Modern bond project launched to facilitate customs clearance in Vietnam

Saturday, 2017-09-02 11:56:13
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The new customs bond scheme aims to develop a mechanism for the application of modern risk management methods.
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NDO – A project on customs bond was launched by the Global Alliance for Trade Facilitation (GATF) and the Vietnam Private Sector Forum (VPSF) on September 1, aimed at facilitating customs clearance in Vietnam.

This is the start of the GATF Technical Assistance Project with the Government of Vietnam to provide a viable solution for the country to implement its World Trade Organisation (WTO) commitments, as well as Resolution 19 on improving the national competitiveness and business environment through the cooperation effort between GATF, VPSF and other units of the Ministry of Finance, the General Department of Vietnam Customs and the Prime Minister’s Advisory Council on Reform of Administrative Procedures, related to State management of import and export goods and specialised inspection of goods.

By the Official Letter dated August 18, 2017 from the Government Office, PM Nguyen Xuan Phuc approved the proposal of his Advisory Council on Administrative Reform for the implementation of the study on applicability of a customs bond scheme in Vietnam, as proposed by the GATF.

At the conference, the GATF announced a ground-breaking project to provide technical assistance to the General Department of Vietnam Customs, the Insurance Supervision Department under the Ministry of Finance and other relevant ministries that manage trading in Vietnam with support from the WTO.

Accordingly, this support project involves the participation of foreign experts from WTO member countries to help Vietnam modernise and reform trade-related procedures concerning import and export. The project also includes the adjustment and revision of legal and management regulations, operation support and information technology for VNACCS/VCIS e-customs system and other support in research and development of a modern customs bond system.

The project aims at developing a mechanism that allows ministries to engage in sectorial management of import and export goods which apply modern risk management methods and international best practices, in coordination with the procedures developed and applied by the General Department of Customs and the Ministry of Finance.

In its Phase 1, the project focuses on feasibility assessment, chaired by representatives from the Ministry of Finance, under coordination from the PM’s Advisory Council for Administrative Reform and other domestic agencies, with the involvement of experts from the US, Canada and Europe.

According to the organisers, Vietnam is the first country in Asia and the first developing country in the world to be selected by donor countries in the WTO to provide technical assistance under the agreement on WTO Trade Facilitation which has been effective since February 22, 2017 when 112 countries ratified it. The scheme will be coordinated by the PM’s Advisory Council for Administrative Reform, whose standing agency is the Government Office.

According to the World Bank's 2016 cross-border trade indicators, Vietnam ranks 93rd in the world which is an increase of 15 places compared to 2015, reducing the customs time taken from 138 hours to 108 hours. However, this indicator has not reached the average of the ASEAN 4 countries; enterprises when participating in commercial transactions which still face difficulties in customs clearance, especially in the area of specialised inspection, hindering production, business and international trade competition.

The set goal is to reduce the handling export policy period from 108 hours to 60 hours by 2020 and the time for import procedures from 138 hours to 80 hours. This is a great challenge and Vietnam needs to be reformed in the implementation of import and export procedures.

According to the consultant teams, every time a product is delayed before being shipped, it reduces trade by more than 1%. Considering Vietnam's export and import data in 2015, this is equivalent to US$3.2 million, equivalent to US$1.2 billion per year. The implementation of a customs bond system could delay the clearance of goods and save at least US$3.2 million per day in import-export activities in Vietnam. In addition, tax revenue may increase from commercial expansion due to reduced barriers and costs.