Vietnamese Update to Border Rules Takes Page From NAFTA

Below are highlights from a short article from Bloomberg about this first special consultations event, on Jan 24.


  •  Ho Chi Minh City moving toward more voluntary compliance with export-import procedures
  •  City will work to make border processes more efficient by cutting storage costs, inspections

By Lien Hoang


Vietnamese customs officials, newly vested with more autonomy from the national government, have pledged better conditions for businesses while drawing some inspiration from the U.S., where Vietnam has one of the biggest trade surpluses.

Ho Chi Minh City leaders signaled Jan. 24 they are moving toward more voluntary compliance with export-import procedures, a style of U.S. enforcement that emerged from the North American Free Trade Agreement. Đình Ngọc Thắng, the city’s deputy customs chief, adopted the language of his U.S. counterparts who advocate “informed compliance” and “shared responsibility,” by which customs authorities supply more legal information to traders, who then take greater initiative to meet their legal duties.

Gone are the days of “general dialogue and no follow-up,” which leaves both the government and business dissatisfied, Thang told the American Chamber of Commerce in Ho Chi Minh City.“Our motto is still that we are partners,” he said.

Still in Pacific Trade Pact

His department’s actions have national implications, as the city once known as Saigon is the biggest contributor to the national budget, raising more than a quarter of revenues. It handles more than half of all shipping containers that pass through the Southeast Asian country, data from the Vietnam Port Association show.

Many of the products on those ships end up in the U.S., the largest export market for Vietnam. Among countries that have a trade surplus with the U.S., Vietnam ranks No. 5 as of November, up from No. 6 in 2016, according to the U.S. Bureau of Economic Analysis.

Red Tape

In hopes of boosting trade, Thang said his office would work to make border processes more efficient, such as by cutting storage costs and inspections. Under official Plan No. 151 published Jan. 12, the department will establish a hotline and strive to trim clearance times for exports to 70 hours (from 108) and for imports to 90 hours (from 138).

“We are committed to minimizing paperwork requirements, to minimize time and cost,” Thang said. “The ultimate goal is to reduce cost, including opportunity costs.”

But red tape lingers. Vietnam, for example, is supposed to accept both paper and digital forms from importers and exporters. AmCham senior director for trade facilitation Herb Cochran points out this is one of its commitments in the Trade Facilitation Agreement signed by more than 100 members of the World Trade Organization.

Yet companies remain weighed down by reams of files that the customs office expects them to have on hand, according to Chi Ngo, purchasing manager at Coats Phong Phu, a major textiles exporter.

“If we have to keep those documents physically, then after a number of years, we have a huge burden,” she said at the business forum.

Trading Hub’s Special Status

The customs office was seeking company feedback as it moved to take advantage of National Assembly Resolution 54, which took effect Jan. 15 and grants Ho Chi Minh City greater powers beyond the purview of the national government. It allows the trading hub the autonomy to experiment in four areas: land use, including zoning for commerce; tax policy, such as for environmental protection or special consumption; the setting of investment privileges; and city administration.

It’s still early days for the resolution, but customs authorities are taking other steps to encourage trade. Attached to its Plan 151 is a list of “common violations,” meant to be a guide for importers and exporters. The roster includes forged e-signatures, tax evasion through low declarations of quantity or value, and falsified forms to avoid licensing or other obligations. The list also seems to offer a solution for bribery, telling traders to report immediately “if customs officials deliberately cause difficulties for enterprises, or negative behavior.”


02/01/2018: Vietnamese Update to Border Rules Takes Page From NAFTA. Vietnamese customs officials, newly vested with more autonomy from the national …

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