Preventing fraud in mineral exports

According to the Anti-smuggling Investigation Department - General Department of Customs, one of the reasons for the increase in mineral export fraud is the change in the Government's management policy for exported mineral products. In 2012, the Prime Minister issued Directive 02/CT-TTg on "strengthening state management of mineral exploration, exploitation, processing, use and export activities", according to which most mineral products are banned from export, except for titanium ore which can continue to be exported until the end of June 2012.

Squadron 1 - Anti-smuggling Investigation Department inspects a detained coal ship (March 2011). Photo: HM

By 2013, in Notice No. 407/TB-VPCP, the Prime Minister allowed the continued export of some types of minerals in stock such as iron ore, ilmenite, lead, zinc, manganese, etc. At the same time, the Ministry of Industry and Trade and the Ministry of Construction also sent documents to a number of provincial and municipal People's Committees agreeing to continue exporting some types of minerals in stock. The Government's permission to continue exporting minerals stems from the need to remove difficulties for businesses, but there is a potential risk of trade fraud in exporting this item.

The characteristic of mineral and ore products is that they often do not have packaging or labels, and the goods are dumped on barges, ships, or in cargo holds (when exported by sea). Enterprises and entities can take advantage of this by falsely declaring the quantity, value, quality, and type of ore. When inspecting, the Customs authority mainly relies on the Certificate of Inspection (VILAS) as a basis for determining the standard export content, and cannot self-check and determine the content. To determine the quantity, the Customs authority also mainly relies on the quantity inspection of the competent authority or through scales at the border gates. If not equipped with scales, it cannot self-determine the quantity, weight, etc.

In addition, enterprises also show signs of price fraud. The main reason is that the payment method of the above subjects for mineral products is mainly payment by TT (payment by telegraphic transfer) or TTR (payment by transfer with reimbursement), leading to difficulties for the Customs authority in controlling the actual price of the export shipment. On the other hand, determining the actual transaction price of exported mineral shipments is relatively complicated because it is related to many factors such as the time of export, the quality of exported ore, payment activities... while verifying payment transactions with foreign elements is extremely difficult.

In order to limit trade fraud through prices for exported mineral products, and ensure correct and sufficient collection of taxable export products, the General Department of Customs has requested the Customs Departments of provinces and cities to direct their subordinate units to promptly rectify the price work for this product. If the declared price is found to be lower than the inspection price or the same type of mineral but the declared export price has a large difference at the same time, it will be transferred to post-clearance inspection for inspection and handling according to regulations. Recently, the General Department of Customs has issued a list of export goods risks and inspection prices. This is a measure to limit, prevent and effectively stop price fraud.

The Anti-Smuggling Investigation Department has also advised the General Department of Customs to direct provincial and municipal customs departments to strengthen control of the export of mineral inventories and fight against smuggling and illegal transportation of minerals abroad to prevent mineral fraud and smuggling.

Mr. Pham Ngoc Thach, Deputy Director of Lao Cai Customs Department:

To carry out the inspection and control of exported minerals, Lao Cai Customs Department has closely coordinated with inter-sectoral forces (Department of Industry and Trade, Market Management and Border Gate Management Board) in the province to inspect from production facilities to mines. In particular, inspection by methods such as: When enterprises register for export, they must register with the Department of Industry and Trade the license plate, vehicle number, driver name... so that the authorities can conveniently check when the goods are brought to the border gate. For some special mineral products (steel), at the border gate there is an inter-sectoral team to inspect and appraise the number of kilograms right at the mine. When the goods are transported to the border gate before completing the procedures, samples will be taken to compare with the content on the documents, the quantity is checked very carefully through the weighing station.

In addition, Lao Cai Customs Department also directed the Customs control force to focus on grasping the situation of the methods and tricks of the subjects' operations, promptly providing information to relevant units to proactively plan and organize the fight. Collect information of enterprises in the area, evaluate and analyze information to build QLRR records, enterprise management records and update them into the system.

Mr. Dam Viet Nghi, Deputy Director of Cao Bang Customs Department:

Through the cases of detecting and arresting illegal transportation of minerals across the border in Cao Bang, it is shown that the subjects often gather various types of ores in areas close to the border, outside the customs management area, then divide them into small groups and hire border residents to transport them across border trails during peak hours such as noon and night, making it difficult for the authorities to deploy and arrest them.

Cao Bang Customs Department has directed the Customs Control Team to strengthen inspection of the area, identify key routes, actively coordinate with the Customs Sub-Departments at border gates and competent agencies to deploy professional customs control measures to promptly detect, arrest and handle violations. From 2011 to 2012, Cao Bang Customs Department arrested 6 cases, confiscating 400 kg of tin ore, 928 kg of tungsten ore and 600 kg of manganese ore, the value of the violated goods was over 1.5 billion VND. In the first 6 months of 2013, Cao Bang Customs Department arrested 1 case of illegal transportation of 1,457 kg of ilmenite ore with a content of over 90%, the value of the violated goods was 20 million VND.

According to baohaiquan PH