Identify and stop smuggling enterprises

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Illegally imported ivory. Photo: T.H.

Established enterprises only for smuggling

This is the topic set out and discussed at the meeting between the Customs Department of Ho Chi Minh City with representatives of the Risk Management Department - the General Department of Vietnam Customs in Ho Chi Minh City on 23 March 2018 to carry out specialized topics on risk control to take advantage of the establishment, suspension of operation, dissolution, and bankruptcy of business with Customs procedure services for smuggling and tax evasion, in accordance with Decision No. 140 / QD-TCHQ of the General Department of Vietnam Customs.

Mr. Quach Dang Hoa, Director of the Department of Risk Management - the General Department of Vietnam Customs said that in recent years, violations had been detected by the Customs but they could not find the real owners of goods. When detected, these businesses abandoned its registered business address, and suspended operation to evade tax obligations. What are the solutions to finding the masterminds who set up more new enterprises, hire legally entity named enterpriseestablishments, only to carry out illegal import of goods and tax evasion?

According to Mr. Tran Ba Tung, Head of Risk Management Department - Customs Department of Ho Chi Minh City, the subject of risk control is very specific and close to the current situation, really necessary for the Customs. Before implementing this plan, the Customs Department of Ho Chi Minh City has many plans to fight it. The violations showed that some perpetrators used the identity of other people to set up enterprises; hired taxi drivers or peddlers to serve as business managers.

Apart from the unclear legal representative, the registered office of the enterprise is also one of the issues to note. The detection of violations showed that many smuggling businesses had temporary business registration addresses, renting some places to hang a name board, but not operating there.

Based on many cases of smuggling and fraud, which were discovered by the Customs Department of Ho Chi Minh City in the past, Deputy Director of Customs Department of Ho Chi Minh City, Mr. Phan Minh Le said that instead of using the form of an unregistered enterprise to smuggle, perpetrators also use the form of a legal entity to do business properly, observing the Law to smuggle.

How to identify?

At the meeting, the participants discussed the solutions to identify and stop smuggling businesses. At the point of direct detection of violations, the Deputy Director of Customs Department of Saigon port, Region 3, Mr. Pham Van Tien said that there are 3 enterprises: enterprises whichobserve the Law and policies well, enterpriseswhich violate the Law if they can find loopholes, and established enterprises only for smuggling and trade fraud.

According to Mr. Tien, the solution is that enterprises will manage by themselves. Accordingly, reduce the hard criteria to have more priority enterprises, so that they see smuggling benefits smaller than the preferred interests, then they will do the right things.

In fact, smugglers mainly focus on behaviors as follows: false declaration of the full name of the goods, the actual import ismore than the declaration; fraudulence on taxable value. Accordingly, corporate tax arises mainly in post-clearance audit, so it is essential to assess the nature of the solutions to prevent illegal operations effectively.

Mr. Le Thanh Hai, Deputy Head of Customs Department of Saigon port, Region 1 said that the openness for businesses to establish, allowed for many cases of ivory smuggling. At present, many enterprises take advantage of storing goods then sell products to the market, then fleeing from the registered business address.

Representatives of units said that when carrying out Customs clearance procedures, Customs officers needed to detect signs of inadequacies when many enterprises with the same owners did not respond to the exchange of Customs offices or there were many introductory letters of many different enterprises.

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In addition, the classification is to manage the newly founded enterprises, by linking with the Department of Planning and Investment of local businesses engaged in export-import activities and implementing decentralization of enterprise management from border gates to identify and manage enterprises.