3 items have a big impact on the budget revenue of Ho Chi Minh City Customs

3 items have a big impact on the budget revenue of Ho Chi Minh City Customs

VCN - Automobiles, petroleum, and steel are three items that account for nearly 35% of the total state budget revenue of Ho Chi Minh City Customs Department. Therefore, fluctuations in these revenue sources will greatly impact the state budget revenue of the entire Department.
Quang Ninh Customs collects 85.75% of the budget revenue through the seaport area

Quang Ninh Customs collects 85.75% of the budget revenue through the seaport area

VCN - In the first 9 months of 2024, Quang Ninh Customs Department collected VND 13,885.23 billion in revenue collection, reaching 111.08% of the assigned estimate (VND 12,500 billion), reaching 106.81% of the target assigned by Quang Ninh province (VND 13,000 billion), an increase of 8.67% over the same period in 2023

More News

Regulating goods across Huu Nghi International Border Gate during peak times

Regulating goods across Huu Nghi International Border Gate during peak times

VCN – In order to reduce the pressure on customs clearance of import and export goods for the international border gate pair during peak times, the management agency of Lang Son (Vietnam) has just discussed with the management authority of Pingxiang (China) to strengthen coordination in regulating the means of transporting goods of enterprises on both sides.
Kien Giang Customs’ revenue reaches over 190% of target

Kien Giang Customs’ revenue reaches over 190% of target

VCN – As of October 15, Kien Giang Customs Department collected VND 116.34 billion, reaching 193.89% of the target, the department reports.
Quang Ninh Customs seeks solutions to promote import and export

Quang Ninh Customs seeks solutions to promote import and export

VCN - Quang Ninh Customs Department has made efforts to synchronously deploy solutions to accompany, support and resolve difficulties for businesses, contributing to improving import and export activities through the area.
Businesses get a fair hearing under Customs

Businesses get a fair hearing under Customs' new 'three no' rule

VCN - The General Department of Vietnam Customs requires units to implement the 3 no principles: "don't say no, don't say difficult, and don't say yes but don't do it" when businesses have recommendations and proposals.
Khanh Hoa Customs reaches revenue target 1 quarter early

Khanh Hoa Customs reaches revenue target 1 quarter early

VCN - Many key import items increased sharply, along with efforts in trade facilitation, tax debt collection, so in just 9 months of 2024, Khanh Hoa Customs Department completed the state budget revenue target.
WCO Permanent Technical Committee Meeting in Belgium: The managerial mark of the Vietnamese customs representative

WCO Permanent Technical Committee Meeting in Belgium: The managerial mark of the Vietnamese customs representative

VCN - For 3 days (from 23-25/10/2024), at the headquarters of the World Customs Organization (WCO) in Brussels (Belgium), the 245th/246th meeting of the Permanent Technical Committee (PTC) was successfully held under the chairmanship of Ms. Nguyen Thi Vinh Hoai, Counselor, Embassy of Vietnam in Belgium, representative of Vietnam Customs, Chairwoman of PTC.
Revise regulations on implementing administrative procedures under the National Single Window

Revise regulations on implementing administrative procedures under the National Single Window

VCN - On October 29, 2024, Deputy Director General of the General Department of Vietnam Customs Au Anh Tuan chaired a meeting to discuss, exchange and develop a plan to amend Decree 85/2019/ND-CP regulating the implementation of administrative procedures under the National Single Window, ASEAN Single Window and specialized inspection of imports and exports.
Launch of the “Proud of 80 years of construction and development of Vietnam Customs” contest

Launch of the “Proud of 80 years of construction and development of Vietnam Customs” contest

VCN - Towards the 80th anniversary of Vietnam Customs' tradition (September 10, 1945 - September 10, 2025), the General Department of Vietnam Customs (GDVC) launches the “Proud of 80 years of construction and development of Vietnam Customs” contest.
Cat Lai Port sees over 1,000 export shipments cleared by customs each day

Cat Lai Port sees over 1,000 export shipments cleared by customs each day

VCN - The volume of goods exported through Cat Lai port is showing signs of increasing sharply in the last months of 2024.
Read More

Your care

Latest Most read
Ha Nam Ninh Customs gathers feedback from the business community

Ha Nam Ninh Customs gathers feedback from the business community

VCN - Ha Nam Ninh Customs Department has provided many policies and solutions to create favorable conditions for enterprises towards the goal of building Digital Customs, Smart Customs, thereby reducing customs clearance time, saving costs for enterprises
Facilitating trade and bolstering customs enforcement at Vinh Xuong border crossing

Facilitating trade and bolstering customs enforcement at Vinh Xuong border crossing

Vinh Xuong International Border Gate Customs Branch (An Giang Customs Department) always has flexible solutions to ensure both convenience and strict control of import and export goods.
3 items have a big impact on the budget revenue of Ho Chi Minh City Customs

3 items have a big impact on the budget revenue of Ho Chi Minh City Customs

VCN - Automobiles, petroleum, and steel are three items that account for nearly 35% of the total state budget revenue of Ho Chi Minh City Customs Department. Therefore, fluctuations in these revenue sources will greatly impact the state budget revenue of
Quang Ninh Customs collects 85.75% of the budget revenue through the seaport area

Quang Ninh Customs collects 85.75% of the budget revenue through the seaport area

In the first 9 months of 2024, Quang Ninh Customs Department collected VND 13,885.23 billion in revenue collection
Regulating goods across Huu Nghi International Border Gate during peak times

Regulating goods across Huu Nghi International Border Gate during peak times

VCN - Huu Nghi - Huu Nghi Quan International Border Gate pair, as an important traffic route connecting the two countries, with a large volume of trade, plays an active role in promoting economic development of both sides.
Mobile Version