Many illegal importation cases of materials prosecuted

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The movement of cashew imports from Cambodia from January to July 2021, unit: tonnes. Source: (The General Department of Customs). Chart: Thai Binh

Imports of cashew materials have soared and gained public attention. The Post Clearance Audit Department under the General Department of Customs has seen a remarkable number of violation cases from inspections.

Not only cashew, the Customs agency has discovered many violations related to using imported materials.

For example, Hai Phong Customs Department issued a decision in October 2020 to prosecute a smuggling of Hai Yen trade and production company limited located in the northern Vietnamese province of Hai Duong and transferred the case to Hai Phuong Police for investigation.

The Customs Enforcement Unit under the Hai Phong Customs Department said the company imported materials for export processing of garments and textiles which are exempt from tariffs. In December 2019, the company suspended its operations and failed to make a final statement of processing contract with Hai Duong Customs Branch which is under the control of Hai Phong Customs.

Inspecting the manufacturing establishment, customs officials found inventories of imported materials which were not reported to the Customs and were not stored at the registered places. The volume of inventories was worth more than VND6.1 billion equivalent to tax payable of more than VND1.4 billion.

Also in Hai Duong, the northern anti-smuggling enforcement unit presided over and worked with the Police Department for Corruption, Smuggling and Economic Crimes (PC03, Hai Duong Police) to seize a 45ft container carrying fabric but the importer declared the goods rags, scraps and waste products to evade tax.

The fabric was bought by Can An Co., Lt (located Nam Sach district, Hai Duong province from Ha Phong Garments Joint Stock Company. As declared by the company, the container carries contains up to scraps and waste products worth VND163 million, but in fact, the container 22 tonnes of fabric of all kinds.

According to Unit 1, if the above goods were imported under business regime, the imported fabric was subject to import tariff of 12% and value added tax of 10%. However, if the firm imports the goofs under processing regime, the company will enjoy tariff of 0%

In addition, the Anti-Smuggling and Investigation Department recognised some northern enterprises take import materials of export processing enterprises to sell at the domestic market. That is an act of reselling residual materials after production to domestic firms or buying goods from export processing zones. These goods have not gone through customs procedures and tax procedures but have been taken out of the export processing enterprises.

The General Department of Customs issued a notice on October 2020 to guide local customs department to strengthen inspection and supervision to detect, prevent and handle violations in a timely fashion.

Beware of the risk of tax evasion from imported cashew nuts

The timely measures of the Customs authority have contributed to fighting against revenue loss and creating fair and transparent business climate and protect interests and brands for legitimate firms.