Circular No. 63/2011/TT-BTC dated May 13, 2011 of the Ministry of Finance providing the pilot application of the priority regime in the state management of customs to eligible businesses

THE MINISTRY OF FINANCE

Circular No. 63/2011/TT-BTC of May 13, 2011, providing the pilot application of the priority regime in the state management of customs to eligible businesses

Pursuant to June 29, 2001 Customs Law No. 29/2001/QH10 and June 14, 2005 Law No. 42/2005/QH11 Amending and Supplementing a Number of Articles of the Customs Law;

Pursuant to November 29, 2006 Law No. 78/2006/QH10 on Tax Administration;

Pursuant to the Government’s Decree No. 154/2005/ND-CP of December 15, 2005, detailing a number of articles of the Customs Law on customs procedures, inspection and supervision;

Pursuant to the Government’s Decree No. 85/2007/ND-CP of May 25, 2007, detailing a number of articles of the Law on Tax Administration, and Decree No. 106/2010/ND-CP of October 28, 2010, amending and supplementing a number of articles of Decree No. 85/2007/ND-CP;

Pursuant to the Government’s Decree No. 118/2008/ND-CP of November 27, 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

In implementing the Prime Minister’s directions in the Government Office’s Official Letter No. 698/VPCP-KTTH of January 30, 2011, promulgating the priority regime in customs procedures;

The Ministry of Finance specifies the pilot application of the priority regime in the state management of customs to eligible businesses as follows:

Chapter I

GENERAL PROVISIONS

Article 1. Subjects and scope of application

1. To apply on a pilot basis the priority regime in the state management of customs to a number of businesses satisfying the conditions specified in this Circular.

2. Apart from the priorities they are entitled to under this Circular, eligible businesses may also enjoy other priorities in the state management of customs as provided by law for their exports and imports.

3. Businesses eligible for the priority regime in the state management of customs (below referred to as prioritized businesses) may enjoy priorities provided in this Circular at all customs offices nationwide, even at the stage of carrying out procedures for customs clearance for goods and the stage of post-customs clearance examination.

4. Once a business is recognized as a prioritized one, all of its goods or services (except imported goods of businesses specified in Clause 2, Article 3 of this Circular) which are exported, imported or domestically purchased and sold will enjoy the priority regime.

Article 2. Duration of pilot application

The duration of pilot application of the priority regime is 2 (two) years from the effective date of this Circular. Upon the expiration of this duration, the General Department of Customs shall review and appraise the application and report it to the Ministry of Finance for proposal on this regime to the Prime Minister for promulgation for stable and long-term application.

Chapter II

CONDITIONS ON PRIORITIZED BUSINESSES

Article 3. Types of prioritized businesses

Prioritized businesses are divided into three types:

1. Businesses eligible for priorities in export and import of all goods items and in all forms of export and import (including also exported, imported or domestically purchased and sold goods and services).

2. Businesses eligible for priorities in export of fisheries products, farm produce and crude oil purely originating in Vietnam.

3. Businesses eligible for priorities in import of goods for production and export of hi-tech products in which investment is encouraged and which are subject to special requirements on production process and product management.

Article 4. Conditions on prioritized businesses

Prioritized businesses must have the lowest risk level and fully satisfy the following conditions:

1. Having a record of the observance of the customs, tax, commercial, investment and enterprise laws (below collectively referred to as laws) in their export and import activities, or having been administratively sanctioned for their violations at the lowest sanctioning level as specified in Article 5 of this Circular; and customs offices are confident of these businesses’ law observance in the future as specified in Article 6 of this Circular.

2. Having export and import turnovers as specified in Article 7 of this Circular.

3. Practicing a transparent accounting regime as specified in Article 8 of this Circular.

4. Conducting efficient business operations.

5. Making via-bank payments for all of their exported or imported goods.

6. Carrying out e-customs procedures.

7. Requesting to be recognized as prioritized businesses as specified in Article 9 of this Circular.

Article 5. Condition of law observance by businesses

1. A business having a record of the law observance means the one which has never been handled by customs offices and other state management agencies defined in Clause 3 of this Article for any violations; or one which, during the period specified in Clause 2 of this Article, has been handled for not more than 3 (three) times by the aforesaid agencies for administrative violations carrying a fine not exceeding VND 20 million each time without any additional sanction (deprivation of the right to use permits or practice licenses; confiscation of material evidence and means involved in violations; forcible destruction or transportation out of Vietnam of goods; forcible payment of money amounts equal to the value of material evidence involved in violations).

2. The period for assessment of a business’s law observance is 36 (thirty six) months up to the date on which the General Department of Customs receives the business’s written request for being recognized as a prioritized business.

Businesses specified in Clauses 2 and 3, Article 3, which have operated for between over 12 months and under 36 months and satisfy the conditions specified in Article 4 and Clause 1 of this Article, may also be considered for being recognized as prioritized ones.

3. Agencies competent to certify businesses’ law observance:

3.1. The agency competent to certify the observance of the customs law (including the observance of the tax law regarding exports and imports) is the General Department of Customs.

3.2. Other agencies competent to certify businesses’ law observance at the request of the General Department of Customs include:

- Agencies certifying the observance of domestic tax laws and the business efficiency are district-level Tax Departments with which businesses have registered and perform the obligation to pay domestic taxes.

- Agencies certifying the observance of the enterprise law are provincial-level Planning and Investment Departments or management boards of industrial parks or economic zones of localities in which businesses are located or have their production establishments.

- Agencies certifying the observance of the commercial law are provincial-level Market Control Sub-Departments of localities in which businesses are located and have their production or business establishments. For a business having offices and production or business establishments located in many provinces or cities, the Market Control Sub-Departments of all of these provinces or cities shall make such certification.

Article 6. Condition of reliability

1. Customs offices can believe in businesses’ law observance in the future.

2. If customs offices do not have sufficient grounds to believe in the future observance of law by businesses which satisfy the conditions specified in Articles 4 and 5 of this Circular, these businesses are ineligible for the pilot application.

Article 7. Condition of export and import turnover

1. For businesses specified in Clause 1, Article 3 of this Circular, the export or import turnover must be at least USD 500 million/year.

2. For businesses specified in Clause 2, Article 3 of this Circular, the export turnover must be at least USD 100 million/year.

3. For businesses specified in Clause 3, Article 3 of this Circular, the General Department of Customs shall determine a specific export or import turnover appropriate to the characteristics of production and management technologies applied to each goods item.

Article 8. Condition of transparent accounting regime

A business practicing a transparent accounting regime is the one certified and evaluated by a tax administration agency with which it has registered for payment of domestic taxes as:

1. Having applied Vietnamese accounting standards.

2. Having applied an internal finance control regime.

3. Having a sufficient and clear system of accounting books and documents.

4. Having made adequate, accurate and truthful financial statements.

5. Having sufficiently and scientifically archived accounting books and documents and documents related to exported or imported goods.

6. Having properly observed financial and accounting regulations.

Article 9. Requests for being recognized as prioritized businesses

Businesses wishing to enjoy priorities shall request in writing the General Department of Customs to consider and recognize them as prioritized businesses and commit to properly complying with law.

Chapter III

PROCESS OF CONSIDERATION AND RECOGNITION OF PRIORITIZED BUSINESSES

Article 10. Procedures for notifying the application of the priority regime

After collecting and analyzing information on businesses, the General Department of Customs shall notify in writing the policies and the provisions of this Circular to each business for the latter to self-evaluate and compare its own conditions with the specified conditions and decide to request for application of the priority regime.

Article 11. Dossiers of request for recognition of prioritized businesses

A dossier of request for recognition of a prioritized business:

1. A written request: 1 original (made according to form 01/DNUT provided in this Circular).

2. Documents proving satisfaction of the conditions specified in this Circular, including:

2.1. A report on export and import statistics of the business in the last 3 years: 1 original.

A statistical period lasts from January 1 to December 31 of a year. For the current year of operation, if 6 months or less have elapsed, figures of the last 3 years are required; if more than 6 months have elapsed, figures of these months are required together with projected figures for the whole year (according to form 02/DNUT provided in this Circular).

2.2. Annual financial statements for the last 3 years: To submit 1 copy of each statement certified by the business and produce the original thereof.

2.3. A report on the business’s law observance in the last 3 years (in case the business has been handled for violations, number of handling times, acts of violation, sanctioning forms and levels, sanctioning authorities and execution of sanctioning decisions must be clearly indicated): To submit 1 original.

2.4. Written conclusions on the latest audit or inspection (conducted within 1 year, if any): To submit one copy certified by the business and produce the original thereof.

Article 12. Assessment of conditions on prioritized businesses

1. The assessing agency: the General Department of Customs

2. Form of assessment:

2.1. Organizing post-customs clearance examination at the offices of businesses under law to evaluate businesses’ law observance; or studying the latest audit or inspection conclusions (as specified at Point 2.4, Clause 2, Article 11 of this Circular) and using these conclusions, if they are sufficient for evaluating the businesses’ law observance, instead of post-customs clearance examination at businesses.

2.2. The General Department of Customs shall request in writing the agencies specified in Clause 3, Article 5 to comment and evaluate the law observance by businesses in their respective fields of state management. The time limit for law observance evaluation is specified in Clause 2, Article 5 of this Circular. Within 10 working days after receiving a written request of the General Department of Customs, these state management agencies shall issue a written reply.

3. Contents of assessment:

3.1. Based on a business’s dossier of request for being recognized as a prioritized business; evaluations and comments of the state management agencies specified in Clause 3, Article 5 of this Circular; results of post-customs clearance examination or inspection/audit conclusions and other collected information, the General Department of Customs shall comment and evaluate the satisfaction of the conditions on prioritized businesses specified in Articles 3 thru 9 by the requesting business. In case of satisfaction of the conditions, it shall notify such to the requesting business for discussion on specific contents of a memorandum on consideration and recognition of a prioritized business (made according to form 03/DNUT provided in this Circular).

3.2. Checking (even in case of acceptance of audit/inspection results) of the business’s technical infrastructure for information technology application to meet the need for e-data exchange between the business and customs offices.

4. Contents of the memorandum: In addition to contents required depending on the characteristics and practical operation of the business, the memorandum must contain the following principal details:

- Name, address, telephone and facsimile numbers and email address of the business;

- Priorities for the business;

- Responsibilities of the business;

- Responsibilities of the General Department of Customs;

- Agreement on identification of headings of goods items exported or imported by the business. Goods headings agreed upon by the two parties will serve as a basis for the business to make customs declaration upon carrying out export or import procedures. Should any agreed goods heading be subsequently detected to be incorrect, the General Department of Customs shall report such to the Ministry of Finance for adjustment and application to goods consignments arising after the time of adjustment;

- Termination of application of the priority regime;

- Commitments.

5. The time limit for assessment is 45 days after the General Department of Customs receives a business’s dossier of request. In case such business is not recognized as a prioritized business, the General Department of Customs shall notify such in writing to the business.

Article 13. Decisions on recognition of prioritized businesses

1. The General Director of Customs shall decide on recognition of prioritized businesses.

2. The time limit for issuing a decision on recognition of a prioritized business is 15 working days after the assessment is completed.

3. The form of decisions on recognition of prioritized businesses is provided in this Circular (form No. 04/DNUT).

Article 14. Revaluation and extension

1. The duration for a business to enjoy the priority regime for the first time is 12 months after the General Department of Customs signs a decision on application of the priority regime to this business. Upon the expiration of this duration, the General Department of Customs shall conduct revaluation and, if the business still satisfies the specified conditions, may extend the duration of application of the priority regime.

2. Principal contents which must be considered and evaluated include the satisfaction of the conditions on prioritized businesses and the discharge of responsibilities by parties. If finding it necessary, the General Department of Customs may gather comments of related state management agencies specified in Clause 3, Article 5 of this Circular.

3. If results of the revaluation show that the business still satisfies the specified conditions and wishes to continue enjoying the priority regime, the General Department of Customs shall issue a decision to extend the duration of application of the priority regime to the business for subsequent 36 (thirty-six) months (made according to form No. 05/DNUT provided in this Circular).

4. The subsequent revaluations shall be conducted by the revaluating parties once every 36 months. Contents of revaluation and handling of revaluation results comply with Clauses 2 and 3 of this Article.

5. If the business no longer satisfies the conditions on prioritized businesses, the General Department of Customs shall decide to terminate the application of the priority regime to this business.

Article 15. Customs offices managing prioritized businesses

1. In order to create favorable conditions for prioritized businesses and avoid different ways of understanding and application, prioritized businesses shall be uniformly managed by the Post-Customs Clearance Examination Department of the General Department of Customs.

2. To assure adequate and accurate comments on and evaluation of businesses, the General Department of Customs requests related local customs departments to provide information and give comments on and evaluation of these businesses’ law observance and export and import activities.

3. Other agencies attached to or under the General Department of Customs that have information and recommendation related to the law observance, customs clearance of goods, post-customs clearance examination, inspection, handling of violations regarding exported or imported goods or domestically purchased goods or services of prioritized businesses shall report them to the General Department of Customs for consideration and decision.

Chapter IV

THE PRIORITY REGIME
FOR ELIGIBLE BUSINESSES

Article 16. Priorities at the stage of customs clearance

Priorities at the stage of customs clearance include exemption from detailed examination of customs dossiers and exemption from physical inspection of goods (except cases showing clear signs of violation):

1. Exemption from detailed examination of customs dossiers (including paper dossiers and electronic dossiers) means that customs offices receive dossiers and only examine the completeness, legality and validity (of the presentation) of these dossiers and do not examine their contents in detail. Businesses shall take responsibility before law and customs offices for the legality, validity and contents of their dossiers.

2. Exemption from physical inspection of goods means exemption from manual inspection and inspection by machines and equipment.

Article 17. Priorities at the post-customs clearance stage

During the time of application of the priority regime to businesses, customs offices shall not conduct post-customs clearance inspection at the offices of these businesses (except cases showing clear signs of violation and cases of inspection for evaluation of their law observance under regulations).

1. No post-customs clearance inspection at offices of businesses means that customs offices do not issue inspection decisions or set up inspection teams to conduct inspection at the offices of businesses. When being notified by customs offices of their errors or matters which must be clarified, businesses shall review these errors or matters and give explanations to customs offices. Form and places of making explanations are specified in Article 145 of the Ministry of Finance’s Circular No. 194/2010/TT-BTC of December 6, 2010.

2. Planned inspection to evaluate the law observance by prioritized businesses shall be conducted once every 5 years.

Article 18. Application of e-customs procedures

1. When e-customs procedures are carried out, e-dossiers are exempt from inspection and replies are issued 24 hours a day and 7 days a week.

2. In case there is a plausible reason, goods of a prioritized business may be entitled to customs clearance with a simple dossier consisting of a customs declaration, commercial invoices and import or export permit (if any). Other documents may be additionally submitted by the business within 30 days under Article 9 of the Government’s Decree No. 154/2005/ND-CP of December 15, 2005.

3. E-customs declarations of prioritized businesses shall be identified by declaration registration systems of customs offices for automatic application of the priority regime.

Article 19. Priority in payment of duties and customs charges

1. If wishing to pay customs charges and fees only once a month on a given day, businesses may register for payment on such day with the General Department of Customs.

2. If wishing to pay duties to customs offices only once a month on a given day, businesses may ask for permission to pay on such day for export or import consignments within the duty payment grace period as provided by law.

3. Via-bank payment of duties and charges must comply with Article 3 of the Government’s Decree No. 87/2010/ND-CP of August 13, 2010.

Article 20. Application of the regime of duty refund and liquidation first and inspection later

1. Duty refund first and inspection later comply with Article 60 of the Law on Tax Administration; Article 30 of the Government’s Decree No. 85/2007/ND-CP of May 25, 2007, detailing a number of articles of the Law on Tax Administration; Clause 21, Article 1 of the Government’s Decree No. 106/2010/ND-CP of October 28, 2010, amending and supplementing a number of articles of Decree No. 85/2007/ND-CP.

2. Prioritized businesses may apply the regime of liquidation first and inspection later under Clause 1 of this Article to their imports or exports which are processed for export or under contracts.

Article 21. Modification of customs declarations and making of additional declarations in customs dossiers

The modification of customs declarations and making of additional declarations in customs dossiers comply with Article 12 of the Ministry of Finance’s Circular No. 194/2010/TT-BTC of December 6, 2010.

Article 22. Single customs declaration

1. Single customs declaration and time limit for liquidation of single customs declarations comply with Article 9 of the Government’s Decree No. 154/2005/ND-CP of December 15, 2005.

2. Prioritized businesses may make single customs declarations in either of the following forms:

- For goods exported or imported across the border or through border gates, customs declaration shall be made first, exportation or importation later.

- For goods imported on the spot; and materials, components and spare parts purchased from bonded warehouses for production, importation shall be conducted first (supervised and recorded in monitoring books by customs offices of bonded warehouses), customs declaration later.

Chapter V

RESPONSIBILITIES OF CUSTOMS OFFICES AND BUSINESSES

Article 23. Responsibilities of customs offices

1. To give to a prioritized business the priorities specified in Articles 16 thru 22, Chapter IV of this Circular, unless they detect any of the following violations of this business:

1.1. Exporting or importing goods on the list of those banned from export or import under law.

1.2. In case of having a ground to believe that the business has erroneously declared the goods name, heading, quantity, weight, value or origin, leading to wrongful duty declaration (reduction of payable duty amount, increase in refundable duty amount, giving rise to or increase in exempted duty amount) with an error of VND 50 (fifty) million or more, customs offices shall decide to suspend the application of the priority regime to the business. After examining and handling the violation, if the business is sanctioned so severely that it can no longer satisfy the condition of observance of the customs law, customs offices shall decide to terminate the application of the priority regime to the business, revoke the decision on recognition of the prioritized business, and concurrently notify such to related agencies specified in Clause 3, Article 5 of this Circular.

- The General Department of Customs is competent to decide to suspend or terminate the application of the priority regime to businesses. Upon detecting any violations of businesses, the units attached to and under the General Department of Customs shall report them to the General Department of Customs for consideration and decision on termination or suspension of application of the priority regime (according to form No. 06/DNUT), or for decision on revocation of decisions on termination or suspension (according to form No. 07 provided in this Circular).

- Pending the issuance by the General Department of Customs of decisions on suspension or termination of application of the priority regime to businesses, these businesses may still enjoy the priority regime.

2. To regularly analyze export or import operations and collect figures of exported or imported goods of businesses so as to help them raise their law observance capability and early detect errors for timely remedying.

The General Department of Customs shall organize a specialized section to coordinate with businesses in receiving and collecting information and analyzing export or import operations and figures of exported or imported goods of businesses. In case it detects errors of businesses or matters which must be clarified, it shall notify such to businesses for self-checking:

- If businesses admit that detections of customs offices are correct, they are required to take remedies (additional declaration; addition of documents; additional duty payment).

- If businesses believe that detections of customs offices are incorrect or there is a matter which remains unclear to customs offices, they are required to make written explanations (enclosed with proof documents). If explanations made by businesses show that they have sufficient legal grounds or evidence to prove that they have made no error or clearly explained matters raised by customs offices, customs offices shall accept explanations of businesses. If businesses fail to or cannot make explanations, customs offices shall work with businesses in re-examining the matters and make conclusions on or handle the matters under law.

3. To be ready to satisfy requests of businesses for policy and law consultancy.

Forms of consultancy include:

- Written consultancy: Customs offices shall issue written replies to businesses on matters raised by the latter for consultancy.

- Oral consultancy: Assigned customs officers shall receive consultancy requests of businesses and orally give consultancy. If matters raised by businesses for consultancy fall beyond these officers’ professional fields or capability, they shall request their superiors to issue written replies to businesses.

Article 24. Responsibilities of prioritized businesses

1. To properly observe the law.

2. To regularly conduct self-checking to detect and remedy errors. When having a new export or import goods item of which the two parties have not reached agreement on its identification number, businesses shall propose a goods identification number and notify it to the General Department of Customs for consideration and approval.

3. To periodically report on their export or import operations and provide figures of exported or imported goods to customs offices.

- Quarterly, in the first week of the quarter, businesses shall report on their export or import operations and provide figures of exported or imported goods in the previous quarter (according to forms No. 08a/DNUT and 08b/DNUT provided in this Circular) to the General Department of Customs.

- Reporting and provision of information shall be made through the computer network connected between them and the General Department of Customs.

4. To be ready to clarify matters related to their exported or imported goods at the request of customs offices.

When being notified by the General Department of Customs of errors or unclear matters in their customs dossiers, they shall re-check, reply and explain notified errors or matters in an adequate and prompt manner.

5. To actively coordinate with customs offices in case of customs inspection

In case customs offices conduct examination at the offices of businesses or businesses request customs offices to come and work on unclear matters, businesses shall create favorable conditions for and comprehensively coordinate with examination teams. For matters on which remain divergent opinions, they shall coordinate with customs offices in finding lawful solutions.

6. Before enjoying the priority regime provided in this Circular, to notify the General Department of Customs and district-level Customs Departments with which procedures for their exported or imported goods are carried out of agents carrying out customs procedures for their exported or imported goods and guarantee the law observance by these agents. In case of change of an agent, they shall notify such to those customs offices. They shall regularly examine the law observance by their agents and promptly notify detected errors (if any) to customs offices.

Chapter VI

HANDLING OF VIOLATIONS; COMPLAINTS AND DENUNCIATIONS

Article 25. Handling of violations

1. Prioritized businesses committing law violations shall, depending on the nature and severity of their violations, be handled under law.

2. Organizations and individuals are strictly prohibited from taking advantage of this priority regime to violate policies and laws. Violators shall, depending on the nature and severity of their violations, be administratively handled or examined for penal liability under law.

Article 26. Complaints and denunciations

1. All individuals and organizations may complain about, and all citizens may denounce law violations in the course of implementation of this Circular.

2. The lodging and settlement of complaints and denunciations comply with the law on complaints and denunciations.

Chapter VII

ORGANIZATION OF IMPLEMENTATION

Article 27. Implementation responsibility

1. Pursuant to this Circular, the General Director of Customs shall direct and guide customs offices in implementing this Circular; and after the period of pilot implementation, review and appraise the implementation and elaborate the priority regime for submission by the Ministry of Finance to the Prime Minister for promulgation.

2. The General Department of Customs shall closely coordinate with related agencies and units in assuring proper and effective implementation of this Circular.

Article 28. Effect

This Circular takes effect 45 days after the date of its signing.-

For the Minister of Finance
Deputy Minister
DO HOANG ANH TUAN

* All the forms provided in this Circular are not printed herein.