Proposals to remove obstacles for cashew businesses

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Cashew nut processing for export in Binh Phuoc. Photo: Dang Nguyen

Stuck with specialized inspection regulations

According to the Ho Chi Minh City Customs Department, agricultural producers and exporters (cashew nuts) are facing difficulties when they are not allowed to change the registered purpose of imported materials for export production (raw cashew nuts, preliminarily processed cashew kernels) originating from several African countries. The reason is that to open a declaration of type A42 for domestic consumption; enterprises must complete a food safety inspection for these imported materials.

However, African countries exporting raw materials to Vietnamese enterprises are not on the list of countries and territories and organizations and individuals who are allowed to export products of plant origin to Vietnam according to Official Dispatch No. 906/BVTV-ATTPMT dated April 5, 2018, of the Plant Protection Department, so the food safety inspection agency does not accept inspection for these cases.

The number of enterprises importing cashew materials from African countries is very large. Before the Covid-19 pandemic, these enterprises had stable export markets. Otherwise, they could still export to the Chinese market by road, but since the outbreak of the Covid-19 pandemic until now, due to the generally difficult situation in the world, enterprises have had difficulty finding export markets for their products; China has closed the border for a long time, so the export by road is also impossible.

On the other hand, if cashew products are stored for a long time, they will reduce quality or be unusable; enterprises cannot transfer to domestic consumption because they are not inspected for food safety, leading to the situation that some enterprises arbitrarily sell cashews into the domestic market to recover capital, repay bank loans, and minimize damage. A series of violations were discovered recently by the processing management customs branch.

It is proposed to allow cashew importers to change the use purpose of imported cashew nuts

Through the post-clearance audit, Ho Chi Minh City Customs Department has identified several enterprises that arbitrarily brought imported materials for export products into the domestic market for consumption. For example, there is a case where an enterprise arbitrarily sold more than 8,000 tons of waste products without customs declaration with a tax fraud of nearly VND11 billion.

According to the explanation of the leader of this enterprise, the enterprise imported 100 tons of raw cashew nuts in type E31 but only produced 24 tons of cashew kernels, of which 17 tons were eligible for export. For the remaining 8 tons, the company wanted in vain to change the type from imported for export production to imported for domestic consumption. Therefore, the company contacted the Food Safety Authority but received no response.

According to regulations, when enterprises register to import raw cashew nuts as raw materials for export production, to enjoy tax policies and several other preferential policies, including regulations on specialized inspection.

If enterprises want to sell raw cashew nuts which are imported raw materials, or have finished products which are cashew kernels produced from imported sources (export production type) in Vietnam, they must comply with regulations on specialized inspection for imported goods. Specifically, enterprises and customs offices must follow the list of countries allowed to export food of plant origin to Vietnam (48 countries), issued by the Plant Protection Department under the Ministry of Agriculture and Rural Development. However, enterprises encountered problems with specialized inspection, as mentioned above.

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To overcome difficulties for enterprises, Ho Chi Minh City Customs Department proposed a solution, which is to request specialized management agencies to allow businesses to register for food safety inspection when they need to change the purpose of use for cashew products of African origin (at least for shipments imported before December 30, 2021, to support businesses and avoid violations).