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Customs targets temporary imports to stop smuggling
Border and coastal provinces have been asked to tighten management over the temporary import of goods for re-export after it was found some of the goods were being sold in Viet Nam.
The Department of Customs order follows an increase in violations of laws on temporary importing and re-exporting.
Customs departments in the provinces of Dien Bien, Lao Cai, Cao Bang, Ha Giang, Lang Son, Quang Ninh, Hai Phong, Ha Tinh and Quang Tri have been ordered to crack down on the temporary imports and to prevent businesses from selling the goods domestically.
Customs said businesses were taking advantage of temporary imports to smuggle goods.
Last Saturday night, customs stopped a foreign ship pumping petrol to three Vietnamese boats in the coastal region between Nam Dinh and Thanh Hoa provinces. The foreign ship was carrying an estimated 2,000 tonnes of petrol, worth about VND40 billion ($1.9 million), said Nguyen Phi Hung, head of the anti-smuggling division.
All the four ships were seized and 23 people held.
The crew claimed they took advantage of temporary imports to buy petrol in Viet Nam but instead of transporting it to China they sold it to dealers in Viet Nam.
Investigation identified the Vietnamese seller as the Viet Nam Petrol Aviation Company, based in Ha Noi's Long Bien District.
The department's statistics shows that turnover of goods temporarily imported for re-export increased sharply between 2006-11, of which imported goods increased nearly $5 billion in five years, from $1.33 billion in 2006 to nearly $6.3 billion in 2011.
Re-exporting also witnessed a similar hike of up to $6.6 billion in 2011 from more than $780 million five years before.
The major difficulties in managing the business activity is tax collection.
The figures released by the department reveal that from 1994 till the end of June this year 806 contracts owed taxes estimated at VND115 billion (about $5.5 million). Tax arrears were recorded at 17 out of 33 custom departments.
Many provincial custom departments say the temporary imports business was not going according to the law.
Theoretically, goods temporarily imported must be kept packed for re-export but many importers split them into smaller packs for easier transport. That makes it difficult for customs to examine.
Moreover, current regulations permit importers to store their goods for 180 days before exporting, which customs said was too long.
The Government decree issued in 2006 and a circular issued by the Ministry of Finance in 2010 asked customs to manage temporarily imported goods during their time in Viet Nam but it was up to the importers where they stored it. That made it difficult for customs to keep track of the goods.
Some importers took advantage of the loose regulations to import large amounts of goods and then sell them domestically rather than re-exporting them.
To solve the problem, provincial custom departments propose to shorten the time for storage to 45 days with no extension allowed.
In the case where a business did not re-export the goods it would be liable for taxes and duties, which would be refunded when the goods were exported
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