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The Customs has detected violations in using textile materials of export production and processing.

Through monitoring and control, Customs discovered a number of fraudulent cases of bringing raw materials into domestic consumption to evade taxes.

The inventoriesareworth more than VND6.1 billion but the company’s director did not know where these inventories are?

On October 12, Hai Phong Customs Department issued Decision No.1828/QD-HQHP prosecuting a criminal case for "smuggling" at Hai Yen Production & Trading Co., Ltd. (Hai Duong) and transferred the case to the Investigation Police Agency (Hai Duong Police) for investigation.

According to Hai Phong Customs Enforcement Team, Hai Yen Production & Trading Co., Ltd. imported raw materials for export processing oftextiles and garments, which aresubject to tax exemption. In December 2019, the company suspended its operations and did not finalize the processing contract with the Hai Duong Customs Branch (Hai Phong Customs Department).

Inspecting the production establishment of the company, Customs detected that the imported raw materials and auxiliary materials in stock have not been finalized with customs and had not been stored at the registered address.

“The inventoriesareworth more than VND6.1 billion, equivalent to a total taxpayable amount of more than VND1.4 billion. However, the company’s director saidthat he did not know where these inventories are,”an officer of the Customs Enforcement Team said.

According to the customs’ verification, this company has signs of selling imported raw materials for export processing to the domestic market.

Selling raw materials of export processing enterprises to domestic market

The representative of the Anti-smuggling and Investigation Department said that, as per provisions of Circular 38/2015/TT-BTC and Circular 39/2018/TT-BTC, Customs shall not directly supervise at the entry and exit of export processing zones and export processing enterprises.

This has greatly facilitated import and export activities, exchange and trade of goods between export processing enterprises and domestic enterprises.

In addition to compliant enterprises, the Anti-smuggling and Investigation Department detected some enterprises abusing the above provisions to bring raw materials subject to tax exemption to the domestic market for consumption.

In July, the working group of Team 3 (under the Anti-Smuggling and Investigation Department) detected that three trucks carrying goods from a warehouse of an export processing enterprise had suspicious signs. The working group inspected these trucks and detected 15 tons of fabric without documents forthe goods. The working group suspected that the enterprise illegally transported raw materials of the export processing enterprise for domestic consumption, and continues to verify the case.

Previously, at the end of 2018, the Anti-Smuggling and Investigation Department advised the leaders of the General Department of Vietnam Customs to issue a decision on sanctioning administrative violations of VND30 million for the act of transporting imported and exported goods without legitimate documents in customs control area and to seize 47.7 tons of spandex fabric that are the infringing goods of T. Company (headquartered in Binh Phuoc province).

According to the case file, Team 3 suspected that T. Company illegally transported goods without legitimate documents. Team 3 has coordinated with Binh Phuoc Customs Department to inspect goods on the five vehicles at the gate of Minh HungKorea Industrial Park, Chon Thanh District, Binh Phuoc Province.When vehicles being inspected, all drivers and peopleon these vehicles did not present any invoices or documents related to the goods and did not cooperate with the customs and escaped from the inspection site.

After verifying that T. Company is the owner of these goods, the Customs asked the company to coordinate in inspecting the goods and present documents related to these goods. As a result, the goods on the five vehicles are spandex fabric and packed in plastic bags with a total weight of 47.7 tons.