return icon

Vietnam tightens supervision on foreign investment to prevent origin frauds

A number of foreign-invested firms have falsely labeled their products as originating from Vietnam to avoid trade safeguard instruments amid the US-China trade war.

Vietnamese authorities are keeping close watch on investment shift from foreign countries, especially China, into Vietnam to prevent product origin fraud and illegal transshipment.

According to Au Anh Tuan, director of Customs Control and Supervision Department under the General Department of Vietnam Customs (GDVC), the move was made after investment inflow from mainland China and Hong Kong to Vietnam has surged sharply this year, but the value of investment projects is insignificant.

Origin frauds will negatively affect Vietnamese exports.



Reports from the Ministry of Planning and Investment’s Foreign Investment Agency showed that in the January-October period, investment from mainland China in Vietnam skyrocketed by 200% against the figure in 2018, while inflows from Hong Kong jumped 400%. However, each foreign-invested project this year has a value of only some US$1 million.

According to Tuan, with such small investment capital, the projects pose high risks of origin fraud and illegal transhipment as owners of  these projects will find it hard to invest extensively to change the origin of their goods. Instead, they can only assemble and tag ‘Made in Vietnam’ labels to finished products before exporting them to the United States, which is currently imposing high tariffs on China.

Recently, customs agencies have found bicycles and lawn mowers with components imported from China being shipped to the American market, Tuan informed.

According to officials, some foreign-invested firms have falsely labeled their products as originating from Vietnam to avoid trade safeguard instruments amid the US-China trade war and illegally benefit from preferential import tariffs in markets with which Vietnam has signed free trade agreements.

Origin fraud occurs when the illicit benefits are high. For example, the origin fraud of goods originating in Vietnam will allow foreign firms to enjoy low import tax.

Minister of Industry and Trade Tran Tuan Anh said that the risks could be seen in some key export destinations that have strict regulations, especially big partners of Vietnam such as the EU, CPTPP member countries and the United States. It thus will negatively affect Vietnamese exports and the whole economy.

Vietnam earned US$217 billion from exports in the first 10 months of this year, up 7.4% year-on-year. Notably, the growth rate of exports to the United States was reportedly four times higher than the average growth rate of Vietnam’s exports to other markets.

During the period, Vietnam mainly imported computers, computer parts, electric wires and electric cable wires from China. The export of these items to the United States rocketed over the period, according to statistics from the customs agency.

Comprehensive measures

To prevent goods origin fraud and illegal transshipment, Tuan said that provincial customs departments are collaborating with relevant ministries and government bodies to check all processes from granting licenses to reviewing exporters’ production capacity.

Considering statistics on import-export revenue collected over the past few months, the GDVC will work with the Ministry of Industry and Trade to identify firms with an import-export revenue upsurge, for closer supervision.

The GDVC proposed the ministry review and amend regulations covering origins of goods in Article 9 of Decree 31/2018/ND-CP, stipulating simple processes and the concept of simple processing of products to ease supervision and inspections of origin fraud.
The customs agency also proposed the Ministry of Planning and Investment provide a list of firms receiving capital from countries subject to preventive measures imposed by the United States, and to intensify supervision of these firms.

In addition, the GDVC suggested the Ministry of Science and Technology collaborate with the relevant ministries and departments to amend  Decree 43/2017/ND-CP on labeling items to clearly provide that goods must meet origin regulations and have “Made in Vietnam” tags before they are shipped to foreign countries. Hanoitimes

Anh Hong

Better management on C/O needed to avoid trade frauds in Vietnam

Better management on C/O needed to avoid trade frauds in Vietnam

The State management efficiency in granting certificates of origin for enterprises needs to be improved to reduce trade frauds.

Vietnam on high alert to origin fraud

Vietnam on high alert to origin fraud

After many exports to the US were found disguised with ‘made in Vietnam’ labels to try to evade anti-dumping duties, Vietnam has become more vigilant over origin fraud.


Shelter cares for 20 breast cancer patients in HCM City

No longer allowed to stay in a hospital, a breast cancer patient sold her house to rent and provide a shelter for 20 patients coming from all over the country to Ho Chi Minh City for chemotherapy and radiation treatment.

G&P Global Ratings raises Vietnam’s sovereign credit rating

The S&P Global Ratings on May 26 raised its long-term sovereign credit rating on Vietnam to “BB+” with a “stable” outlook on the back of strong economic recovery, according to the Ministry of Finance.

Domestic airlines offer millions of tickets for summer travel season

Anticipating that travel demand during the upcoming summer will rise sharply, and even higher than the pre-pandemic levels, local carriers are offering millions of air tickets.

American doctor’s endless love for Vietnamese ethnic minority cultures

When listening to him talk for hours and hours about the objects he found by chance on trips to different mountainous regions, it is easy to see Mark Rapoport's passion for the ethnic groups of Vietnam.

Two new Viettel inventions granted exclusive protection certificate in the US

Viettel Aerospace Institute (VTX), a member of Viettel Group, was officially granted an exclusive protection certificate by the US Patent and Trademark Office (USPTO) for two works in the field of optoelectronics and materials industry.

SEA Games 31 fuels recovery of local tourism industry

The hosting of the recent 31st Southeast Asian Games (SEA Games 31) between May 12 and May 23 can be viewed as a golden chance for the local tourism industry to recover after months of little activity due to the impact of the COVID-19 pandemic.

HCM City Mayor shows concerns as doctors turn from ‘heroes’ to ‘violators’

With great efforts in the fight against Covid-19, medical workers have been honored as heroes.

Stopping the licensing of new airlines, restricting the expansion of fleets

Controlling the number of new airlines until the market recovers and restricting licensing to expand fleets in the immediate time are solutions proposed by the State Capital Management Commission (SCMC).

Luxury-tax hike should be postponed until after 2024

Discussing the luxury tax law, experts said it is necessary to design a reasonable taxation roadmap and begin raising the tax only after 2024.

Huge haul in new markets for Vietnam’s tra fish exports

Demand for Vietnam’s tra fish (pangasius) is up in major markets, driving the export of the catfish overseas, reports the Vietnam Association of Seafood Exporters and Producers (VASEP).

Facebook collects money from partners to pay tax in Vietnam

The amount of money Facebook is planning to collect from Vietnamese partners accounts for 5 percent of invoice value. The money will be used to fulfill tax obligations.

Vinh Phuc: Wall collapse kills three people

Three people were killed and another seriously injured in the northern province of Vinh Phuc after a wall of a house collapsed and buried them.

JPMorgan Chase announces fresh capital injection into VN

JP Morgan Chase on Thursday announced a capital injection of US$123 million into its branch entity in HCM City, bringing the firm’s total capital investment into Viet Nam from $77 million to $200 million, or VND4.6 trillion.

Vietnam ready to facilitate long-term business and production of foreign firms

The nation continues to pay close attention to and attaches great importance to improving the investment environment and creating favourable conditions in which foreign enterprises can conduct long-term production business in the country.

Family of four found dead in Hanoi in apparent murder-suicide

Four members of the same family were found dead in an apartment complex in Hanoi's Hoang Mai District.