Law on Foreign Trade Management 2017: There will be many obstacles in the customs procedures

Mr. Huynh Trung Kien, Deputy Head of the Customs Sub-Department of Managing the Investment Goods (the HCM City Customs Department) mentioned the problems at the conference. Picture: N.Hiền.

Concerned about the business rights of the FDI enterprises

A representative of the Binh Duong Customs Department pointed out that Article 5 of Law on Foreign Trade Management 2017 Law regulating on the freedom right of import and export business stipulated the import and export right of FDI enterprises. Previously, Decree 23/2007/ND-CP granted this right to the FDI enterprises. In particular, the export rights were defined as buying in Vietnam for export abroad, that meant to not allow taking the import goods for exporting. By 2013, the Ministry of Industry and Trade had Circular No. 08 allowing the FDI enterprises to export from import sources, that meant the FDI enterprises imported under the import rights, then sold those goods abroad. However, Law on the Foreign Trade Management 2017 did not mention this issue.

Mr. Huynh Trung Kien, Deputy Head of the Customs Sub-Department of Managing the Investment Goods (the HCM City Customs Department)also mentioned 2 obstacles related to business rights of the FDI enterprises.

Firstly, in the spirit of the Law on Foreign Trade Management and decrees, the FDI enterprises are not allowed to conduct temporary import for re-export and transfer. However, in practice, the enterprises can do this by another method. Accordingly, Article 48 of Decree 08/2015/ND-CP guiding the implementation of the Law on Customs stipulates that the enterprises do not have the using needs of the goods after importing or other reasons, they have to re-export to return the owners abroad or export to third countries. Therefore, it is necessary to have specific provisions on this issue in order to avoid the case of the enterprises referred to Article 48 to put pressure on the Customs.

Secondly, the on-spot export and import activities. Previously, Circular 04/2007/TT-BTM of the Ministry of Trade (now the Ministry of Industry and Commerce) guided the FDI enterprises were allowed to export on-spot the goods made by themselves, but whether Circular 04 has still been valid? In fact, there was the case that an FDI enterprise imported a consignment but then they did not need to use it. Instead of exporting to foreign countries, the foreigners required this FDI send to another company in Vietnam, but this procedure has been currently in trouble.

Mr. Le Van Trien, Deputy Head of the Supervision and Management Division of the HCM City Customs Department also wondered whether the FDI enterprises could be exported or imported on the spot. Law on Foreign Trade Management only stipulated that the FDI enterprises should be entitled to export right through buying goods in Vietnam for export, not be exported on the spot. Similarly, the regulations on import of the FDI enterprises only recorded the goods importing from foreign countries, not to mention the problem of import on the spot.

Answering these problems, Mr. Nguyen Sinh Nhat Tan, Director of Legal Department, Ministry of Industry and Trade said that the export and import rights of the FDI enterprises have been implemented in accordance with the commitments on opening the Vietnamese market when signing and joining the international agreements. In particular, the WTO Agreement required opening the market for export-import rights of FDI enterprises. This right was stated expressly in Article 5 of the Law on Foreign Trade Management, whereby the rights of export and import were the right to sign the declaration and to buy under the condition that they were not organized a network, system to collect, distribute. Basically, all FDI enterprises have had this right at present. For the export and import on the spot and temporary import for export of the FDI enterprises, Mr. Tan affirmed the FDI enterprises were not allowed to trade for profitability. Decree 23 stated this clearly. At present, the Ministry of Industry and Trade is submitting to the Government for the elaboration of the Decree amending Decree 23 which express this viewpoint clearly. However, in practice, the distribution rights of FDI enterprises have been expanded. Many FDI enterprises have been granted distribution rights and have been restricted to retail. Therefore, when the wholesale distribution right was granted, the FDI enterprises would export, import on the spot and temporarily import for re-export.

To clarify the enterprises to cut the procedure

A representative of the Import-Export Department, the Ministry of Industry and Trade said that about the conditions for the enterprises to participate in the self-certification of origin in ASEAN, previously, there was a criterion about enterprises turnover of US $ 10 million in the previous year. However, in practice, there were many enterprises encountered by this regulation. Therefore, in the coming time, the Ministry of Industry and Trade would eliminate this criterion to create conditions for many enterprises to participate in self-certification of origin. At present, the Ministry of Industry and Trade has completed procedures to prepare Circular No. 28/2015/TT-BCT on self-certification of origin in ASEAN.

Mr. Tan also added that when negotiating the self-certification mechanism in ASEAN, Vietnam registered about 10-20 companies. However, up to now, only two companies registered their certificates of origin as Vinamilk and Nestle. Accordingly, Mr. Tan wanted that the enterprises should improve their capabilities to meet international requirements, while also taking advantage of incentives as well as reducing the time required for traditional C/O, issue actively the commercial invoices with the content of origin declaration, facilitate the business and export of the goods.

A representative of Import-Export Department also said that for issuing the C/O, the unit was drafting and preparing to submit to the Ministry's leaders on the classification of business lines in order to create more favorable for the enterprises. Accordingly, there would be criteria to assess the enterprises, classify into the Green, Yellow or Red lines. The enterprises assigned to the Green line would enjoy preferential treatment for the document processing time… Besides, risk management on goods would be built. The criteria would be based on the C/O application process of the enterprise, such as the number of dossiers or turnover that the enterprises had applied for C/O were compliance and the compliance of the enterprises with the taxation and customs regulations. The Enterprises on the list of priority enterprises of the General Department of Customs would also be considered to classify in the Green line.