Licencing criticism is rebutted

Deputy Minister of Industry and Trade Tran Tuan Anh, before the Vietnam Business Forum (VBF) last week, talked down concerns over Circular 24/2010/TT-BCT, effective from July 12, 2010.

Circular 24 on automatic import licencing requires importers of a number of commodities to submit automatic import licences for customs clearance.

Under the circular, the time limit for the issuance of a licence is lengthened to seven days. With the application and issuance of the licence required to be done by regular mail, the procedure now likely takes 10 working days,  triple the time previously required.

Circular 24 also specifies that the automatic import license will be valid for 30 days only, which means reapplication is a must for any logistic changes regarding the same lot of goods.

“Under the WTO Import Licencing Agreement, Vietnam is required to explain why such measures are needed. However, despite formal requests by its trading partner, Vietnam has yet to give a justification for these measures to the WTO,” said Seck Yee Chung, representative of the VBF’s Manufacturing and Distribution Working Group.

According to Eurocham Vietnam, in assessing Vietnam’s international trade law obligations, articles 1, 2 and 4 of Circular 24 might breach Vietnam’s obligations under the relevant World Trade Organization (WTO) commitments dealing with import licencing, namely the Agreement on the Import Licencing Procedure.

Anh said: “The purpose of this rule is not to restrict the import volume of enterprises but assist state management, especially in import volume data collection.”

He said businesses were free to decide their import volume and under Circular 24 they only spend seven days to obtain such a licence, while under WTO regulations it could be up to 10 days.

Nguyen Ngoc Hoa, an executive of local import and export firm Inco Company, claimed her firm generally had to wait 13-14 working days for such a licence.

Circular 24 adds more items to the list of goods subject to automatic import licencing. The initial list under the old Circular 17/2008/TT-BCT included products such as plastics, cosmetics, ceramics and glassware, certain iron and steel products, certain electronic products including TVs, vehicles, and furniture. The additional goods as regulated under Circular 24 includes raw foods and edible products, drinks and beverages, clothing and footwear, and toys.

“It is time-consuming to submit and receive the application by post. Therefore, this costs the traders even more, especially in cases where the goods are shipped by air and only arrive in Vietnam one or two days after the date of shipment and traders have to pay extra fees for storing their goods at the airport due to the delay in automatic import licence issuance,” Baker & McKenzie law firm stated on its website.

“Moreover, the import registration dossiers or the documents sent to enterprises could be lost due to the unreliability of the postal service, and government officials hold no responsibility in such a case,” the firm said.