Wednesday, October 17 2018

VietNamNews

Customs clearance bond system can facilitate trade

Update: October, 01/2018 - 09:00
Deputy head of the Customs Supervision and Management Department under the General Department of Việt Nam Customs, Ngô Minh Hải.
Viet Nam News

A customs clearance bond system can improve the speed and efficiency of customs processing in Việt Nam. Deputy head of the Customs Supervision and Management Department under the General Department of Việt Nam Customs, Ngô Minh Hải, talks to Hải Quan (Customs) newspaper about how the system works.

Can you explain in detail about the customs clearance bond system?

The system is meant to streamline import processing, with the bond being an agreement that ensures an importer (who would buy a customs bond from an approved surety company) will pay all fees and taxes as well as comply with laws and regulations.

They can acquire customs clearance for the imported goods even when they have not completed all customs procedures as required.

Anyone who is importing goods or transporting them locally is required by the customs agency to purchase a bond from a surety company. If an importing company fails to pay fees or follow regulations, customs officials can file a claim against the bond. The surety company would then pay the claim, but in the end the importing company is required to pay back the surety company.

Customs bonds thus help speed up the goods clearance process.

The surety company would have to meet certain requirements set by the customs authority, including those on financial insurance.

A customs bond system would help protect Viet Nam’s customs revenues and ensure compliance with laws and regulations.

Can you elaborate on the benefits of a customs bond system for state management bodies as well as enterprises?

For importing companies, the customs bond system will help them have more time for completing their dossiers and documents while still enjoying preferential policies on tax debt, fine delays, customs receipts, etc. They can pick up their goods from the customs bodies for storage requirements. This is especially convenient for goods that require special inspection or examination.

In case an enterprise uses an official customs guarantee letter issued by a bank, they have to pay a certain amount of money every month and this amount is often rather huge. In this case, the enterprise’s capital would be held at the bank and can’t be used for import-export activities. A customs bond system would replace this bank guarantee and often does not require an enterprise to pay a large amount of money for the fee.

These impacts would help increase predictability and efficiency for traders, particularly small- and medium-sized enterprises, when shipping items to and from Việt Nam, and also improve Việt Nam’s competitiveness and appeal for foreign direct investment.

For the customs bodies, the customs bond system ensures stable revenues from import-export tax, fees and even fines in case enterprises violate customs regulations.

Surety companies would enjoy a guarantee fee in accordance with the amount of goods and will have to take responsibility for the import-export firms in case they don’t fulfill current customs regulations. The customs bond market will be a potential new subset of the insurance market.

With all the benefits, a customs bond system can be said to be an effective tool to facilitate trade and increase the economy’s competitiveness.

What are the challenges of a potential customs bond system in Việt Nam? What are the next moves to bring the system to Việt Nam in the near future?

The Government has aggressively asked relevant bodies to bring out reform policies on specialised examinations with import-export goods. Ministries have made certain reviews and cut down the number of goods that need special examination before customs clearance. Changes have also been made so that goods can be examined after customs clearance instead of before customs clearance.

However, the list of goods that have to be especially examined is still long. In 2017, the number of customs declarations for goods with requirements for special examination accounted for 19 per cent of all imported goods – about two million pages. The Government has required this number to be reduced to one million pages, but that’s still a lot. 

When administrative reform has not caught up with changes in trade and there has not been a synchonised system in customs declarations, information exchange between special examination units and the customs authority and a national one-door mechanism, a customs bond system would surely facilitate trade, reduce time and money spent for enterprises.

There are certain challenges to bring the system to Việt Nam relating to the legal area. We do not yet have fully established regulations on customs bond systems. The first thing to do is to build legal documents allowing insurance enterprises and firms to participate in the customs bond area.

The customs authority will play the leading role in co-ordinating with relevant ministries who are competent in trial pilots and training for relevant parties. — VNS

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