Binh Duong Customs investigates businesses committing violations on import and export of cashew

Professional activities of Post Clearance Audit Branch (Binh Duong Customs Department)

Exposing fraudulent tricks

Recently, Binh Duong Customs Department transferred information and signs of criminal violations of two enterprises in cashew nuts' export and import activities to the Investigation Police Agency of Binh Duong Provincial Police for further investigation.

Through investigation, verification and conducting a post-clearance audit of enterprises operating export-import cashew, the Post-Clearance Audit Branch under Binh Duong Customs Department discovered L.G.P Production Trading Import-Export One Member Company Limited violated regulations on the management of raw materials, supplies, machinery, equipment, processed products, export production, and export processing lead to a shortage of actual goods in stock compared to accounting vouchers, accounting books and customs dossiers for imported and exported goods. According to the explanation of the business, the reason was that the goods were reprocessed, signed a contract for pledging, so there was a lack of actual goods. However, when the Customs authority verified, this enterprise did not have any activities of sending goods to be reprocessed or pledged.

In addition, during the inspection process, the Customs Branch for import-export goods outside the industrial park also discovered that L.G.P Production Trading Import-Export Company Limited and P.T.P Co., Ltd. are not eligible for tax exemption(not meeting the capacity of factories, machinery and equipment to carry out the type of export production as prescribed).

With the above violations, Binh Duong Customs Department decided to sanction administrative violations and collect taxes on L.G.P Production Trading Import-Export One Member Company Limited with more than VND47 billion; P.T.P Co., Ltd. has been imposed tax with an amount of VND 8.8 billion. At the same time, due to criminal signs, Binh Duong Customs Department transferred the case files of these two enterprises to the police agency for further investigation and clarification.

Many hidden risks

Director of the Post-Clearance Audit Branch under the Binh Duong Customs Department Tong Quoc Thinh said that, besides inspecting cashew enterprises as assigned by the General Department of Vietnam Customs, Binh Duong Customs Department had expanded the scope of inspection for other enterprises operating import-export cashew in Duong province. Therefore, leaders of the Binh Duong Customs Department directed the Post-Clearance Audit Branch to review and make a list of the remaining enterprises engaging in import-export activities of this item at the Customs Branches and at the same time, giving warning signs for the customs branches to carry out the information collection, investigation and verification.

The unit also checked and reviewed the operation of cashew enterprises imported from 4 African countries: Cote Divoire, Nigeria, Ghana, TanZannia. Unfortunately, those countries are not on the list of countries and territories allowed to produce and export products originating from food into Vietnam. Thus, the unit will take appropriate measures for handling.

However, from the inspection results in the past, it can be seen that the importation of cashew materials under the type of import for export production has faced many potential problems in the management of the Customs authority. Typically, enterprises rent factories, machinery and equipment to meet production capacity conditions when customs authority conducts inspections. At the same time, enterprises carry out activities of subcontracting processing (maybe the subcontracting processing activity is real or agreement to sign a contract to legalize). After that, there is a case that the enterprise does not have any production or reprocessing activities but can still export following the E62 form, and at the end of the fiscal year, enterprises still make the final settlement report following regulations.

At the same time, there are cases when business activities face difficulties or losses or intentionally make illegal profits; enterprises directly sell goods (imported materials subjected to tax exemption) as soon as the goods arrive at the port and are shipped directly to the buyer's premises without opening the declaration for changing use purpose and paying the required taxes.

If the enterprise signs a subcontracting processing contract, it will agree with the processing partner if there is a buyer with a profit difference, and they will sell it immediately (including raw materials that have not been put into production or are finished products). Then they buy goods from other objects in the country to make up for the shortage of goods sold, especially since this sale is not invoiced or recorded in the accounting books, so when conducting post-clearance audits, Customs authorities failed to detect these cases. However, the case was discovered recently in Binh Duong through investigation and verification.