International experts share experiences in combating origin fraud

	Vietnam commits to drastically combat origin fraud
	Customs plays an important role in combating origin fraud
	Against fraud of origin: Control the production capacity of businesses

Customs Officers of North Thang Long Industrial Park Customs Branch inspect import and export goods. Photo: N.L

At a recent conference, Jennes shared about the office’s investigation of illicit transshipment. He said OLAF investigated when anti-dumping and anti-subsidy measures were applied and there were signs of avoidance. The investigation has been conducted by officers of the member states, which is based on the framework of the agreement signed 30-40 years ago allowing a direct exchange mechanism via the security system.

According to Jennes, the first step of the investigation is to collect information. This information can be from anonymous sources, trade statistics or complaints of import/export and domestic production enterprises of the EU.

“If they see a problem with fraud or evasion, they will send a complaint to us. In addition, there are information sources from customs authorities of member states. Because these authorities conduct inspections, sampling of goods and send data to us to implement analysis or use statistical data mining techniques. If it needs to take further measures, we will coordinate with member states to expand the investigation. The investigation conducted by OLAF is focused on origin,” he said.

Origin fraud accounts for 10 percent of the number of cases but its impact on finance is about 30 percent. “We conducted some certain investigations. Accordingly, we request of the General Department of Trade to provide better trade remedies. For example, for forklifts, enterprises import this item and installed more rudimentary equipment to be classified into other sub-headings for tax avoidance.

Jennes said the EU takes a lot of time to determine that China's solar batteries had got origin fraud. At the end of 2013, the EU concluded and imposed anti-dumping and anti-subsidy duties with high tax rate for solar batteries imported from China. The volume of imported solar batteries sharply increased since the middle of 2013.

“Therefore, we want to take active measures. In this case, it took us several weeks to analyse and detect the transshipment. In 2014, solar battery shipments started to be imported from Japan into the EU. Customs declarants submitted some documents. Initially, we did not pay attention to these documents but upon careful analysis, we detected these documents showed that the goods were shipped to Japan. We checked the container number, combined with the investigation and cooperation of Japanese enterprises. As a result, the shipment was only packed into containers and shipped to Japan, then imported into the EU,” Jennes said.

Jennes said that the perpetrators of these illicit transshipment were very sly. They shipped goods from China to Japan, then to the EU through territories with many sophisticated tricks. Many enterprises complained that many shipments were exported from China to countries and territories that are abused for illicit transshipment such as Malaysia, Taiwan, India and Vietnam then to the EU. This act affected the EU’s finances and economy.

To prevent the origin fraud and illicit transshipment, Jennes said that when detecting fraud and illicit transshipment, OLAF will send financial recommendations to collect the anti-dumping and anti-subsidy duties or other preferential taxes for member states to decide whether to collect or not. OLAF may make legal recommendations to criminally prosecute or make administrative recommendations.

OLAF can also publicise notification and warnings to enterprises. For example, for a specific product, enterprises can import into a market but must be aware that if there is a deviation from the declaration by the enterprises, they will be responsible and the punitive tax rate will be apply.