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Deputy Director General of the General Department of Customs Hoang Viet Cuong and Director of the Risk Management Department Nguyen Nhat Kha award medals and flowers to 10 outstanding businesses actively participating in the "Pilot program to support and encourage businesses to voluntarily comply with customs laws".

Businesses increase their brand reputation by participating in the AEO program

Speaking about the AEO program at the Customs – Business Forum 2023 organized by Customs Magazine last week, Mr Nguyen Sy Hoang, Deputy Director of the Post-Customs Clearance Audit (PCA) Department (General Department of Customs), said with the desire to support many businesses to comply well with the customs law, the AEO program was first piloted in 2011, then in 2014 this Program was legalized in the Customs Law and other relevant legal documents.

After more than 12 years of implementation, there were 73 AEOs by September. Although there were up to 75 AEOs at one time, during the inspection and evaluation process, the Customs discovered businesses that violated and did not meet the criteria, so the Customs agency suspended the priority.

"The AEO Program has many incentive regimes and policies for qualified businesses, but on the contrary, if businesses violate or do not comply with regulations, the Customs is ready to suspend the priority immediately," said Mr Nguyen Sy Hoang.

The representative of the PCA Department said 73 AEOs come from many different countries, including 25 Vietnamese enterprises, 16 Korean enterprises, 13 Japanese enterprises and the remaining enterprises are from markets: United States, Taiwan, Italy, Denmark, and Vietnam - Russia joint venture. Although there are only 73 businesses, they contributed about 36% of the country's trade turnover, reaching about US$266 billion in 2022. The AEOs operate in various fields, from industry processing to agricultural manufacturing.

Mr. Nguyen Sy Hoang added that, through 12 years of accompanying businesses, the Customs has understood the difficulties and advantages of proposing practical and effective incentive policies for businesses. The first benefit that AEO receive is shortening customs clearance time. This is very important for those who need to deliver goods quickly and on time, thereby reducing many other costs from human resources and related costs.

Next, when recognized as an AEO, the enterprise will increase its reputation and brand domestically and internationally. Another benefit is that the AEO can pay taxes after 40 days from the date of opening customs declaration. This benefits businesses with high tax rates and values.

In addition, the General Department of Customs has signed a Mutual Recognition Agreement of the AEO Program with the Customs of ASEAN member countries and is negotiating the agreement with other countries such as Korea, Japan, China, Chile, and England. This means that once signed and recognized as an AEO of Vietnam, the enterprise will enjoy the same policies as those countries' businesses. Currently, 100 countries around the world have applied to the AEO program.

According to Mr. Nguyen Sy Hoang, when participating in the AEO program, through management measures of the Customs agency, businesses will proactively raise their standards and have better internal control to meet the management and increase business efficiency. Management agencies can spend resources on inspecting and supervising other risky businesses and products. Thereby reducing resources but still ensuring the management requirements of the Customs agency.

70 businesses upgraded their compliance level

Along with the AEO program, which also brings many benefits to businesses, the Program supports and encourages businesses to voluntarily comply with customs laws. Mr. Nguyen Nhat Kha, Director of the Risk Management Department (General Department of Customs), said that during the management process, the Customs found that the majority of businesses comply with the customs law, but there are some not. Therefore, the department has advised the General Department of Customs leaders to develop and promulgate a program to accompany businesses to raise compliance levels. At that time, the Customs agency will reduce inspection and control for compliant businesses and use resources to inspect incompliant businesses.

The Program was launched in July 2022. In phase 1, 213 businesses are participating in 35 local customs departments. The Program has benefited both Customs and businesses. For the Customs, a 3-level apparatus including the General Department, the Customs Department, and the Customs Branch has been established with 123 officers. More than 153 recommendations and problems of the participating businesses have been guided and answered, reaching 100%.

Mr. Nguyen Nhat Kha said that through the first phase, more than 70 of 213 participating businesses in the Program had their compliance level upgraded (from level 3 4 to level 2 – high compliance, approaching level 1 – authorized enterprise). Businesses participating in the Program enjoy practical benefits such as reduced inspection rates, support with customs procedures, and proactively preventing violations during import and export activities.

Open opportunities for many businesses

Mr. Nguyen Nhat Kha said that in the next phase, the 2023 plan, the Customs agency will increase 20% to 213 businesses. But now, with the initiative of local customs and businesses, it is expected that the General Department of Customs will coordinate with local customs to sign contracts with 85 businesses, which means 40% higher than the initial number.

The number of businesses has also expanded, with operating in production, trade, agents, and transportation to have an overall overview. After the 2-year pilot period ends, the Customs agency will evaluate and learn from experience to officially implement the Program.

Mr. Nguyen Sy Hoang shared that we are currently researching to adjust policies related to the AEO program in two stages, before and during the amendment to the Customs Law.

The content that many businesses are interested in is expanding the number of participants. It is regulated that all businesses participating in the supply chain can become AEOs if they meet the conditions and regulations.

"Currently, Vietnamese businesses account for a relatively small number, 25/73 AEOs. Due to the characteristics of Vietnamese enterprises, most are small and medium enterprises, accounting for 96-97% of import-export enterprises. Therefore, their conditions are not equal to businesses from developed countries. Therefore, the Customs is aiming to revise this content. For small and medium enterprises, there will be specific priority policies to attract and open opportunities for them to become AEOs. In addition, the Customs also reports to the competent authorities to stipulate the expansion of priorities not only in customs and tax but also in other fields such as specialized inspection, investment..." said Mr Nguyen Sy Hoang.

Digital transformation needs the companionship of businesses

In parallel with amending legal regulations, the Customs is actively signing Mutual Recognition Agreements with Customs of other countries. Thereby, it will benefit businesses and partners to be treated equally as AEO of the host country. The Customs hopes that with such revised directions, there will be more and more AEOs. For existing AEOs, the Customs agency will ensure maximum companionship and support.