The act of counterfeiting of certificates of origin (C/O) in Vietnam will negatively affect consumers, genuine businesses and prestige of Vietnamese goods on the international market. Therefore, the concerned authorities are targeting to build a mechanism to closely coordinate with relevant functional agencies to detect early cases of Vietnamese origin-related fraud and counterfeiting, especially some key commodities with large import and export turnover.
Multiple tricks of origin
Facing the sudden increase of plywood export to the United States, from January 2018 to March 2019, the Department of Anti-Smuggling and Investigation (under the General Department of Vietnam Customs) conducted a review of export turnover for plywood coded HS4412 from Vietnam to the US market. According to statistics, there were 90 companies exporting HS4412 plywood from Vietnam to the US. In particular, the production and export of plywood, veneer plywood and composite wood products of six companies with large timber production and export volume showed signs of a sudden increase.
Specifically, the export turnover of six companies in the verification period was very high, such as VT Co. Ltd. (Hanoi) at nearly VND406 billion, VM Co., Ltd. (Hung Yen province) over VND60 billion, AA Joint Stock Company (Nam Dinh province) VND60.4 billion and GR Joint Stock Company (Lang Son province) nearly VND113 billion. Similarly, FN Co. Ltd. (Phu Tho province) and Go Co. Ltd. (Hanoi) recorded a very high increase in wood export turnover in a short space of time.
According to the Anti-Smuggling and Investigation Department, through the verification of the above six companies and the working results with relevant households and local authorities, some emerging issues related to violations in the establishment of C/O application dossiers by enterprises. Specifically, VT, VM, GR and AA companies admitted that they did not purchase eucalyptus and acacia wood materials from local households under the relative set contracts. These companies used fake contracts to trade materials, while land use right certificates in some C/O applications were also fake, with the purpose of validating input documents to carry out procedures for obtaining certificates of Vietnamese origin for shipments that such companies produced for sale to other export enterprises or directly export by themselves.
This is one of the latest C/O forging cases that have been uncovered by the functional forces. According to Au Anh Tuan, Director General of Customs Control and Supervision Department under the General Department of Vietnam Customs, through inspection, supervision and management when carrying out customs procedures for import and export goods and post-clearance inspection, the customs authorities have detected multiple tricks of frauds and forgery related to illegally using Made-in-Vietnam origin and labels.
Specifically, in the illegal labelling of goods and infringement of intellectual property rights, many types of goods produced abroad when imported to Vietnam already featured the words "Made in Vietnam" or "Originated from Vietnam"; or labelled in the products’ packages and warranty cards in Vietnamese with information about trademarks, addresses of business offices, websites and warranty centres in Vietnam for domestic consumption or export.
In addition, many goods imported from abroad, labelled with origin from foreign countries or not showing the country of origin on the goods label, when being put into circulation in domestic consumption in Vietnam have been changed into new labels reading "Made in Vietnam" or "Originated from Vietnam."
Especially for goods origin, the functional agencies have discovered a range of enterprises, including Vietnamese enterprises and those with foreign direct investment, who import raw materials and sell finished products, components and parts for production, processing and assembling but do not undergo processing and manufacturing or just merely undergo simple processing, manufacturing and assembly stages that do not meet the prescribed the origin-related rules, and have named their products with Vietnamese origin when exporting or legalising their dossiers to apply for Vietnamese C/O.
Traders were found labelling made in Vietnam or with Vietnamese origin on their products for consumption in the domestic market or for export during establishing multiple companies, with each of them importing a number of components, parts or disassembled parts for assembling or selling to other companies for simple processing and assembling stages without meeting the set criteria for Vietnamese origin in accordance with regulations.
Criminal prosecution probably
Against the above developments, the General Department of Vietnam Customs has strengthened coordination with customs of other countries in exchanging information and verifying the fraudulent origin and illegally transmitting, while proactively collecting information about goods subjected to anti-dumping duties in major markets, such as the US, Europe and Japan.
In the near future, Vietnam Customs said that it will actively implement project on "Strengthening State management on combating the avoidance of trade remedies and frauds of origin" according to Decision No. 224/QĐ-TTg dated July 4, 2019 by the Prime Minister. Under the plan, the sector focuses on building, issuing and directing the implementation of the process of inspection, supervision and control of goods at risk of fraud and counterfeiting of origin and labelling of goods and illegal transfer. The General Department of Vietnam Customs also guided the local Customs Departments in relevant provinces and cities to strengthen the inspection and identification of goods origin. At the same time, strengthened management and strict control of imported goods from China will be also facilitated to promptly detect, prevent and handle frauds in the import of goods and frauds of origin.
The customs are also set to target to develop mechanisms to closely coordinate with relevant agencies to detect cases of fraud and forgery of origin in order to determine the imports and exports surge in quantity and turnover, while promoting information collection and inspection for consignments showing signs of suspicion of counterfeiting C/O, especially some key commodities with large import and export turnover for investigation and considering or proposing criminal prosecution against violating organisations and individuals.
Moreover, the verification and determination of the volume and proportion of goods to achieve Vietnamese origin is a difficult issue for customs agencies if there is no clear indication from the competent authorities. Therefore, in the future, customs will continue to coordinate with the Ministry of Industry and Trade and the Vietnam Chamber of Commerce and Industry to set up inspection teams directly at production facilities to ensure the clear identification for input materials and specific output products.
