Improving vietnam e customs procedures towards adopting modern customs standards by 2020

Thesis research goals Thesis aims to handle the researched problems: 1 Theoretical basis of electronic customs procedures aligns with the application of modern customs standards; 2 asse

CENTRAL INSTITUTE FOR ECONOMIC MANAGEMENT

NGUYEN BANG THANG

IMPROVING VIETNAM ELECTRONIC CUSTOMS PROCEDURES TOWARDS ADOPTING MODERN CUSTOMS STANDARDS

The Works is completed in: Central Institute For Economic Management

Scientific instructor:

1 Prof, Dr Hoang Van Hoa

2 Dr Dinh Duc Sinh

Comment 1: Comment 2: Comment 3:

The thesis will be defended before the Institute's Board of Examiners meeting at the Central Institute For Economic Management at on 2014

The Thesis can be found at:

- Library of Central Institute For Economic Management

- National library, Hanoi

OPENING

1 Theme's necessities

Vietnam increasingly integrates into the world economy, is impacted

by more complex and diversified foreign trade relations Customs is

considered as "economy guard" who both facilitates

trade-investment-travel, and helps to promote economic development; but controls smuggling, commercial fraud, protects economic sovereignty, national security and social safety

Vietnam electronic customs procedures began piloting from 2005, after an application period, many great benefits have been obtained but there are still many limit aspects that need to overcome, especially in the context of integration, compliance with international commitments For

these reasons, the author chose theme "Improving Vietnam electronic

customs procedures towards adopting modern customs standards by 2020" to used as PhD thesis' research theme

2 Research overview related to the thesis

The e-customs procedures are popular applied around the world, especially developed countries which had the implementing process from the 80th century ago; There are many foreign works which are primarily researched on professional application of modern customs on customs procedures With regard to domestic works which mainly focuses on pilot deployment of e-customs procedures on building organization model of information technology and wider as the customs modernization plans

Especially, there has not been any comprehensive research, dedicated to the finishing of e-customs procedures according to the modern customs

standards that focus on application of 12 typical standards

3 Thesis research goals

Thesis aims to handle the researched problems: (1) Theoretical basis

of electronic customs procedures aligns with the application of modern customs standards; (2) assessment of the status of implementation of Vietnam electronic customs procedures in the context of applying the modern customs standards from 2005 to present; (3) to improve Vietnam electronic customs procedures towards adopting modern customs standards, what solutions and conditions should be systemized

for successful implementation

4 Object and scope of research

- The research object: e-customs procedures and matters improve towards the application of the modern customs standards

- The thesis research scope focuses on researching 7 major issues: customs procedures; modern customs standards; awareness of the role of e-customs procedures; the legal framework of the e-customs procedures; apparatus organization to implement e-customs procedures; development and application of information technology in e-customs procedures; training for e-customs procedures

e Time and space of research: from 2005 to present, at 21 Customs Bureaus of provinces and cities where the pilot on 90% of the amount of imported and exported goods

5 Research methods

Thesis uses the combined methods: analysis, comparison, systematic, dialectical materialism to cater for research In addition to using the actual survey investigation (1200 businesses and 122 customs officers), econometrics, statistics to evaluate both the substance and the amount of research results

6 New contribution of the thesis

- In terms of theory: (1) Overview of basic theoretical issues about customs procedures and modern customs standards; (2) building 12 lists

e-of universal & modern customs standards, necessary and factors affecting the application of standards of electronic customs procedures improvement

- In terms of practice: (1) Experience research of some countries with similar conditions to Vietnam, drawing the successful and un-successful lessons for Vietnam; (2) Analysis, comprehensive review of status to apply e-customs procedures under the modern customs standards over time; (3) building goals, views, trends to complete e-customs procedures by 2020; (4) proposing the core solution groups and conditions ensure to complete Vietnam electronic customs procedures towards adopting modern customs standards by 2020

7 Thesis structure

In addition to the Opening, conclusion, indexes, the thesis consists of

CHAPTER 1 SOME THEORIES AND PRACTICES FOR ELECTRONIC CUSTOMS PROCEDURES TOWARDS THE APPLICATION OF THE MODERN CUSTOMS STANDARDS 1.1 Some concepts

1.1.1 Concept of customs and customs procedures

- Customs: the State Agency made national sovereignty in

international relations, in the separate areas set up on the territory of the country to ensure national security, social order and safety to test, monitor, control and collection of taxes and fees, make customs clearance for import and export goods means of transport in transit and immigration; Detecting, preventing and treating in violation of law on commercial fraud, tax-evasion of import-export activities, immigration

- Customs procedures: Customs law (Vietnam) defines "Customs

procedures are the affairs that customs and the customs officers to comply with the provisions of this law in respect of goods, means of transport" Kyoto Convention's general definition: "customs procedures are all the activities that the customs agency and the persons concerned must undertake in order to ensure compliance with customs law"

1.1.2 The concept of traditional customs procedures and e-customs procedures

- Traditional customs: customs procedures are made in form of craft and

starting with the mechanized application (by fax, telegram and baggage, goods tested by scanner) in management of import and export activity of goods and transport means immigration in every country

- Electronic customs procedures: are all the activities that the

customs agency and the persons concerned must undertake in order to ensure compliance with customs legislation based on the application of information technology, digital, computer tools, means of

communication on internet

Table 1.1 Comparing two methods of performing customs procedures

procedures

E-customs procedures

technology

Source: General documents of research in 2013 on e-customs procedures

- Role, advantages of e-customs procedures: (1) Regard to

international integration; (2) Regard to state management; (3) Regard to business

1.2 Concept of a modern customs standards and conditions applied in implementing e-customs procedures

1.2.1 Concept of modern customs standards

- Customs standards: all legal regulations, standardization in foreign

trade activities between countries and between countries with regard to customs procedures built by international organizations, adopted member countries as a basis to follow

- Modern customs standards: standards of customs are made by basing on

the application of information technology, electronic trading in the internet environment to make the electronic customs procedures

Of the system standards of customs issued by WCO, WTO, UN, there are 12 universal standards applied by many countries in building and improving the electronic customs procedures include:

Table 1.4 Lists of modern universal, necessary customs standards applied for implementation of electronic customs procedures

No Concept of modern customs standards Organizations of issue

Source: General of NCS to review the implementation of international commitments of Vietnam customs, in 2013

1.2.2 Concept of modern customs standards and conditions applied

in implementing e-customs procedures

- Must have a major political commitment of national leaders of international economic integration

- Invest articles for the necessary conditions to build legal, information technology, training of human resources to apply e-customs procedures

- Fully cooperate closely, share between State bodies and businesses in building policies for electronic customs procedures

- Adequate investment business of human resources, information technology infrastructure for the deployment of electronic customs procedures according to modern customs standards

1.3 The factors impact on application of e-customs procedures according to modern customs standards

1.3.1 Group of external factors

First, international factor:

- Trend and pressure of international integration: Giving nations a

new favorable opportunities, to develop, and challenges and pressures forcing countries to strongly reform to join a playground, game rules;

- Help, support of nations, international organizations, cooperating partners: Support, cooperation between countries and international

organizations to ensure strength in application of electronic customs procedures according to modern customs standards

Second, national factors:

Political determination and investment act of resources of both the State and enterprises to create new impetus to the development of the country

1.3.2 Internal factor group (belongs to the customs authority)

- Cognitive and thinking views of leading customs about the application

of e-customs procedures in the modern customs standards: The correct

perception of the importance of this issue and with determination, adequate investment then will promote the effective application soon On the contrary, will hamper and delay the procedures, the application route of e-customs procedures

- Structure of apparatus, organization level: E-customs procedures to

remove geographical distance, therefore there should be new management apparatus in the direction of focus, consistent effectiveness

in lieu of a traditional organization today

- Technical infrastructure, scientific and technological level of the Customs Office: As a condition of extreme importance to help save

processing time of jobs, create conditions for enterprises implement fast customs clearance, customs clearance of goods; especially in the present electronic customs procedures

- Customs human resources: Renovation and modernization of

customs, the capacity for customs force in implementing e-customs procedures is indispensable problem just convenient for commerce, has just met the requirements of the customs administration

1.4 Experience in some countries in terms of implementing customs procedures and lessons learned for Vietnam customs

e-Vietnam carries out e-customs procedures late than many countries in the world, is a country going after countries, leveraged pretty well

experienced many countries going ahead with similar conditions

1.4.1 Experience of some countries

- South Korea: (1) Establishing and putting into use of customs

automation systems in the focus model; (2) Customs Organization of two-level model; (3) application of risk management technique in e-customs procedures; (4) extending the application of risk management techniques

- Singapore: (1) Establishing specialized customs intelligence

accountability and risk management; (2) building the information technology system and there are always 2 parallel systems to ensure safety and security; (3) applying modern customs standards many of the

electronic customs procedures

- Japan: (1) Construction of a complex system of electronic customs

procedures on the basis of consolidated lot system for all State customs-business and interactive use of export-import operations and internal management; (2) customs procedures system must automatically based on the two main customs system (NACCs) and customs intelligence information (CIS)

objects-1.4.2 Lessons learned for Vietnam customs

- Successful lessons: (1) Implementation, plans tied to infrastructure

construction in information technology with the application of information technology in development of e-customs procedures (2) Enhancing synchronization between e-Customs with e-Government to make the connection between the customs and local ministries, departments (3) Construction, development of electronic customs clearance system should automatically apply the modern customs standards and always update to meet the requirement of practicality (4) Focusing on building, intelligence-gathering and extending the application of risk management techniques to automatically for each profession and the customs of all three previous stitch-in-after the

customs clearance of goods

- Un-successful lessons: (1) Receiving information processing of

e-customs procedures declarations upon the entire VAN (2) Application of standard content model does not match the system practices of legal basis and the country's foreign trade practices

CHAPTER 2 STASTUS OF VIETNAM ELECTRONIC CUSTOMS PROCEDURES IN APPLICATION OF MODERN

CUSTOMS STANDARDS SINCE 2005 2.1 Overview of Vietnam customs

Vietnam Customs was established on September 10th 1945 under the Decree No 27-SL referred to as "Customs authority and indirect taxes" under the Ministry of finance, in 1954 changed into "Central Customs Department" in the Ministry of Industry & Trade On August 20th 1984, the State Council established the General Department of Customs in the Council of Ministers By 2002, however, the Prime Minister issued the decision transferring the General Department of Customs Ministry of Finance as the first establishment

The process of formation, development over many names, positions, sizes, but Vietnam Customs still fulfill the countries' customs function Vietnam customs became a member of the World Customs Organization (WCO); the system is organized by vertical industry from Department of customs, Bureau of customs Since 2005 the electronic customs procedures have been started

2.2 Status of major factors affecting the application of modern customs standards

2.2.1 Group of external factors

First, international factor:

- Trend and pressure of international integration: Vietnam has been

member of organizations: World Trade Organization (WTO), the United Nations (UN), the Association of ASEAN, APEC, ASEM and official member negotiating Trans-Pacific Agreement (TPP) Thus, the requirements and regulations binding for members, Vietnam must be fully involved

- Integration requirement in the field of Customs: As a member of the

World Customs Organization, Vietnam should be in full compliance with all the conventions of this organization given according to certain routes To date Vietnam has signed over 186 bilateral, multilateral agreements with the customs of the countries in the world

However, besides achievements, there are still many issues, in the

review in the 10th Party Congress resolutions stated "a integration

process has not been attached to the perfecting legislation, institutional, policy and reform of the economic structure; improving the competitiveness of businesses and of the economy which has not kept up with integration "

Second, national factors:

Vietnam customs has always been specially interested, expressed through the State has enacted customs Law as a basis for legal action and decision 448/QD-TTg on the development strategy of modernization of Customs actions as a basis for innovation

2.2.2 Group of internal elements

- Cognitive and thinking views of leading customs about the application of e-customs procedures in the modern customs standards:

The first pilot phase of e-customs procedures 2005-2009, awareness has just started from a number leaders and officers at the Directorate level, officials at the local level which is still very limited, leading to the deployment of a difficult, challenging From 2010 to now with the fiercely into the customs of the system from the General Directorate to local, the deployment of electronic customs procedures had the breakthrough with leaps and strides

- Structure of apparatus, organization level: From 2005 to present,

by a proper and timely interest; especially since 2007 there is a specialized unit to deploy electronic customs procedures

- Technical infrastructure, scientific and technological level of the Customs Office: Since 2005, the customs sector focused venture capital

from major investment budget for the infrastructure hardware and software systems There's also been a tremendous help from the World Bank, the Government of Japan

- Customs human resources: To create a good human resources,

Customs has partnered with the World Customs Organization and the customs of some countries (Japan, Korea, Singapore, France, the United states of America, ) training the modern customs services To improve the customs intelligence, from October 2013 Vietnam customs nominates as representatives at the World Customs Organization and proceed to put in Japan, America and China

2.3 Status of Vietnam electronic customs procedures in application of modern customs standards since 2005

2.3.1 Content of implementing Vietnam electronic procedures

Electronic engineering has been used in certain customs from the 80's

of the last century, with the digitized a number of professional information and declaration information of customs clearance Officially mark in 2005 by the e-customs procedures pilot with the goal "to switch from manual customs procedures to electronic customs procedures"

2.3.2 Status of modern customs standard application in the process of Vietnam electronic customs procedures development since 2005

Based on the legal conditions, the resources, the level of response to national information technology, customs initially applied some modern customs standards in e-customs procedures as follows:

First, apply the previous reporting standards information and receive customs declarations through electronic means: The customs declarants

are allowed to make the customs profile declaration before the goods arrived and data processing system for electronic customs automatically receiving 24/7

Secondly, apply a standard to reduce commercial vouchers of customs documents: Electronic customs documents are prescribed: e-

e-customs declarations and accompanying documents may be in electronic form (legal value as paper documents) Helping reduce customs documents in the process of customs clearance

Thirdly, processing information of automated customs declaration to proceed to apply standards of auto customs clearance: Some of the test

contents have been automatically processed by the system: validity, conformity of the information; the policy of items; at the request of each customs administration mode; automatic goods routing

Fourthly, enforcement of auto tariff standards: Checking tax policy

and tax classification is processed by customs officer on tax accounting system of KT01 (formerly KT559)

Fifthly, application of auto tax payment standards of import and export cargo: From 2009 the Customs changed the tax payment mode

through a connection between customs departments-treasury-

commercial bank This is just the initial step of electronic tax payment that has not reached the level of auto tax payment

Sixthly, application of risk management standards: Focused on the

stage during the customs clearance of goods, for the step before and after customs clearance is only prepared to apply

Seventhly, application of electronic information exchange standards in a decision of customs clearance on the system for electronic data processing:

Through a system of electronic data processing of customs to exchange, inform the declarants about results processing customs documents (automatic range can only stop at routing) and other businesses must still be interfered

by customs officers

Full evaluation of the application of modern customs standards in Vietnam e-customs procedures, the author has systemized and analyzed the application status of 12 modern customs standards as follows

Table 2.2: Assessment of the status of application of Vietnam modern customs standards to January 01st 2013

Content

Standard

Law of Vietnam Implementation Level of response

Fully regulated

Insufficie ntly regulated

defined

Un-fully implemen ted

partially implemen ted

implemen ted Satisfied partially satisfied

satisfied