Customs Barriers in Vietnam

7/29/2019 Customs Barriers in Vietnam

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B I N T R A N G T H O V Y

P H M N G C T H I N T H A N H N G U Y N T H H I Y N

P H A N P H C N G

T R N K H N H Q U N H T R A N G

P H M T R N V I T T R U N G

N G U Y N K H C P H C

N G U Y N P H M M I N H T R

N G U Y N C T

P H N G H N G

CUSTOMS BARRIERS

FOR SME IN VIETNAM


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Tho Vy


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SME is divided into three levels:

Very small Small

Medium

According to:

the sizes of their total capital

the average annual number of laborers

Tho Vy


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STATISTICS ON SME

SMEs account for 97% of total number of enterprises in

Vietnam.

SMEs use 50.1% of the labor force

SMEs contribute over 40% to the GDP.

In 2000, there were 14,453 newly established

enterprises

In 2010, the total number of enterprise in Vietnam was

about 520,000.

Tho Vy


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The impact of the global economic recession

The overly high lending interest rates

REASON FOR BANKRUPTCY


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TYPICAL TYPES OF BARRIERS

TARIFF

NON-TARIFF

Thin Thanh


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TARIFF BARRIERS

A tax or duty imposed on goods which

effectively create an obstacle to trade.

Known as import restraints.

Thin Thanh


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Protect newly established domestic industries fromforeign competition.

Protect aging and inefficient domestic industries from

foreign competition.

Protect domestic producers from "dumping" by foreign

companies or governments.

Raise revenue.

Reasons for imposing tariff barriers:

Thin Thanh


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IMPACTS

DD: domestic demand

DS: domestic supply

Thin Thanh


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TYPES

Ad valorem tariff:

A tax or duty on imports which is specified as a

percentage of the value of the good or service being

taxed.

Generate revenue for the government.

E.g: a 15 percent ad valorem tariff on a TV set worth $100

would pay a tariff of $15.

Thin Thanh


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Specific tariff:

Tax on imports that is specified as the amount of

money which is levied per unit of imports.

Generate revenue for the government.

E.g: a specific tariff of $5 for 1 ton of container.

Thin Thanh


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NON-TARIFF BARRIERS

A form of restrictive trade where barriers to trade are

set up and take a form other than a tariff.

Another way for an economy to control the amount

of trade that it conducts with others.

Thin Thanh


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TYPES

Licenses:

o Granted to a business by the government,

allows the business to import a certain type of

good into the country.

E.g:

There could be a restriction on imported cheese,

and licenses would be granted to certain companies

allowing them to act as importers. This create a

restriction on competitions, and increases prices

faced by consumers.

Thin Thanh


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Quotas:

o A restriction placed on the amount of particulargood can be imported.

o Often associated with the issuance of licenses.

E.g:

Quotas for sugar is 10.000 tons, tax rate in quotas

is 10%, tax rate out of quotas is 45%; hence, the first10.000 tons of sugar imported will be imposed for

10%, from the 10.001 tons over will be imposed for

45%.

Thin Thanh


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Voluntary export restraints (VER):

o Created by the exporting country rather than the

importing one.

o Usually levied by at the behest of the importingcountry and could be accompanied by a reciprocal

VER.

E.g: VER between Vietnam and China.

Thin Thanh


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Local content requirement:

o The government can require that a certainpercentage of a good be made domestically instead of

placing a quota on the number of goods can be

imported.

o This restriction can be a percentage of a good itself,

or a percentage of the value of the good.

E.g: a restriction on the import of computers might say

that 25% of the pieces used to make the computer are

made domestically.

Thin Thanh


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Inadequate property rights protection

(e.g. intellectual property):

Protect the ownership, use, control, benefit, etc. of

both physical and intangible property especially

intellectual property (e.g. copyrights, patents, trademarks

and trade secrets).

Problems

Thin Thanh


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Restrictive health, safety and technical

standards (e.g. sanitary requirements):

Inconsistent or country-specific standards for imported

goods including:

o Sanitary requirements.

o Industrial and environmental protection standards.

o Conformity assessment procedures and technical

standards.

Thin Thanh


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Unfavourable quotas and/or embargoes:

o Unreasonable prohibition of commerce and trade

with a certain country.

o Unreasonable restrictions on the quantity of

specific goods being imported to certain countries.

Thin Thanh


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High costs of Customs administration:

o Delay in customs clearance procedures (e.g.excessive and/or irrelevant paperwork, congestion at

points of entry, delay and cost of cargo clearance).

o Lack of procedures for prompt review.

o Lack of transparency and/or irregular/illegal

practices.

E.g: unofficial customs procedures, unwritten rulesand unpublished changes, unofficial fees to

accelerate processing.

Thin Thanh


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EXPORTING PROCESS

c T

Exporting process:


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c T

Exporting process:

Contract Registration

Get the schedule from Booking Room Contact to shipping company to book space

Make customs declaration and

Contact to the shipping

company to take place

Delivery goods to the port

Register goods inspection

Conduct goods inspection

Packing in container or

warehouse

Complete customs declaration

Make goods voucher for the

customer and payment


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Step 1: Preparation

Contract Registration

Booking space on ship

Bulk cargo

Regular line

Prepare documentary

Cargo list and instruction queue

Export license (original)

2 customs declarations (original)

Foreign trade contract (copy)

Business register and enterprise code (only in the first time)

c T


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Step 2: At the port

Present all of the documents

Customs will check the documents as well as the annual

products

Packing then arranging goods in container under the

observation of customs

Complete customs declaration

c T


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Step 3: Contact to customer

Make documents to send to customer:

1. Invoice

2. Packing list

3. L / C or AWB and C / O

c T


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Minh Tr

IMPORTING PROCESS


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Procedures of import goods

If you want to import goods, you must first have a

business license imported goods.

The common method of payment is L / C which is the

first letter of credit, which banks committed buyers will

pay the shipment to the seller via the seller bank

Minh Tr


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PROCEDURES OF IMPORTING CARGOES

Contact to customer to take

import documents

Contact toshipping agent to receiveD/O

Endorse B/L (if requried)

Register customs declaration form

Give D/O to port to receive cargoes

Register contract with

customs

Register examination the cargoes

Examining the cargoes

Liquidate customs declaration

form

Deliver the cargoes to

companys store

Minh Tr


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Full set of import documents include:

1 B / L original, 1 B / L copy

1 original commercial Invoice,1 Invoice copy (copy of theoriginal)

2 Packing Lists

1 copy of purchase contract

1 C/O (to enjoy the preferential tax) 1 Customs declaration (if the list has more than nine items

were added Appendix declarations)

Appendix taxable value declaration.

Business registration, import and export code registration

These are the basic documents to be able to open thedeclaration. In some specific cases need to add some more.

Payment is usually used L/C or TT (Telegraphic Transfer)

Minh Tr


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The process of importing cargoes and vouchers

after opening L / C

Include 3 stages (10 steps)

I. On the ship:

Step 1: The original documents will be sent to the Bankin Vietnam which are banks open L / C and the latter will

be the mortgage bank.

Step 2: Vietnamese bank send money to a foreign bank

after checking the documents and the L / C, confirm

receipt of the cargoes (at the moment the ship docked in

the port)

Minh Tr


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II. When ship close to the port of Vietnam:

Step 3: When the ship close to the Vietnamese port,

shipping agent will notify the ship to the port of

importation and consignee, send endorsement bill to

Vietnamese banks when the ship docked.

Step 4: Vietnamese banks will send endorsement billfor consignee

Step 5: Consignee will send endorsement bill to the

shipping agent and receive D/O from the shipping

agent.

Minh Tr


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III. When the ship docked:

Step 6: Consignee send D/O to import port which will

confirm the consignee is the owner of the consignment.Step 7: The Vietnamese mortgage bank will sign atripartite contract between: Consignee; import port;mortgage bank

Step 8: The mortgage bank transfer the originalvouchers to consignee in order to open customsdeclaration.

Step 9: Consignee open the customs declaration base

on vouchers of mortgage bankStep 10: Consignee moved through declarations to themortgage bank.

Minh Tr


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THE STEPS OF CARGOES RECIEVING

For storage cargoes:

Port receivedfrom the ship

Port givecargoes for

buyer

Hi Yn


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For non-storage cargoes:

o If the cargoes have large volume up entire basement or ship

or bulk goods such as fertilizer, cement, clinker, coal, ore, food

... the owner or the owner trustee may stand directlyforwarding with the ship.

o Before delivery, shippers must complete the customs

procedures and port given to B / L, the delivery D / O. After

comparison with the Cargo Manifest , port to invoice handling

charges and delivery orders directly to all of the staff at the

ship to port forwarding delivery.

o After receiving the cargoes, shippers and buyer sign the

statement and confirm the number of goods delivery with the

delivery slip cum bills.The Ships still make tally sheet and

Report on receipt of cargo (ROROC).

Hi Yn


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Contanier

FCL/FCL

LCL/LCL

Hi Yn


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GENERAL PROVISIONS

CERTIFICATE OF ORIGIN

CERTIFICATE OF QUALITY

(HEALTH, QUALITY, ENVIRONMENT)

PAPERWORK OF

ACCREDITATION

ng Hng Phc ng


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GENERAL PROVISION

All exports and imports must report to customoffices procedures.

The report must be complete with detailed

characteristics (quantity, weight, value,specifications, quality)

Exporters/Importers must turn in the report

following the form issued by the CustomDepartment.

ng Hng


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Certificate of Free Sale (CFS), is issued tobusinesses by the authority.

Is needed to allow good to circulate freely in the

exporting country. ( VN in this case)

ng Hng


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AN EXAMPLE OF CFS

ng Hng


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CERTIFICATE OF ORIGIN (C/O)

Issued by the authority of the region/country

C/O must show detailed information of the

origin of goods.

ng Hng


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Roles of C/O:

o Prioritized tariff reduction (for countries undercontracts)

o

Anti price-dumping, price subsidies

o Create trade statistics and maintain quota

system

o Encourage trade

ng Hng


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Features of C/O:

o C/O is issued to a specific export/import

cargo

o C/O verifies the goods origins and follow

rules that must be accepted by the countries

the goods are exported to.

ng Hng


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KINDS OF C/O

Direct C/O

Issued by the original country, can be the

exporter as well.

Back to back C/O

Issued by the exporting country, not theorigin.

ng Hng


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FORMS OF C/O

Form A (Apply GSP - General System of

Preferences)

Form B (For exports in general)

Form D (CEPT - Common Effective Preferences

Tariff)

Form T (Textile exports to EU market)

ng Hng


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Form O (Coffee export to countries in World

Coffee Federation) Form X (Coffee export to non-WCF countries)

Form E ( ASEAN China)

Form AK ( ASEAN Korea)

Form S ( VN Laos; VN Cambodia)

And more

ng Hng


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LEGALITY OF C/O

Issued by department or organization with

authority of the original country.

Issued by the manufacturers: must have

confirmation from the authority of the involved

country

ng Hng


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Issued by Indirect country, C/O is accepted:

If that country is also a country entitled to

preferential tariff treatment

If not, C/O is accepted with a copy of a C/O

from the original country .



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(C/Q)

1. Definition: certify the quality of the imported

goods in accordance with the standards of the

importing country or international standards.

(Health, Environment, Components)

Phc ng

STANDARD CERTIFICATES OF QUALITY


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STANDARD CERTIFICATES OF QUALITY


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2. CRITERIA FOR C/Q

Country-level standard (TCVN); Global-level

standard (ISO, IEC, Codex); Region-level

standard (EN); Foreign Standard (BS (British), JIS

(Japan), GB (China))

Phc ng


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Certificate of a Zott Monte product


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Certificate of a Zott Monte product

Phc ng


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3. The form of certificate of conformity of quality

goods

4. Conformity marks or conformity

5. Benefits of certified goods

6. Certification is voluntary or mandatory

Phc ng

f


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7. Rights of organizations and individuals

requesting certification of conformity

8. How do I know if the goods are certified and not

certified

9. Commodity certification process

10. The term of the certificate of goods

11. Costs for certification of goods

Phc ng


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EFFECTS OF BARRIERS

Vit Trung

Positive Negative


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g

Import Export Import Export

Restrict imported

products to

protect domestic

manufacturing of

SMEs

Guarantee the

quality of

Vietnamese

products

Restrain the

investment of foreign

businesses, flow of

foreign goods and

services into Vietnam

Protect thequality of

consumershealth, domestic

market,

environment

Protect thereputation of

Vietnamese

SMEs

sampling and testing cost a lot oftime and money for SMEs

Resist the devaluation currency Complicated custom procedure

for SMEs

Vit Trung


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SOLUTIONS FOR BARRIERS

GOVERNMENT

SME

Qunh Trang Khc Phc

GOVERNMENT


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Qunh Trang

Improve export and imports related facilities: Ports

connected roads, port lanes, cargo clearance posts, cargo

storage bays

Establish Export Import Logistics centers which providebusinesses with logistics affairs full pack service.

E.g: Ct Li port logistics center

Maximize the use of advantages from international

commercial treaties which Vietnam participates in.

GOVERNMENT


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Qunh Trang

Shorten the administrative procedures

Organize job specialization training. (E.g: arrange short

courses to improve the work efficiency of the staff).

Provide consultations and trainings for businesses in export

import areas. (E.g: Monthly program for answering the

questions from businesses)

Implement the use of technology in the export import

customs activities such as electronic document filling,

X-ray for checking cargo, online services

SME


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Khc Phc

SME

Actively exploit the possible advantages from regulations(tax & customs), trading and investment incentives.

Invest in modern technology to improve productivity,

quality and competiveness of exporting goods.

Hire consulting, market research and laws services to gain

support in related export and import matters to reduce the

confusions.


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Khc Phc

Develop good understandings of the trading partners

country regulations. Communicating language will be default

as English.

Keep updating necessary information to avoid conflicts or

losses in trading. Participate in supporting programs from

government

Adapt to the actual culture of export import in any country

that is related to contracted partners. Flexible behaviors will

ease the flow for bypassing the customs barriers.


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Documents

Customs Barriers in Vietnam