Bonded warehouse mechanism lends a hand to smuggling Petroleum, cars, tobacco, beer and liquor products have been easily evading tax when entering Vietnam because of the loosened regulations on bonded warehouse operation.   The Ministry of Finance, in a report to the Prime Minister, expressed its worry that the bonded warehouse mechanism has been exploited to bring smuggled goods to Vietnam. Import and export products can be kept at bonded warehouses before they are re-exported to third countries. As bonded warehouses are considered the non-tariff area, the export products there are not taxed. Analysts have noted that the trade activities have similarities with the mode of temporarily importing for re-export later. However, the bonded warehouse regulations are much more simple. The enterprises, which registered the business mode of temporary import for re-export later, can also easily ask for the permission to leave goods at bonded warehouses. The problem is that the goods owners do not export the products as committed, but they slip the products in the domestic market for domestic consumption. In some other cases, they brought the goods to the third countries (China, for example), but did not make the customs declarations about this. Customs agencies lately discovered the case of smuggling 125,000 tobacco packs with Esse, 555 and Camel brands. The consignment of goods came from Singapore under the mode of temporary import for re-export later. However, after the procedures for re-export were fulfilled, the products were then carried back to Vietnam on boats. In another case, Tuan Dong Company Ltd imported 36 cars from Hong Kong. After fulfilling the procedures for exporting the cars, they bore counterfeit number plates to illegally enter the Chinese territory. A report of the Ministry of Finance showed that 4,499 customs declarations were made from January 1, 2012 to May 31, 2013 for liquor imports of different kinds, worth $1.7 billion. There were also 122 customs declarations for the import cars worth $4 million and 109 declarations for refined sugar, worth $19.8 million. The imports have been left at the bonded warehouse before they are shipped to Cambodia and China. The ministry has also found 3,013 customs declarations for the imported tobacco products. The imports worth $180 million have also been “residing provisionally” at bonded warehouse, waiting to be shipped to China, Cambodia, Singapore, Thailand and Laos. In general, the goods have been kept at the bonded warehouse in HCM City, Hai Phong, Quang Ninh and Lao Cai. However, Hai Phong and Quang Ninh prove to be the best “residence” for the goods which would be exported to China through the northern border provinces. Meanwhile, the goods at the HCM City bonded warehouse would be headed for Cambodia. The Ministry of Finance has urgently requested customs agencies to tighten the control over the activities of importing temporarily for re-exporting alter and check the regulations of bonded warehouse. Customs officers have been requested to carry out the 24/7 supervision over the bonded warehouses to be sure that all the goods really leave the Vietnamese territory after the goods owners fulfill the procedures for re-export. The ministry once asked goods owners to pay import tax for the imports and get tax refund when they re-export the products. However, the ministry failed to implement the plan. Hundreds of containers got stuck at the ports just within one month, because the goods owners did not have money to pay tax. VietNamNet Bridge. Pham Huyen