Digital signatures misused for smuggling

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Illicit electronic goods were seized by the HCM City Department of Customs on January 2016. Photo: Thu Hoa.

Using the name of reputable enterprises

According to the HCM City Department of Customs, perpetrators using the name of reputable enterprises for violations may be employees of these enterprises or outsiders, which has put a negative impact on the reputation of these enterprises. Vina Kraft Paper Ltd Company located at My Phuoc Industrial Zone 3, Ben Cat Town, Binh Duong is a typical example. This company has 100% foreign investment, and is ranked 2 for compliance with the law. Several perpetrators used Customs agents to forge digital signatures of the company for smuggling electronic goods. However, the perpetrators in this case were arrested by the police office after Customs clearance in August 2016.

According to the Customs Branch for Investment Management, Vina Kraft Paper Ltd Company has foreign investment from Thailand and Japan, well observed with Customs law. From August 2015 to August 2016, (the time of detection of violations), Vina Kraft Paper Ltd Company opened 46 Customs declarations of imported goods. Specifically, there were 45 declarations implemented by the company's officers with imported goods such as raw paper for production, which was classified in the “Red Channel”. The declaration was implemented under current law and regulations in accordance with Circular 34/2012 /TTLT-BCT-BTNMT.

However, for Customs declaration number 100987012710 on August 10, 2016 (the violated declaration), the goods were declared as Kraft Visy Liner papers for printing, classified in the “Green Channel”. On reviewing the content of this declaration, the Customs Branch for Investment Management detected the Customs agent was F2375 Truong Cong Luan (while 45 previous Customs declarations had no Customs agent). However, at the time of Customs clearance for this shipment, Customs officers did not have sufficient evidence to determine the exact information about the number of Customs agents. Therefore, the shipment passed Customs clearance under the name of Vina Kraft Paper Ltd Company.

Earlier, the Customs Branch for Investment Management in collaboration with the HCM City Police (PC46) carried out physical inspections and discovered a shipment containing 265 imported illicit air conditioners which were declared as steel pipe. Through the investigation by police agencies, perpetrators took advantage of the name of NSSB company which was well complies with the law to implement Customs declaration with code number D6718. Then, the perpetrators used a digital signature of another company and implemented Customs declaration under the name of NSSB company for smuggling.

Loopholes in management of digital signatures

In addition to taking advantage of reputable enterprises, many perpetrators also made use of digital signatures of a number of companies having loopholes in management of their digital signatures for smuggling, which made these companies know nothing about their names on declarations for illicit imports. In fact, currently, an individual may implement Customs procedures for many enterprises and they are entrusted to interpret digital signatures of these enterprises for the implementation of Customs declaration procedures.

In particular, on June 7, 2016, MB Vietnam Ltd Company (in Ward 3, Tay Ninh Town, Tay Ninh Province) opened a Customs declaration No. 100894022020/E21 in the Customs Branch for Investment Management (under HCM City Department of Customs) to import goods declared as materials for garments, worth more than 253 million vnd. Then, the declaration was classified in the “Yellow Channel”. Through inspections, Customs officers discovered that the goods were actually used electronic equipment, used electrical appliances and used automobile spare parts which were prohibited for import, and functional food, pharmaceuticals and cosmetics, etc worth more than 6 billion vnd.

Through the investigation, the authorities concluded that Mrs. Doan Thi Kieu Oanh, Head of the Import and Export Division of MB Vietnam Ltd Company took advantage of the management of digital signatures on an open Customs declaration for smuggling under the name of MB Vietnam Ltd Company. Notably, when Customs authorities discovered the violations of Mrs. Oanh, she forged the signature of the Director General of MB Vietnam Ltd Company and sent an official dispatch to the Customs Branch for Investment Management to refuse the shipment. In addition, from January 2016 to June 2016, MB Vietnam Ltd Company opened 12 Customs declarations with 141 tons raw materials for garments, worth more than 1.2 billion vnd.

The Director General of MB Vietnam Ltd Company, Mr. Kang Young Keun confirmed that these goods were not transported to warehouses of the company and he did not know what kind of goods they were and where they were from? All transactions and other activities relating to import of the goods were made by Mrs. Doan Thi Kieu Oanh.

In order to implement electronic Customs declarations, each company shall use its ID number and digital signature to perform Customs declarations. However, several companies assigned their employees or officers to use digital signatures, sign and seal on the transaction documents without checking or monitoring. Thus, the employees took advantage to carry out acts of smuggling and commercial fraud.

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HCM City Department of Customs said that using services of Customs agents is proper policy, in accordance with international practise, however, companies should choose reputable Customs agents and strictly manage or supervise their officers using digital signatures to prevent smuggling and trade fraud.