Data-driven risk management signals major shift in customs administration

Data-driven risk management signals major shift in customs administration

The Ministry of Finance has introduced a new circular transforming customs management through digital data-based risk assessment, easing border procedures while strengthening compliance and post-clearance oversight for import-export businesses.

Circular No. 121/2025/TT-BTC issued by the Ministry of Finance marks a significant shift in Vietnam’s customs sector from pre-clearance control to data-driven risk management, delivering tangible trade facilitation for import-export businesses.

Effective from February 1, the circular amends and supplements regulations on customs procedures, inspection and supervision, export and import duties, and tax administration for traded goods, reshaping customs governance towards a modern model grounded in digital data and enterprise compliance.

At the core of Circular 121 is the redesign of information indicators in Form No. 01, the electronic import declaration, aiming to standardise and structure data at the point of entry.

Under this approach, risk management begins not at the border gate but at the enterprise’s declaration stage.

According to Dao Duy Tam, head of the Customs Control and Management Board under the General Department of Vietnam Customs, the changes systematise specialised operations and eliminate long-standing information gaps that have hindered state management.

The new approach follows the principle that the more complete and detailed the data, the lower the clearance risk.

Requirements such as adding the importer and exporter codes and names for on-the-spot import-export transactions, or separate annotations for goods pending analysis and classification, demonstrate that customs authorities are managing cargo flows and entities comprehensively on a unified digital platform.

The circular also incorporates Incoterms 2020 into the total invoice value. Issued by the International Chamber of Commerce, Incoterms 2020 are internationally recognised trade rules that define the responsibilities of buyers and sellers for delivery, risk transfer, costs, and insurance in international transactions.

This update aligns international trade standards with domestic management systems, reducing discrepancies in customs valuation and strengthening consistency between tax and customs authorities.

In addition, Circular 121 introduces rigorous data filters at the information intake stage. Businesses are required to provide more detailed value declarations during indirect consultations and clearer descriptions of goods processed abroad.

Instead of responding only when doubts arise, businesses can proactively supply digitised data under standardised criteria, forming transparent and consistent digital compliance profiles.

Together with governmental Decree No. 167/2025/ND-CP, Circular 121 represents a breakthrough in customs valuation, highlighted by the ‘release first, consult later’ mechanism.

Businesses are no longer required to explain immediately during clearance for goods deemed price-risky; goods may be released for storage or directly for production and business, while value consultations are conducted within 30 days from the release date.

Decree No.167/2025/ND-CP, effective since last August, amends and supplements several provisions of Decree No.08/2015/ND-CP from 2015, which details and guides the implementation of the Law on Customs regarding customs procedures, inspection, supervision, and control.

The new mechanism reinforces a trust-based management approach. When enterprises meet five matching criteria – goods name, Harmonised System code, origin, trading partner and delivery terms – and the declared value is not lower than the accepted benchmark, consultation results may be reused for up to six months at the same regional customs sub-department.

At the same time, the entire consultation process is digitised and conducted indirectly. Businesses are no longer required to visit customs offices in person; all relevant documents are submitted and stored electronically, enhancing transparency and delivering substantive trade facilitation.

However, as border procedures are relaxed, compliance responsibilities for enterprises increase. Customs authorities shall strengthen post-clearance audits, requiring businesses to standardise accounting systems and documentation, and to be ready to provide objective evidence of transaction values within prescribed time limits.

VIR