Ministry of Industry and Trade: Should not ban the import of virtual currency mining machines

In a document sent to the Prime Minister, the Ministry of Industry and Trade proposed that the Government not apply the measure of stopping the import of automatic data processing machines (virtual currency mining machines) with HS classification code 8471.80.90 as previously proposed by the Ministry of Finance.

The Ministry of Industry and Trade said that, through practical analysis, the scope of impact if the import of this group of goods is stopped is very wide. According to statistics from the General Department of Customs, in 2017, there were more than 27,239 products and in the first 5 months of 2018, there were more than 15,117 products with this HS code imported to Vietnam.

"Suspending imports while the Ministry of Finance has not yet specifically determined the HS code for the goods that need to be managed is not consistent with the provisions of the Law on Foreign Trade Management on the freedom of import and export business and the application of temporary import suspension measures," the Ministry of Industry and Trade stated its opinion.

Furthermore, machines and equipment used to mine virtual currencies are multi-purpose items, used for different purposes depending on the user. The Ministry of Industry and Trade is concerned that stopping imports will cause negative impacts, affecting the production and business activities of enterprises using the equipment.

Citing the comments report of the Ministry of Information and Communications, this agency said that virtual currency mining is not only carried out by automatic data processing machines, but also takes place on mobile devices, cloud platforms, and hard drives. In the future, with the explosive development of technology, the variety of virtual currency mining machines, as well as virtual currency mining activities, will increasingly increase. Therefore, the Ministry of Information and Communications believes that, when the HS code has not been specifically determined, it is only necessary to temporarily stop importing ASIC virtual currency mining machines (specialized mining machines manufactured to perform the function of mining virtual currency), and this measure should not be applied to VGA mining machines (machines with functional blocks, assembled like regular PCs).

In addition, current laws do not have specific regulations on domestic management measures for virtual currencies, as well as production, business activities and use of automatic data processing machines to mine virtual currencies.

Therefore, the Ministry of Industry and Trade assesses that the temporary import suspension measure, if applied, will not ensure effectiveness and will not achieve management goals due to the diversity of virtual currency mining equipment, especially in the era of the 4.0 industrial revolution and the information technology boom.

In addition, the Ministry of Industry and Trade proposed that the Government assign the Ministry of Finance to preside over and coordinate with ministries and branches to research, classify, and apply appropriate HS codes to automatic data processing machines as a basis for applying appropriate management measures.

The Ministry of Justice shall coordinate with the Ministry of Information and Communications, the Ministry of Public Security, the State Bank and relevant ministries and branches to research and develop a legal framework and submit to competent authorities to issue legal documents to strictly manage and prescribe sanctions for violations of activities related to mining, trading and investing in virtual currencies and other similar products.

In April, Prime Minister Nguyen Xuan Phuc issued a directive requiring enhanced management of activities related to bitcoin and other virtual currencies. This directive was issued in the context of many activities of investing in, buying and selling virtual currencies, raising capital through initial coin offerings (ICOs), and using virtual currencies to raise capital through multi-level marketing, causing risks and disrupting social order.

Most recently, regarding the virtual currency business model, in April, dozens of investors went to the headquarters of Modern Tech Joint Stock Company in Nguyen Hue, District 1, Ho Chi Minh City, hanging banners accusing the company of appropriating more than 15,000 billion VND by calling for capital to buy virtual currencies Ifan and Pincoin (with interest paid). The amount of 15,000 billion VND was explained to be converted from 650 million USD of successful ICO (capital mobilization) from iFan, Pincoin and some other virtual currencies represented by Modern Tech.

Faced with shortcomings in management and trading of virtual currencies under the guise of multi-level marketing, deceiving people, in June 2018, the Ministry of Finance proposed to temporarily stop importing virtual currency mining machines and received the majority of support from ministries and branches.

The Government Office has issued a document conveying Deputy Prime Minister Trinh Dinh Dung's directive on strengthening the management of activities related to Bitcoin and similar virtual currencies. The Deputy Prime Minister assigned the Ministry of Industry and Trade to preside over and coordinate with the Ministry of Finance and relevant agencies to study and consider this proposal to stop imports.