Five solutions to improve quality of imported goods classification

	Unify goods classification for fish oil, EFA/DHA, omega supplements
	Applying classification for transformer radiators

Customs officers of 3rd Hai Phong Seaport Customs Branch inspect imports and exports. Photo: N.L

There are still shortcomings

In 2022, after five years of review and negotiation, the General Department of Vietnam Customs submitted to the Ministry of Finance and the Government to promulgate Resolution No.29/NQ-CP dated March 8, 2022 on approving the ASEAN Harmonized Tariff Nomenclature 2022 (AHTN 2022). The AHTN 2022 is harmonized at 8-digit level and based on the WCO Harmonized Commodity Description and Coding System 2022 (HS 2022). The Ministry of Finance issued Circular 31/2022/TT-BTC on Vietnam Export and Import Classification Nomenclature 2022.

Based on Vietnam Export and Import Classification Nomenclature 2022, the Ministry of Finance has submitted to the Government to issue decrees on Most-Favored Nations (MFN) tariff, FTA, and coordinated with ministries and sectors to build decisions on additional import taxes, specialized management lists, list of domestically produced goods…

In 2021, the Ministry of Finance issued Circular 17/2021/TT-BTC supplementing and amending contents on goods analysis and classification to shorten the time for issuance of notification on goods classification, and facilitate enterprises in customs procedures.

According to the Import and Export Duty Department, after issuing the new nomenclature, the General Department of Vietnam Customs has instructed and notified revised contents on goods classification, and remained contents under former versions…, and organized training courses for Customs officers and the business community on goods classification and updated revision in the Vietnam Export and Import Classification Nomenclature. The GDVC has guided classification for items that are difficult to classify or need to be consulted by relevant agencies, including consultations from ASEAN member states and WCO to create consistency in performance in the whole sector, ensuring full and accurate revenue collection.

According to Ms. Dao Thu Huong, Deputy Director of the Import-Export Duty Department, the goods classification is a specialized technical operation, requiring skills and experience of customs officers in determining commodity codes. Meanwhile, motivated by the strong development of technology, many products have been invented and produced by many uses and components but have not yet listed and regulated in the notes of headings and sub-headings of the Vietnam Export and Import Classification Nomenclature; the nature of some products cannot be determined manual methods, and must be identified by machinery and analytical equipment at the laboratory to classify and apply goods codes, causing difficulties.

Notably, one item has been declared different codes or insufficient information, false declaration of goods nature, tax rate, taxes for on-site import and export goods….

Proposing five solutions

To remove obstacles and enhance efficiency of analysis and classification, ensure consistency in an item with only one code, the Import and Export Duty Department proposed to revise legal regulations to reduce sampling and facilitate enterprises in customs release if the identical items are sampled and waiting for analysis results; regulations on the sending samples in case the item is not analyzed at units under the Customs Department for Goods Verification; the harmonization of product codes in the List of specialized management and the List of domestically produced goods are not consistent with the codes classified under the Vietnam Export and Import Classification Nomenclature; regulations on re-verification of sample when there is a dispute between the Customs agency and enterprises about the analysis results issued by the Customs Branch for Goods Verification

The Import and Export Duty Department has requested local customs departments to focus on goods classification to direct units to strictly comply with regulations. Regularly review to detect errors in goods classification, especially instructed products; guide enterprises to fully declare descriptions of goods, materials, operating principles, components ...

Closely control under risk management instruction for Green channel declaration to conduct post-clearance audit within 60 days. For pre-determination of codes, customs officers need to improve the qualifications and responsibilities during performance, and require to re-determinate the goods code if detecting inconsistencies.

Also Mrs. Dao Thu Huong said that it is necessary to strengthen training, especially in-depth training on commodity classification techniques including sampling; and effectively use resources and equipment to serve goods classification.

It is necessary to build an IT system to resolve the current problems of the system. For example, the system may automatically determinate tax rates or provide warnings Customs officers about falsely declared tax rate, avoiding applying false tax rate; support warnings for items that results of analysis and classification, pre-determination of codes, instruction on goods classification have been issued; design the system to check declarations according to the flow of procedures such as before, during and after customs clearance. Build functions to analyze and control the goods classification so that the system can automatically warn customs officers in cases of inaccurate declaration of codes and tax rates.

According to Huong, the final solution is to strengthen strict control of sensitive goods groups that are easily confused because they are difficult to determine by eye, goods with differential tax rates, and goods subject to additional import tax, scraps…