Specialized inspections: Enterprises spent tens of billions of dollars for storage

	Enterprises spend 15,000 billion VND per year on specialized inspection
	State Treasury implements over 300 specialized inspections
	Ministries review fees for specialized inspection of imported and exported goods

Imports and exports across land border gates are inspected and supervised by both Customs and Border Guard, causing time and is cost-consuming for enterprises and making them angry. Photo: H. Anh ​

Overlap is slowly improved

Assessing the specialized inspection in the report on the implementation of the Government's Resolution No. 19-2017 / NQ-CP (dated 6th February, 2017) on continuing the implementation of the main tasks and solutions to improve business environment and enhance national competitiveness in 2017, and orientation by 2020, MPI said that ministries and sectors understood the requirements of specialized inspection and management reform and some ministries had taken specific measures to perform this task. Accordingly, the time of some specialized inspection procedures had been shortened. However, there were still many problems and obstacles in specialized inspection.

First of all, the scope of goods subject to specialized inspection is too wide and tends to increase. In fact, the circulars of some ministries tends to expand the List of goods subject to specialized inspection compared with the provisions of the Law.

As reflected by enterprises, animal quarantine procedures were very difficult, complicated, time and cost-consuming for businesses. This process consists of two phases and is carried out in two offices of the Department of Animal Health: Quarantine registration at the Department of Animal Health in Hanoi (the time is regulated as 5 days, the actual time is much longer, including prolonging the time without reason and Declaration and quarantine at the regional agency of animal health (the time is not specified).

The Department of Animal Health has often responded that the delay in issuance of quarantine approval was due to too many dossiers with only one staff in charge of registration for all enterprises in the country. The process is quick or slow, easy or difficult, that depends the staff. This is the internal work of the Department of Animal Health, but the affected parties are enterprises.

MPI also realized that during the past, the overlap in specialized management and inspection had been slowly improved. Accordingly, the overlapping management and inspections among Ministries (Industry and Trade, Agriculture and Rural Development, Health, Border Guards and Customs) in all fields have not yet improved (except positive changes in the assignment of state management responsibility for food safety in the Draft Decree replacing Decree 38).

Specifically, the technical inspection, labour safety, hygiene training and working environment survey are managed by 10 Ministries. According to an enterprise, in order to import a (01) crane forklift remote (1.2kg), the enterprise must carry out procedures 8 times at many different units of the Ministry of Industry and Trade and Ministry of Information and Communication.

According to the MPI, imports and exports across land border gates must be inspected and supervised by both Customs and Border Guards, causing time and cost consuming for enterprises and making them angry. Right after issuing Resolution 19-2017, the Ministry of Defence reported the contents related to the regulation that the border guards shall inspect and supervise the imports and exports across land border gates in Circular 09/2016 / TT-BQP. Accordingly, the Ministry of Defence reported that it was actively working with relevant ministries to finalize the revised circulars in compliance with the Customs Law and at the same time proposed to amend the Ordinance on Border Guards. However, it has been almost 1 year, no changes and no proposals had been made and implemented.

Many costs seriously affect enterprises

Regarding the time of specialized management and inspection, the MPI emphasized that although time had been reduced more than before, it was still long, causing many risks for enterprises (storage costs and administrative penalties for delayed clearance, loss of business opportunities).

For example, the registration time for energy labeling at the General Department of Energy (MOIT) usually takes about 3 weeks. Circular No. 36/2016 / TT-BCT amending Circular No. 07/2012 / TT-BCT has changed the method of certification for vehicles and equipment; applied the form to let enterprises self-announce the energy efficiency level and labeling. However, the General Department of Energy (MOIT) still requires enterprises to have their announcement codes before labeling for product circulation (previously, this was the registration number). Hence, the energy labeling procedure was reformed on paper, but not implemented in practice.

Most concern is cost, according to MPI, the cost of the specialized inspection is still too much especially the inspection fee of energy efficiency, veterinary quarantine fee and inspection fee of imported feed quality

Accordingly, many costs of specialized inspection seriously affect the business performance of enterprises and is contrary to the direction of the Prime Minister on "cost reduction for enterprises.

For example, to import a shipment of refrigerators, an enterprise must carry out inspections such as, an inspection of electromagnetic compatibility costs VND 16-20 million/per product sample, and the unofficial fee was VND 4 million per result sheet; Inspection of energy efficiency costs VND 16 million per product sample; and inspection of conformity and CR stamping costs VND 6 million per product sample and the value of destroyed product sample (destructive inspection for first time imported product) and unofficial fee was VND 2-3 million per result sheet. Thus, the total cost of specialized inspections for a refrigerator model was about VND 70 million (excluding the value of the destroyed sample). The enterprises calculated that if the shipment only had a few units, the enterprise would not be profitable, and even suffer from financial loss.

MPI also provided evidence that the quarantine agency requires the quarantine certificate issued by the exporting country to verify the quarantine certificate if suspecting it before quarantine registration. This caused difficulties, time and is cost-consuming for enterprises. An importer of wood products said that every year, the company must spend tens of billions of dong (even VND 2.5 billion a month) for storage.

In order to strongly promote the implementation of Resolution 19 on improving the business environment and enhancing national competitiveness, MPI recommended the Prime Minister to request that ministries must promptly review and propose the reduction of investment and business conditions in areas under their management and report to the Prime Minister in January 2018.

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At the same time, ministries are required to fully and promptly carry out tasks and solutions of specialized management as specified in Resolution 19, to reduce the percentage of goods subject to specialized inspection from 30-35% to 15% in the second quarter of 2018.