Preventing fraud in Customs declarations

On averageper month there are 600 enterprises which cancel declarations and 800 enterprises which correct declarations. In the photo: Activity in the Thuy An Customs Branch (Thua Thien Hue Customs Department).

According to the Risk Management Department, during the past time, in the process of risk analysis and assessment in Customs operations, the specialized risk management general-level force has discovered many cases where enterprises canceled or modified declarations. Many enterprises canceledor modified declarations several times in a certain time period.

The additional declaration cases have been clarified in Circular No. 38/2015/TT-BTC of the Ministry of Finance (MOF), but the fact is that many enterprises take advantage of the additional declaration to avoid diversion to avoid goods inspection for smuggling and trade fraud. During follow-up, most of the goods on declarations of cancellation or correction usually are conditional import for business, with high tax rates, huge turnover, with high possibility of breach.

Aware of the above need, the Risk Management Department actively built and deployed a special project "Risk control for export, import declarations editing" on a national scale.

In localities with a large flow of goods such as Ho Chi Minh City, Hai Phong, Quang Ninh, Lang Son, the unit focused on enterprises and items that are high-risk at taking advantage of declaration cancellation or correction for smuggling and commercial fraud such as paving bricks, wood, and stone powder. At the time of deployment (starting from late February to July 2016), every month, Customs forces discovered 600 enterprises canceling declarations and 800 enterprises correcting declarations. The forces discovered over 200 enterprises taking advantage of the declaration cancellation and correction for smuggling and trade fraud.

Typically, taking advantage of additional declarations forms for fraud in Customs declarations isa number importing Chinese ceramic tiles, enterprises under-reported the number of tiles compared to the actual numberon the initial declaration in the import for consumers type (A11). After declarations were classified for actual inspection of goods, enterprises modified declarations, and increased the number. Specifically, they under-reported the number of tiles compared to the actual import in the initial declaration by type A11, after the declarations were physically checked, companies declared new additional declarations by type H11 (General declaration for container and bill of lading with the original declaration by type A11) for excess goods after inspection, to avoid the handling of violations of Customs and Tax sanction.

To prevent this situation, the Risk Management Department issued a warning and sent to all units of local Customs to make a list of key enterprises to implement risk control measures. On the other hand, the units that also work with Post clearance audit forces to handle and collect taxes, submit into the State budget. At the same time, to enterprises that have signs of violation, the units also transferred the list to specialized anti-smuggling forces to identify the situations, detect, and promptly handling violations.

According to the Risk Management Department, through the Project deployment, the number of canceled or modified declarations has significantly reduced; contributing to raising awareness of enterprises in law observance. Besides, the Risk Management Department has also proposed the MOF amendments to some existing regulations. Specifically, revision of Circular No.38 in the direction, only allow additional declarations before the flow switching point.

In the upcoming time, the Risk Management Department will hold a conference to summarize the evaluation, learned lessons during Project implementation, as well as propose measures to fight and prevent fraud in the Customs declaration process.