As a company specializing in the production of textile and garment accessories for export to foreign countries, the implementation of customs procedures plays an important role, in addition to creating conditions for production activities to take place promptly and on schedule from imported raw materials and machinery, or goods cleared for export smoothly, successfully completing customs procedures also helps an export processing enterprise like Da Nang Telala to take advantage of tax incentives, comply well with the state's import and export policies, thereby bringing profits and development to the company. Although the related activities have been presented as a preliminary procedure, in reality, the application and implementation of electronic customs procedures at Da Nang Telala Co., Ltd. still encounter many problems related to related to declaring customs clearance declarations, determining taxes or detecting and editing post-customs clearance declarations, etc. These issues do not occur often, so they have not been recorded and resolved in detail and unified, causing loss of time and costs, slowing down the customs clearance process of goods to serve the company's export production process. Faced with these practical problems, it is necessary to have solutions for businesses to be able to minimize errors in the process of implementing electronic customs procedures, thereby avoiding acts of false declaration leading to administrative sanctions and enhance compliance with state’ policies. Therefore, the topic "ELECTRONIC CUSTOMS CLEARANCE PROCEDURES FOR IMPORTED GOODS AT DA NANG TELALA COMPANY LIMITED" is carried out, aiming to describe and evaluate the customs procedure implementation process of this business, from there to propose and recommend some solutions to help businesses improve and improve the efficiency of the process.
Rationale
In the context of globalization of the world economy, countries are increasingly interdependent, and integration is an inevitable trend of the times Globalization and economic integration require countries to adjust and amend their policies towards openness and economic liberalization, enter into bilateral or multilateral agreements, reducing tariff barriers and eliminating non-tariff barriers Participating in this process, Vietnam has received many benefits, attracting FDI from many developed countries to establish industrial parks and export processing zones, gradually becoming a part of the international business process, contributing to the formation of value chains, having the opportunity to access many new and modern technologies Moreover, economic integration helps import and export activities to develop increasingly, the export turnover of agricultural products, footwear and garments to countries increases.
In the 5 years from 2018 to 2022, the average export and import growth rate of Vietnam reached 11.3%/year[CITATION Tổn24 \l 1033 ].
In international trade, customs activities play an important role, contributing to the implementation of the state's import-export management policy and international economic integration policy In recent years, along with the development of cargo flow, the customs industry has handled about 15 million records of people and businesses each year[ CITATION TB23 \l 1033 ] From 2011 to 2022, the number of import and export declarations increased by 314% (from 4.63 million declarations to 14.55 million declarations)[ CITATION Hồn23 \l 1033 ] Thanks to the development of information technology, e-customs was born to replace traditional paper management method, core customs procedures are fully implemented automatically through the VNACCS/VCIS system with more than 99% of businesses participating,handling over 99.6% of the volume of declarations, creating favorable conditions for businesses' goods to help save costs, time and resources[ CITATION Xuâ22 \l 1033 ].Some major reforms of the customs agency in recent times have been recognized by businesses such as reducing overlaps and duplication in post-clearance inspection, procedures for verifying goods through the surveillance area through the automatic customs management system[ CITATION Báo21 \l 1033 ] However, businesses still face many difficulties when declaring incorrect quantity of goods, HS code, origin of goods, lack of tax or difficulty in complying with the consultation procedure for determining customs value[ CITATION Đậu21 \l 1033 ] Problems with system errors or confusion, errors, lack of knowledge in declaration can hinder businesses, slow down the process of customs clearance of goods, as well as for customs officials in inspection of goods, ensure anti-tax evasion, anti-smuggling and trade fraud.
As a company specializing in the production of textile and garment accessories for export to foreign countries, the implementation of customs procedures plays an important role, in addition to creating conditions for production activities to take place promptly and on schedule from imported raw materials and machinery, or goods cleared for export smoothly, successfully completing customs procedures also helps an export processing enterprise like Da Nang Telala to take advantage of tax incentives, comply well with the state's import and export policies, thereby bringing profits and development to the company
Although the related activities have been presented as a preliminary procedure, in reality, the application and implementation of electronic customs procedures at Da Nang Telala Co., Ltd still encounter many problems related to related to declaring customs clearance declarations, determining taxes or detecting and editing post- customs clearance declarations, etc These issues do not occur often, so they have not been recorded and resolved in detail and unified, causing loss of time and costs, slowing down the customs clearance process of goods to serve the company's export production process.
Faced with these practical problems, it is necessary to have solutions for businesses to be able to minimize errors in the process of implementing electronic customs procedures, thereby avoiding acts of false declaration leading to administrative sanctions and enhance compliance with state’ policies Therefore, the topic " ELECTRONIC CUSTOMS CLEARANCE PROCEDURES FOR
IMPORTED GOODS AT DA NANG TELALA COMPANY LIMITED " is carried out, aiming to describe and evaluate the customs procedure implementation process of this business, from there to propose and recommend some solutions to help businesses improve and improve the efficiency of the process.
Objectives
General goal: Learn the process of implementing electronic customs procedures for imported goods of Da Nang Telala Co., Ltd., thereby evaluating and proposing solutions to improve the process.
Detailed description and diagram the electronic customs clearance process for imported goods at Da Nang Telala Company Limited
Evaluate and determine the strengths and weaknesses of the current process
Establish notes during the company's implementation of electronic customs procedures, propose solutions to improve the process
Methodology
The topic uses a qualitative approach through the following data collection methods:
Observation: Carry out activities of observing and watching the operations of employees in the import-export department in declaring and carrying out customs procedures for the company's shipments, and listen to information given to them by others management, supply instructions as well as how employees communicate and handle arising problems
Document analysis: Use articles, books, textbooks, websites, and legal documents to learn about the process of implementing electronic customs procedures to clear import and export goods and use company's annual reports,guidance documents for implementing electronic customs procedures are provided by the company to understand the company's activities and how to perform operations of employees in the department.
Interview: ask questions to employees and managers as well as instructors about existing problems in the import-export department, common solutions, get opinions while performing assigned tasks as well as when making reports, as well as knowledge related to performing electronic customs procedures
Scope
Spatial scope: The project was carried out at the import-export department of
Da Nang Telala Co., Ltd.
Time scope: The project is carried out from January 2024 to May 2024, with secondary data collected from the company's annual reports for the period2021-2023, documents of the company in the period 2023-2024.
Research subject
The research object of this topic is the process of implementing customs procedures for imported goods of Da Nang Telala Co., Ltd.
Research structure
The report consists of four main chapters:
Chapter 2: Overview of Da Nang Telala Co., Ltd
Chapter 3: Analysis and evaluation of the current status of electronic customs clearance procedures for imported goods at Da Nang Telala Co., Ltd
Chapter 4: Some recommendations and solutions to improve electronic customs procedures for imported goods of Da Nang Telala Co., Ltd
THEORETICAL BASIS
Theoretical basis of electronic customs clearance procedures
Pursuant to Clause 23, Article 4 of the Customs Law 2014, “Customs formalities mean activities to be carried out by customs declarants and customs officials in accordance with this Law for goods and vehicle”[CITATION Law14 \l 1033 ].
1.1.1.2 Customs procedures for export processing enterprises
Pursuant to Clause 21 Article 2 Decree 35/2022/ND-CP[CITATION GOV22 \l
1033 ], “Export processing enterprise refers to an enterprise performing the export processing function in an export processing zone, industrial zone and economic zone.
In particular, “Export processing refers to a specialized act of manufacturing of exported commodities and provision of services for production of exported products and exportation” (Clause 20 Article 2 Decree 35/2022/ND-CP).
Point a, Clause 4 Article 26 Decree 35/2022/ND-CP also stipulates: “Customs procedures; customs inspection and supervision; customs duties for exported and imported goods of export processing enterprises shall be subject to regulations as applicable to special customs areas and free trade zones, except special regulations applied to free trade zones inside the perimeter of economic zones;.”
Pursuant to Article 74 of Circular 38/2015/TT-BTC, amending by Circular 39/2018/TT-BTC[ CITATION Min18 \l 1033 ], Exports and imports of EPEs:
“Goods imported for manufacturing of domestic exports by an EPE shall undergo customs procedures and be used for intended purposes, except for the cases in which the EPE and its partners may decide whether to follow customs procedures…
Customs procedures is not required when goods imported by the EPE are sold to domestic enterprises if taxes on which have been fully paid and regulations on management of exports and imports of non-EPEs are complied with
Customs procedures are not required for trade of domestic goods purchased by the EPE if tax on which has been fully paid in accordance with regulations applied to non- EPEs In the cases where an EPE purchases domestic goods subject to export duty, customs procedures have to be completed unless the goods are used as raw materials or supplies and consumed during the manufacture process (e.g fossil coal burnt during production).”
Pursuant to Clause 1 Article 3 Decree 08/2015/ND-CP “Electronic customs procedures refers to customs procedures under which the information used for the customs declaration shall be provided, received and processed, and the exchange of other information between parties involved shall be carried out through the electronic data processing system, as stipulated by the applicable law on customs procedures”[ CITATION Gov15 \l 1033 ].
1.1.2 The role of electronic customs procedures
Diagram 1.1: Procedures for importing goods
Based on the import procedure flowchart, it can be seen that customs clearance plays a particularly important role, being the decisive step for goods to be smoothly
Identify the type of imported goods
Sign import contractReceive and check the documentsReceive arrival noticeObtain delivery orderPerform customs proceduresTransport goods to the warehouse for storage cleared through customs, businesses can fulfill their tax obligations in accordance with legal regulations, and at the same time enjoy related incentives, after which the goods can be transferred to the warehouse for other production activities Notably, implementing electronic customs procedures helps businesses reduce customs document inspection time, customs clearance time, and release goods faster to serve production and business activities, the cost of making customs declarations and the cost of storing goods also have been decreased, thereby partly helping to increase profits and competitiveness of businesses, facilitating international integration activities.
Implementing electronic customs procedures also allows simplification and reduction of the number of administrative procedures of the customs industry, accelerating the process of modernization – applying information technology in administrative procedures, strengthening transparency, clarity and improved efficiency of customs inspection and supervision, preventing tax loss, smuggling or trade fraud. Customs authorities can rely on criteria to select shipments that need to be inspected based on automation and consistent, accurate information to help save time and reduce cargo congestion at border gates, airport[ CITATION Ngu13 \l 1033 ].
Pursuant to Article 24 of the Customs Law 2014, “A customs document comprises
A customs declaration or documentary evidence in substitution;
As the cases maybe, a customs declarant shall submit sale contract, commercial invoice, bill of lading, packing list, certificate of origin, import or export permit, notice of specialized inspection results or exemption from specialized inspection, and documentary evidence related to goods as prescribed by corresponding regulations of law
Documents in customs documents may be paper or electronic documents.Electronic documents must ensure the integrity and format prescribed in regulations of law on e-transactions In case of application of the national single-window mechanism,specialized regulatory bodies shall send import or export permits and notices of specialized inspection results or exemption from specialized inspection in the electronic form via the integrated communication system”[ CITATION Law14 \l 1033 ]
Pursuant to Clause 1 Article 18 Circular 38/2015/TT-BTC amended by Circular 39/2018/TT-BTC, stipulates a number of principles when declaring customs as follows:
“The declarant must provide sufficient information on the customs declaration as instruction Documents of the customs dossier may be electronic data or scans having certified by digital signatures;
Goods that are exported, imported in different manner shall be enumerated on separate declarations;
A customs declaration shall be used for a shipment with one invoice When declaring a shipment with multiple invoices on the same customs declaration, the declarant must make a list of commercial invoices for exports or imports and send it together with the customs declaration to the e-customs system;
When declaring exports or imports that are eligible for tax exemption or non-dutiable, information about the tax exemption must be declared;
The declarant may use the analysis results given by competent organizations to declare information related to the names, codes, quality, categories, quantity of goods, and other information about the shipment;
A bill of lading must be declared on a separate import declaration If a bill of lading is declared on more than one declaration or more than one bills of lading are declared on a single declaration or goods are imported without a bill of lading, the declarant shall follow instructions;
Regarding exports and imports requiring licensing by line management authority, the license must be available upon registration of the customs declaration and specified in the customs declaration according to instructions”
Electronic Customs Clearance Procedures for Import Goods
Based on ISO 9000:2015, “Process” is defined as a set of interrelated or interacting activities that use inputs to deliver an intended result “Procedure” is the specified way to carry out an activity or a process Procedures can be documented or not Procedures in organizations and businesses are ways of performing activities that have been standardized, formalized, and documented[CITATION ISO \l 1033 ].
A process can be controlled by many procedures Procedure building plays a role in supporting the organization in implementing processes to achieve common goals. When following a procedure, assigned activities are performed consistently, clearly, and specifically, limiting human errors due to standardization, making it easier for new employees to complete their work with accuracy, exactly the same as long-term employees, thereby cutting costs by increasing productivity and optimizing and improving operational activities
1.2.2 Criteria for evaluating the effectiveness of a procedures
According to the majority of authors, such as [ CITATION Dum18 \l 1033 ], [ CITATION Sar11 \l 1033 ], [ CITATION WuH08 \l 1033 ], time, cost, quality and flexibility are the four key dimensions used to evaluate the performance of business procedures.
On the production side, time serves as a measure of process competitiveness and operational efficiency The issue of time can be assessed from many different perspectives: Within a just-in-time production paradigm, for example, production and/ or delivery of production outputs at a premature or belated point of time is considered to be a waste of time[ CITATION Ley14 \l 1033 ].
Many different cost elements serve as the foundation for cost metrics, including labor costs, information technology costs, manufacturing costs, product costs, service costs, errors, etc Since the advent of activity-based costing, metrics such as activity- based costing, sub-process costing or process-related costing have also become possible.
Quality reflects the degree of compatibility between the actual characteristics of the product and the proposed basic specifications In the past, quality assessment indicators often focused on costs, including error prevention costs, quality measurement costs, and costs related to error rates [ CITATION Cam87 \l 1033 ]. However, today, customer satisfaction is considered an important measure to evaluate product or service quality.
[ CITATION Sla87 \l 1033 ] defines flexibility as the ability to adjust production or service processes This capability includes changing lead times and costs associated with process reengineering Flexibility is also demonstrated through the ability to respond to fluctuations in output volume or resource utilization.
1.2.3 Steps in the customs procedure for imported goods.
Depending on each type of imported goods, businesses will need to carry out different customs procedures However, a basic process of implementing electronic customs procedures for imported goods includes the following steps[ CITATION Gen19
Diagram 1.2: Customs procedures for imported goods
No Yellow lane Yellow/Red lane
Step 2:Register for specialized inspection
Step 9: Tax and fee payment
Step 5: Official Customs declaration (IDC)
Step 1: Prepare documents and determine information about imported goods
Step 6: Receive channeling declaration result
Step 10: Customs clearance/Release of goods/Transfer to warehouse
Step 1: Prepare documents and determine information about imported goods
Prior to the arrival of the shipment, the enterprise need to identify HS code, origin, and value of the goods of the import shipment, as well as prepare necessary documents for customs procedures and verify their accuracy
Step 2: Register for specialized inspection (if any)
After identifying the HS code and origin of the goods, the customs declarant must identify commodity policies related to export and import goods In case the goods are subject to specialized management, carry out procedures for registration of specialized inspection and licensing according to regulations.
Registration for specialized inspection and licensing can be done through the national single-window mechanism https://vnsw.gov.vn/ or at specialized management units according to regulations.
Customs declarants register importer information, and the system automatically cross-references with the database to determine whether the information exists If the information exists, the system will respond to the customs declarant; otherwise, the customs system will accept the information and automatically assign an importer identification code
Additionally, in case the enterprise does not have a digital signature, it needs to prepare a digital signature and register with the Customs authority.
Step 4: Declare provisional customs declaration information
Step 4.1: IDB: Retrieve customs declaration information
The IDB operation is used to retrieve information registered by the "Pre- declaration of import declaration" (IDA) prior to modifying information with the IDA operation This operation is also used to retrieve summary information on declared goods and/or invoice information/packing lists to restore before registering information with the IDA operation
Customs declarants can use this operation to retrieve information from various databases such as the bill of lading database, customs document database, specialized inspection database, summary information on declared goods, etc.
Step 4.2: IDA: Declare provisional customs declaration information
At this step, the customs declarant completes the customs declaration information and submits it to the system The system may provide warnings related to incomplete declaration, inaccurate item names, or non-existent/already-used bill of lading numbers for customs declaration registration Subsequently, the customs system automatically assigns a provisional declaration number and provides feedback to the customs declarant.
The customs declarant completes the information about the customs documents according to the formatted criteria and submits them through the electronic customs system (scanning and submitting documents to the electronic customs system).
OVERVIEW OF DA NANG TELALA COMPANY LIMITED 17 2.1 Introduction of Da Nang Telala Company Limited
General information
Figure 2.1: Logo of Da Nang Telala Company Limited
Name: Da Nang Telala Company Limited
Address: No 9 Street, Hoa Khanh Industrial Zone, Hoa Khanh Bac Ward, Lien Chieu District, Danang City, Vietnam
Email: info@telala.com.vn
Website: https://danangtelala.com.vn/
Business scope: Garment accessories such as lingerie, clothing, packaging
Establishment and Development process
According to the investment registration certificate with code 9869369928 for the
"Danang Telala Factory" project certified by the Management Board of the High-Tech
Zone and Industrial Zones of Danang for the first time on January 18, 2011, Danang Telala Co., Ltd was established to implement this investment project as a wholly- owned subsidiary of Inoue Ribbon Co., Ltd (Japan) The number of employees as of December 2023 was 124.
"Telala" is a word created by combining two words in Spanish, "Tela" meaning fiber, fabric, and "Ala" meaning wings "Fiber wings" symbolize the image of a leap towards the future.
Business industry
Danang Telala Co., Ltd applies export processing enterprise (EPE) regulations, with the investment project named Danang Telala Factory, with the project scale and objectives as follows:
Project scale: Ribbon rolls: 120 tons/year; Wire loop tapes: 16 tons/year; Hanging/ strapping tapes: 30 tons/year; Drawstrings: 20 tons/year; Hooks: 30 tons/year; Collar bands: 6 tons/year; Straps: 40 tons/year; Lace: 30 tons/year.
Operational goals Industry code according to VSIC 1
Production of other uncategorized textiles
Details: Production and/or processing of rolled tape and loop wire; hanging/slinging strap; drawstring; clasp; Splints shirt; wire; lace
Wholesale of other household appliances
Details: Exporting, importing, buying and selling roll tape, loop wire, hanging/straps, drawstrings, clasps, bra clips, cords, lace to serve production for the project
1 VSIC (Vietnam Standard Industrial Classification System) is a Vietnamese economic industry system that is uniformly used when registering to establish a business.
Business segments
As a manufacturer specializing in narrow width woven and knitted fabrics, dyeing various types of tape ranging from 2mm to 10mm, the company has been and is aiming to create products with high uniqueness and Japanese quality Telala mainly supplies accessories for lingerie, clothing, and packaging ribbons The products are sold in Asian countries and widely across the globe.
Figure 2.2: Application of products from Telala in lingerie, clothing and packaging 2
Figure 2.3: Telala company's products are used in lingerie
2 Source: Da Nang Telala website: https://danangtelala.com.vn/
Figure 2.4: Telala company's products are used in clothing
Figure 2.5: Telala company's products are used in packaging
Telala Company mainly imports various raw materials such as polyester weaving yarn, thread, chemicals, machinery and equipment, as well as various types of nylon bags from companies like Thai Asahi Kasei Spandex, Xinhui Dehua Nylon Chips, orDalian Telala Textile for manufacturing, weaving, dyeing, and packaging various types of cords, ribbons, which are then exported domestically to companies like GunzeVietnam, Morito Danang, F.L.D Vietnam, or abroad to its parent company InoueRibbon Japan, or companies like Lecien Cambodia, Itochu Corporation for further production of lingerie and clothing.
Organizational structure
Diagram 2.3: Organizational structure of Da Nang Telala Co., Ltd 3
The company is headed by president Inoue Seiji, followed by director Tran Thi Uyen Sa, under the director are 3 main blocks divided into departments Different departments have different numbers of personnel, functions, and tasks These departments coordinate with each other to form an information network, working consistently and effectively.
Including 4 main departments, responsible for producing products according to customer requirements Goods from the weaving department will be transferred to the dyeing department to continue the production process, then will be sent to the
3 Source: Human Resources General Accounting Department processing and inspection department for finishing and quality control Some types of products where customers request colors with specific standards will be transferred from the dyeing department to the laboratory in the quality management department for testing The civil service department will be responsible for matters related to engineering, repairing machinery and equipment, boilers, etc.
The laboratory is responsible for checking product quality If the product is defective, it will determine at what stage the error occurred and implement a correction plan.
There are 3 main departments, including:
Production management department: includes 2 internal and external departments:
- The internal affairs division will receive information about orders from the foreign affairs department, connect with the production block to plan production, prepare goods for the company's export activities and vice versa to receive requests to import raw materials, machinery and equipment serving the production process of goods from the production block and send that request to the foreign affairs department.
- The external affairs division is the place to receive information, quantities, and product designs from the warehouse, orders from customers as well as purchase requests from the internal affairs department, from which to enter information about the company's product lines and contact customers and suppliers, draft contracts, send information to the import-export department for next steps.
Import-Export Department: Responsible for documents related to the company's goods purchase and sale activities, contacting customers or suppliers to control the transportation of goods and documents, notify customers to receive goods, work with relevant parties to apply for import and export licenses or C/O, and save and send documents to the accounting department.
General accounting and human resources department: Receive information from other departments and divisions, perform tasks related to book settlement, pay suppliers, receive money from customers, make payments all kinds of expenses for the company, paying salaries to employees, managing, recruiting personnel, preparing reports, storing documents, ensuring safety and security.
- Warehouse team: check and report the quantity of imported and exported goods to serve the company's production and export process to other departments
Company’s resource
According to the project “Da Nang Telala Factory”:
From January 2011 to December 2020, the company carried out production at Street 6 of Hoa Khanh Industrial Park (rented factory from Kane-M Da Nang Co., Ltd.), Lien Chieu District, Da Nang with an area Factory area is 5,000 m 2
Then, from February 2020 to December 2046, Telala company built a factory on Street 9, Hoa Khanh Industrial Park, Lien Chieu District, Da Nang to relocate the project and use the land area is 11,800 m 2
In January 2024, Telala Company has 124 employees, of which the office has 17 people, the company's import-export department includes 3 employees and 1 manager, other information is not collected.
Total project investment capital is 12,700,000 USD, of which contributed capital is 3,800,000 USD, accounting for 28.58% of total investment capital; Capital mobilized from the parent company is 8,900,000 USD The project has an operating term from January 18, 2011 to December 12, 2046 4
4 Source: Da Nang Telala Factory Investment Registration Certificate changes for the 11th time, effective May 5,2023
ANALYSIS AND EVALUATION OF THE CURRENT STATUS
Current status of customs procedures for importing goods at Da Nang Telala company
Diagram 3.4: General process diagram of customs procedures for importing goods
Based on the company's general customs procedures, in this chapter, the author uses various sets of documents to describe the customs procedures for importing goods, helping to clarify some differences compared to the general procedures
Log in, set up digital signature
Get results of channeling and customs clearance
Get the list of cargo
Pay taxes and attach proofIDC
1 Chemical import document set: This set is used to describe in detail the steps involved in the customs clearance process for imported chemicals Compared to the standard import procedure, this process includes an additional step for declaring chemicals
2 Nylon Bag and Adjuster import document set: Telala is a manufacturing company, so most of its imported products will be exempt from import duties or VAT For the import of nylon bags, the company will have to pay an environmental protection tax, so this document set will clearly show the tax payment step in the general procedure in the theoretical part Additionally, the declaration of split bills of lading is also carried out in this document set due to the two types of imports
3 Other document sets: These sets are used to describe various steps that may occur for different types of goods or transportation methods
Number of customs declaration staff: 4 people
Number of computers used: 4 computers
Software used: ECUS5 – VNACCS 2018 provided by Thaison company
Description of electronic customs procedures for imported goods at Da Nang
3.2.1 Description of the customs clearance procedure for imported goods at Da Nang Telala Co., Ltd using Document Set 1
Prepare the necessary documents for submitting a customs declaration for imported chemicals, including:
Bill of Lading No HEB123110024
Chemical confirmation certificate HC2023075113 (added after completing Step 3)
Chemical Safety Data Sheet (received from supplier)
Step 2: Set up digital signature
The customs declarant opens the electronic customs declaration software, selects System à Set up digital signature usage à Start signing gate à Enter PIN code
Figure 3.6: Set up digital signature (1)
Figure 3.7: Set up digital signature (2)
Figure 3.8: Set up digital signature (3)
Figure 3.9: Set up digital signature (4) Step 3: Declare chemicals (Different from the general procedure)
When importing chemicals, the importer must request the MSDS 5 of the chemicals from the exporter Based on the MSDS of the chemical, search for the name of the chemical in Annexes 1, 2, 3, 4, 5 of Decree 113/2017/ND-CP and the CAS 6 code of the product The CAS code is listed in Annex V of Decree 113/2017/ND-CP and must be declared when making customs procedures for chemicals Once the importer has a
5 MSDS stands for Material Safety Data Sheet, which can be understood as a detailed data sheet on the components and properties of chemicals.
6 CAS stands for Chemical Abstracts Service, which is a chemical summary service This is a unit of theAmerican Chemical Society, which assigns identification numbers to all chemicals From there, it makes identifying and managing chemicals easier clear understanding of the chemicals that need to be declared and the precursors, the enterprise will proceed to import and carry out customs procedures.
Step 3.1: Login to Vietnam National Single Window
Log in to the National Single Window Information Portal at website https://vnsw.gov.vn/ à Ministry of Industry & Trade à Chemical Declaration à Add new
Figure 3.10: Login to Vietnam National Single Window
Figure 3.11: Add new a chemical declaration
Step 3.2: Fill in the information in the chemical declaration procedure
The declarant proceeds to fill in the enterprise information and chemical information:
Enterprise name: Da Nang Telala Co., Ltd
Address: No 9, Hoa Khanh Industrial Park, Hoa Khanh Bac Ward, Lien Chieu District, Da Nang City
Name and phone number of the representative
Name and phone number of the declarant
Type of activity: In this set of documents, the imported chemicals are used for dyeing and weaving, so choose the type of activity “Use”
Invoice number: based on commercial invoice (23/10/30 – 1789)
Name and country of the exporting company: Inoue Ribbon Industry Co., Ltd
Customs gate for importing chemicals: VNCLI (Cat Lai Port HCM)
After that, upload the invoice file and chemical safety data sheets (MSDS) to the system
In the list of chemicals, click on the icon + in the Chemical list The new chemical information screen will be displayed as follows:
Figure 3.15: Add new chemical information
Fill in the information such as CAS code (IUPAC name and chemical formula will be automatically displayed), TM name (chemical name), HS code, content (based on MSDS), weight, unit (based on invoice),…of the chemical to be declared, then press save, the newly added chemical will be displayed in the chemical list as below
Figure 3.16: Chemical list Step 3.3: Submit the dossier and receive the chemical declaration confirmation certificate
After declaring the chemical, check it again and submit the dossier to the system. When the declaration is approved, the dossier status becomes “Notice of reception of chemical declaration” à Download the certificate of declaration of imported chemicals to make customs declaration in the following steps.
Figure 3.18: Certificate of declaration of imported chemicals HC2023075113 Step 4: Make a customs declaration
Step 4.1: Get declaration information from customs (IDB)
The customs declarant copies the import declaration of previous orders for the same supplier: Customs declaration à List of import declarations à Enter the declaration number in the “search information” box à Copy the declaration
Step 4.2: Entering Information in the General Information and General Information 2 Tabs
Following the model No 1 Appendix I issued with Circular No 39/2018/TT-BTC, the customs declarant proceeds to fill in the information in the import declaration form on the electronic customs declaration software.
1 Group type: Telala imports goods for production of export products à Select
2 Declaration number: Since the system automatically updates, the declaration number here is 105899126210, consisting of 12 digits, in which the “0” at the end represents the number of supplementary declarations.
3 First declaration number: Only enter this field if the consignment has more than 50 lines or if the declaration must be split Based on the Invoice, the set of documents only includes 3 lines, so leave this field blank
4 Form type code: Based on the import purpose of the consignment, select according to the instructions of the General Department of Customs Here, select the form type code “E11: Import of raw materials of EPE from foreign countries”, this form type code is used in the case of importing raw materials and supplies from foreign countries for the production and processing of export processing enterprise's export goods
5 Customs Authority: Enter the code of the Customs Sub-department where the customs declaration is registered in accordance with law Here enter “34NG:
Hoa Khanh - Lien Chieu Industrial Park Customs Branch”
6 Declaration Processing Unit Code: Enter the declaration processing procedure code based on the customs sub-department code, here enter “00”
7 Individual/Organization classification: type “4: Organization/Company sending organization/company”
8 Mode of transport code: “3: sea (bulk)”
9 Expected declaration date: Enter the expected date/month/year to perform
IDC procedures Based on the Arrival Notice, enter “22/11/2023”
The import-export organization section includes information based on the sale contract (usually no data entry is required because it will be displayed when copying the declaration).
Name: DANANG TELALA CO., LTD.
Address: No.9 Street, Hoa Khanh Industrial Park, Hoa Khanh Bac
Ward, Lien Chieu District, Danang City, Vietnam
Name: INOUE RIBBON INDUSTRY CO., LTD
Address: 2-6 Chihara-cho, Fukui pref 915-0243, Echizen-city, Japan
Country code: consists of 02 characters according to the UN LOCODE code table, here it is “JA”
Figure 3.21: Bill of Lading section
Bill of Lading section: Based on the information on B/L and PKL, enter the following information:
12.Bill of lading number: enter B/L HEB123110024
The system will display as shown and the bill of lading number will automatically be updated to “091123HEB123110024” when click on “Accept”
Figure 3.22: Notice of declaration of goods identification number
After entering the bill of lading number and bill of lading date, select “Declare bill of lading date in value details” to automatically update to the Value Declaration
Details section in the “General Information 2” tab.
14.Number of packages: 11 CT (carton)
15.Total gross weight of goods: 292.7 KGM (kilogram)
16.Code of the expected customs clearance warehouse: Enter the code of the place where the goods are stored when declaring import and based on A/N
“02CIRCI: CCHQCK CANG SG KV I” (goods arrive at Kho 02 Cat Lai port HCM)
17.Packaging marks and numbers: Enter the marks and numbers of the packaging used to pack the goods (shown on boxes, cartons, etc.) Here, type
Box 1: Enter the call sign in case of transport by sea/river If the basic information of the vessel has not been registered in the system, enter
“9999” as shown in the figure.
Box 2: Based on B/L, enter the name of the vessel as “ARICA BRIDGE
19.Date of arrival of goods: based on A/N is “22/11/2023
20.Cargo unloading place: enter the cargo unloading place code and name
“VNCLI: CANG CAT LAI (HCM)” (Cat Lai Port HCM)
21.Cargo loading place: enter the code and name of the cargo loading place according to B/L: “JPUKB: KOBE - HYOGO”
Document and license information section: Because chemical import companies must declare chemicals, so you need to fill in the information in this section as follows
22.Other legal document code: “ZB” corresponding to Decree 113/2017/ND-CP detailing and guiding the implementation of a number of articles of the Law onChemicals
Figure 3.23: Other legal document code
23.Import license: Enter the import license classification “ZB03”: Chemical declaration and the chemical declaration license number “HC2023075113”
Commercial Invoice section: Take information from Invoice
24.Invoice type classification: Select “Commercial Invoice”
27.Invoice classification code: select “A”: Invoice value for goods to be paid
29.Payment method: According to the invoice, the payment term is T/T remittance, so select “KC”: Other (including T/T payment)
32.Insurance fee: Select “D”: No insurance
33.Value declaration details: Enter some information such as
Enter the bill of lading date in the DDMMYYYY#& format:
Payment method: “PHUONG THUC THANH TOAN: T/T”
Chemical declaration information: “KHAI BAO HOA CHAT (DONG
HANG SO 2 & 3); GIAY XAC NHAN KHAI BAO: HC2023075113, SO TIEP NHAN: 2023-0075583 (21/11/2023)”
34.Total value allocation coefficient: Enter the total invoice value before adjustment: 691,250
35.Transport departure date: Since the imported goods are transported by sea to
Cat Lai port, HCM and then by road to Da Nang, enter the departure date of the goods subject to customs control, usually taken after 2 days of arrival of goods on A/N is “24/11/2023”
36 Destination for bonded transport: “34NGC99” (CTY DA NANG TELALA)
37 Notes section: Enter some specific information about the contract number, date, inspection registration place, etc Here, type “HOP DONG: 23/10/30 –
1789 (30/10/2023); DKKH: KHO CONG TY (34NGC99)”
Figure 3.31: Transport Information & Other Information section
Report à Search for import and export goods à Search for the name of the goods, based on previous declarations to get the name of the goods and HS code (need to compare the HS code with the latest tax table)
Figure 3.32: Search for import and export goods (1)
Figure 3.33: Search for import and export goods (2)
Figure 3.34: Search for import and export goods (3)
After having the name of the goods and HS code, proceed to create and import into the system an Excel file including the columns Item Code, Item Name, HS code, Origin, Quantity, Unit, Quantity 2, Unit 2, Contract Unit Price, Unit Price Currency Code, Unit Price Unit, Contract Value, Import Tax Schedule Code, Import Tax Exemption/Reduction Code, VAT Tax Schedule Code, VAT Tax Exemption/Reduction Code.
Figure 3.35: Excel file for declaring list of cargo
Import the list of goods into the system by pressing F6 à Select the newly created Excel file (select the Sheet name and the first row on the Excel file) à Save
In which, it is necessary to note about:
Import tax schedule code: Select “B30”: Tax schedule code applicable to subjects not subject to import tax.
Import tax exemption/reduction/non-imposition code: Select “XNK32”: Goods imported from foreign countries into duty - free zones
Figure 3.36: List of cargo tab
Figure 3.37: Import tax exemption/reduction/non-imposition code
Double-click on the item name to display detailed declaration information.
In the tax rate section: type “0” in the case of “Import tax schedule code” enter the code B30
Quantity, invoice value, invoice unit price items: Based on the information on the invoice of each line of goods.
In the Taxes and Other Fees section, select:
Tax rate/tax rate and other fees application code: Select “V”: Goods subject to VAT at a tax rate of 0%
Tax and other fees exemption/reduction/non-imposition code: “Goods traded between foreign countries and non-tariff zones, between non-tariff zones”
Figure 3.41: Tax and other fees exemption/reduction/non-imposition code
Note: avoid rolling the mouse during the declaration process to avoid missing information, but use the tab key to move between cells
Step 5: Declare declaration information in advance (IDA)
After copying the declaration and editing the information to match the current order, the customs declarant selects the “2 Declare declaration information in advance (IDA) à choose the “Declaration Management” tab à clicks on the “Add new attached documents” button à uploads the relevant documents (B/L, Invoice, chemical declaration, chemical safety certificate à uses a digital signature to sign the declaration and submit the documents, and retrieves the system's response.
Figure 3.43: Add new attached documents Step 6: Official declaration (IDC)
Carefully review the information entered in the declaration and ensure it is accurate and complete, verify that all required documents have been uploaded correctly and are attached to the declaration If any errors or discrepancies are found, return to Step 4.1 to make the necessary corrections or additions On the contrary, check and see that the information is correct, proceed to select item “3 Official declaration (IDC)”
Figure 3.44: Result Step 7: Get results of channeling and customs clearance
After submitting the official declaration, the declarant proceeds to select the “4.
Receive classification and Clearance results” option to obtain the classification results
In the case of green lane classification, the system will automatically check tax obligations and send the declaration clearance decision after taxes are completed.
For yellow lane classification, the customs authority will review the documents attached to the system If compliant, the customs officer will update the results in the system The system will automatically check tax obligations and send the declaration clearance decision Conversely, if non-compliant or suspicious, the declaration will be transferred to the red lane.
In the case of red lane, the customs authority will inspect the attached documents and the actual goods If compliant, they will update the system to check tax obligations and send the declaration clearance decision Conversely, Customs will take action if any violations are found.
Since this set of documents is classified as yellow, after verifying the documents and tax obligations, the customs declarant will proceed to the next step
Step 8: Retrieve the list of cargo
Evaluation of electronic customs procedures for imported goods at Da Nang
Firstly, implementing electronic customs procedures has saved considerable time and costs for businesses compared to paper-based procedures Since 2021, Telala Company has proactively conducted electronic customs procedures instead of outsourcing Although initially faced with many challenges in the declaration process, the company has now been able to save time in declaring customs by eliminating the process of sending and receiving documents, cross-checking declarations between the company and third parties, as well as the time spent searching for reputable customs agents.
A general procedure for conducting customs procedures is also described in an Excel file, allowing customs declarants to refer to it during the process Training new employees can also be based on this general procedure to save time.
Previously, the cost for customs declaration procedures paid to third parties ranged from $30 to $40, which increased the company's expenses It also made it difficult for the import-export department to monitor and manage closely Therefore, taking autonomy in customs declaration can save costs, thereby contributing to increasing the company's profits.
Orders are regularly tracked, and customs procedures are carried out promptly to facilitate quick customs clearance, reduce storage costs, enable the company to receive goods on schedule or even earlier, and support the company's manufacturing activities, enhancing credibility with suppliers and customers.
Cross-checking of documents and customs declarations among employees is conducted, and they also proactively verify and store necessary documents after procedures to detect and rectify errors in the declaration promptly, thereby reducing associated costs or penalties and legal actions if Customs authority detects irregularities in the import declaration Additionally, this helps ensure compliance with tax obligations, improve the company's compliance level, and facilitate more streamlined flows of goods.
Recently, the company has been upgrading equipment in the import-export department, such as transitioning employees' desktop computers to laptops and upgrading software to facilitate the customs clearance process.
Cross-checking among employees during customs declaration can enhance the efficiency and quality of the process Clear steps are executed, and any obstacles can be identified and addressed promptly (thus also increasing flexibility).
The coordination and communication between the import-export department and other departments such as warehouse, order tracking and management, or accounting are generally quite flexible and swift There's continuous contact and updates from suppliers, shipping lines, or forwarders to receive and verify documents.
Clear task assignments are present within the import-export department, and information is exchanged and standardized among employees They understand each other's tasks well, so when someone is absent, other employees can support and complete their tasks.
The most significant time-wasting issue is the malfunctioning of the electronic customs declaration system This system's errors prevent customs declarants from attaching documents or goods lists, leading to frequent red and yellow lane classifications Additionally, the public service website frequently experiences overload and inaccessibility, further increasing customs declaration submission and clearance times These issues collectively contribute to substantial delays in customs clearance processes.
Declaring first-time imported goods requires considerable time to research the product's function and HS code for accurate customs declaration.
In addition to the aforementioned issues, there are also unforeseen problems that lack standardized handling procedures due to their infrequent occurrence. Consequently, addressing these issues can be time-consuming as it often involves researching circulars, decrees, and consulting with experts from customs authorities.
Frequent malfunctions or overloads of the customs system can significantly delay customs clearance processes, leading to increased storage fees for businesses.
When inaccuracies occur in customs declarations, either at the time of submission or due to subsequent changes in documentation, the company may be required to amend or supplement the declaration Failure to complete these amendments or supplements within the legally mandated 60-day timeframe may result in administrative penalties for the company.
The customs procedure, although described, does not cover all transactions, handling methods for arising cases are not comprehensive due to the incompleteness of knowledge and practical experience of drafting staff, electronic customs procedure notes are not clearly and fully recorded, and there are differences in the competency level among staff.
The company's process presents fixed information when declaring customs specifics, but it's quite mechanical and fails to explain the essence, leading employees to carry out tasks without full comprehension or application in various scenarios. Handling arising issues is sometimes merely communicated by word of mouth from one employee to another, and changes in the process are not consistently documented in writing.
SOME RECOMMENDATIONS AND SOLUTIONS TO
Notes during the process of implementing electronic customs procedures for
In addition to the notes presented in the steps to carry out customs procedures in the above section, here the author summarizes a number of cases when carrying out customs procedures for imported goods in the same B/ L
Table 4.2: Customs declaration cases for goods in the same bill of lading
Number of invoices 1 2 or more
Follow the same steps as the general procedure If you import chemicals, add the chemical declaration step
It is necessary to separate the bill of lading, prepare a bill value distribution table and declare each type separately
Declare the same customs declaration, need to make a list of commercial invoices according to Form No.
Separate bills of lading, separate declarations
Source: Summarized by the author
4.2 Some solutions at Telala company to improve electronic customs procedures for imported goods
4.2.1 Improve knowledge and experience of employees
The company's current scale is less than 150 employees, the import-export department alone has only 4 people, including one employee from a different field, so it is possible to both work and learn based on the company's general procedure While this procedure include detailed information required on customs declarations, they do not yet provide detailed instructions for some cases
Employees often simply copy the old customs declaration without understanding them, overlooking changes that result in incorrect information and tax calculations (for example, in chapter 3, section AMA declaration, employees, despite checking, did not recognize and identify that the CHF currency code was used instead of USD as usual). Processing and adjusting declarations for such cases takes a lot of time and money, so it is necessary to enhance the professional knowledge and language proficiency of employees Additionally, it is essential to prepare notes on document verification during the customs clearance process and update common occurrences regularly
Furthermore, when the company enhances knowledge and practical experience for employees through professional development courses, learning, updating and sharing information about circulars, decrees, and regulations of the government to comply with the law, as well as improve employees' information technology skills and foreign language skills (Japanese, English, ), the process of communication and collaboration with suppliers or customers will be more efficient The steps in the customs procedure process can be completed clearly and in detail, also helping to train new employees more quickly.
Continuous upgrades and modernizations should be made to the company's equipment, computer software, and network infrastructure to ensure smooth customs clearance procedures For example, the company needs to contact Thai Son company to update the software, then the information will be updated according to new decrees of the Government such as the new tax rate code displayed and the customs declarant will be able to applicable
In the process of customs clearance for imported goods, for items subject to taxation, the company's customs declarations often follow the yellow Customs clearance will be affected by tax payment, which must go through the accounting department Therefore, it is crucial to enhance information exchange between,specifically request accountants to issue tax payment orders early so that the import- export department can upload evidence and quickly obtain a list of goods.
It is necessary to contact and urge the suppliers to send documents, pre-declare import declarations, and attach necessary documents to the system early to save time and prepare for system errors Detailed information on documents should be carefully checked when entering data into the software, paying attention to details that cannot be edited after official customs declaration Proactively understanding official documents, decrees, legal texts, and regulations related to handling violations resulting from incorrect information on declarations is necessary.
While waiting for the supplier to send the goods as well as the arrival notice from the carrier, employees often pre-declare information on customs declarations and upload documents received from suppliers Before official declaration, confirmation must be made with the department managing the company's orders If any information on the order needs to be amended on the documents, the customs declaration must be adjusted, and new documents uploaded
Currently, only two staff in the department have the ability to understand and guide information on new item declarations or resolve arising issues Therefore, it is necessary to grasp contact information for customs experts or officers to obtain timely and accurate confirmation Moreover, if these staff members are absent, contacting for guidance will be easier and faster, avoiding dependence on them and disrupting the import procedure
In addition, the company also needs to create files to track order status, unify the database of product codes for customs declaration and comparison with other departments.
Da Nang Telala Company was newly established in 2011 and is in the process of development Customs procedures have only been independently conducted by the company since 2021, so there are still some issues in the implementation process. However, the company's employees are also trying to carry out the steps of the process professionally and carefully With the aim of expanding the company's project scale in the future, Telala will increasingly enhance management, enhance employee training to cultivate human resources, these efforts will lead to improved processes, enhanced operational efficiency, and a stronger reputation among customers, suppliers, and stakeholders
During the internship, I had the opportunity to approach and learn about Telala company's customs procedures for imported goods, as well as practice electronic customs declarations From there, I realized that implementing a process in general and customs procedures in particular requires meticulousness, carefulness, speed, coordination, and timely exchange of information with other departments within the company as well as other suppliers, customers or shipping units
Graduation internship report with the topic "Electronic Customs clearance procedures for imported goods at Da Nang Telala Company Limited" presented the theoretical basis and contents related to the implementation of the company's customs clearance procedures By analyzing the current process, I propose a series of solutions and recommendations aimed at streamlining the procedures and boosting the company's overall operational efficiency
Due to time constraints and limitations in data and related knowledge exploration, the report may not be devoid of errors I eagerly anticipate receiving feedback and suggestions from teachers.
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2) Bill of Lading No HEB123110024
6) The list of goods eligible to pass through the Customs supervision area
2) Bill of Lading No LDLDAN2396001A
1) List of goods for FCL cargo
4) Online public service application receipt form