Hanoi (VNA) –A workshop took place in Hanoi on December 4 to collect feedback fromenterprises on a draft circular to evaluate the level of law observance in importsand exports and transit of goods.

The event was held by theVietnam Chamber of Commerce and Industry (VCCI) and the General Department ofVietnam Customs.

The circular is expectedto have huge impacts on Vietnamese exporters and importers as it outlines a setof criteria for the classification of importers and exporters based on thelevel of law observance and on that basis, these businesses would be subject todifferent customs inspections and clearance regimes.

Vietnam’s increasinglyopen economy has facilitated foreign trade, with turnover doubling thecountry’s gross domestic products (GDP), said VCCI Vice President Hoang QuangPhong.

The expansion ofimport-export industries is posing plenty of challenges to customs authoritiesand the greatest among these are the rapid increases in the volume anddiversity of imported and exported goods, meanwhile the number of qualified customsstaff has not been able to keep up, Phong said.

The risk managementmethod based on assessment of businesses’ law observance will be an appropriateapproach to deal with the issue, he noted. It would improve the effectivenessof state management and raise awareness of the importance of law complianceamong enterprises.

Once the goods areclassified based on various degrees of risks associated with them in terms ofsmuggling, trade fraud or tax evasion, it would enable faster customs clearancefor low-risk items, while law-abiding firms would benefit from saved costs and priorityplacement at customs, the VCCI official added.

Hoang Viet Cuong, deputyhead of the General Department of Vietnam Customs, said the customs authorityis adopting risk management measures which are widely used in developedcountries to reduce burdens for its staff and optimise customs control.

The law observance-basedrisk management enables customs authorities to shift from pre- to post-customsclearance inspection with only a minimum quantity of goods checked.

Currently, goods are divided into green,yellow, and red flows for customs clearance, Cuong noted. The green flow applies to commodities entitled to exemptionof customs declaration and actual inspection, with 60 percent of shipmentsgoing through this flow. The yellow flow applies to goods with low tax rates,common taxes, or goods imported for export processing (35 percent of shipments).Meanwhile, the red flow is applicable to commodities requiring permits andsubject to higher tax rates (5 percent of shipments).

Under the draft circular,importers and exporters will be subject to a new system of classification whichlabels them according to four levels of law observation; Level 1 (High), Level2 (Medium), Level 3 (Low), and Level 4 (Failure to observe laws).

Based on theclassification, the customs authority will decide whether they are entitled tocustoms incentives, take proper actions to control import-export activities,and prevent smuggling and trade frauds.

A representative fromC&A Tax Consultancy Co., Ltd. said the new classification would motivatefirms to abide customs regulations more strictly, but noted that there shouldnot be so many criteria that it would be difficult for firms to identify whichcriteria they violate and that the criteria should be simple and easy tocomprehend. –VNA