Circular No. 32/2003/TT-BTC guiding the implementation of Article 29, Article 30 of the Customs Law and Clause 8 of Decree No. 101/2001/NĐ-CP dated December 31, 2001 of the Government detailing the implementation of certain provisions of the Customs Law on customs procedures, inspection, and supervision regimes.

CIRCULAR

Guidelines for implementing Articles 29 and 30 of the Customs Law and Clause 8 of Decree 101/2001/NĐ-CP dated December 31, 2001, detailing certain provisions of the Customs Law regarding customs procedures and customs inspection and supervision regimes.

Pursuant to the Customs Law No. 29/2001/QH10 adopted by the National Assembly of the Socialist Republic of Vietnam at its tenth session, ninth meeting on June 29, 2001.

Pursuant to Decree No. 101/2001/NĐ-CP dated December 31, 2001, detailing certain provisions of the Customs Law regarding customs procedures and customs inspection and supervision regimes.

The Ministry of Finance hereby provides guidelines for customs procedures and customs inspection and supervision regimes as follows:

All export and import goods must be inspected by customs authorities through one of the methods prescribed in Article 30 of the Customs Law.

The actual inspection of goods shall be conducted either directly by customs officers or through the use of machinery, technical equipment, and other professional measures.

A. GENERAL PROVISIONS

Customs authorities at all levels are responsible for collecting and exchanging information to build a database on the compliance with customs laws by the consignor, export-import management policies, the nature, type, origin of export-import goods, and other relevant information about export-import goods to predict the form and rate of actual inspections of goods.

Based on the aforementioned database and information about the consignor obtained from the cargo manifest provided by the ship, the Head of the Customs Branch will analyze each case and predict the form of actual inspection for each consignment. If there is no additional information at the time the consignor processes customs formalities for the consignment, the consignment will be subject to the predicted form of inspection.

Should new information arise necessitating a change in the form or rate of actual inspection of goods, the Head of the Customs Branch will decide on an appropriate form of inspection.

B. SPECIFIC GUIDELINES

I. BASIS FOR DECIDING THE FORM OF ACTUAL INSPECTION OF EXPORT AND IMPORT GOODS:

When deciding the form of actual inspection of goods, the Head of the Customs Branch must base their decision on:

- The consignor's compliance with customs laws for exported and imported goods;

- Current export and import management policies;

- The nature, type, and origin of exported and imported goods;

- Customs documentation;

- Other relevant information about exported and imported goods.

Among these bases, the primary and overarching basis is the consignor's compliance with customs laws. When deciding on a specific form of inspection, this basis must be considered first, followed by the other bases.

II. SPECIFIC BASES AND FORMS OF ACTUAL INSPECTION:

1. Exemption from Actual Inspection of Goods:

a) For Exported Goods:

a1) The exporter has not been administratively penalized for customs violations within one year prior to processing customs formalities for the export consignment, or has been penalized within the authority of the Head of the Customs Branch, and at the time of processing customs formalities for the export consignment, there is no additional information about the consignor's compliance with laws.

a2) Exported goods of the consignor that meet the conditions specified in point a1 above are exempt from actual inspection: agricultural products, aquatic products; textile and garment products; footwear, natural rubber; fresh food; processed food; goods requiring special storage; machinery and electrical appliances, liquid, bulk goods, and other goods where the determination of quantity, quality, and type depends on the conclusions of competent state management agencies or certification organizations; export goods of enterprises in export processing zones, regular export goods; other goods as prescribed by the Government.

a3) In cases where a newly established enterprise has not had sufficient time to assess compliance with laws as stipulated in point a1 but the exported goods fall under the categories specified in point a2, customs will conduct actual inspections for some initial exports. If the enterprise complies well with customs laws, subsequent consignments can be exempt from actual inspection.

For other exported goods: Inspections shall be carried out in accordance with the provisions of the Customs Law and Decree 101/2001/NĐ-CP.

a4) For export processed products exempt from actual inspection, when processing customs formalities, they are also exempt from sample comparison of imported raw materials. The enterprise bears full responsibility under the law for using the correct imported raw materials to produce the exported product.

b) For Imported Goods:

b1) The importer has not been administratively penalized for customs violations within two years prior to processing customs formalities for the import consignment, or has been penalized within the authority of the Head of the Customs Branch, and at the time of processing customs formalities for the import consignment, there is no additional information about the consignor's compliance with laws.

b2) Imported goods of the consignor that meet the conditions specified in point b1 above are exempt from actual inspection: equipment and machinery; fresh food; goods requiring special storage; goods stored in bonded warehouses, duty-free warehouses; goods imported into export processing zones, bonded warehouses, or other preferential customs areas; liquid, bulk goods, and other goods where the determination of quantity, quality, and type depends on the conclusions of competent state management agencies or certification organizations, regular import goods; other goods as prescribed by the Government.

b1) The importer of imported goods has had a two (2) year import process up to the date of customs procedures for the imported consignment without being administratively penalized by customs, or has been administratively penalized by customs within the penalty authority of the Customs Sub-Department Head, and at the time of customs procedures for the imported consignment, customs does not have any other information regarding the importer's compliance with the law and the consignment.

b2) Imported goods of the importer that meet the conditions stipulated in point b.1 above are exempt from actual inspection: Equipment, machinery; fresh live food products; goods requiring special storage; goods stored in bonded warehouses, duty-free warehouses; goods imported into export processing zones, duty-free warehouses, or other preferential customs areas; liquid goods, bulk goods, and goods whose quantity, quality, type must be based on the conclusion of competent state management agencies or inspection organizations, regularly imported goods; other goods prescribed by the Government.

b3) In the case where a new enterprise has been operating import and export activities for a short period of time, not having enough time to review its compliance with laws as stipulated in point b.1 above, but if the imported goods fall under the category specified in point b.2 above, Customs shall conduct on-site inspections of some initial imports. If the enterprise complies well with customs laws, subsequent inspections will be conducted through random spot checks as prescribed.

For other imported goods: The inspection shall be carried out in accordance with the provisions of the Law on Customs and Decree No. 101/2001/NĐ-CP.

b4) As for imported raw materials for processing and re-exporting, if they are exempt from on-site inspections, samples must still be taken as a basis for inspection at the time of export and post-clearance inspection. The Head of the Customs Management Unit managing the processing contract decides which raw material samples should be taken. The port-of-entry Customs office shall carry out the sampling and sealing of samples according to the regulations on sampling of processing raw materials.

2. Random on-site inspection of goods:

a) The method of random on-site inspection shall be applied in the following cases:

- Cases that do not qualify for exemption from inspection as provided for in point 1 above;

- Cases that do not qualify for full inspection as provided for in point 3 below;

- Cases where the consignor qualifies for exemption from inspection, but the goods do not belong to the list of items exempted from on-site inspection.

b) Inspection ratio:

- For exported goods: The inspection ratio is 3% or 5% for each batch of exported goods.

- For imported goods: The inspection ratio is 5% or 10% for each batch of imported goods.

3. Full on-site inspection of batches of goods:

Full on-site inspection of batches of goods shall be applied in the following case:

a) Case 1:

The consignor has been administratively penalized three or more times for violations of customs regulations within two years from the date of customs procedures for imported goods and one year from the date of customs procedures for exported goods, with fines exceeding the authority of the Head of the Customs Management Unit.

Within the specified period (two years for imported goods and one year for exported goods), the consignor has been administratively penalized once for violations of customs regulations with fines exceeding the authority of the Director of the Provincial Customs Department.

b) Case 2:

In the event that a batch of exported or imported goods of a consignor who does not fall under the category of frequent violators shows signs of violating customs laws, the customs authority shall conduct a full inspection of the batch of exported or imported goods in accordance with Clause c, Section 6, Article 8 of Decree No. 101.

4. For enterprises found to have abused the exemption from on-site inspection of goods to export or import goods inconsistent with customs declarations, they shall immediately lose the benefit of this exemption and all subsequent batches of exported or imported goods shall be subject to full inspection in accordance with point c, Clause 1, Article 30 of the Law on Customs.

For enterprises found to have abused random on-site inspection of goods to export or import goods inconsistent with customs declarations, immediate measures for full inspection shall be applied.

For enterprises engaged in processing and exporting, importing raw materials for production of exported goods, if found to have abused exemptions from on-site inspection of goods or inspections based on ratios to under-declare exports or over-declare imports compared to customs declarations, provincial or city Customs offices need to conduct reviews and inspections of all completed tax refund or duty refund files of such enterprises. If violations are discovered, penalties shall be imposed in accordance with the law.

5. Authority to decide and change inspection methods:

a) Based on the criteria stipulated in Sections 1, 2, and 3 above, the Head of the Customs Management Unit shall decide on the method of on-site inspection of goods.

b) In cases where a batch of exported or imported goods is registered with a Customs Management Unit outside the port but the on-site inspection is conducted by the Port Customs Management Unit, based on the actual situation of on-site inspection of goods, the Head of the Port Customs Management Unit may decide to increase or decrease the inspection ratio, but shall not change the inspection method.

c) During the process of handling customs procedures for a batch of exported or imported goods, if new information arises requiring a change in the inspection method, then:

The Head of the Customs Management Unit shall decide to change the inspection method previously decided by themselves.

The Director of the Provincial Customs Service decides to change the inspection method decided by the Director of the Customs Sub-department (including the Director of the Customs Sub-department of other provinces and cities).

6. Goods frequently exported or imported as defined in Article 30 of the Law on Customs and Article 8 of Decree No. 101/2001/NĐ-CP dated December 31, 2001 refer to goods that enterprises specialize in exporting or importing, including imported raw materials and processed products for export, imported raw materials for producing exported goods, and exported products.

C. IMPLEMENTATION

1. The application of the method of exemption from on-site inspection of goods and random on-site inspection must be linked to the following business practices:

a) The Head of the Customs Management Unit must immediately organize the review of files to promptly identify and address errors, mistakes, fraud, and report to the Director of the Provincial Customs Department if beyond their authority; organize forces and strengthen supervision and control at border areas to support the lawful handling of customs procedures.

b) The Director of the Provincial Customs Department must organize forces and intensify advisory work against smuggling, customs control, information collection, and analysis to promptly identify and address cases of law violations, and report to the Director General of the General Customs Department if beyond their authority.

Based on the file review of the Port Customs Management Unit and information provided by subordinate advisory units and other sources, the Director of the Provincial Customs Department must promptly examine and issue decisions for post-clearance inspections in cases showing signs of law violations or discovering errors or mistakes during the clearance of goods.

This Circular shall take effect fifteen days from the date of publication in the Official Gazette and shall replace the provisions of Decision No. 1557/2001/QĐ-TCHQ dated December 28, 2001, Article 8 of Decision No. 19/2002/QĐ-TCHQ dated January 10, 2002, and other guiding documents of the General Department of Customs on this matter.

During implementation, if there are any difficulties or obstacles, business units are requested to promptly report them to the Ministry of Finance for further study and supplementary guidance./.