GENERAL DEPARTMENT OF VIETNAM CUSTOMS VIETNAM AEO PROGRAM

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GENERAL PROCEDURES UNDER CENTRAL EXCISE

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GENERAL DEPARTMENT OF VIETNAM CUSTOMS VIETNAM AEO PROGRAM 2016

I. Vietnam custom organization General Department of Viet Nam Customs Director General Vice Director General (4) Departments (12) Post Clearance Audit Director 4 Deputy Director Local Customs (34) PCA sub-departments 6 Divisions AEO Others sub-depts

Pilot Project II. AEO OVERVIEW - Objective: voice of private sector; identify potential problems. - Period: May 2011 May 2013. - Participants: 8 companies (Process-criteria, validation techniques, traning benefits post management)

2.1 Implemention & Legislation II. AEO OVERVIEW - Customs Law no 54/2014/QH13 dated 23/6/2014 (Articles: 42, 43, 44, 45); - Import and Export Tax Law no 107/2016/QH13 dated 6/4/2016 (Articles: 9) -Decree 08/2015/ND-CP dated 21/1/2015 (Articles: 9, 10, 11, 12); -Circular no 72/2015/TT-BTC dated 12/5/2015. - Decision no 2659 / QD - GDC dated 14/9/2015

II. AEO OVERVIEW 2.2 AEO Criteria - Compliance records; - Export, Import Volume; - E-Customs, E-Tax procedures; - Payment of export, import goods; - Internal Control system; -Compliance of accounting, auditing legislations. - Security management

II. OVERVIEW OF AEO PROGRAM 2.3 Validation Documentary + on-site: 30 working days 2.4 Authorizing Entities -Export and import companies (including High-tech companies or major investment project); - Exporters (product made by Vietnam) - Customs brokers;

II. OVERVIEW OF AEO PROGRAM 2.5 Post management 2.6 Account manager Annual internal assessment report Counseling from customs offical designated to each AEO for improving law compliance and satisfying AEO standards

II. OVERVIEW OF AEO PROGRAM 2.7 Renewal audit - Subject: companies authorised as AEOs. - Period: no later than 6 months before expiration of authorization. - Contents: authorizity criteria. - Method: document audit or on-site audit.

II. OVERVIEW OF AEO PROGRAM 2.8 Suspension and revocation of status 2.9 Validity - Suspension: period 6 months: no report of change, no submission of annual report... - Revocation: failure to meet criteria. - 3 years period

III. AEO AUTHORIZATION PROCESS Application Local customs Criteria AEO GDVC Fulfill Failure Rejection Failure Compre hensive audit Fulfill AEO certificate

IV. SUBJECT OF APPLICATION 1 2 3 4 Enterprises operate in the field of export, import for at least 2 consecutive years Customs brokers High-tech enterprises pursuant to provisions of Ministry of Science and Technology Key investment project approved by Prime Minister before being licensed for investment

IV. PRIORITY POLICY 1. 2. 3. Exemption from documents inspection, physical inspection (except for random purpose). Customs clearance with incomplete declaration Priority entitlement when making customs procedures 4. Specialized inspection

IV. PRIORITY POLICY 5. 6. Tax procedures Procedures for indirect export and import 7. Post clearance audit

IV. Priority Policy Priority in terms of tax procedures and PCA Tax Procedures Tax is refunded first, inspection shall be conducted later Aplication documents : Regulated in Circular 38/2015/TT- BTC Allowed to submit settlement report for processed, manufactured and exported goods within 90 days after the end of the fiscal year Given priority when making tax procedures for export/import IV. Priority Policy accordant with the regulations PCA Exemption from PCA at declarant s premises (except for sign of infringement) Implementation of PCA does not exceed 1 time in 3 consecutive years from the date issuing approval decision (except for cases where there are signs of law infringement)

V. CONDITIONS FOR AEO STATUS 1. Compliance with customs and tax legislation 2. Reach the required turnover for export, import 3. Having procedures for electronic customs and electronic tax in place

V. CONDITIONS FOR AEO STATUS 4. Payment for export, import goods 5. Internal management system 6. Good compliance with legislation on accounting, auditing

V. CONDITIONS FOR AEO STATUS 1. Required turnover for export, import - Exporter: 100 mil. USD/year - Enterprise export goods manufactured in Viet Nam: 40 mil. USD/year - Enterprise export agriculture, aquatic products which are grown or manufactured in Viet Nam: 30 mil. USD/year

V. CONDITIONS FOR AEO STATUS 1. Required turnover for export, import Customs broker: the number of declarations under the broker s name: 20.000 declarations/year High-tech enterprise in accordant with CNC Law: Turnover requirement is not applied for this type of enterprise

V. CONDITIONS FOR AEO STATUS 2. Internal management system - Enterprise conducts and maintains process to manage, supervise, and control its entire operation - Enterprise has measures and instruments, internal security process to ensure supply chain security of exported, imported goods

SUPPLY CHAIN SECURITY OF GOODS Supervise the process of goods transportation from enterprise s premise port Check container security before loading goods to means of transport Supervise at key areas: warehouse, production area, Decentralize staff to move around and work in appropriate areas Supervise information and technology security Staff security

VI. PROCEDURES FOR RECOGNITION, EXTENSION 1a. Requested documents The written request using the provided form (attached to the Circular) Financial report of 2 years under consideration Auditing report of 2 years under consideration Examination conclusion of 2 years under consideration (if any) Description of internal security system Certificate of merit (if any)

VI. PROCEDURES FOR RECOGNITION, EXTENSION 1b. Required documents for key investment project Written proposal and commitment to implement the project in compliance with schedule (attached to the Circular) Investment certificate, technical and financial report

VI. PROCEDURES FOR RECOGNITION, EXTENSION Provincial/City Customs Department GDVC Submit report within 5 working days Examination of enterprise s records: - Examination of dossier s completeness, validity, legality - Review of enterprise s information, information collection from the area that enterprise is under management with the requirement for AEO application Base on the result of dossier examination and physical inspection, verification result of supplement information (if any) Written document specifying reasons Physical inspection at enterprise s premise Written document specifying reasons DG of GDVC sign the Decision of recognition

VI. PROCEDURES FOR RECOGNITION, EXTENSION Physical Inspection At Enterprise s Premise Check declared information in enterprise s application documents for AEO recognition Compare the result of physical inspection with the result of documentation verification Conduct PCA in enterprise s premise to assess the legal compliance of the enterprise in 24 consecutive months up to the time when that enterprise submit its application

VII. MANAGEMENT AFTER RECOGNITION 1. Responsibility of Customs Administration EXTENSION Every 3 years: assess the conditions for AEO application, assess the compliance of enterprise with customs law and tax law => automatic extension SUSPENSION Enterprise does not completely take responsibility specified in Article 45 of Customs Law after being notified by Customs Administration => temporary suspension for 60 days TERMINATION Enterprise does not meet 1 of the required conditions Enterprise does not comply all the provisions specified in Article 45 of Customs Law when its termination period expires Enterprise requests for termination of AEO recognition

VII. MANAGEMENT AFTER RECOGNITION 2. Responsibility of Enterprise Comply to Customs Law, Tax Law, Accounting Law, Auditing Law Send report every 3 months by electronic means of communication Submit financial and auditing report within 90 days after the end of the fiscal year Self-evaluate, detect and correct errors, report to Customs, maintain AEO conditions Report completely and in time when being notified of errors or unclear points in Customs documentation Provide GDVC with the list of enterprise s authorized customs brokers

VIII. MUTUAL RECOGNITION AGREEMENT As Viet Nam comes to conclusion of AEO mutual recognition agreements with other countries, territories, all Viet Nam s AEOs will be entitled to the priority policy of those countries, territories and vice versa.

IX. AEO BENENEFITS - Exemption from document inspection and goods physical inspection - Customs clearance with incomplete (simplified) declarations - Priority when customs procedures - Post-clearance inspections

X. NUMBER OF AEO COMPANIS 60 51 50 39 40 21 30 8 11 20 10 0 Year 2011 Year 2012 Year 2013 Year 2014 Year 2015 Year 2016

XI. Mutual recognition Studying WCO program

THANKS YOU