Shortening Customs clearance time thanks to risk management

	Risk management for fiscal sustainability and public financial security
	Preventing loss of revenue via goods classification: Making healthy competitive environment for enterprises
	Insufficient information makes violation detection rate through risk management low

Operation at container scanner center at Hai Phong Customs Department. Photo: T.B

Finding compliant enterprises to apply incentive policies

According to statistics from the General Department of Vietnam Customs, from 2012 to 2017, there were 108,242 enterprises engaged in import and export nationwide. The number of export and import enterprises sharply increased and fluctuated over the years. Specifically, there were 68,685 enterprises in 2012 and 81,864 enterprises in 2017 (increasing 19.1%, equivalent to 13,179 enterprises. However, small and medium enterprises engaged in import and export are the majority in the structure and have lack of professionalism, limited resources for investment in management, therefore they easily make mistakes. In addition, the number of enterprises that are not regularly engaged in import and export activities is high and the sustainability in business activities is low, and always with high risks. This is a challenge for the Customs in collecting information and identifying enterprises subject to key control.

In order to implement risk management well, over the past time the General Department of Vietnam Customs (GDVC) issued a plan for information collection and analysis on risk management, which aims to collect and update information of 30,000 dossiers of import and export enterprises; 100% of bond warehouse, port and yard operators, 100% of enterprises that are dissolved, bankrupted, stopped and suspended from operations. At the same time, focusing on collecting and updating information on import and export goods subject to specialized inspection, major commodities, and goods that are beyond the time limit for carrying out export procedures and are backlogged at warehouses, yards and ports before arrival.

From 16th July to 15 August 2018, among 103,778 enterprises, there were 0.06% authorized economic operators (68 enterprises); 11.2% of compliant enterprises (11,642); 1.46% of non-compliant enterprises (1,517 enterprises); 87.26% of enterprises did not meet the compliance assessment criteria (90,551 enterprises were not subject to the above group).

Thanks to information collection from many sources, the Customs has focused on managing compliance of enterprises by collecting, updating and managing information on enterprises’ dossier, assessing and classifying enterprises; applying compliance management policies and encouraging voluntary compliance of enterprises; and developing partnership. Besides, the Customs regularly monitors, analyzes and evaluates operation and law compliance of enterprises; summarizes and proposes to amend policies, procedures and incentive policies as well as polices on compliance assessment and risk classification for import and export enterprises, facilitating enterprises that comply well with the law. On the other hand, inspecting non-compliant enterprises to improve the business environment and enhance national competitiveness and law compliance.

Chart shows the results of channel classification: Green, Red and Yellow channel (updated as of 15th August 2018). Source: The GDVC

Screening prior to the arrival of goods

In recent years, the risk management has been an increasingly important role and expanded in scope and specialized in contents and techniques applying in Customs operation, such as channel classification to decide the screening for imported goods before Customs procedures; channel classification to decide the inspection during Customs procedures; channel classification to decide the screening of exported goods after Customs clearance. This channel classification is linked and inherited in the management process chain and based on the unified risk management process, which has achieved positive results.

Implementing the Government's Resolution No.19/NQ-CP in 2017, the Customs has step by step completed the risk management mechanism and classified channel prior to the arrival of goods for Customs clearance and good release when goods arrive at ports, facilitating import and export activities.

Previously, enterprises implemented procedures to present goods and transport goods container (from warehouse, yards and entry port) to the site for screening under the instruction on channel classification for inspection on the system or channel transfer in carrying out Customs procedures at Customs Branches. Currently, through collecting, analyzing and assessing information prior to the arrival of goods, the Customs has clearly identified and scanned goods containers as soon as they were unloaded from means of transport and transported to the gathering sites after screening .

According to the assessment of importers and exporters, thanks to advance screening, cost and time during Customs procedures, cost for machine operation, and production of port operators have been shortened. At the same time, helping the Customs to take the initiative in Customs inspection and supervision on the basis of methods and techniques of risk management for key subjects and facilitating trade activities.

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The risk management is increasingly developed and improved, ensuring the smooth channel classification, meeting the requirements of automation, electronization of customs procedures, harmony between trade facilitation and control. However, this work still has many shortcomings, such as the lack of legal framework for the management, compliance assessment and compliance incentive policies for import and export enterprises; the application scope of specialized management policies is too large and not in line with the principle of risk management application.