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SHARING PRACTICES TO PREVENT ORIGIN FRAUD AND CIRCUMVENTION OF TRADE REMEDIES
In the framework of cooperation with the United States Agency for International Development (USAID), the Ministry of Finance in collaboration with the Ministry of Industry and Trade recently organized the Workshop on International Best Practices to Prevent Origin Fraud, Illegal Transshipment and Circumvention of Trade Remedies in Hanoi.
The workshop was attended by experts from the United States, Japan, the European Union, the ASEAN-U.S. Business Council, the Alliance for Global Trade Facilitation and Vietnamese governmental agencies as well as more than 30 representatives of business associations and enterprises of Vietnam.
In the context of complicated world trade where trade protectionism is emerging as a popular trend, the imposition of trade remedies among major economies has produced significant impacts on Vietnam, an open economy that has already joined 17 free trade agreements (FTAs).
Facing the risk that foreigners may use Vietnam as a departure to export disguised goods of faked Vietnamese origin to its FTA partners to enjoy preferential tax rates, Deputy Finance Minister Vu Thi Mai said, the Government of Vietnam has drastically and closely requested relevant agencies and stakeholders to tackle this issue. Specifically, on July 4, 2019, the Prime Minister issued Decision 824/QD-TTg approving the Project on “Strengthening State administration against trade remedy circumvention and origin fraudulence”.
The Ministry of Finance - the General Department of Customs has taken active, specific and effective solutions to amend legal documents in connection with origin of goods such as Circular 38/2018/TT-BTC dated April 20, 2018 of the Ministry of Finance on inspection and determination of origin of exported and imported goods, Circular 62/2019/TT-BTC dated September 5, 2019 on amendments and supplements to Circular 38/2018/TT-BTC, amendments to Decree 45/2016/ND-CP dated May 26, 2016 on amendments and supplements to Decree 127/2013/ND-CP on penalties for administrative violations and administrative enforcement of executing administrative decisions in the customs field to raise sanctions against defrauded origin of goods. The ministry/general department promulgated documents directing and ordering provincial/municipal customs departments to intensify supervision and inspection of declaration of origin on customs declaration forms and labeling of import and export goods, with responsibility of the authority clearly stated. They also analyzed import and export statistics and other information sources to determine a list of important products with high risk exposure to origin fraud to have best inspection and control measures.
Mr. Au Anh Tuan, Director of the Customs Supervision and Control Department, informed the workshop that goods highly exposed to origin fraudulence risks unexpectedly increased in the past time, including aluminum, electronics, rubber and wood products. For example, electric wire and cable exports to the U.S. surged by 252% over the same period; plastic materials by 147% and woodwork by 140%. Imports from China also jumped high, for example electronic products rising by 53%, and electric cables by 52%. Many Vietnamese exports are being subjected to trade remedies such as cold rolled steel, shaped aluminum and forklifts and this reality seriously affected many honest businesses of Vietnam.
Mr. Claudio Dordi, Director of USAID-funded Trade Facilitation Program, said, through this 5-year project, USAID is assisting the Vietnamese government to apply and carry out risk management for customs authorities and specialized inspection and control agencies, thus helping enhance the WTO Trade Facilitation Agreement. The project will promote and encourage more effective partnerships between government agencies and customs authorities at central and local levels with the business community.
Source: VCCI
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