Smuggling, counterfeiting, trade fraud becoming more complex

December 26, 2022 - 08:45
Smuggling, counterfeiting and trade fraud have been showing more complex developments on the border lines, sea areas and in the domestic market after Việt Nam effectively controlled the COVID-19 pandemic and resumed activities of production, business, import and export.
Customs officers check goods at Kim Thành Border Gate in the northern mountainous province of Lào Cai last week.—VNA/VNS Photo Quốc Khánh

HÀ NỘI — Smuggling, counterfeiting and trade fraud have been becoming more complex in border areas, coastal areas and in the domestic market as the COVID-19 pandemic fades and activities of production, business, import and export resume.

Nguyễn Văn Hoàn, deputy director of the Anti-Smuggling and Investigation Department under the General Department of Việt Nam Customs, told Nhân dân (People) online newspaper that suspects often take advantage of night time and difficult terrain in border provinces to use cars, motorbikes and boats to transport smuggled goods into the domestic market for consumption.

Before transporting, the suspects arrange people to monitor the security forces, and if being chased, they are ready to abandon vehicles and goods to flee or recklessly fight back, he said.

The masterminds and owners of the smuggled goods often use virtual addresses and unregistered SIM cards, making it difficult for the security forces to further investigate, he said.

Some suspects have even been found ordering the production of counterfeit goods from abroad and then importing them into the country for consumption, he said.

Many businesses and organisations already take advantage of the State's preferential and open policies, especially after the COVID-19 pandemic, to bring smuggled goods into the country by many new tricks, he said.

For example, they import goods via express delivery or by air; or import raw materials declared for production but later sold to the market for domestic consumption, he said.

Dương Đức Duy, head of Project Management Board of Rạng Đông Light Source and Vacuum Flask Joint Stock Company, said that the company has been one of victims of counterfeit goods.

It has caused bad effects to the company's revenue in the past, he said.

Currently, fake LED lights are still floating in the market, and are used in many distribution systems with prices much lower than authentic LED lights, he added.

Some organisations set up factories to manufacture products with the same packaging, form, and trade name of Rạng Đông, he said.

It not only resulted in the company's revenue dropping sharply but also caused damage to consumers, he said.

As a victim of commercial fraud, Hoàng Hữu Lộc, deputy head of Dry Cell and Storage Battery Joint Stock Company’s Sale Office, said by sophisticated tricks, some organisations have sold smuggled batteries with at only 66 per cent of the announced price.

According to calculations, a 120Ah battery has the announced price of VNĐ2.84 million (US$120). However, the value-added tax (VAT) invoice price is only VNĐ1.86 million ($78.7). The difference is about VNĐ972,000 ($41.3).

If it is multiplied by 8 per cent of the VAT, the State loses more than VNĐ77,000 ($3.2) per product, he said.

Every year, each battery company is estimated to spend about $6 million to import about 140,000 batteries. It means that the State loses nearly VNĐ11 billion ($465,700) in VAT per year, not including import tax, he said.

The phenomenon of tax evasion is causing losses to State budget revenue, disturbing the market and leading to inequality in price competition, he said.

According to a report of the National Steering Committee for Anti-smuggling, Counterfeit Goods and Trade Fraud, so far this year, security forces across the country have detected more than 100,000 violations, including more than 12,000 cases of smuggling, about 83,000 cases of commercial and tax fraud and more than 1,800 cases of counterfeit goods and intellectual property violations.

There are 380 cases being prosecuted, collecting VNĐ7.66 trillion ($324,000) to the State budget.

Officers of Market Management Division check the quality of goods in a store in Đà Nẵng last week.—VNA/VNS Photo

Causes and solutions

Vice president of the Việt Nam Chamber of Commerce and Industry (VCCI) Nguyễn Quang Vinh said the reason for this crime is that some localities have not been strict enough in the prevention and control of smuggling, trade fraud and counterfeit goods.

Some civil servants are believed to lack responsibility and professionalism, he said.

Some legal provisions related to the prevention and combat of smuggling and commercial fraud are inadequate, he said.

The ineffective and asynchronous coordination between law enforcement agencies is also one of the reasons, he added.

Trần Hữu Linh, director of Market Management General Department under the Ministry of Industry and Trade, said inspections only solve the top of the problem.

The most important thing is how to make every citizen understand and join the fight against smuggling and trade fraud by not buying and selling counterfeit goods.

Each business should actively coordinate with the authorities to prevent counterfeiting, he said.

Security forces also need to closely work with each other, especially the those forces in border areas, to fight against smuggling and commercial fraud, he said.

The Government is advised to increase the level of penalties to deter violators, he said.

From now until after Tết (Lunar New Year), market management forces throughout the country will strengthen inspection, control and strictly punish violations of the law on commerce, focusing on suspects who take advantage of high consumer demand to raise prices unreasonably, which causes market instability, especially for essential consumer goods, he said.

Therefore, security forces nationwide need to make plans to fight against and effectively prevent cases of smuggling, commercial fraud and counterfeit goods to protect domestic production activities as well as the legitimate interests of consumers, he said.

It is also necessary to strictly and publicly punish organisations and individuals that illegally protect smuggling, commercial fraud and counterfeiting activities, he said.

In a related movement, Deputy Prime Minister Phạm Bình Minh, head of the committee, signed and promulgated Plan 115/KH-BCĐ389 to combat smuggling, commercial fraud and counterfeit goods before, during and after the Lunar New Year. Accordingly, Minh requested ministries, sectors and localities to take drastic measures to prevent counterfeit and smuggled goods from entering the country.— VNS