VN to build customs bond system
VN to build customs bond system
The Global Alliance for Trade Facilitation (GATF) will help Viet Nam to establish a customs bond system – part of the country’s efforts to modernise and reform administrative procedures relating to import and export.
The GATF and the Viet Nam Private Sector Forum (VPSF) launched their joint project on customs bond last Friday, aimed at facilitating customs clearance in Viet Nam. A customs bond is an agreement that ensures that any importer will pay all fees and taxes paid as well as operate according to all laws and regulations.
This is the start of the GATF’s Technical Assistance Project with the Government of Viet Nam to help the country implement its World Trade Organisation (WTO) commitments, as well as implement the Government’s Resolution 19 on improving the national competitiveness and business environment.
Viet Nam is the first country in Asia and the first developing country in the world to be selected by donor countries in the WTO to receive technical assistance under the agreement on WTO Trade Facilitation, in effect since February 22, 2017 when 112 countries ratified it.
The scheme will be co-ordinated by the PM’s Advisory Council for Administrative Reform, whose standing agency is the Government Office.
Customs bonds are designed to streamline importers’ process for bringing goods into the country. Anyone that is importing goods or transporting them locally is required by the customs agency to purchase a bond from a surety company. If an importing company fails to pay fees or follow regulations, Customs can file a claim against the bond. The surety company would then pay to make restitution, but in the end the importing company is required to pay back the surety company.
According to the advisory council, a customs bond is a trade-facilitating mechanism widely used in countries such as the US, Australia, Sweden, New Zealand, UK, Singapore, Malaysia, the Philippines, Thailand and South Korea.
Basically, the mechanism is meant to separate the releasing of goods at border gates and the preparation and submission of required customs documentations to facilitate the export or import into the country.
Once importers or exporters have customs bonds, they are guaranteed to fulfill their tax obligations before their goods arrive in the country, so the goods can undergo faster customs clearance.
GATF director Philippe Isler said that the GATF would provide Viet Nam feasible solutions to implement WTO commitments, increase national competitiveness and improve business climate.
Foreign experts from WTO member countries will assist with administrative procedure reforms, reviewing and amending the legal framework as well as monitoring Viet Nam Automated Cargo and Port Consolidated System/Viet Nam Customs Information System (VNACCS/VCIS).
A customs bond system would be a breakthrough in facilitating trade in Viet Nam, he said.
Nguyen Viet Nga, vice head of International Affairs Department under Viet Nam Customs, said that in Viet Nam, customs clearance operations consumed up to 72 per cent of required time for goods to be released from border gates because of cumbersome procedures relating to specialised inspections of goods.
Dao Huy Giam, General Secretary of Viet Nam Private Sector Forum, said that the customs bond has helped enterprises, surety companies and customs effectively monitor import and export processes and save time in customs clearance.
An official from the Insurance Supervisory Authority under the Finance Ministry told thoibaotaichinhvietnam.vn that over 30 non-life insurance companies in Viet Nam provided insurance guarantees but none of them offered customs bond.
Surety companies face major difficulties such as a lack of information about insured companies or the risk of losing money that they paid to make restitution.
Viet Nam has climbed 9 spots to 82 from 91 on the World Bank’s Doing Business 2017 ranking, and moved 15 spots up to 93 from 108 for improved border-trade indicators related to import-export operations. Time needed to handle customs procedures was cut from 138 hours to 108 hours.
Viet Nam wants to cut down the required time for customs procedures from 108 hours to 80 hours by 2020.
