Circular No. 114/2005/TT-BTC guiding post-clearance inspection for exported and imported goods

CIRCULAR

Guidelines on post-clearance inspection for exported and imported goods

Pursuant to the Customs Law No. 29/2001/QH10 dated June 29, 2001;

Pursuant to the Law Amending and Supplementing Certain Provisions of the Customs Law No. 42/2005/QH11 dated June 14, 2005;

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 154/2005/NĐ-CP dated December 15, 2005 of the Government detailing implementation of certain Articles of the Customs Law regarding customs procedures, customs inspection, and supervision;

The Ministry of Finance provides specific guidelines on some aspects of post-clearance inspection for exported and imported goods as follows:

PART A. GENERAL GUIDELINES

1. Post-clearance inspection is a specialized activity carried out by the competent authority of the Customs sector aimed at verifying the accuracy and honesty of customs declarations for exported and imported goods that have been cleared and assessing the level of compliance with laws by the declarant as a basis for considering priority in customs procedures, inspection, and supervision, and handling violations (if any).

2. Post-clearance inspection is conducted through reviewing customs files, accounting documents, accounting books, financial reports, and other documents related to exported and imported goods; when necessary and under appropriate conditions, it may involve inspecting imported goods that have been cleared from organizations and individuals (referred to as inspected entities) as follows:

a) Owners of exported and imported goods.

b) Organizations entrusted by owners of exported and imported goods and directly representing the entrusting party in customs procedures.

c) Legally authorized representatives (applicable in cases of exporting and importing goods and items not for commercial purposes) representing the owner in customs procedures for goods and items not for commercial purposes.

d) Customs agents.

đ) Postal service enterprises and international express delivery service enterprises representing the owner in customs procedures for exported and imported goods via postal services and international express delivery services.

3. Post-clearance inspection shall be carried out according to the following principles:

Customs files of exported and imported goods that have been cleared shall all undergo post-clearance inspection in accordance with the customs inspection principles stipulated in Clause 1a, Article 15 of the Law Amending and Supplementing Certain Provisions of the Customs Law and shall be conducted in accordance with the provisions of the law; confidentiality of information; ensuring objectivity, accuracy, and not hindering normal production and business activities of the inspected entity.

4. Indications of violation of customs laws as prescribed in Clause 1, Article 64 of Decree No. 154/2005/NĐ-CP dated December 15, 2005 of the Government (hereinafter referred to as Decree No. 154/2005/NĐ-CP) include:

a) Documents in the customs file are not lawful or valid according to the prescribed form, content recording, sequence of time (such as mismatch, incorrectness, inconsistency, lack of rationality between documents in the customs file related to information about the name of goods; quantity; weight; volume; brand; code number, tax rate; nature; composition, structure; function; packaging method and other attributes of the goods), or there are signs of forgery of documents.

b) Unreasonable declared value for duty purposes of imported goods:

- Significantly lower or higher than: The selling price of such goods on the domestic market after deducting taxes, reasonable costs, and profit; The declared value for duty purposes of identical goods, similar goods imported by other units at the same time, same market, and same mode of delivery;

- Incorrect declaration of amounts to be added or deducted from the transaction value, special relationship between buyer and seller; Actual payment method and time not consistent with customs declaration;

- Unreasonableness in declaring means of transport, transportation vehicles, distance of transport, transport route, freight charges, insurance fees related to determining the customs value.

c) Fraud in enjoying tax benefits, trade fraud such as: Improper use of purposes, fraud in raw material and auxiliary material consumption quotas for processing trade goods, imported goods for export production; Fraud to enjoy tax exemption, reduction, refund regimes as prescribed by the law on taxes for exported and imported goods; Importation of goods violating intellectual property rights regulations and origin of goods regulations.

d) Exported and imported goods subject to specialized management but without valid permits or lacking conditions for export and import; Inspection certificates, analysis, classification certificates of exported and imported goods not matching the actual condition of the goods.

5. Time limit for inspection at the inspected entity's premises

a) Before conducting planned inspections, the Customs authority must notify the inspected entity of the Inspection Decision at least five working days prior. In cases where the Customs authority has grounds to determine that the entity has signs of destroying documents and materials, the inspection will be carried out immediately after announcing the inspection decision without prior notification.

b) Working days at the inspected entity's premises as stipulated in Clause 1 and Clause 2, Article 68 of Decree No. 154/2005/NĐ-CP are the actual days the Customs authority conducts inspection at the entity, and in case of interruption of inspection, the reason must be clearly recorded in the record.

6. Responsibilities of Customs authorities at all levels in post-clearance inspection

a) Post-clearance inspection is the responsibility of the General Department of Customs and Provincial, Interprovincial, and Central City Customs Departments.

b) The Director of the General Department of Customs manages, directs, guides, and inspects units throughout the Customs sector regarding post-clearance inspection work, decides on post-clearance inspection according to these Circular guidelines.

The Post-Clearance Inspection Department under the General Department of Customs is the specialized agency assisting the Director of the General Department of Customs in managing, directing, guiding, and inspecting units in the Customs sector to implement post-clearance inspection work, and conducting post-clearance inspection as prescribed.

c) The Director of the Provincial Customs Office, inter-provincial, centrally-administered city organizes the implementation of post-clearance inspection work within their jurisdiction as stipulated in the Appendix attached to this Circular.

The Post-Clearance Inspection Department under the Provincial Customs Office, inter-provincial, centrally-administered city is the specialized unit assisting the Director of the Provincial Customs Office in implementing post-clearance inspection work.

d) Staff members specializing in post-clearance inspection work, in addition to the general standards for customs officials, must possess necessary knowledge and skills obtained through training in Tax Law, Accounting, Auditing, and Law on Inspection and Examination. The General Director of the General Department of Customs shall be responsible for specifying these standards, organizing training, and arranging staff for post-clearance inspection work.

7. Authority to decide on post-clearance inspection

a) The Director of the Provincial Customs Office, inter-provincial, centrally-administered city decides to inspect units subject to inspection within their jurisdiction (where tax registration code is registered). In cases where the inspected unit does not fall within the jurisdiction but has processed customs procedures within the jurisdiction and signs of violation are discovered, inspections shall be carried out according to the following procedures:

- Conducting inspections of relevant files and documents of the inspected unit at the customs office premises;

- If it is necessary to conduct direct inspections at the inspected unit's premises, report to the General Department of Customs and notify the Customs Office managing the jurisdiction.

b) The General Director of the General Department of Customs decides to conduct post-clearance inspections in cases involving complex inspection contents and jurisdictions affecting multiple provinces, centrally-administered cities.

The General Director of the General Department of Customs authorizes the Director of the Post-Clearance Inspection Department to decide on post-clearance inspections.

PART B. SPECIFIC GUIDELINES

I. Forms and Methods of Post-Clearance Inspection

Customs declarations of exported and imported goods that have been cleared are subject to post-clearance inspection according to the following forms and methods:

1. Inspecting at the customs office premises using the method of comparing and contrasting the contents declared in the customs declaration with business-related customs information and relevant laws and regulations.

2. Inspecting at the premises of the inspected unit using the method of comparing and contrasting accounting books, accounting vouchers, financial reports, and other relevant documents related to exported and imported goods with the contents declared in the customs declaration. In necessary and appropriate circumstances, actual goods that have been cleared may be inspected.

II. Procedures and Contents of Post-Clearance Inspection

1. Inspecting at the customs office premises

a) Inspecting customs declarations:

- Checking the completeness, legality, and validity of documents in the customs declaration compared to the contents declared in the customs declaration form;

- Checking the declaration, calculation, and payment of taxes through determining the bases for calculating taxes including: taxable value; tax rate; quantity of exported and imported goods;

- Checking conditions related to enjoying tax benefits such as tax exemption, tax reduction, tax refund (if applicable), adjustments to tax amounts, and other revenues;

- Checking compliance with policies governing the management of exported and imported goods, intellectual property rights, and other relevant customs procedures regulations.

b) Upon completing the inspection of customs declarations, the post-clearance inspector is responsible for concluding the inspection results:

- For customs declarations that are complete and clear without any violations, confirm the inspection results;

- For customs declarations that are unclear, incomplete, or show signs of violating the law, the post-clearance inspector must clearly record the inspection results on the inspection result sheet and report to the immediate supervisor.

c) For customs declarations that are unclear or incomplete, the customs office is responsible for verifying at relevant agencies, organizations, and individuals and notifying the inspected unit to explain and supplement necessary information and documents.

- If verification or explanations and supplements from the inspected unit prove the customs declaration to be correct, the customs declaration will be confirmed according to regulations. If verification or explanations and documents do not sufficiently prove the correctness of the declaration, request the declarant to supplement. Within 60 days from the date of registering the customs declaration, if the inspected unit reviews and verifies the accuracy and truthfulness of the customs declaration, tax calculation, and payment, and voluntarily reports to the customs office and pays any outstanding taxes and late payment penalties, they will be exempted from other tax penalties;

- If beyond 60 days from the date of registering the customs declaration, the inspected unit fails to self-discover and rectify the consequences or the verification, inspection, and comparison results of the customs office determine a violation, the inspector must prepare an Inspection Conclusion and handle the results according to point 3, section II, part B of this Circular;

- If the unit does not attend the inspection or cannot provide explanations and supplementary documents sufficient to prove the correctness of the customs declaration, the customs office will base its conclusions or conduct inspections at the unit's premises based on available information and documents.

2. Inspecting at the premises of the inspected unit

a) When conducting inspections at the premises of the inspected unit, post-clearance inspectors perform the following tasks:

- Announcing the Decision on Post-Clearance Inspection;

- Inspecting accounting vouchers, accounting books, financial statements related to exported and imported goods that have been cleared;

- Inspecting trade data, including key documents such as: Goods purchase and sale contracts; transport documents, insurance documents; international payment documents, and other relevant documents and materials related to exported and imported goods that have been cleared;

- In cases where it is necessary to clarify the contents of the customs declaration, post-clearance inspectors carry out verifications at relevant agencies, organizations, and individuals.

b) In case it is necessary, the inspection shall be carried out:

- Production lines, machinery and equipment related to the production and processing of exported and imported goods;

- On-site inspection of imported goods or products resulting from the processing, production, or processing of imported goods stored at the warehouses of the inspected entity. The on-site inspection of goods shall be conducted when conditions are met, provided that the goods have not lost their basic characteristics compared to the time of clearance, and are being held by the Customs authority, the inspected entity, other agencies, organizations, or individuals.

c) Upon completion of the inspection, the head of the inspection team shall prepare the Inspection Conclusion. The Inspection Conclusion must bear the signature of the head of the inspection team and the authorized representative of the inspected entity. If the authorized representative of the inspected entity does not sign the Inspection Conclusion, the head of the inspection team must clearly state the reason. The Inspection Conclusion must be sent to the person deciding the inspection as the basis for handling violations (if any) in accordance with point 3, Section II, Part B of this Circular.

3. Handling the results of the inspection

a) In cases where taxes and other revenues need to be recovered, the person deciding the post-clearance inspection shall handle according to their authority or provide written comments for the competent authority to issue a decision to recover taxes in accordance with tax laws. The amount recovered shall be deposited into the temporary holding account of the Provincial/City Customs Office where the inspection decision was made. In cases where the General Director of the General Department of Customs decides on the inspection, the recovered amount shall be deposited into the temporary holding account of the Provincial/City Customs Office managing the area where the inspected entity's headquarters is located.

b) In cases where taxes and other revenues need to be refunded, the person deciding the post-clearance inspection shall handle or notify in writing and transfer the file to the Provincial/City Customs Office to process customs procedures for the export/import consignment of goods for examination and implementation of the refund in accordance with tax laws.

c) In cases where administrative violations within the jurisdiction of the Customs authority need to be handled, the person deciding the post-clearance inspection shall handle according to their authority or request the competent authority to handle in accordance with the law. In cases where administrative violations are not within the jurisdiction of the Customs authority, the person deciding the post-clearance inspection shall transfer the file to the competent authority to handle in accordance with the law.

d) In cases where criminal responsibility needs to be pursued due to violations, such actions shall be carried out in accordance with the provisions of the Criminal Procedure Law.

4. Monitoring the handling of inspection results

The person deciding the post-clearance inspection has the responsibility:

a) To direct the monitoring and urging of the inspected entity to implement the decision to handle in accordance with the inspection conclusion. To apply coercive measures in accordance with the provisions of tax laws and other relevant laws. The deadline for recovering taxes, refunding taxes, imposing fines, and other forms of handling shall be carried out in accordance with the provisions of tax laws and other relevant laws.

b) To notify the Provincial/City Customs Office, Border Gate Customs Sub-department related to the inspection conclusion, and the measures to handle legal violations against the inspected entity (if any).

c) To update information about the inspection results into the database system in accordance with the guidance procedure of the General Director of the General Department of Customs.

PART C. COMPLAINTS, REPORTS, AND LAWSUITS;

REWARD AND DISCIPLINARY ACTION FOR VIOLATIONS

1. Complaints, Reports, and Lawsuits

Matters related to complaints, reports, and lawsuits concerning post-clearance inspections shall be carried out in accordance with the provisions of the law.

2. Commendation and Handling of Violations

a) A customs officer who commits a violation of the law on post-clearance inspections shall be subject to disciplinary action or criminal responsibility pursued, depending on the nature and severity of the violation, and if damage is caused to the inspected entity, compensation must be provided according to the provisions of the law.

An organization or individual who commits a violation of the law on post-clearance inspections shall be subject to administrative penalty or criminal responsibility pursued, depending on the nature and severity of the violation, as stipulated by the law.

b) The Customs General Department, customs officers who achieve success in post-clearance inspections; organizations, entities, and individuals who achieve success in cooperation and implementation of post-clearance inspections shall be commended in accordance with the provisions of the law.

PART D. IMPLEMENTATION ORGANIZATION

1. The Director of the General Customs Department is responsible for issuing the Post-Clearance Inspection Procedures for exported and imported goods and guiding the provincial, inter-provincial, and city Customs Departments to implement uniformly.

2. This Circular takes effect fifteen days from the date of publication in the Official Gazette. The Circular No. 96/2003/TT-BTC dated October 10, 2003, issued by the Ministry of Finance guiding the Government Decree No. 102/2001/NĐ-CP dated December 31, 2001, on post-clearance inspections of exported and imported goods is hereby abolished./.