“Disguise” of goods in transit – Episode 1: Examining 132 transit containers, nearly 76% violating containers

Some infringing items in transit consignments were inspected by the Anti-Smuggling and Investigation Department in 2020 under the Inspection Plan of Goods in Transit.

Recently, the Vietnam - ASEAN Association for trading goods in transit of Lang Son province sent documents to authorities and stated that the Customs authority caused difficulties for enterprises operating goods in transit. What is the real story?

Taking advantage of transit activities for transporting prohibited goods

First of all, it should be affirmed the transit of goods is a common activity in international trade. Like other types of import and export in general, businesses that comply well with the law are always facilitated by the Customs authority. However, besides trade facilitation, the Customs authority also performs functions and tasks of preventing and combating smuggling, trade fraud, illegal transport of goods across borders, contributing to security protection and community safety.

Starting from the requirements of State management, in recent years, the Customs authority has discovered many legal violations related to transit goods like transporting counterfeit goods, drugs, ivory, rhino horn and banned goods slipped into the inland.

From the results of the physical inspection, the General Department of Vietnam Customs developed an inspection plan for goods in transit (Plan No. 01/KH-Đ4 dated April 2, 2020 on control of in-transit goods with signs of counterfeit goods, goods infringing intellectual property rights sending from foreign countries into Vietnam to Laos, Cambodia and vice versa) and directed the Anti-Smuggling and Investigation Department (General Department of Vietnam Customs) to work with Huu Nghi Customs Branch (Lang Son Customs Department), Moc Bai Customs Branch and Xa Mat Customs Branch (Tay Ninh Customs Department), Hoa Lu Border Customs Branch (Binh Phuoc Customs Department), Cha Lo Customs Branch (Quang Binh Customs Department) to stops goods being taken to the supervision area for conducting inspection 132/647 containers of goods (physical inspection time was from July 13-21, 2020).

The inspection results found many transit shipments showed signs of violation of customs laws, transporting counterfeit goods and goods infringing intellectual property rights of four enterprises: Son Ha Trading Company Limited; Bach Viet Lang Son Company Limited; Import and Export Trading and Service Company Limited; and Transnational Transport Joint Stock Company.

Although the Customs authority found signs of violation, enterprises showed signs of non-cooperation. Until August 16, 2020, they only presented 132 containers of goods for the Customs authority to conduct physical inspections upon (previously, the enterprise only produced a small number of containers). Son Ha Trading Co., Ltd. did not present goods at Moc Bai and Hoa Lu border gates, so the Customs authority had to issue a decision for examination.

The results of inspecting 132 containers, detecting up to 91/132 infringing containers. In particular, 35/91 containers of counterfeit goods of well-known brands (38.5% infringing containers); 56/91 containers of undeclared goods or incorrect declaration (61.5%).

The number of key inspection containers mentioned above only accounts for 20% of the number of transit containers of four enterprises, but the rate of infringing goods has reached 75.8%, with the rate of violations of counterfeit goods rules 38.5%.

In the process of settlement, the General Department of Vietnam Customs invited representatives of the four companies to work on the infringing shipments. To date, there have been records of administrative violations in industrial property for 14 out of 35 containers containing counterfeit trademark goods. The General Department of Vietnam Customs issued a decision to sanction an administrative violation No. 01/QD-XPVPHC dated January 7, 2021 for the Import-Export Service and Trading Co., Ltd., and the company has complied with the decision and paid the fine.

Some infringing items in transit consignments were inspected by the Anti-Smuggling and Investigation Department in 2020 under the Inspection Plan of Goods in Transit.

Repeatedly responding to petitions

Returning to recent reflections of the Vietnam - ASEAN Association of Goods in transit in Lang Son province "about the widespread inspection conducted by the Customs authorities, not the right violators, wrong acts of violation", the General Department of Vietnam Customs has synthesised answers in Official Letter 7396/TCHQ-ĐTCBL dated November 20, 2020.

In the process of trading in transit goods, the Import-Export Trading and Service Co., Ltd. was sanctioned by the People's Committee of Lang Son province.

On August 16, 2018, the Chairman of the People's Committee of Lang Son province issued a decision on the settlement of complaint No. 1589/QD-UBND with the content keeping Decision No. 96/QD-XPVPHC dated October 20, 2017 of the Chairman of the People's Committee of Lang Son province on the sanction of administrative violations in industrial property for the Import-Export Trading and Service Co., Ltd. for transporting counterfeit trademark goods.

On January 10, 2020, the General Department of Vietnam Customs authorised the Ministry of Finance to sign Decision No. 58/QD-BTC on the second complaint settlement of Import-Export Trading and Service Co., Ltd. for Decision No. 96/QD-XPVPHC dated October 20/10/2017 sanctioned administrative violations in the field of industrial property by the People's Committee of Lang Son province. Accordingly, recognising and retaining the content of Decision No. 1589/QD-UBND dated August 16, 2018 of the Chairman of the People's Committee of Lang Son province on settlement of complaints by Import-Export Trading and Service Co., Ltd. (the first time) was correct.

Next, on October 23, 2020, the General Department of Vietnam Customs had a working session per the written request of Nguyen Thi Thu Thuy - Chairman of the Board of Members of Import Export Trading and Service Co., Ltd. at the headquarters of the General Department of Vietnam Customs, chaired by the Deputy Director General.

At the meeting, leaders of the General Department of Vietnam Customs explained clearly the company's complaints and general problems in the field of goods in transit. At the same time, the leader of the General Department of Vietnam Customs notified the company of the contents of Decision No. 58/QD-BTC dated January 10, 2020 of the General Department of Vietnam Customs, been authorised by the Ministry of Finance to process the second complaint decision of the Import-Export Trading and Service Company Limited.