How is risk management applied in specialized inspections?

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The Director General of the General Department of Vietnam Customs, Mr. Nguyen Van Can and the Deputy Minister of the Ministry of Agriculture and Rural Development, Mr. Ha Cong Tuan in the meeting about specialized inspections for exports and imports on September 7, 2016 (Photo: N.LINH).

Mr. Ngo Minh Hai, the Deputy Director of Customs Supervision and Management (under the General Department of Vietnam Customs) said: “On the list of legal documents on management and specialized inspections for export and import which need to be amended and supplemented by the General Department of Vietnam Customs and other functional Ministries, most of the proposed amendments focus on risk management to reduce specialized inspections, application of electronic systems and promotion of the National Single Window for registration and payment of specialized inspection results. In the process of implementing specialized inspections, although many Ministries have issued legal documents applying risk management principles, they have not been applied correctly and fully, so goods on the list of legal documents have still been classified in the “Yellow Channel” for clearance of goods.

For example, the Ministry of Health applied risk management to reduce the rate of imported and exported goods for specialized inspections (Circular 52/2015/ TT-BYT). Specifically, after 3 times passing quality inspections, enterprises shall have specialized inspections reduced. Circular 33/2014/ TT-BNNPTNT regulating procedures for phytosanitary and Circular 12/2015/TT- BNNPTNT defining food safety inspections of the Ministry of Agriculture and Rural Development have applied risk management but ineffectively. Because enterprises must implement all steps to determine whether they may reduce specialized inspections or not. For example, Circular 12/2015 /TT- BNNPTNT regulates that enterprises must present full legal documents through all steps of inspections to receive the final conclusion of Customs clearance procedures.

Thus, in principle, goods subject to specialized inspections at all levels shall be classified in the “Yellow Channel” when owners carry out Customs declarations.

Therefore, according to Mr. Ngo Minh Hai, in order to reduce the rate of goods for specialized inspections according to Resolution 19-2016 / NQ-CP, Ministries should narrow the list of goods subject to specialized inspections. In particular, they should transfer low-risk goods to post-clearance audit before consumption in the market.

Notably, in the field of management of the Ministry of Health, the list of goods subject to food safety inspections before clearance is very large. For example, Clause 1b of Article 28 of the Law on Food Safety regulates: Food, food additives, utensils and packaging materials must have food safety inspections before clearance. According to this Clause, goods subject to food safety inspections are large. Therefore, the General Department of Vietnam Customs said that the Ministry of Health should clearly identify the low-risk goods and high-risk goods for specialized inspections. Specifically, the high-risk goods shall be inspected before clearance and the low-risk goods shall be inspected before circulation and consumption in the market.

For goods which are managed by the Ministry of Industry and Trade, the General Department of Vietnam Customs needs to transfer the list of goods which must be inspected to Group 1 (inspections before circulation and consumption) to reduce Customs clearance time. The regulations on energy labeling and minimum energy performance shall be done after Customs clearance (before being put into circulation).

For the field of food safety inspections under the management of the Ministry of Agriculture and Rural Development, functional authorities should clearly define the list of imports for food safety inspections into two types: The list of goods for specialized inspections before Customs clearance (high-risk goods) and the list of goods for inspection before being put into circulation and consumption in the market under Resolution 19/2016 / NQ-CP. In addition, for the list of goods to be inspected before Customs clearance, Ministries should issue full name and details of goods and HS codes.

According to Resolution 19/2016/ NQ-CP, the Government has requested Ministries to change management methods, specialized inspections and other management principles on the basis of risk assessment, international practices, and a substantial change to the post-clearance audits; apply electronic management of procedures; and share information among functional agencies, organizations, specialized inspections agencies and Customs agencies.

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Earlier, Decision 2026 / QD-TTg in 2015 of the Prime Minister approving scheme "Solutions to improve specialized inspections for exported and imported goods" stated that: There is a need to modernize specialized inspection methods to facilitate exports and imports of enterprises, which reduces costs and shortens the clearance time of goods. Functional agencies should research and apply risk management methods in specialized inspections or post-clerance audits for low-risk goods which originate from industrialized countries or enterprises complying with the law.