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Risk management to cut red tape, clearance costs

Update: July, 27/2015 - 08:45

GDC Deputy Head Vu Ngoc Anh spoke with Thoi bao Kinh te Viet Nam (Viet Nam Economic Times) about how risk management has reduced red tape and saved time during customs procedures.

How would you evalu-ate the GDC's implementation of risk management activities in recent years?

A risk management system has been put into practice on a national scale since December 2005. Ever since, the system has become an effective tool. It helps the department allocate manpower and resources efficiently while allowing it to ensure the quality and accuracy of its services.

The system also played an important role in improving its automated clearance's effectiveness and readjusting the country's customs procedures in line with international standards.

Risk management activities didn't just reduce the number of physical cargo examinations and facilitate the import/export process. They also reduced the time required for customs clearance, saving businesses time and money.

In 2006, the general department processed a total of 2.1 million customs files. Of these, 24.45 per cent were classified as red files, which required the general department to check both import and export documents, and actual cargo.

With the help of the risk management system, the general department processed a total of 7.2 million customs files in 2014. But just 9.6 per cent were classified as red files. It meant a lot of time and money were saved for both the general department and businesses.

What are the criteria for the GDC's risk management system?

The GDC employed a number of criteria in its risk management system, such as how well a business co-operates with customs and tax agencies and how many violations were found in a business's custom and tax records. In general, cargo declared by a business with a clean history and willing to co-operate would require less checking. The general department also had special mechanisms to support larger businesses or those that possessed proven capacity in import/export activity management.

The GDC's risk management system was built on a large information database that was based on business activities both inside and outside Viet Nam. The inspection measures necessary depend on each business's profile.

Then can we say the risk management system assigned risk levels to a business based on its record?

That's correct. The decision on whether a business's cargo requires a document check or full-on physical examinations is made based on the business's record. Furthermore, it also depends on the result of the GDC's information analysis and risk assessment procedures.

The system allowed GDC to focus its manpower and resources in high-risk areas, where it was required most. It helped the GDC reduce the number of cheats, improving accuracy and management capacity.

The general depart-ment's goal was to focus on its post-clearance audit process. It's mandatory that it must manage its risk management effectively to meet that goal.

Risk management activities would help businesses significantly reduce red tape, and the time and money required for import/export activities. Indirectly it helped to improve a business's competitiveness by cutting costs.

It would also help to prevent corruption, and set out legal standards and procedures for businesses to follow in the future. — VNS

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