Currently, India is Vietnam's largest trading partner in South Asia (Vietnam Investment Review, 2024), with the bilateral trade’s value reaching USD 14.70 billion registering an increase of 3.98% during 2022 – 2023 (Embassy of India, 2024). Thus, trade has played an important role in Vietnam - India's economic relations over recent years. One of the key items exported from India to Vietnam is frozen meat and fishery products, which belong to the list of duty-free goods according to the ASEAN-India Free Trade Agreement (AIFTA). According to APEDA ’s report 2022 - 2023, India is the fourth largest buffalo meat worldwide exporter with major export destinations (2022-23): Malaysia, Vietnam, Egypt, Indonesia, and Iraq (APEDA agriXchange, 2023). This proved the potential growth of the imported buffalo market for Vietnamese traders. However, importing buffalo meat is still risky and challenging, especially for startups that don't have much time to work on custom formalities. Therefore, understanding buffalo-importing procedure from India in detail is very necessary, ensuring international trade activities take place effectively. NHAT THANH DUC COMPANY LIMITED is currently one of the import startups in the Danang market, which was established in April 2022. The company focuses on importing frozen meats from foreign markets, such as India, Germany, Poland, etc, and then sells them to domestic businesses for various purposes. Especially, the highest contribution belongs to frozen buffalo from India, fluctuating the level of 50% annually. These values far exceeded the figures of the other types of meat, proving this market’s remarkable potential. That said, ensuring custom formalities in importing buffalo meats is important, which helps the company gain sales value and maintain a strong relationship with partners. In this report, the author will do an internship report titled “Analyzing the process for customs formalities in importing frozen buffalo meat from India at NHAT THANH DUC COMPANY LIMITED” while working as an Export-Import Intern at this office.
Rationale for the topic
In recent years, international trade activities have been extremely vibrant and played a crucial role in promoting the global economy This is a firm premise for trade, cooperation, import, and export of goods amongst many countries
Being one of the members of the World Trade Organization (WTO) since 2007, Vietnam has put a lot of effort into promoting foreign trade by joining various free trade agreements (FTAs) with major trading partners According to Vietnam General Statistics Office, the total import and export turnover in 2023 is estimated at 683 billion USD, which decreased by 6.6% compared to the previous year However, the value of import-export turnover has increased dramatically in the 4 final months of the year 2023, with up to 12% in December This proved the recovery of the Vietnamese economy from the global economic downturn (Tong Cuc Thong Ke, 2024)
Currently, India is Vietnam's largest trading partner in South Asia (Vietnam Investment Review, 2024), with the bilateral trade’s value reaching USD 14.70 billion registering an increase of 3.98% during 2022 – 2023 (Embassy of India, 2024) Thus, trade has played an important role in Vietnam - India's economic relations over recent years One of the key items exported from India to Vietnam is frozen meat and fishery products, which belong to the list of duty-free goods according to the ASEAN-India Free Trade Agreement (AIFTA)
According to APEDA ’s report 2022 - 2023, India is the fourth largest buffalo meat worldwide exporter with major export destinations (2022-23): Malaysia, Vietnam, Egypt, Indonesia, and Iraq (APEDA agriXchange, 2023) This proved the potential growth of the imported buffalo market for Vietnamese traders However, importing buffalo meat is still risky and challenging, especially for startups that don't have much time to work on custom formalities Therefore, understanding buffalo-importing procedure from India in detail is very necessary, ensuring international trade activities take place effectively
NHAT THANH DUC COMPANY LIMITED is currently one of the import startups in the Danang market, which was established in April 2022 The company focuses on importing frozen meats from foreign markets, such as India, Germany, Poland, etc, and then sells them to domestic businesses for various purposes Especially, the highest contribution belongs to frozen buffalo from India, fluctuating the level of 50% annually These values far exceeded the figures of the other types of meat, proving this market’s remarkable potential That said, ensuring custom formalities in importing buffalo meats is important, which helps the company gain sales value and maintain a strong relationship with partners
In this report, the author will do an internship report titled “Analyzing the process for customs formalities in importing frozen buffalo meat from India at NHAT THANH DUC COMPANY LIMITED” while working as an Export-Import Intern at this office.
Research objectives
The goal of this report is to understand the step-by-step process of doing customs when importing frozen buffalo meat from the Indian market at NHAT THANH DUC COMPANY LIMITED In particular:
● Analyze the steps involving the custom formalities in importing frozen buffalo meat from Indian suppliers
● Find out some outstanding issues when implementing the frozen buffalo- importing procedure and propose some solutions to improve this situation.
Research subjects
The report aims to research the customs formalities process when importing frozen buffalo meat from the Indian market at NHAT THANH DUC COMPANY LIMITED.
Research scope
● Time: From January 1st to May 5th, 2024
● Space: NHAT THANH DUC COMPANY LIMITED.
Research methods
The report is collected and prepared according to the following methods:
The mentors belonging to the Sales, Export-Import, Administration, and Finance-Accounting departments allow the author to join several different tasks to easily observe the total sequence of completing custom formalities for specific orders
The author interviewed and exchanged relevant problems through the following questions:
1 Does the company carry out customs formalities itself or use third-party services?
2 What are the steps involved in custom formalities when importing frozen meat?
3 Are there any difficulties in completing customs formalities when importing frozen meat?
4 What should you do as a Finance-Accounting/ Sales/ Export-Import/ Administration department’s staff?
The author collected documents from books, newspapers, textbooks, slides, and the Internet as the important theoretical basis for the topic In particular, Fundamentals of Business Process Management and slides from various subjects like Multimodal Transport, International Business Management, Export-Import Business, etc
Additionally, the report refers to other reliable resources such as ISO Standards, Vietnamese Law on Customs, Revised Kyoto Convention, General AIFTA, and other Vietnamese Laws
The author collected secondary data from various departments within the company In particular:
(1) Finance - Accounting: Collect documents relating to the company’s income statement in 2023, aiming to provide a preliminary assessment of the company’s business situation
(2) Administration: Collect information about organizational structure and the total value of infrastructure
(3) Sales: Collect documents about the targeted customers, market analysis and potential suppliers
(4) Export-Import: Collect details relating to the frozen meat-importing procedure, how to complete customs formalities, and how to tackle unexpected problems
From the collected data, the author started synthesizing and comparing categories Then, the author illustrated all the steps in a specific procedure for carrying out customs formalities when importing frozen meat
Finally, the author analyzed the procedure and pointed out its advantages and disadvantages From that, propose proper solutions to overcome some potential problems in the future.
Report Structure
The internship report is structured with four main parts as follows:
Chapter 1: Theoretical basis around custom formalities in importing frozen buffalo meat
Chapter 2: An introduction of NHAT THANH DUC COMPANY LIMITED Chapter 3: Customs formalities process in importing frozen buffalo meat from
Al-Hamd Agro Food Product Co., Ltd, India at Nhat Thanh Duc Company Limited
Chapter 4: Recommendations to improve the custom formalities-completing process in importing frozen buffalo meat.
THEORETICAL BASIS
Fundamentals of business process
According to the (ISO, 2015), the process is a set of interrelated or interacting activities that use inputs to deliver an intended result Inputs and outputs may be tangible (e.g., materials or equipment) or intangible (e.g., data, information, or knowledge)
Similarly, (Dumas et al., 2018) defined “Process as a chain of events, activities, and decisions involving a number of actors and objects, triggered by a need and leading to an outcome that is of value to a customer A process will include subjects: participants (including employees or relevant systems), information (documents, electronic records), and physical objects (equipment and papers).”
For example, the process for custom formalities in importing frozen buffalo meat will cover sellers, buyers, custom-relating partners, products, and required documents (physical and electronic) All of these subjects support the importing process and ensure it is successful
According to (Dumas et al., 2018), process discovery is defined as the act of gathering information about an existing process and organizing it To attain a specific process discovery, the researcher needs to follow the following steps:
In this step, defining business targets, analyzing current situations, connecting departments, and distributing human resources are required tasks to make the process accessible and successful
This step is about building an understanding of the process (Dumas et al., 2018) encourage researchers to use various discovery methods (interviews, observations, and documents), as well as design forms (if necessary) to easily gather information This ensures that the process is conducted properly and that stakeholders have a clear understanding of how to perform
Step 3: Conducting the modelling task
After researching and determining the steps to perform the process, the next step is to modify these ideas into a visual model It is especially effective for determining relevant sources while implementing the process The model will include the steps and the activities to be done sequentially
Step 4: Assuring process model quality
This is the final step in the process discovery Quality assessment aims to ensure that the process results meet the organization's original purposes and criteria To establish a reliable process model, researchers cannot miss this step
Normally, the process performance will be estimated in four distinctive dimensions: time, quality, cost, and flexibility Here is a brief of how to evaluate a process’s success through these concerns:
Often the first performance dimension that comes to mind is time The longer it takes to run a process, the more ineffective the process is Indeed, the main purpose of having process setups is to optimize how it works and generate more value for the business Thus, the time to complete a process should be as short as possible but still ensure the finest results
Another common dimension to consider relates to the company’s financial nature Whenever mentioning the cost, there will be several highlights, such as turnover, revenue, and yield Nevertheless, it’s important to have strict control over fixed costs (e.g infrastructure and software) and variable costs (e.g number of purchased products or new hires)
An efficient process is one in which costs are significantly reduced if necessary
If costs decrease, company profits will grow As a result, the company’s performance will be improved considerably
With quality standards, the business process should be analyzed from both angles: from the client’s side (external quality) and from the process participant’s perspective (internal quality)
● External quality: Measured as the client’s satisfaction with either the product or the process, depending on the 2 basic measures: churn rate and net promoter score
● Internal quality: Covering “the level that a process participant feels in control of the work performed, the level of variation experienced, and whether working within the context of the business process is felt as challenging.” (Dumas et al.,
Basically, a high-quality process will help the company to increase all participants’ satisfaction
Many researchers overlook the level of flexibility when evaluating the impact of process design Flexibility, in broad terms, refers to the capacity to adapt and respond to changes It might be helpful to differentiate between two types of flexibility: runtime flexibility and build-time flexibility
● Runtime flexibility: The ability to adapt to changes and variations during the execution of a specific business process
● Build-time flexibility: Focusing on the capacity to modify the structure of the business process itself.
Custom Formalities
In accordance with Article 14 (23), (Vietnamese Law on Customs, 2014),
“Customs formalities mean activities to be carried out by customs declarants and customs officials in accordance with this Law for goods and vehicles”
● Customs declarants: Goods owners; vehicle owners; vehicle operators; customs brokers, and persons authorized by goods owners or vehicle owners to formalities follow customs formalities (Article 4 (14), (Vietnamese Law on Customs, 2014))
● Customs officials: Customs officials are those who are qualified to be recruited or appointed to ranks, positions, or titles in customs authorities; and being trained, managed, and employed in accordance with the laws on officials and civil servants (Article 15, (Vietnamese Law on Customs, 2014))
In accordance with Chapter 2, Revised Kyoto Convention, 1999: “Customs formalities means all the operations which must be carried out by the persons concerned and by the Customs in order to comply with the Customs law.” (UN Statistics Division)
Based on the method of implementing customs procedures, customs procedures are divided into:
● Traditional customs procedures (customs procedures on paper);
● Electronic customs procedures (modern customs procedures): Electronic documents must ensure the integrity and format prescribed in regulations of law on e-transactions (Clause 2, Article 24, (Vietnamese Law on Customs, 2014))
According to (Hau, 2011), customs procedures have the following basic principles:
Customs formalities are administrative procedures because customs formalities relate to the executive power in the field of customs and are carried out by state administrative agencies, specifically customs authorities
All customs formalities are specifically regulated by the Customs Law School and documents guiding the implementation of Law on Customs Customs declarants and customs officials are responsible for coordinating with each other and other state agencies to carry out these regulations
Similar to other procedures, the procedures for customs formalities also reflect its sequence It means that all steps towards customs formalities must be completed continuously without interruption to ensure customs clearance and create friendly conditions for import and export activities
Customs procedures must be consistent with the document system and the regulations on documents to be submitted, must be presented and consistent in handling; must be consistent in all national departments, and must be unified throughout the customs clearance chain
To ensure the consistency of customs formalities, it is inevitable that customs formalities must be publicized and transparent Customs formalities are specifically stipulated in legal documents; e-documents posted in the Government's Official Gazette, and at customs clearance locations
1.2.3 Legal basis of customs formalities
The national legal basis includes a legislation system about customs and a customs-relating legislation system In particular:
Here are the most important and outstanding legal documents about carrying out customs in Vietnam:
3 Consolidated documents of Law on Customs 2014 (12/VBHN-VPQH)
Decree 154/2005/ND-CP dated December 15, 2005, stipulating a number of detailed articles of customs formalities, customs inspection, and customs supervision
Circular No 194/2010/TT-BTC, dated December 6, 2010, guiding on customs formalities, inspection, and supervision; export tax, import tax, and tax management for exported and imported goods
6 Decree 128/2020/ND-CP regulating penalties for administrative violations in the field of customs
7 Official Dispatch 19046/BTC-TCHQ guiding the implementation of the provisions of the Law on Customs 2014
8 Circular 31/2022/TT-BTC on the List of Vietnam's export and import goods
9 Decision 874/QD-TCHQ on promulgation of customs procedures applicable to commercial imported, exported goods
10 Circular No.39/2018/TT-BTC,amended to Circular No 38/2015/TT-BTC, dated March 25, 2015 guiding customs supervision inspection
(source: (Thu Vien Phap Luat, n.d.))
Documents related to Customs such as Commercial Law 2005; Civil Code 1985 and Civil Code amended in 2005; Civil Aviation Law 1991 and Civil Aviation Law amended in 1998, 2006; Maritime Code 2005; Law on Export Tax and Import Tax 2005; Law on Special Consumption Tax;
The international legal basis is documents developed by agreements between countries, often called international treaties They include international treaties on customs and customs-relating international treaties
Convention establishing a Customs Cooperation Council (CCC), now called World Customs Organization (WCO); Convention Kyoto 1973 and Convention Kyoto Revised 1999; ASEAN Customs Agreements 1997; ASEAN–India Free Trade Area (AIFTA); Harmonized Commodity description and coding system, 1988 (Harmonized system); General Agreement on Tariffs and Trade, 1947 (GATT); and Trade Related Intellectual Property Rights, 1995 (TRIPS)
International treaties related to customs activities that Vietnam has joined or recognized: United Nations Convention on Law of the Sea - UNCLOS, 1973; Chicago Convention on International Civil Aviation, 1947; Vienna Convention on Consular Relations, 1963; Vienna Convention on the Law of Treaties, 1969; and Convention on the Privileges and Immunities of the United Nations, 1946.
Details of custom formalities
1.3.1.1 A customs document relating to customs formalities
In accordance with Clause 1, Article 24, (Vietnamese Law on Customs, 2014), a customs document includes: a A customs declaration or documentary evidence in substitution; b Relevant documentary evidence: Sale contract; Commercial invoice; Bill of lading; Certificate of origins of goods; Import or Export permit; Notice of specialized inspection results or exemption from specialized inspection; Documentary evidence related to goods as prescribed by corresponding regulations of law
1.3.1.2 A customs document set for imports
Circular (No.39/2018/TT-BTC, 2015), amended to Circular No 38/2015/TT-BTC, dated March 25, 2015, regulates a customs dossier of imports in the Article 16, consisting of:
+ A customs declaration (form No 01 in Appendix II hereof);
+ Commercial invoices or equivalent documents if the buyer has to pay the seller:
+ Bill of lading or other transport documents of equivalent value;
+ The import license or a document permitting the import issued by a foreign trade authority if required;
+ The certificate of eligibility to import prescribed by investment law: 01 photocopy while following procedures for import of the first consignment; + Value declaration;
+ Documents certifying goods origins specified in Circulars of the Minister of Finance on determination of origins of exports and imports;
+ Required documents/contracts regarding specific products (machinery, equipment, school or research institute - relating goods/services)
1.3.1.3 A customs document for importing frozen meat
From the documents regulated above and (Vietnamese Law on Veterinary Medicine, 2015), businesses importing frozen meat need to prepare the following customs documents:
+ Inspection certificate: Veterinary Certificate (Article 41, Vietnamese Law on Veterinary Medicine);
+ Notice of specialized inspection results: Certificate of Health by export country; + Documents certifying goods origins: Certificate of Origin (C/O)
+ Documentary evidence related to goods as prescribed by corresponding regulations of law: Packing list;
1.3.2 Time limit for submission of customs documents
In accordance with Article 25, (Vietnamese Law on Customs, 2014), the time limit for submission of customs documents follows the regulations below:
(1) The customs declarations shall be submitted: Before goods arrive at border checkpoints or within 30 days after goods arrive at border checkpoints regarding imported goods;
(2) Customs declarations are valid for customs formalities within 15 days from the day on which they are registered
(3) The time limit for submission of relevant documents in customs documents:
+ Regarding e-customs declaration, when customs authorities conduct an examination of customs documents and physical inspection of goods, customs declarants shall submit paper documents in customs documents, except documents that are already available in the national single-window communication system;
+ Regarding paper customs declarations, customs declarants shall submit relevant documents when registering their customs declarations
1.3.4 Detailed steps in custom formalities for importing frozen meat
Figure 1 1 Steps involved in custom formalities for importing frozen meat (WTO)
Step 1 - Submit the application for quarantine of imported terrestrial animals and products
After the importing business has checked customs documents without mistakes, it needs to complete an application of quarantine of imported terrestrial animals and products thereof, aiming to get a Veterinary Certificate In accordance with Article 45, (Vietnamese Law on Veterinary Medicine, 2015): a The application for quarantine of imported terrestrial animals and products thereof shall include:
+ An application for guidance on quarantine of imported animals and products thereof of organizations/individuals (Form 19 Appendix V, Circular (No 25/2016/TT-BNNPTNT, 2016));
+ For animals and animal products subject to the management of other relevant state agencies, documents or licenses must be submitted according to regulations
**How to send documents: By post or email, fax, then send the original to the DAH
Within 05 working days from the day on which an application for a Veterinary Certificate is received, the DAH shall issue a written approval for quarantine of imported animals and products thereof and provide relevant guidance documents If the application is rejected, a written response shall be made containing the explanation b Documents on quarantine declaration of imported terrestrial animals and products thereof shall include:
+ A declaration form of quarantine (Form 03, Appendix V, Circular (No 25/2016/TT-BNNPTNT, 2016))
+ The Quarantine Certificate of the exporting country
Within 01 working day from the day on which the satisfactory documents of quarantine declaration of animals and products thereof as prescribed above are received, the DAH shall decide and notify the applicant organization/individual about the location and time of quarantine
Since April 2020, this step will be implemented nationwide through the Vietnam National Single Window (VNSW): https://vnsw.gov.vn/, at the Department of Animal Health (DAH) category This aims to optimize the time and cost for both importing businesses and the Sub-Department of DAH
Step 2 - Declare and submit customs declarations
According to Clause 1, Article 30, (Vietnamese Law on Customs, 2014), importing businesses can have registration of customs declarations in one of the 2 following methods:
● E-customs declarations shall be electronically registered;
● Paper-customs declarations shall be registered directly with customs offices Since April 2014, the Customs Authority has begun using the new VNACCS system for customs declarations With this system, customs declarants can register customs clearance documents by creating and sending information electronically through electronic forms Customs officers receive and check documents sent by businesses and notify the results through the VNACCS It means that customs declarants and customs officials do not have direct contact (except for some exceptional cases)
Step 3 - Get a Veterinary Certificate provided by the DAH
In accordance with Clause 1, Article 50, (Vietnamese Law on Veterinary Medicine, 2015), at the importing checkpoints, Department of Animal Health shall check the Quarantine Certificates and the seals/lead seals on vehicles used for transporting animals or animal products In this step, there are 2 following cases:
Case 1: Frozen meat meets prescribed quality standards
If the goods are conformable to the Quarantine Certificate granted, the importing business can get a Veterinary Certificate within 24 hours after completing this step
Case 2: Frozen meat doesn’t meet prescribed quality standards
The DAH doesn’t provide a Veterinary Certificate in any of the following cases:
● Animals and animal products that have passed through a country or territory that is having an animal disease epidemic that is susceptible to that animal species;
● The Quarantine Certificate of the exporting country is unconformable;
● Animals are suspected of infection; animal products carry dangerous pathogens according to the regulations of Vietnam's Law
*Note: The importing business is responsible for transporting and preserving the shipment while waiting for the result of the sampling process With frozen animal products, they must be stored at the border gate area until satisfactory inspection results are obtained (Circular (No 25/2016/TT-BNNPTNT, 2016), amended and supplemented in Clause 14, Article 1, Circular 35/2018/TT-BNNPTNT)
Step 4 - Receive the result of the stream
The customs system will carry out the streaming After receiving results from the system, the declaration can belong to 1 of 3 streams: green, red, and yellow In accordance with (Decision 874/QD-TCHQ, 2006), streaming is carried out as follows:
(1) If the goods belong to the green stream: a Enterprises have well implemented the legal regulations on customs; enterprises are exempt from detailed inspection of documents and detailed inspection of goods b Products are imported frequently, with a huge number c Import/export goods are accepted for customs clearance from the electronic customs declaration d Goods are exempt from detailed document inspection and physical inspection
(2) If the goods belong to the yellow stream: a Goods must be checked in detail on paper documents, but detailed inspection of goods is exempted If no further violations are detected, the customs clearance process will be conducted similarly to the green stream b Customs officers will follow Article 11, (Decree 154/2005/ND-CP , 2005) to exempt detailed inspection of goods for several cases when:
+ Exemption from inspection of exported and imported goods if businesses comply well with customs laws
+ Exported goods (except for exported goods made from imported raw materials and conditional exported goods according to the goods export management policy.)
+ Machinery and equipment that create fixed assets are exempt from tax, such as foreign investment projects and domestic investments
+ Goods from abroad are brought into free trade zones, bonded warehouses, transhipment ports, goods in transit, or cases of emergency relief according to the provisions of the law in Clause 1, Article 35 of the Customs Law, in addition There are also goods used in national security and defense, humanitarian aid, and temporarily imported and re-exported goods for a limited time in Articles 30, 31,
32 and 37 of (Decree 154/2005/ND-CP , 2005)
+ Special goods such as those decided by the Prime Minister
(3) If the goods belong to the red stream:
The customs officials will conduct a detailed inspection of the documents and the details of the goods In accordance with Circular 112/2005/TT-BTC, there are 3 levels of inspection: a Inspect the entire shipment b Physically inspect 10% of the shipment If no violation is detected, end the inspection If a violation is detected, continue checking until the extent of the violation is concluded c Physically inspect 5% of shipments, if no violations are detected, end the inspection If violations are detected, continue checking until the extent of the violation is concluded
In some situations, customs officials will propose other more appropriate forms and levels of inspection, and the streaming will be recorded
After checking customs documents for the green, yellow, and red streams, the customs officials will announce:
+ Import of goods is not allowed
Step 5 - Submit a set of custom documents
The importer needs to submit custom documents to the Sub-Department of Customs and wait for document checking A set of custom documents relating to importing frozen buffalo meat includes: Sale of contract; customs declaration; commercial invoice; Bill of Lading (B/L); Veterinary Certificate; Certificate of Health by export country; Certificate of Origin (C/O); Packing list; and other documents (if required)
Step 6 - Pay taxes and complete other obligations as prescribed by law
Buffalo frozen meat
1.4.1 Standards of Buffalo Frozen Meat
● The meat block is frozen, and sticky;
● There is an echo when tapped;
There is no ice on the surface but there may be a little snow on the outer surface of the meat block;
(source: (Thu Vien Phap Luat, 2020))
1.4.1.2 HS code of frozen buffalo meat
Meat of bovine animals, frozen
- Frozen bovine carcasses and half-carcases;
- Frozen bovine cuts, with bone in (excl Carcases and half-carcases);
- Frozen, boneless meat of bovine animals
1.4.1.3 Import tax of frozen buffalo meat
Table 1 4 Import tax on frozen buffalo meat
HS code Preferential import VAT ACFTA ATIGA AJCEP VJEPA AIFTA
(source: Import and export tariff schedule 2023)
To import frozen meat to Vietnam, importing businesses need to follow the policies specified below:
● Circular 38/2015/TT-BTC dated March 25, 2015, amended and supplemented 39/2018/TT-BTC dated April 20, 2018;
● Decree No 69/2018/ND-CP dated May 15, 2018;
● Decree No 43/2017/ND-CP dated April 14, 2017;
● Decree 128/2020/ND-CP dated October 19, 2020;
● Circular No 103/2015/TT-BTC dated July 1, 2015;
● Circular 14/2015/TT-BTC dated January 30, 2015;
● Circular 25/2016/TT-BNNPTNT dated June 30, 2016;
● Circular 24/2017/TT-BNNPTNT dated November 15, 2017.
General AIFTA
The General ASEAN (Association of Southeast Asian Nations) India Free Trade Agreement, commonly known as AIFTA, is a regional trade agreement between the ten member countries of ASEAN and India Its objectives are to promote trade and economic cooperation by eliminating or reducing tariffs and non-tariff barriers on goods, as well as facilitating investment flows and enhancing economic integration between the participating countries
Currently, AIFTA has had a positive impact on import-export activities between Vietnam and India and contributed to the growth of bilateral trade According to the AIFTA, businesses that want to import frozen meat from India can get special preferential tax rates of 0% All Vietnamese import businesses should follow Vietnam's special preferential import tax schedule between 2022 - 2027 to conduct their frozen- importing performance effectively
Overall, the General ASEAN India Free Trade Agreement (AIFTA) has played a crucial role in fostering economic integration and strengthening trade relations between
Vietnam and India It continues to serve as a foundation for importing Vietnamese businesses, especially startups grow their revenue and scale from scratch.
OVERVIEW OF NHAT THANH DUC LIMITED COMPANY
General introduction
• The name of the company: NHAT THANH DUC COMPANY LIMITED
• Abbreviation: Nhat Thanh Duc Co., Ltd
• The headquarters: No 109 Le Dinh Ly, Vinh Trung Ward, Thanh Khe District,
• Date of business license: April 19th, 2022
The NHAT THANH DUC CO , LTD was established in April 2022 It specializes in importing frozen meats, such as chicken, beef, pork, and buffalo, from European and Asian markets Initially, the company faced challenges due to its startup status, limited working experience, and competition with well-running enterprises in Danang Additionally, COVID-19’s consequences and the economic downturn have significantly prevented the growth of the exporting-importing market
However, with strong efforts, the company has quickly reached proper markets and established relationships with reliable suppliers and customers This has helped the company overcome challenges and maintain a stable sales volume up to now Currently, the company has worked with a wide network of international suppliers from different countries, such as Germany, Poland, Australia, India, and more It also partners with reliable wholesale distributors, retailers, processors, and food service providers in the Northern and Southern regions of Vietnam
2.1.2 The business fields of the company
2.1.2.1 Business environment a Targeted market and customers
Although Nhat Thanh Duc Co., Ltd is located in Danang, it mainly provides services in Hai Phong, Ha Noi, and Ho Chi Minh In particular, Ho Chi Minh accounts for nearly 45% of the market share because the majority of processor and food service companies are distributed in this market Ha Noi and Hai Phong account for 25% and 20% in the equivalent figure Finally, the others contribute 10%
Figure 2 1 Nhat Thanh Duc Co., Ltd’s targeted market
The company mainly imports frozen meat, including chicken, buffalo, beef, and pork Buffalo normally accounts for about 50% of the company’s monthly revenue Beef accounts for roughly 25%, followed by pork and chicken, which account for 15% and 10%, respectively
Figure 2 2 Nhat Thanh Duc Co., Ltd’s targeted market
Currently, the company focuses on 3 main groups of customers:
● Retail sector (30%): Personal customers, local grocery shops, or mini-marts
Nhat Thanh Duc's targeted market
Ho Chi Minh Ha Noi Hai Phong Others
● Foodservice sector (50%): Restaurants, hotels, cafés, canteens, catering companies, and street food vendors
● Industrial consumers (20%): Food processing companies, ready-to-eat meal manufacturers, and institutional buyers such as schools, hospitals, and corporate cafeterias b Main suppliers
Nhat Thanh Duc Co., Ltd has been a partner with the suppliers in the 3 following regions:
● Asia (60%): India, Malaysia, and Japan;
● Europe (30%): Denmark, Germany, Poland and the Netherlands
● Americans (10%): The US and Brazil
However, the majority of goods are buffalo imported from India Other types of frozen meats, such as chicken, beef, or pork, are mainly imported from the European market c Competitors
At Nhat Thanh Duc Co., Ltd, competitors are businesses that distribute imported frozen meat to local markets, such as Fish Asia Company Limited, Ha Noi Nutrition Food Joint Stock Company, Huong Thuy Corp, and Huong Thuy Corp
Being a professional company in importing frozen meat from international markets, Nhat Thanh Duc Co., Ltd specially provides the following services:
● Distribute frozen meat to wholesale distributors, retailers, food service providers, and other customers within the domestic market
● Offer flexible delivery options, as well as ensure the delivery time of orders;
● Offer expertise and guidance on product sections and how to store them to minimize product spoilage and ensure freshness.
Organizational structure
Figure 2 3 Nhat Thanh Duc Co., Ltd’s organizational structure
The director decides on strategic policies and manages the business activities Currently, Nhat Thanh Duc Co., Ltd only has one director – CEO and no CEO assistant to support him in tackling relevant tasks Thus, the director will directly evaluate the performance of importing contracts and business departments, as well as address any unexpected problems
Besides that, because of the small number of employees, the director assists in the partial performance of the Sales department In particular, he directly works with great and long-established customers (e.g business to business) to promote sales effectively
They are responsible for developing relationships with targeted customers, launching useful advice relating to the company services, as well as finding potential customers to grow the business market Moreover, they need to maintain strong relationships with old customers to increase revenue and profit sustainably
Notably, the Sales Department frequently works with the Export-Import Department to have updates about the amount of imported meat, its prices, and its originals This is especially important to negotiate contracts with potential customers
They have responsibility for monitoring customer debt, and the financial performance periodically Additionally, they tackle tax-related problems or any other financial mistakes, aiming to ensure the smooth process of buying and selling products
In addition, the Finance–Accounting Department needs to update changes or additions regulated by the Vietnamese government and Vietnamese Legislation to ensure the strict account principles and create an ethical business environment
They are in charge of completing detailed contracts, negotiating prices, opening declarations, and doing customs clearances for import shipments They always work with customs to receive imported goods, as well as stay up-to-date with changes in trade policies, tariffs, and trade agreements regulated by Vietnamese Legislation and Vietnamese Law on Customs
Moreover, the Export-Import Department encompasses other areas, including trade compliance, market research and analysis, risk management, and supplier relations This helps the business determine the number of potential suppliers, aiming for a cut down on the cost of goods and services
The Administration Department typically manages office operations, coordinates administrative activities, oversees facilities and resources, handles communication and correspondence, and provide support to employees
In particular, Nhat Thanh Duc Co., Ltd’s administration employees recruit the company’s personnel and infrastructure, as well as give proper solutions relating to administrative issues and employee benefits They normally exchange with the director to establish useful regulations for the use of assets and types of equipment.
Resources
Table 2 1 Nhat Thanh Duc Co., Ltd’s infrastructure
Despite its small scale, the company has been fully facilitated with various office equipment This aims to create a beneficial working environment, as well as encourage the staff’s performance effectively Currently, the company mainly outsources transportation vehicles, warehouses, loading and unloading vehicles, etc, to conduct delivery and package-related activities flexibly
Besides its headquarters in Danang, Nhat Thanh Duc Co., Ltd has 2 representative employees in Hai Phong and Ho Chi Minh They work as assistants for the Director and the Export-Import Department to promote the customs process and work with logistic agencies more conveniently Basically, all the goods are shipped to the Hai Phong Port and Cat Lai Port (Ho Chi Minh City)
2.3.2.1 Human resources categorized by education
Table 2 2 Human resources by the education level
Sum University-degreed College-degreed
At Nhat Thanh Duc Co., Ltd, the majority of human resources achieve high education levels through college and university degrees There are 11 employees studying at universities (78%) and 3 employees graduating from colleges (22%)
However, this qualification evidence can not actually reflect each individual’s final performance, which depends on various factors like skills, experiences, and especially personal career ethics
2.3.2.2 Human resources categorized by gender
Table 2 3 Human resources by the gender
As can be seen in the table, there are no significant differences between the male (36%) and female employees (64%) Actually, the majority of tasks relate to contract and documentation control; thus, the number of females is slightly higher than the figure for males, thanks to their careful and meticulous characteristics However, some positions require high-frequency traveling or communications and the male employees have been performing better
Nhat Thanh Duc Co., Ltd started with a capital of nearly 10 million Vietnam Dong and has become one of the well-established companies in importing frozen meat in Danang City Initially, the company mainly raised capital from the shareholders and the bank to grow the business network Up to now, the company’s financial resources have been well-maintained thanks to effective development strategies and a stable number of customers.
Business performance (Performance results)
Table 2 4 Business performance between 2022 and 2023
Income from financial activities 1,086,714.3 1,930,807.1 Expenses for financial activities 423,890.4 645,789.4 General & administration expenses 1,625,789.5 2,445,223.6
Figure 2 4 The revenue growth between 2022 and 2023 (Finance – Accounting Department)
In the year 2022, the company faced a range of challenges since it was only a startup business and under the negative impact of COVID-19 With strong efforts and effective strategies between 2022 and 2023, Nhat Thanh Duc Co., Ltd recorded positive signs that its revenue in 2023 increased by 17.17% compared to the figure in 2022 It is simply because the company has gained a certain market share in the North, as well as the South and started having long-term contracts with reliable worldwide suppliers with reasonable price levels
Figure 2 5 Increase in the retained earnings between 2022 and 2023
However, the general and administration expenses recorded a dramatic increase of 50%, mainly because of the cost of infrastructure and staff management, training programs, and marketing costs, This also means that the retained earnings in the year
2022 nearly grew gently compared to that of 2023, around 8% (680,000 USD)
From that, Nhat Thanh Duc Co., Ltd has been proving its effective business performance, with a stable increase in its retained earnings The profits are crucial to promote the business to invest and expand production and services effectively It is a great opportunity to gain its position in the export-import market in Vietnam.
CUSTOMS FORMALITIES PROCESS IN IMPORTING FROZEN
Overview of the frozen buffalo meat-importing activities from India at NHAT
3.1.1 Buffalo frozen meat - importing activities at Nhat Thanh Duc Co., Ltd
Table 3 1 The total value of frozen meat imported between 2022 and 2023
The table illustrates the total value of frozen meat imported by Nhat Thanh Duc Co., Ltd between 2022 and 2023 The highest contribution belongs to frozen buffalo, fluctuating between 52% and 55%, with specific values of 9.5 billion USD and 12.1 billion USD These values far exceeded the figures of the other types of meat, which proved the huge demand for buffalo in the Vietnamese market
Table 3 2 The value of imported frozen buffalo meat categorized by country
Malaysia 2,298,001.4 24.2 2,382,383.7 19.7 source: Export – Import Department
Currently, Nhat Thanh Duc Co., Ltd imports frozen buffalo meat from both India and Malaysia However, the Indian suppliers are the favored partner, delivering up to 75.8% and 80.3% of the total value
Here are several reasons explaining this tendency:
● Indian suppliers offer a huge amount of frozen buffalo meat at a low price and various processing sections like frozen buffalo corn, tongue, tail, or tendon
● Many customers prefer buffalo meat as the best alternative for other ingredients in several dishes, as well as processed food
● Frozen buffalo meat imported from India is a free-tax product, optimizing the customers, and importers’ budgets
● A dramatic growth has been recorded in the number of Indian tourists visiting Vietnam recently, with a total value of 12,6 million visitors in 2023
● Vietnamese and Indian businesses get benefits from the AIFTA Generation
3.1.2 Outstanding suppliers from the Indian market
Table 3 3 The list of Indian suppliers partnered with Nhat Thanh Duc Co., Ltd
Name Products registered to export to Vietnam
M/s Al Marzia Agro Foods Frozen Halal boneless buffalo meat
M/s Al-Dua Food Processing Pvt
Ltd Frozen Buffalo Meat, Chilled Buffalo Meat
Frozen Buffalo Meat, Chilled Buffalo Meat, Buffalo red offal (heart, liver, kidney), cheek meat, tongue, hock tendon, ta)
Frozen Buffalo Meat, Chilled Buffalo Meat, Buffalo red offal (heart, liver, kidney), cheek meat, tongue, hock tendon, tail, knee tendon, short tendon, paddy whack
Frozen Boneless Buffalo Meat; cheek meat, tongue, hock tendon, tail, knee tendon, short tendon, paddy whack; buffalo red offal (heart, liver, kidney)
Chilled/Frozen Buffalo Meat and Meat Products; cheek meat, tongue, hock tendon, knee tendon, short tendon, paddy whack, buffalo red offal(heart, liver, kidney)
Frozen Buffalo Meat, Chilled Buffalo Meat, Buffalo red offal (heart, liver, kidney), cheek meat, tongue, hock tendon, tail, knee tendon, short tendon, paddy whack
The company has partnered with 7 different Indian suppliers to import frozen buffalo meat to Vietnam These companies qualify for the HALAL Certificate, which is a mandatory certification in Muslim countries like India, Pakistan, and Indonesia Basically, HALAL certification is proof that a product meets the required ingredients and production conditions according to the provisions of the Quran Scripture and Shariah Law In particular:
● The product does not contain pork or any other ingredients that are prohibited for Muslim consumers, such as alcohol, beer, or alcohol-related substances
● The entire process of production, processing, packaging, labeling, storage, and transportation follows the Quran Scripture and Shariah Law
Currently, M/s Al-Hamd Agro Food Products Pvt Ltd and M/s Al-Dua Food Processing Pvt Ltd are currently the most important partners, accounting for nearly 80% of the total value of imported goods This is simply because they are the leading brands in India, satisfying all quality standards and safety measures and offering a flexible pricing system for importers Additionally, both M/s Al-Hamd Agro Food Products Pvt Ltd and Al-Dua Food Processing Pvt have been partnered with a lot of Vietnamese businesses, and had in-depth insights into Vietnamese Law on Customs Thus, the company can effectively restrict risks while conducting customs and animal quarantine policies.
Customs formalities process in importing frozen buffalo meat from India at
According to the data collected from the Export-Import Department, the author arranged all steps related to doing customs formalities into the process below (including names of the steps, implementation parties, and estimated time duration for the goods imported from the M/s Al-Hamd Agro Food Products Pvt Ltd.)
+ Company: M/s Al-Hamd Agro Food Products Pvt Ltd
+ Address: Sarai Miyan, Delhi Gate, Aligarh, 202001, India
+ Company: Nhat Thanh Duc Co., Ltd
+ Address: No 109 Le Dinh Ly Street, Vinh Trung Ward, Thanh Khe District, Danang City, Vietnam
Goods: Boneless frozen buffalo meat (28 tons – 1400 cartons – 1 container)
Table 3 4 Steps involved in customs formalities when importing frozen buffalo meat
Step Responsibility Documents Department Time
1 Submit the application for quarantine of
(1) An online application for Export-Import 5-6 days imported terrestrial animals and products guidance on quarantine of imported animals
(2) Required documents (Certificate of Health)
2 Declare and submit customs declarations
Refer to the information in the commercial invoice, B/L, C / O, and packing list to fill out the customs declaration
Certificate provided by the DAH
4 Receive the result of the stream
Bring the following customs documents:
5 Submit a set of custom documents
Bring a full dossier of customs documents:
Pay taxes and complete other obligations as prescribed by law
The following section will specifically analyze how Nhat Thanh Duc Co., Ltd performed custom formalities to successfully import one container of frozen buffalo meat from the Indian supplier, M/s Al-Hamd Agro Food Products Pvt Ltd
Figure 3 1 Nhat Thanh Duc Co., Ltd completed custom formalities to import frozen buffalo meat
The process above will be illustrated below:
After receiving an arrival note for the shipment of one container – imported frozen buffalo meat, the staff instructed the following steps:
(1) The Export-Import employees check a set of customs documents for their number and content If there is no mistake, the staff will apply for quarantine of imported terrestrial animals and products By contrast, the staff will exchange the exporter to modify the documents properly
(2) Then, the Export-Import employees use the customs documents to declare and submit customs declarations (normally conducted simultaneously with step 1)
(3) If the frozen buffalo meat satisfies the quality standards from the sampling step, the importing business can get a Veterinary Certificate provided by the DAH
(4) After the Export-Import staff declares customs declarations on VNACCS in step
2, the Sub-Department of DAH will announce the result of the stream Based on the result of the stream, the importing business needs to submit additional documents to qualify for the required conditions to make customs clearance
(5) Continuously, the importing business will submit a full set of customs documents to the customs official, and wait for a confirmation
(6) Finally, the importing business’s staff will pay taxes and complete other obligations as prescribed by law to make customs clearance for shipment
Step 1 - Submit the application for quarantine of imported terrestrial animals and products
According to the Sale of Contract, M/s Al-Hamd Agro Food Products Pvt Ltd sent the necessary documents to Nhat Thanh Duc Co., Ltd, including:
● Certificate of Origin (C/O) - Form AI: 1 original + 1 copy
● Bill of Lading (B/L): 3 original + 1 copy
After receiving the documents, Nhat Thanh Duc Co., Ltd, particularly the Export- Import Department in Danang, checked whether the documents matched what both parties exchanged in the Sale of Contract Several terms and content should be confirmed, such as the goods’ name, weight, and delivery conditions, etc
As can be seen in the Packing list in the figure 3.1, the description of goods:
● Cartons Containing: Indian frozen boneless buffalo meat
Similarly, the staff read the other documents (Certificate of Health, commercial invoice, B/L, Certificate of Origin, and HALAL Certificate) for a comprehensive check and confirmed with the exporter that there was no mistake in the documentation
When receiving the arrival notice for this shipment on 08/12/2023, Nhat Thanh Duc Co., Ltd prepared documents for the application for quarantine of imported terrestrial animals and products Then, the Export-Import staff submitted relevant information and attached documents through the Vietnam National Single Window (VNSW): https://vnsw.gov.vn/, at Department of Animal Health (DAH) category (Ministry of Agriculture and Rural Development) on 09/12/2023
**Note: To complete this step, the business must register a business account on VNSW
Figure 3 3 Navigate to Department of Animal Health (DAH) category at VNSW
Here are the fields that Export-Import staff filled out the application for quarantine of imported terrestrial animals and products:
(1) Profile information: Status (New), date (09/12/2023), and tax code (0402144361);
(2) Importing business/individual information: Name, tel, email, address, fax registered, the type of product (automatically filled)
(3) Product information: Frozen buffalo meat;
(4) Exporting business information: AL HAMD AGRO FOOD PRODUCTS PVT.LTD
(5) The information on processing facilities for terrestrial animal products in the exporting country: Al-Dua Food Processing Pvt., Ltd
(6) Information on quarantine locations: the import border gate (Cat Lai Port), the time (the end of December 2023), the purpose (food business), and the relevant documents (Certificate of Health & HALAL Certificate)
(7) Signing information: Name, signing position, and place
Besides that, the staff attached the required documents, including: HALAL
Slaughtering Certificate & Certificate of Health confirmed by the Veterinary Officer (Amrauli Aligarh, Dept of Animal Husbandry, Govt of Uttar Pradesh, Reg No UPVC-
After three days (12/12/2023), the company received written approval for quarantining imported animals and their products and provided relevant guidance documents
In 12 hours, the Sub-Department of Animal Health of Region I (2 Le Phung Hieu, Cat Lai Ward, District 2, Ho Chi Minh City)—the official responsible for conducting animal health and food safety sampling for imported meat—announced to the Export- Import staff the time and place of quarantine
Step 2 - Declare and submit customs declarations
To transmit a customs declaration, the Export-Import staff used the information from the commercial invoice, B/L, and packing list to fill out the electronic forms through VNACCS On 09/12/2023, when the shipment departed at Cat Lai, Ho Chi Minh, Nhat Thanh Duc Co., Ltd submitted a customs declaration and did not change any information relating to the importing and exporting businesses or goods until the sampling day
With this shipment, the Export-Import staff completed a customs declaration with
● Page 1: Exporting and importing business information
● Page 2: Note - Confirmation for C/O - form AI
● Page 3: Good description and tax payment
Here are the detailed steps in declare a customs declaration to import one container ò frozen buffalo meat from the Indian supplier
Step 1 Click “To Khai Hai Quan” tab in ECUS – VNACCS and select “Dang ky moi to khai nhap khau (IDA)”
Step 2 Get declaration information from customs (IDB) “Lay thong tin to khai tu hai quan (IDB)”
In “Thong tin chung” tab, fill out the following fields:
• [Ma loai hinh]: A11 – Consumer goods
• [Ma hieu phuong thuc van chuyen]: 2 – Seaway
• [Co quan hai quan]: 02CI – CSGONKVI
• [Ma bo phan xu ly]: 01
• [Phan loai ca nhan/to chuc]: 4 - Business & Business
• [Ten]: Nhat Thanh Duc Co., Ltd
• [Dia chi]: 137 Phung Chi Kien, Hoa Minh, Lien Chieu, Danang, Vietnam
• [Ten]: Al-HAMD AGRO FOOD PRODUCTS PRIVATE LIMITED
• [Dia chi]: 5/5-, B-5, BEEMA NAGAR, ALAMPUR NEAR SAI MANDIR, SARSOL, G.T ROAD, ALIGARPH, UTTAR PRADESH INDIA
• [Tong trong luong (Gross)]: 28.840 – KGM
• [Dia diem do hang]: VNCLI – Cang Cat Lai (HCM)
• [Dia diem xep hang]: INPAV – PIPAVA (VICTOR) POR
• [Phuong tien van chuyen]: 9999 GSL NICOLETTA//346E
In “Thong tin chung 2” tab, fill the following fields:
• [Van ban quy pham]: FT02
• [Giay phep nhap khau]: BNNPYNT12230122313
• [Phan loai hinh thuc hoa don]: Click [Hoa don]
• [Phuong thuc thanh toan]: KC
• [Ma phan loai hoa don]: A
• [Dieu kien hoa don]: CIF
• [Ma dong tien hoa don]: USD
• [Tong tri gia hoa don]: 90.300
• [Ma phan loai khai tri gia]: 6
• [Chi tiet khai tri gia]: 16112023#&.Phuong thuc thanh toan: TT Ma ho so KD mot cua: BNNPTNT12230122313
• [Ghi chu]: Hàng có C/O AI: EIC/2023/013/0961350A/00945221 ngày 20/11/2023
• [Ma xac dinh thoi han nop thue]: D
In “Danh sach hang” tab, click “Them moi” button and fill out the following fields:
• [Ma so hang hoa (HS)]: 02023000
• [Mo ta hang hoa]: Thịt trâu không xương đông lạnh (Thịt bắp rùa) - INDIAN FROZEN BONELESS BUFFALO MEAT (KASILA), Hiệu AL MINHA, quy cách: 20kg/thùng Mới 100%
• [Ma nuoc xuat xu]: INDIA
• [Don gia hoa don]: 3,225 USD KGM
Step 3 Declare customs declaration information in advance “Khai truoc thong tin to khai hai quan – IDA”
Click “2 Khai truoc thong tin to hai hai quan – IDA” button and wait for confirmation In the “Thong tin chung 2”, the Export-Import staff checked all the information relating to the customs declaration, especially the value of tax, the good description, and the importing–exporting parties’ profile
In “Quan ly to khai” tab, click “Them moi chung tu dinh kem” and select “C/O”
In the new tab “C/O”, the Export-Import fill the following information:
After that, click the “File dinh kem” button and upload the “C/O PDF file” Finally, click the “Ghi” button and the “Khai bao” button to confirm IDA Step 4 Submit the customs declaration
Click “3 Khai chinh thuc to khai (IDC)” and receive the announcement “Khai bao to khai thanh cong”
The VNACCS would automatically receive and send notices on guidance of customs formalities to the importing businesses In this situation, Nhat Thanh Duc Co., Ltd got several responses, such as whether the declaration was accepted or not, the declaration number, the customs clearance form, and the tax notice
Step 3 - Get a Veterinary Certificate provided by the DAH
After submitting a customs declaration, the staff in Danang booked an express delivery at Viettel Post to transfer a set of customs documents to the assistant in Ho Chi Minh City On 11/12/2023, the assistant in Ho Chi Minh received these dossiers
According to an announcement by the Sub-Department of Animal Health of Region I, the sampling process would be conducted at the Cat Lai Border Gate, at 3 PM on 15/12/2023 Thus, on 15/12/2023, the assistant came to the destination mentioned, together with available customs documents
Evaluate the process for customs formalities relating to importing frozen buffalo
Based on the process measures mentioned in the theoretical basis, the data collected from the company’s departments, and a detailed analysis of the in-practice process, the author has some evaluations about the steps involving custom formalities when importing frozen buffalo meat from India at Nhat Thanh Duc Co., Ltd
The time is assessed depending on the progress of conducting the steps, such as submitting an application for a sampling process, having declarations, getting a Veterinary Certificate, or the duration of waiting for the results from the DAH Here are its strengths and weaknesses
With professional skills, the company’s staff ensures a relatively quick and smooth process, which helps optimize the time, as well as restrict as many mistakes as possible The workload is distributed and specialized in each department, and each employee will undertake specific tasks in the process Thus, all parties can easily coordinate with each other and complete all activities as soon as possible
The step involving transmitting declarations is completed with electronic forms, which shortens the process Notably, each step doesn’t take more than 3 days, except for the result of the stream In particular:
● Step 1 - Submit and get a confirmation for the application for quarantine of imported terrestrial animals and products: 3 days;
● Step 2 - Declare and submit customs declarations: 30 minutes;
● Step 3 - Get a Veterinary Certificate provided by the DAH: 1 day;
● Step 4 - Receive the result of the stream: 10 days;
● Step 5 & 6 - Submit a set of customs documents & pay tax: 1 day;
Additionally, while Nhat Thanh Duc Co., Ltd waited for the stream result, the importing business could move to the sampling process simultaneously This helped the company optimize the total time (around 10 days) to complete all customs formalities
While the shipment departs in Cat Lai Port (Ho Chi Minh), some important steps in the process need to be done by the Export-Import and Finance-Accounting staff in
Danang This takes time to exchange information and updates between the departments and even leads to several unexpected mistakes
Besides that, the company takes the third party’s support (e.g., logistic agencies) in transporting goods from the port to the warehouse It means that the process might partly depend on the logistics team, making it inconvenient for time, and negatively impacting the business performance
Costs include operation and administration expenses (human resources, infrastructure, OT fee, etc.) Having an effective and well-structured cost control is one of the most important factors in achieving the finest results while completing custom formalities
The business has good time control among the steps and a proper distribution of human resources for each step It is a great opportunity to save the storage cost and demurrage charge for the shipment
Specifically, to complete the process for custom formalities in importing buffalo frozen meat from the Indian market, Nhat Thanh Duc Co., Ltd arranged the staff as follows: Export - Import Department (2 staff - Danang and 1 assistant - Ho Chi Minh) and Finance - Accounting Department (1 staff - Danang) The company always has 1 assistant in Ho Chi Minh, which is beneficial for working with the customs officials and submitting relevant documents All these export-import employees reported updated information about the shipment (goods, time, and cost), helping the finance-accounting employees easily follow and estimate the budget
Besides that, the Finance - Accounting Department has distributed a reasonable budget for the company’s infrastructure, aiming to save costs and utilize all equipment for the best performance
The process of shipping documents from Danang to Ho Chi Minh to conduct the required steps in doing customs formalities charges the company a certain amount of money
Because Nhat Thanh Duc Co., Ltd doesn’t have a professional team to transfer goods from the port to the warehouse, it’s also required to pay third parties for this service More specifically, the company only used a sole service for transportation (not door-to-door packages), so the cost per shipment might be higher compared to the average logistics cost In addition, the company had a payment for hiring a cold storage warehouse for frozen buffalo meat storage while waiting for customs clearance confirmation, which might charge between 250,000 and 400,000 VND
This criterion is based on the level of satisfaction of the external and internal parties relating to the steps while implementing custom formalities Here are several personal evaluations of the quality measure
With dedication and enthusiasm, the staff always ensures the best performance and minimizes as many mistakes as possible This helps increase the trust between customers and suppliers Once the staff processes all documents smoothly, the customers can easily get the goods, and the suppliers can quickly get a full payment from the importing company
Regarding highly valued shipments like frozen buffalo, Nhat Thanh Duc Co., Ltd always arranges for export-import specialists in Danang to check all documents in detail and reply to its suppliers Then, these employees transfer the customs dossier to Nhat Thanh Duc Co., Ltd’s representatives in Ho Chi Minh to conduct the other steps This helps the director easily manage the quality performance in the process relating to customs formalities
Since its establishment, the company has applied proper policies to support the staff’s working environment comprehensively That’s why many employees show respect to the director and their department During my internship, the employees were always willing to support the author and answer any questions relating to professional knowledge
RECOMMENDATIONS
Provide customs compliance training
Through comprehensive training programs, employees can be equipped with the knowledge and skills to navigate complex customs regulations and procedures effectively Moreover, they gain insights into international trade compliance best practices and emerging trends in customs regulations
The company should cover a wide range of topics, including import/export documentation requirements, tariff classifications, valuation methods, trade agreements, and customs clearance procedures Besides that, adding hands-on exercises and case studies is especially effective for reinforcing learning and enhancing practical application This will surely contribute to improved efficiency, accuracy, and customer satisfaction in customs clearance processes
The company should have 3-4 meetings/ month to exchange academic knowledge relating to export-import, customs formalities, resource distribution,etc This helps the director, as well as the departments’ leaders understand the staff’s current performance, and propose proper training programs
To organize training programs, the Administration Department needs to have a detailed and well-structured plan for the Director and other departments After getting the support, the Administration Department should exchange all expected costs with the Finance - Accounting Department for the estimated budget effectively (1.000.000 VND/month) Finally, the leaders work with each other to lead excellent training.
Modify the policies relating to employee welfare
Human resources are the backbone of business operations and play a crucial role in driving organizational growth Beyond executing professional tasks, they shape the company's culture, foster customer relationships, and enhance product and service quality That’s why the company should prioritize investment in human resources, especially their welfare-relating terms
Indeed, investing in employee welfare can also improve the company's reputation as an employer of choice, attracting top talent and strengthening the organization's competitive position in the market Therefore, allocating resources to support employee welfare initiatives is not only a moral imperative but also a sound business strategy that drives long-term success and sustainability
Some notable policies that companies can consider, such as competitive salaries, comprehensive healthcare coverage, flexible work arrangements, and opportunities for professional development, demonstrate a commitment to employees' well-being and encourage loyalty and dedication
The company should start promoting recruitment programs for talented employees, focusing on the task-distributed plan equally and effectively Continuously, the Administration Department can propose the policy “working hybrid with a maximum of 8 online hours per month” This might make the staff feel more flexible, and easily solve unexpected problems without getting an allowance from the leaders and director
Finally, the business should set up team buildings to connect and expand the networking site amongst team members effectively Each department can freely organize their workshops, or picnics themselves, with a certain budget supported by the Finance - Accounting Department (e.g 500.000 VND/month/department)
Invest in infrastructure and open new branches
Although the company is currently fully equipped, it’s necessary to invest in advanced infrastructure like upgrading warehouse facilities, implementing advanced logistics systems, and enhancing transportation networks This can help the company reduce the cost of hiring the external logistic team, optimizing the total expense
Additionally, opening new branches in Ho Chi Minh or Hai Phong can help expand the company's reach, tap into new markets, and increase the efficiency in processing custom documents More notably, this investment saves the cost and time of transferring documents from the headquarter
The company should invest more in state-of-the-art infrastructure, such as the RFID, projector, personal laptops, to bring a beneficial working environment to the staff
Moreover, the Director should consider opening a new branch in Ho Chi Minh - the leading consumption market for imported meat at Nhat Thanh Duc Co., Ltd From that, the company will have specific training strategies for the talented employees, aiming to become the export-import and sales specialists in 12 months This helps the headquarters in Danang have more time to expand Nhat Thanh Duc Co., Ltd's market to other regions in the future
The report is based on the theoretical basis relating to customs formalities and the in-fact steps involving doing customs formalities at Nhat Thanh Duc Co., Ltd From that; the author has in-depth insights into custom formalities and how to implement them to import frozen buffalo meat from the Indian market
In addition, the author contributes some potential solutions to improve business performance, including providing customs compliance training, investing in infrastructure, and establishing various policies supporting employees’ welfare
During the internship, the author learned a range of useful and professional knowledge, participated in several training activities at the company, and worked with the in-practice process, which made the experience more meaningful and effective
However, the internship period is not long, and the exposure to the in-reality process is not dedicated, the author hopes that the instructors, teachers in the department, and the company will give feedback to make the report more all-rounded During the reporting process, the author received dedicated guidance from the instructor, the company’s departments, and the director It is a great condition to help the author to complete the assignment
Once again, I greatly appreciate the assistance of Ms Tran Thien Tri and Nhat Thanh Duc Co., Ltd
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