|Professional activities at Hon Gai port Customs Branch – Quang Ninh Customs Department. Photo: Quang Hùng|
Pioneering in reform
According to the General Department of Vietnam Customs (GDVC), in 2011, among the total of more than 4.6 million customs declarations, the number of red channel declarations accounted for 12.62%. By 2015, the number of declarations increased to more than 8.3 million and red channel declarations accounted for 7.55%, down 5.07% compared to 2011.
Along with the development of the economy, the number of declarations is also constantly increasing. In 2020, customs authorities processed customs clearance for 14.1 million import and export declarations and total turnover reached $545.36 billion, increasing by 5.4% compared to 2019. In particular, there are 7.4 million declarations in the green channel, accounting for 52.48%, 6 million of yellow channel declarations, accounting for 42.55% and 700,000 declarations of red channel, accounting for 4.97%.
Although the number of declarations has increased greatly, thanks to a renovation in customs management, the import-export activities of firms are run smoothly. Up to now, the legal corridor and business process system have been formed basically and firmly, meeting automated channel classification for inspection decisions based on the application of criteria and professional customs information system. In 2019, the Ministry of Finance issued Circular 81/2019/TT-BTC stipulating risk management in customs operations in accordance with the requirements of reform, modernisation and facilitation for import-export enterprises and control of legal compliance in management of import-export and immigration activities (hereinafter referred to as Circular 81).
To further facilitate the enterprises and the Customs authorities in the inspection and control of imported and exported goods, the GDVC has set up a compliance management programme, voluntary compliance enterprises, helping to facilitate businesses in import and export. The result of the compliance assessment of firms will serve as basis for customs authority to focus on applying customs inspection and supervision measures to enterprises’ goods and means of transport. Customs authority will reduce the rate of direct document inspection and physical inspection of goods for enterprises that voluntarily comply and many other priorities and incentives. However, if firms do not obey, they will be directly inspected by the Customs authority.
Compliance management, which has been implemented recently, has helped build a transparent environment, complete full legal procedures in customs operations. This has helped reduce the rate of physical inspection over the years. Therefore, firms that are eligible under the regulations need to contact and provide full information and dossiers to Customs authorities for compliance assessment; improve the compliance capacity of firms; especially, businesses must actively and voluntarily cooperate fully with the Customs authorities in implementing customs procedures.
According to Nguyen Minh Thao, Director of the Business Environment and Competitiveness Department, the Central Institute of Economic Management (CIEM), the Ministry of Planning and Investment, the Customs sector was the first in Vietnam to apply the modern management method based on risk management application and compliance management in import and export activities.
Help businesses reduce resources
Nguyen Minh Thao added that the reform of the Customs authorities would create motivation, opportunities, and a good precedent for ministries and sectors to adjust policies and apply risk management measures, compliance management for management. With the management measures being implemented by the Customs sector, especially, more transparent groups of criteria and information, firms having access to information would create confidence and motivate them to comply with the law. Therefore, it is necessary to be more transparent in applying criteria so businesses know how their shipments are classified into green, yellow, and red channels. Thereby, creating information transparency, as well as creating confidence for businesses that comply with the law, will be facilitated in import and export activities.
The director of Delta International Company Tran Duc Nghia said the issuance of Circular 81 was a step forward for the Customs sector, bringing benefits not only to the business community and also to Customs authorities. In 2018, businesses registered more than 11 million import and export declarations. With this large number of declarations, if risk management was not applied to classify channels for goods, the social resources spent on customs procedures would be very large. Every year, firms make from 35,000 to 40,000 declarations and devote too many human resources to this activity. On the other hand, the revenue collected from customs brokers was only less than 10%, corresponding to about 30-40 people performing this work. This means that 100 declarations per day would be carried out. Therefore, when customs authorities transformed from paper customs declaration to electronic customs declaration based on effective risk management and accurate channel classification (Green-Yellow-Red), enterprises reduced human resources force, Nghia said.
Nghia cited if the consignment was classified to red channel, enterprises would incur many costs. To conduct physical inspection by the Customs authority, enterprises must work with warehouses and yards to prepare goods, accompanied by a lot of administrative work and costs.
Nguyen Minh Thao said when participating in import-export activities, enterprises are affected by the regulations of specialised management authorities. If specialised management agencies did not apply risk management, then unintentionally, the reforms and changes of the Customs agency would only be a very small step forward. Because if risk management was not applied in specialised management, all shipments subject to specialised inspection would be classified in the yellow or red channel.