Hanoi (VNS/VNA)- The application of a customs bond model would benefit the country,contributing to an increase of one per cent of the total import-export turnoveraccording to comments by Minister and Chairman of the GovernmentOffice Mai Tien Dung.

Customs bond systems are designed to streamline the process for bringing goodsinto the country, thereby reducing the financial burden on businesses whileensuring the government receives all legally required taxes.

A customs bond is an agreement that ensures any importer will pay all fees andoperate according to local laws and regulations.

Speaking at a Hanoi conference on facilitating trade onSeptember 10, Dung said the Government has worked to create a competitivefinancial environment to facilitate business.

“The Government has taken specific measures, reducing unnecessary barriers tosuccessful business,” he said.

He said that the ministries had reformed special inspection procedures,reducing the number of regulations from 9,929 to just 1,700 and streamliningthe import-export process.

There is still work to be done, with authorities only meeting with 28.3 percentof the set targets so far.

The Government Office has urged ministries to cut unneeded regulations thatimpede growth and prevent new businesses from getting off the ground.

Thus far, 968 out of 6,213 requirements for new businesses have been simplifiedor eliminated. This makes up 25.5 percent of the planned changes.

Ministries have submitted 23 decrees to reform business conditions. It isexpected that these decrees will reduce the number of conditions by 2,800.

“Last year, Vietnam’s GDP grew 6.81 per cent, and it is expected to reach 7 percent growth this year thanks to the Government’s efforts to save time and costfor firms,” he added.

Business costs have been sharply reduced through the deregulation push. Firmsreported 200 million USD in savings last year due to the reduced time it takesto implement simplified import-export procedures.

Nestor Scherbey, senior policy advisor to the Global Alliance for TradeFacilitation (GATF) in Vietnam, said outdated trade regulations andburdensome administrative procedures slow trade growth. He cited a World Bankstudy that calculates the cost of these unneeded regulations as equal to a164.25 percent “Invisible Tariff”.

Scherbey said this has been the largest barrier to Vietnamese small and mediumenterprises (SMEs), which make up 97 percent of Vietnamese firms.

The application of a modern customs bond system in Vietnam is expected toremove barriers while ensuring proper implementation of regulations.

A modern customs bond system will make it easier and cheaper for importers tobring goods into the country by simplifying the import-export process.Businesses will find it simpler to navigate customs checks and tariff policies.

Importers and those transporting goods domestically are required by the customsagency to purchase a bond from a surety company. If an importing company failsto pay fees or follow regulations, customs enforcement can file a claim. Thesurety company would then pay to a restitution fee. Finally, the importingcompany is required to reimburse the surety company.

GATF launched a new project in September 2017 to provide technical assistancefor the Ministry of Finance (MoF)’s Insurance Supervision Authority. Ministriesand State agencies regulating trade will also receive support.

The project means international WTO experts will help with the efforts toreform Vietnam’s trade regulations. The VNACCS/VCIS e-Customs system will alsoreceive attention.

The ultimate goal is for State agencies involved with customs inspections tocoordinate the implementation of a modern customs bond system with the GeneralDepartment of Customs and MoF.-VNS/VNA