CHAPTER 2: ANALYZING AND EVALUATING SEA FREIGHT
2.5 Sea freight forwarding activity at E.I freight forwarding company
2.5.1 The process of exporting cargo by sea
2.5.1.4 Carrying out customs procedures
Preparing for customs documents Documents for customs procedure include:
- Export customs declaration (2 originals) - Sale contract (1 original)
- Packing list (1 original)
- Commercial Invoice (1 original)
- Business license (1 copy enclosed with original for comparison if it is the first time export of company)
If goods that are exported is food, it must register for Phytosanitary Certificate. Documents for this register as follow:
- 2 licenses quarantine registration form of the central registry quarantine - Commercial invoice (1 original)
- Packing list (1 original)
- Sample for quarantine (if any) - Bill of Lading
The full document will send to quarantine agency for register Phytosanitary Certificate. Staff at quarantine agency will check documents, if it complete, staff
29 will sign and stamp on registration. When goods are delivered to port, quarantine staff will come to where container is put and inspect. The certificate will be issued after goods are inspected. This certificate is certified for state of goods and ensure about hygiene and food safety.
E-customs declaration
Base on documents provide by shipper, document staff will check it again and conduct on e-customs declaration of exporting goods. E-customs will be made on ECUS software; it was invented and developed by Thai Son company. This is the first official e-custom declaration software of Vietnam and is used by thousands of businesses.
After entering all information into the e-customs declaration ECUS software, data will be uploaded. If data is transmitted successfully, the customs network system will notify automatically receiving record number, number of customs declaration, goods ramification. Thanks to this improvement, customs declaration is made faster than previous manual as customs officers do not have to retype the data declarations into the system.
About goods ramification, customs officers will base on the criteria for classifying enterprise such as whether enterprises have well observed the customs law or not? Whether exported goods have been exported before or not? Since then, the customs officers will propose level of inspection as follow:
- Green line: if goods are in green line, it means that goods will be free from documents inspection in detail and exempt from actual inspection of goods. Customs officers transfer documents over the leadership department for approval, seal clearance "has made customs procedures"
on the export declaration.
- Yellow line: if goods are in yellow line, it means that goods will be free from actual inspection, records will be transferred to the tax department to check pricing for detail. If record is valid, it will be sent to leading department for approval, clearance seal "customs procedures completed"
on the customs declaration.
- Red line: in this case, record will be transfer to the actual goods inspection. Depending on the ratio for inspection of leadership of departments that shipper will present of 5%, 10%, or 100% of goods for customs inspection. After inspecting if the goods match with in formation in the form and relevant documents, customs officials will press the customs seal on the container and will note on the declaration certifying
30 the goods appropriates and transfer records to leading department for approval, clearance seal "customs procedures completed" on the customs declaration.
Some information of customs declaration form of exporting goods
Item 1: Exporter: name and address of exporter
Item 2: Importer: name and address of exporter
Item 3: Delegated person: like item 2 (if any)
Item 4: Agent to make customs procedures: like item 1 (if any)
Item 5: Exported form: there are many form of export such trade export, investment export, processing export, etc.
Item 6: Business License: fill with date and expired date.
Item 7: Sale Contract: number, signed and expired date of contract
Item 8: Commercial Invoice: fill with information about date and number of commercial invoice.
Item 9: Port of loading: name of departure port.
Item 10: Imported Country: the name of imported country
Item 11: Delivery term: base on Sale Contract to fill this field
Item 12: Payment method: it is mentioned in Sale Contract, it may be L/C, D/A, D/P, etc.
Item 13: Currency: using the currency in sale contract such as USD, EUR, VND, etc.
Item 14: Exchange rate: bas on current exchange rate.
Item 15: Result if goods ramification
Item 16: Previous customs document
Item 17: Description of goods: filling item base on the information from Commercial Invoice and Sale Contract
Item 18: Commodity’s code: looking for commodity’s HS code in import and export tariff of Vietnam.
Item 19: Commodity origin: fill it with name of original country
Item 20: Quantity: filling with the quantity of commodity in Commercial Invoice.
Item 21: Unit: base on Commercial Invoice and Sale Contract
Item 22: Unit price: base on Commercial Invoice and Sale Contract
Item 23: Value of each commodity: the amount of money for each commodity. It will equal the unit price multiple quantity.
31
Item 24: Export duty
Item 25: Other amount
Item 26: Total amount of money and other collecting ( = item 24 + item 25)
Item 27: Total gross weight, container, mark of container or package.
Item 28: Other notice
Item 29: Confirming of releasing goods: customs staff will sign and stamp in this field.
Item 30: Declarant signs and stamps in this field
Item 31: Confirming of customs that goods is passed the supervised area:
customs staff will sign and stamp in this field.
Item 32: Confirming customs clearance: customs staff will sign and stamp in this field to confirm customs clearance.
Making customs procedures at the port
After having customs declaration to complete the customs documents, document staff will make customs procedures at the port. Base on the result of goods ramification, it will have two cases as follow:
Case 1: Exported Goods is exempted from inspection (green line) or exported goods is inspected in documents (yellow line)
Step 1: Register on export customs declaration
Freight forwarding staff presents documents for customs staff to register export customs declaration. These documents include two register export customs declaration, a letter of recommendation (if goods is designate in green line), a sale contract, a packing list.
Customs officer will inspect the customs dossiers. He will check information on the declaration and information that business had declared when registered in e-customs declaration or with enclosed documents. If the information is true, customs officer will stamp and send declaration to next department.
Step 2: Customs declaration is returned
Freight forwarding staff buys a stamp and sticks on Customs declaration.
Customs officer will return one customs declaration and keep one customs declaration that has a stamp.
Step 3: Customs liquidation
At the port, freight forwarding checks whether container can be transported by vessel that is noted in document or not. If container arrives at port before closing
32 time, it can be transported. In contract, container arrives late after closing time, it will not be allowed to on board and has to change into other vessel.
After that, customs officer will issue a form for confirming that container has been recorded to ship book. This form includes one white form and one yellow form. In this form, container number, seal number, time for recording into ship book are all written on this form. Customer officer will keep the white form and return the yellow form for freight forwarding staff.
Case 2: Exported goods is in inspection (red line) Step 1: Register on export customs declaration
Documents are required for customs declaration of goods in red line as follow:
- Letter of recommendation
- Export customs declaration (2 originals) - Sale contract (1 copy)
- Commercial invoice (1 original) - Packing list (1 original)
Customs staff receives record and check the documents. It is similar to yellow line. At the same time, customs staff also checks the observance of customs law of enterprises. Next, checking detail in declaration whether is suitable with documents or not and type of goods is on the list of banned goods or not. Then, customs staff will stamp and transfer to inspection department.
Step 2: Inspection of goods
Freight forwarding staff will register for moving container into inspection yard and start to gut container.
Freight forwarding staff contacts with customs staff for prepare to inspect goods.
Freight forwarder staff goes to inspection yard, finds container, and cut seal for inspecting goods by customs staff. Rate of goods for inspecting can be 5% or 10% or 100% depend on requirement of customs.
Step 3: Customs declaration is returned
Freight forwarding staff buys a stamp (customs fee) and sticks on Customs declaration form. After above steps, customs staff will return documents to freight forwarding staff, it includes:
- Export customs declaration form (customs staff keeps one form that has a stamp on it)
- Sale contract (1 copy)
33 - Commercial invoice (1 original)
- Packing list (1 original)
Step 4: Customs liquidation and record to ship book (Similar to case 1)
Procedure for proving that goods is exported
Procedure to authenticate on the customs declaration that goods is on board and is transport to import country and complete whole documents. Therefore, the most important documents to prove this is original Bill of Lading.
A record for this authentication includes:
- Export customs declaration (1 original and 1 copy) - Bill of lading (1 original)
After sailing, freight forwarding staffs brings the documents to export customs border gate. At here, customs staff will stamp to authenticate and check container number, seal, and quantity of goods that was exported is accordance with the actual quantity of goods or not. This is the basis for taxation between domestic contract and value-added tax.
Time for paying tax and tax grace period
By law on import tax and export tax that had been approved at the seventh session of the Eleventh National Assembly on 14/06/2005 and had effect on 01/01/2006; decree No. 149/2005/NĐ-CP on 08/12/2005 of the government, circular No. 113/2005/TT-BTC on 15/18/2005 of Ministry of Finance guide for export tax and import tax, which stipulates that:
- The deadline for payment of export tax is 30 days from the date of registration for customs declarations.
- If the taxes and fines are paid late over the last day prescribed period or the last day to be paid within the period stated in the tax-handling decisions, shipper must make a full payment of taxes and fines for each day of late payment and has a penalty of 0.1% payable for late payment amount.
Pros: Electronic customs system helps the process of making customs procedures is quick and save more time. It do not need to spend time on receiving the result of assessment and getting the number of customs declaration form. It also helps to limit complicated procedures. Furthermore, we only apply the exact export duty, the system will calculate tax automatically, so it can avoid wrong number of tax.
34 Cons: Customs brokerage of E.I company has just been founded for several years, so it still young. The guiding of customs process is not clear and it is difficult for staffs to reach. When some unexpected problem arises, employee can hardly cope.