Regulations on penalties for violations of goods origin improved

VCN - Identifying improvement of customs mechanisms, policies and laws as a key task, the General Department of Customs has focused on the building and improving of customs mechanisms and laws, solving difficulties and problems for the business community, limiting overlapping regulations between management agencies and ensuring feasibility, as well as effectiveness and efficiency. In particular, the General Department has strengthened synchronous implementation of measures to fight against origin fraud; the General Department of Customs has quickly completed legal provisions on goods origin and penalties for violations of origin of import and export goods.
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Lang Son Customs strictly controls imported goods that were incorrectly declared on the name, quantity, tax rate, code and origin. Photo: H.Nu

Along with open-door up and international economic integration, the management of goods origin is a specialised task, which is not only associated with free trade agreements but also closely related to the emerging trend of applying trade remedies in recent years.

With the recent growth rate, origin fraud has become a warning threat because of its potential to cause damage not only to a specific shipment or a specific business but to an entire industry or the country’s export activity. In addition, the brand "Made in Vietnam" has been recognised by domestic and foreign consumers and the labelling "Made in Vietnam" aiming to trade fraud and deceive consumers is more and more common.

Vietnamese origin fraud not only has direct consequences on specific products, affecting consumers but also has a significant impact on domestic industries, harming the reputation and competitiveness of goods produced in Vietnam.

To strengthen inspection, control and stop this situation at the border gate, with the attention of the Government, ministries and agencies, regulations on the origin of import and export goods and regulations on penalties for violations of goods origin are increasingly improved.

From 2018, the Government issued Decree 31/2018 / ND-CP dated March 8, 2018 detailing the Law on Foreign Trade Management, the Ministry of Industry and Trade also issued Circular 05/2018 / TT-BCT dated April 3, 2018 regulating goods origin. These are considered important grounds to determine origin of goods.

Clause 1, Article 3 of Decree 31/2018 / ND-CP provides: "Origin of good" means a country, group of countries or territory where the good has been wholly obtained or where the last substantial transformation has been carried out when more than one country, group of countries or territory is concerned in the production of the good.

Article 6 of Decree 31/2018 / ND-CP stipulates that originating goods are goods which are wholly produced or obtained in a country, group of country, or territory as provided in Article 7 of this decree; or goods which are not wholly produced or obtained in a country, group of countries or territory provided that the good has satisfied the requirements of Article 8 of this decree.

Circular 05/2018 / TT-BCT providing for determination of the origin of goods. Accordingly, import and export goods shall be treated as which is not wholly obtained or produced in a country, group of countries, or territory if it satisfies criteria prescribed in the Appendix I of Product Specific Rules issued together with this circular. Non-preferential rules of origin are specified in Article 6 of Circular No. 05/2018/TT-BCT.

In tandem with the improvement of the content regulations, the regulations on penalties for violations of origin were also improved. In 2020, the Government issued Decree 128/2020 / ND-CP dated October 19, 2020, providing for penalties for administrative violations in customs and Decree No. 98/2020 / ND-CP dated August 26, 2020 providing for penalties for administrative violations in commercial activities, the production of and trading in counterfeit or banned goods and the protection of consumer rights

It is the first time penalties for acts of import, export, trading, temporary import for re-export, transit or border-transfer of fake Vietnamese origin goods specified in Decree 128/2020 / ND-CP have hit the highest rate of VND100 million. In addition, infringing goods are confiscated or infringing goods as goods harmful to human health, animals, plants and the environment and depraved cultural products are destroyed.

In cases where the infringing goods have been sold, evacuated or destroyed in contravention of regulations, enterprises will also have to pay an amount equal to the value of those infringing goods. In addition, Decree 128/2020 / ND-CP also stipulates rules for cases of false declaration of origin. Some acts of false declaration of origin have been added compared to Decree 127/2013 / ND-CP (amended and supplemented in Decree 45/2016 / ND-CP) such as the false declaration of origin of imported taxable goods but this does not affect the tax payable, or the false declaration of origin of goods imported from non-tariff area into the inland will be sanctioned for tax evasion.

Also in Decree 98/2020 / ND-CP specifying penalties for violations related to the certificates of origin of goods. Violations against regulations on origin specified in Article 44 of this decree include erasing or falsifying contents of the certificate of origin, self-issued certificate of origin or written approval for the self-certification of origin issued by competent authorities; providing documents containing inaccuracies to competent authorities or organisations when applying for issuance or verification of a certificate of origin; falsely self-certifying origin of goods when obtaining an approval for self-certification of origin from a competent authority; forging the certificate of origin or self-issued certificate of origin, if not liable to criminal prosecution; providing documents containing inaccuracies to competent authorities or organisations when applying for an approval for self-certification of origin or verification of a self-issued certificate of origin; and using a fake certificate of origin or self-issued certificate of origin, if not liable for criminal prosecution.

In addition, Decree 98/2020/ND-CP also stipulates the goods whose label or package contains information forging the origin of good or place of manufacturing, packaging or assembling (point dd Clause 7 of Article 3). Penalties for the trading of above goods are described in Article 11 of this decree.

Thus, so far, there are provisions on penalties for fraudulent acts of Vietnamese origin. However, through implementation, the regulations on origin have exposed shortcomings that must be amended such as the regulations on simple processing nad self-certification of origin.

In the near future, to improve the quality of the management of the origin of goods, the Government should direct the completion of the above-mentioned documents and strongly encourage solutions on law enforcement.

It is necessary to strengthen coordination among authorities such as the General Department of Customs, General Department of Market Surveillance and Import - Export Department under the Ministry of Industry and Trade. At the same time, it is important to build a general information system about fraudulent acts of origin, enterprises violating regulations on origin and products at risk of origin fraud to facilitate search and management.

Jurisdiction to impose penalties of customs agency in the field of oil, petroleum and gas clarified Jurisdiction to impose penalties of customs agency in the field of oil, petroleum and gas clarified

In addition, it is also deemed necessary to promote communication in the media about the risks and harms of origin fraud; provide information on violations and penalties and sanctions applied to deter enterprises attempting to fraud the origin; raising awareness of the people and businesses in the direction of encouraging businesses to eschew immediate benefit but also cover and support fraudulent acts of Vietnamese origin goods, creating a mechanism for people to denounce acts of goods origin fraud.

By Vu Huong (Legal Department) / Huyen Trang

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