In the present trend of globalization and internationalization, foreign economic activities in general and importexport activities in particular are becoming more urgent than ever. It plays a very important role in the process of socioeconomic development in Vietnam and the world as well. The fact shows that import and export business activities in Vietnam have been gradually growing. Enterprises operating in the field of import and export are still expanding in both scale and stature, which have contributed to speed up the growth of the Vietnamese economy, helping the Vietnamese economy participate in integrating and expanding international trade relations with other advanced countries in the world. In the field of import and export business, the customs clearance process is an extremelyimportant and relativelycomplicated process. The customs clearance process asks the enterprises operating in the field of import and export to possess deeplyexperienced staff, master specialized operations and have knowledge of the laws. Therefore, if the enterprises want to complete an importexport business process well, they should follow the customs clearance procedures well. To sum up, building a reasonable process and applying the process correctly and flexibly based on the input standards will bring about great values at the output stage of the process; these values will become much more effective if they are considered the inputs of another process. On the contrary, any failure to control and operate the process properly will cause serious consequences to the overall operation of processes in enterprises and organizations. Currently, our country has limited human resources, equipment and production knowledge, which have not been fully exploited, resulting in the fact that many types of modern equipment have not been put into production or they have been put into production but not worked efficiently. Therefore, domestic enterprises have always given priority to speeding up activities of importing modern machinery and equipment to meet essential needs of the State and people. To facilitate the import of goods for business purposes, the enterprises should fully implement import customs procedures and receive permits by the relevant ministries and branches for the essential goods. The foregoing issues made me realize how important the customs clearance process for imports for business purposes is. Therefore, during my internship at Pozitronics Co., Ltd., with the learnt knowledge together with the enthusiastic help of PhD. Vu Duy Nguyen and the teachers of the Department of Taxation – Customs as well as the staff currently working for Pozitronics Co., Ltd., I have bravely learnt about, studied and selected the thesis “The implementation of customs procedures for imported medical equipment goods at Pozitronics Co., Ltd” as my courseend thesis.
Overview of medical equipment imports
1.1.1 Definition of medical equipment imports
Imports are subjects to be cleared and subject to inspection and supervision by the customs authorities.
Imports 1 are the goods which are brought into the territory of Vietnam from abroad or from separate customs areas in accordance with laws.
Based on the import purposes, imports are classified into two main groups:
Imports for non-business purposes, also known as non-commercial imports, refer to goods brought into Vietnam's customs territory for non-profit reasons These imports are intended primarily for support, charity, or the living and consumption needs of individuals and organizations, rather than for commercial gain Essentially, non-commercial imports are goods that enter the customs territory without being linked to the business activities of merchants.
1 Section 1.1.1, Part 1.1, Chapter 1, Textbook “Customs inspection and supervision”.
Imports for non-commercial purposes include:
Gifts and presents of overseas organizations and individuals delivered to the Vietnamese organizations and individuals;
Movable assets of organizations and individuals;
Personal luggage of passengers on entry;
Goods of diplomatic representative agencies and international organizations in Vietnam and people working at these agencies and organizations;
Temporarily imported working tools and means of agencies, organizations and people on termed entry;
Business imports, also known as commercial imports or previously termed trade imports, refer to goods brought into Vietnam for profit-driven purposes These imports are specifically intended for the business or commercial activities of merchants operating within the Vietnamese customs territory.
Commercial activities of merchants include: goods purchase and sale; commercial service supply; investment; trade promotion and other commercial activities for the profitability purpose.
Business imports refer to goods brought into the customs territory for commercial activities by merchants These imports encompass various categories that align with specific commercial behaviors.
Imports under sale and purchase contracts;
Imports for commercial service supply activities such as goods processing,transit, transshipment, etc.;
Imports for trade promotion activities such as attending fairs, exhibitions, sales presentation, advertisement, promotion, ;
Imports for other commercial activities.
For the approach in a narrow sense, business imports are merely the goods imported under goods sale and purchase contracts.
With this approach, business imports include:
Temporarily-imported and re-exported business goods;
Business goods transferred from border gate to border gate;
Goods which are raw materials and supplies imported to produce exports;
Imported business goods of border residents;
Each type of those imports has different properties and characteristics, so the customs procedures and customs inspection and supervision regime also have different points.
Medical equipment encompasses a range of devices, instruments, materials, implants, reagents, in vitro calibrators, and software These items are utilized individually or in combination for human use, as specified by medical equipment owners, to serve various medical purposes.
Diagnosing, preventing, monitoring, treating and mitigating medicals or compensating for injuries or traumas;
Carrying out tests, replacements and adjustments; assisting in operations and physiological processes;
Sterilizing medical equipment, including chemicals used in the tests;
Being used for specialized transportation or medical activities;
Providing information for diagnosis, monitoring and treatment through inspection of specimens originating from the human body.
A medical device is defined as any instrument intended for medical use, distinguishing it from everyday devices by its specific purpose These devices play a crucial role in aiding healthcare providers in diagnosing and treating patients, ultimately enhancing their quality of life However, the use of medical devices carries inherent risks, necessitating that they be proven safe and effective before regulatory authorities permit their marketing Generally, as the risk associated with a device increases, so does the extent of required testing.
2 Clause 1, Article 2, Decree No 36/2016/ND-CP establish safety and efficacy also increases Further, as associated risk increases the potential benefit to the patient must also increase.
1.1.2 Classification of medical equipment article
Medical equipment consists of 2 groups, which are divided into 4 categories based on the potential risk level related to the technical design and manufacture of such medical equipment 3
Table 1.1 Classification of medical equipment by groups
Group Category Risk level Example
B Medium – Low Needle, suction apparatus
C Medium – High Respirator, bone hold-down plate
Cardiac value, cardiac vibration eliminator transplanted in the body
(Source: Clause 3, Article 1, Decree No 169/2018/ND-CP)
Classification of medical devices other than in vitro diagnosis devices (Non- IVDMD): 16 rules.
Classification of in vitro diagnosis medical devices (IVDMD): 7 rules.
In case a medical device can be classified into two or more risk levels, the classification according to the highest risk level of such medical device shall apply.
In case a medical device is designed to be used in combination with another medical device, the separate risk level classification must be done for each medical device.
When a medical device is utilized alongside another device or serves multiple purposes, its classification should be determined by its primary intended use.
1.1.3 Role of medical equipment imports
Medical equipment plays a crucial role in influencing human health, significantly impacting the quality and effectiveness of healthcare It aids physicians in diagnosing and treating patients with accuracy, speed, safety, and efficiency.
In Vietnam, 90% of medical equipment is imported, with diagnostic imaging devices such as MRI machines, CT scanners, ultrasounds, and X-ray devices accounting for 30% of the total import value This influx of modern equipment is crucial in addressing the increasing demand in healthcare facilities driven by the growing population from 2019 to 2029.
Medical equipment imports significantly enhance the health sector's infrastructure, attracting investments amounting to thousands of billions of Vietnamese Dong They also foster the growth of the private healthcare sector and reinforce satellite hospital networks.
1.2 Customs procedures for medical equipment imports at enterprises
1.2.1 Indentification of HS code, customs value and tax rate
The HS code, established by the World Customs Organization, is essential for classifying global imports and exports through the Harmonized Commodity Description and Coding System This classification enables customs authorities to apply appropriate import tax rates to businesses and facilitates the aggregation of domestic trade, imports, and exports.
The HS List aims to systematically classify commodities, standardize codes across countries, and unify customs terminology to enhance understanding and streamline processes for organizations and individuals This initiative also facilitates trade negotiations and the implementation of agreements among customs authorities globally.
Medical equipment under specialized management of the Ministry of Health is coded according to the list of imports and exports of Vietnam 4
The list of commodity codes of medical equipment is specified according to Circular No 14/2018/TT-BYT, which includes 81 articles, divided into 34 groups.
The customs value is the actual value paid or payable for medical equipment imports.
The medical equipment import tax rate is based on:
Import tax rate according to the applicable import-export tariff;
Value-added tax according to the Tax Law.
Checking the number of copies presented according to the L/C’s regulations.
Checking the data about sellers and purchasers against the L/C’s contents.
An invoice must include the beneficiary's signature to be valid However, if the invoice is issued by a third party, it remains valid as long as the letter of credit (L/C) explicitly states that documents from third parties are acceptable.
The description of the goods on the invoice must be in accordance with the provisions of the L/C.
Checking the quantity, weight, unit price, amount, delivery terms (Incoterm
2010), packaging terms and marking whether they have any conflict with other documents such as packing list, ocean bill of lading or air waybill, etc…
Checking the invoice for the data mentioned by the bank in the L/C, contract, and other information on the invoice whether they are in accordance with the L/
- Bill of Lading/Air Waybill
Checking the number of originals presented.
Checking the type of the Bill of Lading.
Checking the autheticity of the Bill of Lading.
Checking the box “Consigner/Shipper”.
Checking the box “Notify party”.
Checking boxes “Port of loading” and “Port of discharge”.
Checking the term of Partial shipment.
Checking commodity contents shown in the B/L.
Checking the characteristics of the B/L.
Check the box of ocean/air freight rate.
Amendments or additions to the Bill of Lading (B/L) require verification through signature and seal It is essential to check the L/C number, opening date, and other reference documents, including the commercial invoice and contract.
The importing party must check whether the date of issue of the B/L is valid or not.
Checking the description of goods, quantity, weight per unit including package whether they are in accordance with the L/C’s regulations.
Packaging terms must be accurately stated.
Other information must not be in conflict with the contents of the L/C and other documents.
Checking the name and address of consigner, consignee and notify party.
Transport details: Departure country, destination country, name of transport means, B/L number, etc…
The name of commodity, specification, quantity, weight,…, must be consistent with other documents.
The invoice number and date in the C/O must coincide with the number and date of the commercial invoice.
Certification of the C/O issuing authority.
Certification of the C/O issuing applicant.
Fully checking the criteria on the goods quality certificate form.
Comparing the seal and signature on the C/Q of the C/Q issuing authority.
Checking the country of certification of quality.
When dealing with medical equipment articles, it is essential to verify the import license from the Ministry of Health and the classification of medical equipment as outlined in Circular No 30/2015/TT-BYT.
1.2.3 Registration of specialize import license
According to Decree No 36/2016/ND-CP issued by the Government on May 15, 2016, and the Ministry of Health's Official Letter No 3593/BYT-CB-TC dated June 23, 2017, all imported medical equipment must be registered for circulation Medical equipment that has been assigned circulation numbers in Vietnam can be exported and imported without any quantity limitations or the need for approval from the Ministry of Health.
The classification of medical equipment complies with the roadmap specified in Article 68 of this Decree.