Proposing to implement Customs procedure via ASEAN transit system

Import-export goods at Lach Huyen port (Hai Phong). Photo: Huy Khâm

The ASEAN Framework Agreement on Facilitation of Transit Goods was signed by ASEAN Country Members on 16/12/1998 with the objective of facilitating the goods in transit, supporting the implementation of ASEAN free trade and regional economic integration. Thus, in order to implement this objective, the Framework Agreement stipulated the development and conclusion of relevant protocols, including Protocol 7 on customs transit.

In the Resolution 105/NQ-CP dated 9/10/2017, the Government approved the Protocol 7 on the Customs Transit System under the ASEAN Framework Agreement on Facilitation of Transit Goods and assigned the Ministry of Finance to chair and coordinate with the concerned ministries and authorities in formulating the Government's Decree for the implementation of Protocol 7.

According to the drafting committee, the development of legal documents for the implementation of the ASEAN customs transit system under Protocol 7 is necessary. Thereby, creating a legal basis for the application of customs modernization for goods in transit between ASEAN countries including Vietnam, and reducing paperwork in the implementation of customs procedures for transit goods. The reason was that by carrying out procedures in accordance with Protocol No. 7, e-customs procedures would be carried out on a single system from the country of origin to the country of transit, and to the destination country. It would contribute to reducing costs and facilitate enterprises in goods transit activities between Vietnam and ASEAN member countries in accordance with the guidelines of the Party and State on international economic integration, ensuring the request for administrative reform and customs modernization.

At the same time, it enhances the competitiveness of enterprises engaged in goods transit activities, facilitates and promotes the transit of goods and brings into play the advantages of the geographical position of Vietnam in the transportation of transit goods.

At present, the draft decree regulated a number of important contents such as: Specific provisions on system principles on the basis of technical documents provided by ASEAN, including the issues of data exchange between countries’ customs authorities.

For the customs procedures, it would have specific regulations for procedures for each channel of goods: Specifically, goods originating in Vietnam going through ASEAN countries and arriving at a destination within ASEAN countries, then Vietnam will be the departure point and in accordance with the current regulations, the goods are exported; in the opposite case, Vietnam will be the destination, and in compliance with the current regulations, the goods are imported; goods that come from an ASEAN country or outside of ASEAN and go through Vietnam to another country within ASEAN, and goods from an ASEAN country going through Vietnam to another country outside of ASEAN, each procedure must ensure full documentation procedures and are the responsibilities of the concerned parties.

Regarding customs supervision, the draft Decree does not only regulate the supervision of goods when goods arrive in the territory of Vietnam, or for the goods that have completed export procedure for putting into the supervision and Customs authority’s management area until goods have been actually been exported, but it also has relevant provisions in order to supervise a whole journey for the freight.

Regarding the place for implementing customs procedure, based on the provisions of Protocol 2 and Protocol 7, the draft Decree stipulated specifically the location for implementing customs procedure (where enterprises declare and submit information of transit declarations, relevant dossiers), and border gates for transit goods that are allowed to bring goods into the Vietnamese territory and vice versa (in accordance with the provisions of Protocol 2).

The issues of guarantee and deposit of tax under the provisions of Protocol No. 7 are also specified as: Private guarantee; general guarantee; method of guarantee payment; tax deposit; conditions, rights and responsibilities of the guarantor; inspecting, monitoring the handling of guarantees and deposits of customs offices; recovery and coordination for debt recovery of customs duty owed by the transit countries, etc. Particularly, the level of guarantee under the provisions of Protocol 7 shall be based on the highest tax rate of the country which transits goods go through in its schedule, and in order to determine the maximum tax rate, it is the duty of each country to connect to the ACTS data system for determining the level of guarantee or deposit for transit taxes at the highest rate.

The draft also specified the authorized economic operator (AEO): Includes issues on conditions for recognition of AEO, dossiers and procedures to be recognized as AEO of the state management authority which is assigned the task for recognition. The State management authorities shall implement the recognition of AEO, as well as priority regimes, when they should apply in the course of customs procedure.