Vietnam: The Ministry of Industry and Trade warns 11 export products could be investigated for origin fraud

Vietnam: Plywood from solid wood materials, wooden cabinets, sofas with wooden frames, foam cushions, artificial stone, ceramic tiles, copper pipes, gas cylinders, packing pins, tires, and electric bicycles are exported products that could be subjected to investigation for commercial practices, origin fraud and illegal transshipment.

List of products at risk of being investigated for application of trade remedies, origin fraud and illegal transshipment

The Vietnam Ministry of Industry and Trade has warned that 11 export products are at risk of being investigated, including: plywood made from solid wood materials, wooden cabinets, sofas with wooden frames, foam cushions, artificial stone, ceramic tiles, copper pipes, gas cylinders, packing pins are exported to the US market and tires and electric bicycles are exported to both the US and the EU.

In July 2021, the United States Customs and Border Protection (CBP) conducted an investigation against evasion of the obligation to pay trade remedy taxes, as well as implemented the application of temporary measures against with imported wooden furniture products of a few Vietnamese companies.

According to the General Department of Customs, two main forms of fraud by enterprises using investment capital from China are taking advantage of Vietnamese origin to export products to some large markets such as the United States. One of the main forms of fraud is importing plywood but then using Vietnamese origin to export products. Enterprises do not have to do anything significant from the time of importing raw materials to exporting finished products, which makes it difficult for products to meet Vietnamese standards. Therefore, the customs authority has identified the bad effects from the increase in wood import turnover from China, as well as the increase in wood export turnover to the US since 2018.

Customs authorities can take strong measures to identify violations such as implementing inspection and examination plans. In the process of implementing the plan, the customs authority also cooperates with the Vietnam Timber and Forest Products Association, the Ministry of Agriculture and Rural Development, the Ministry of Industry and Trade, and the Vietnam Chamber of Commerce and Industry (VCCI). For a long time, customs authorities have been able to establish close relationships with businesses. In 2018, when the risks related to trade fraud with wood products appeared, the Vietnam Timber and Forest Products Association tried to cooperate effectively as well as provide suspicious information related to frauds and violations. Therefore, the authorities have promptly implemented effective management measures for products as well as businesses.

In addition, to protect domestic production, the US has set up significant barriers for foreign suppliers, including Vietnam. According to the Vietnam Trade Remedies and Trade Office in the US, the US Customs and Border Protection Agency has begun conducting an investigation against trade remedy tax evasion as well as applying temporary measures for imported wooden cabinet products of some Vietnamese companies.

With the aim of mitigating the adverse effects of trade remedies, the Trade Remedies Administration (Ministry of Industry and Trade) has recommended that Vietnamese manufacturing, exporting and enterprise industries need to have basic knowledge related to trade remedy law as well as to prepare adequate resources to handle litigation cases. In addition, Vietnamese enterprises must also update information of the Ministry of Industry and Trade when exporting products, and cooperate effectively with the investigating agency, and closely coordinate with the Ministry of Industry and Trade in case handling.

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