Vietnam’s Customs Priority Regime (AEO): Benefits, Conditions & Recognition

Under the customs priority regime, is an enterprise given priority by the customs authority in completing goods handover procedures first?

1. Under the customs priority regime, is an enterprise given priority by the customs authority in completing goods handover procedures first?

Whether an enterprise is given priority by the customs authority in completing goods handover procedures first under the customs priority regime is prescribed in Article 9 of Decree No. 08/2015/ND-CP, as supplemented by Clause 6, Article 1 of Decree No. 59/2018/ND-CP, as follows:

Priority regime

1. The priority regime is implemented in accordance with Article 43 of the Law on Customs.

2. Enterprises are given priority by customs authorities and port, warehouse and depot operators in completing goods handover procedures first, and in prior inspection and supervision.

3. Where goods are subject to specialized inspection, the enterprise may take imported goods to its warehouse for storage pending the specialized inspection results, except where specialized inspection laws require inspection at the border gate. Where goods must undergo specialized inspection at the border gate, they are given priority inspection first.

4. Enterprises are exempt from post-clearance audits at customs offices, except as prescribed in Clause 1, Article 78 of the Law on Customs.

Thus, under the law on the customs priority regime, enterprises are given priority by the customs authority in completing goods handover procedures first.

2. Does an enterprise that has committed tax evasion satisfy the conditions for the customs priority regime?

The conditions for an enterprise that has committed tax evasion to be eligible for the priority regime are prescribed in Article 10 of Decree No. 08/2015/ND-CP as follows:

Conditions for application of the priority regime

1. Compliance with customs and tax laws

Within 02 consecutive years up to the time the enterprise submits its written request for recognition as a priority enterprise, the enterprise must not have violated tax or customs laws to the extent of being sanctioned for the following acts:

a) Acts of tax evasion; tax fraud; smuggling and illegal cross-border transportation of goods;

b) Administrative violations subject to sanctioning forms and levels exceeding the authority of the Head of a Customs Sub-department and equivalent titles.

2. Conditions on good compliance with accounting and auditing laws:

a) Applying accounting standards as prescribed by the Ministry of Finance;

b) Annual financial statements must be audited by an audit firm qualified to provide audit services under the law on independent auditing. The audit opinion on the financial statements in the audit report must be an unqualified opinion in accordance with Vietnamese auditing standards.

3. Conditions on the internal control system:

The enterprise must implement and maintain a system and procedures for managing, supervising and controlling actual operations throughout its entire import-export goods supply chain.

…

Thus, under the law, if an enterprise committed tax evasion within the 02 consecutive years up to the time it submits its written request for recognition as a priority enterprise, it will not satisfy the conditions.

An enterprise that committed tax evasion before that 02-year consecutive period may still satisfy the conditions.

3. Who is competent to issue the decision recognizing the priority regime for an enterprise in customs procedures?

The authority competent to issue the decision recognizing the priority regime for an enterprise in customs procedures is prescribed in Article 11 of Decree No. 08/2015/ND-CP, as supplemented by Clause 7, Article 1 of Decree No. 59/2018/ND-CP, as follows:

Procedures for recognition, extension, temporary suspension and suspension of the priority regime

…

2. Appraisal and recognition of priority enterprises

a) Within 30 days from the date of receipt of a complete dossier as prescribed in Clause 1 of this Article, the General Department of Vietnam Customs appraises and concludes on the recognition of the priority enterprise.

For complicated cases requiring consultation with relevant ministries and sectors, the appraisal period may be extended but not exceeding 30 days;

b) Where the enterprise satisfies the conditions, the Director General of the General Department of Vietnam Customs issues the decision recognizing the priority enterprise.

The decision recognizing a priority enterprise is effective for 03 years from the date of issuance and is automatically extended for a further 03 years if the enterprise continues to fully satisfy the prescribed conditions.

3. Temporary suspension of the priority regime: Where an enterprise fails to perform its responsibilities under Article 45 of the Law on Customs after being notified by the customs authority, the customs authority temporarily suspends application of the priority regime for 60 days.

…

Thus, under the law, the authority competent to issue the decision recognizing the priority regime for an enterprise in customs procedures is the Director General of the General Department of Vietnam Customs.

Notes on applying current legal provisions

This article belongs to the General Knowledge group and is presented for reference, helping readers understand the legal issue at an overview level before preparing dossiers or conducting transactions.

Legal provisions may change depending on timing, locality, dossier type and specific circumstances. Where it is necessary to determine the exact legal basis applicable to your dossier, you should contact an ANT Legal lawyer at 0966.475.966 for review and advice before proceeding.

Common risks to note

• Applying legal texts that have been amended, supplemented or replaced.
• Preparing incomplete dossiers, documents or evidence.
• Misunderstanding the applicable conditions, procedures, time limits or competent authority.
• Signing, filing or conducting transactions without fully assessing legal risks.

How can ANT Legal help?

ANT Legal assists in reviewing specific situations, checking dossiers, identifying the applicable legal basis, advising on handling plans, and representing you in working with individuals, organizations or competent authorities when necessary.

For quick advice, you may contact a lawyer at 0966.475.966.

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