Many consignments of goods made in non-ASEAN countries have been labelled as ASEAN-origin before being imported into Vietnam in order to evade taxes.

Vietnam has decided to cut taxes from 40-60% to 0-5% on 21 categories of products sourced from ASEAN nations under the commitments within CEPT/AFTA. The low tax rates have prompted smugglers to change the origin of products they import into Vietnam in order to avoid taxes.

Billions in trade fraud discovered

Recently, a Ministry of Trade’s mission making an inspection tour to the Cau Treo border gate in the central region’s Ha Tinh Province discovered 23 consignments of imported goods using C/O (certificate of origin) form D. The goods, certified as being produced in Thailand, can enjoy the preferential tariff in accordance to AFTA (ASEAN Free Trade Area).

The consignments included TV sets, refrigerators, electric cookers and microwave ovens, and all of them have come from the only exporter in Thailand, Chokchaimukdahan Import - Export.

Though appearing to be ‘made in Thailand’, the products all had the labels of Sony, Panasonic, Hitachi or Sharp. The TV sets alone were worth $730,000, or VND11.9bil, of which Sony TVs were valued at $557,000, or VND8.9bil.

According to Sony Vietnam, Sony products made in Thailand cannot have a localisation ratio of 100%. If the products owner presented C/O form D, it must have been either fake C/O or there was a mistake by the certificate issuer.

Where is the problem?

Using C/O form D to evade taxes is a new type of fraud appearing in Vietnam in the post-AFTA period, as Vietnam imposes low taxes on ASEAN origin imports.

The Ministry of Trade of Vietnam has cooperated with Thai agencies to fight trade fraud to ensure the VND113bil import deal is clear.

The ministry said that the C/O form D presented by the consignment owners was granted by a Thai authority, however, the grant proved to be against Thai laws.

On the Vietnamese side, customs agents decided to collect tax arrears on the imported goods (no preferential tariff, with import duty of 50% of value).

Experts said that electronic products, especially Chinese handsets, are commonly seen at the Cambodia – Vietnam border gate, waiting for being brought into Vietnam. Meanwhile, Vietnamese customs officers acknowledge that it is very difficult to control the flow of the smuggled goods.

Source: Vietnamnet