Foreign invested enterprises import products, then label the products as Vietnam goods and export to other countries. The trick helps them escape from trade barriers and enjoy the preferential tariffs offered by import countries.
The trade fraudulence not only makes import countries fail to collect tax from imports, but also affects the prestige of Vietnamese goods. Experts have warned that if the problem cannot be settled, Vietnam may get involved in the misfortune if its products are put under strict control by the import countries.
The Dong Nai provincial customs agency has discovered the workers of SPC Tianhua Vietnam Company, a 100 percent Chinese owned enterprise, headquartered in the Nhon Trach 3 Industrial Zone in the province, replacing Chinese labels on products with the Vietnamese labels.
The products are the water treatment compounds which would be exported to the US.
The customs officers found on the site 13 consignments of products (1000 kilos per consignment) which have replaced labels, and 87 other consignments which still had Chinese labels. As such, the total number of discovered consignment was 100, which had the export value of 215,000 dollars, or 4.5 billion dong.
The products used to clean and kill bacteria, algae in swimming pools were imported from Shijiazhuang Hgw Trade Co. Ltd in China with the certificate of origin from China. The imports were carried directly from the import border gate of Cat Lai port in HCM City to the storehouses of Tianhua.
Tianhua’s General Director has admitted that the 100 tons of products would be exported to the US as Vietnamese goods, without undergoing any other process of production or processing. The US importer is BSW Chemical Co. Ltd.
According to Nguyen Phi Hung, a senior official of the General Department of Customs, a lot of similar cases have been discovered recently, when Chinese businessmen import Chinese goods to Vietnam, labeled the imports as Vietnamese goods for export to third countries.
The products prove to be diversified, from chemicals to tiles and construction materials. Currently, China is imposed a high tax on the products and bear strict control on the export volumes, or face technical barriers and bear anti-dumping tax.
Recently, customs agencies have discovered a business in Da Nang City and another in Tay Ninh province, which exported bee’s honey to a foreign country.
The exporters declare that the exports are made in Vietnam. However, customs officials found out that the products all were sourced from China.
The trade fraudulence has become so popular that the Vietnam Beekeepers Association has sent a document to the General Department of Customs asking to keep strict control over the exports.
Dinh Quyet Tam from the association said Chinese products are being taxed very heavily. If counting on all kinds of tax, Chinese bee’s honey exports to the US are taxed 221 percent. Meanwhile, Vietnamese products are taxed 16-17 percent only.
An official for the general department said that Chinese exports have seriously influenced Vietnamese goods, revealing that some countries have kicked off investigation on the issue. Therefore, customs agencies have been reinforcing control over the exports, and they will verify all the consignments with signs of trade fraudulence.
Regarding Tianhua Company, according to the Dong Nai Customs Agency, the company has the investment capital of two million dollars, but in fact, it only has some old equipment. With the above said case, Tianhua has just been imposed the fine of 20 million dong.