The Department of Post-Customs Clearance Inspection from the General Department of Customs revealed that it had recently discovered a company in HCM City using its certificate of origin (C/O) to pass off Chinese silk products as Vietnamese and export them to India.
Customs officials said the firm imported finished silk from China to Cat Lai port in HCM City, then labelled them as 'Made in Vietnam' in a local warehouse.
Customs officials deemed the move tax evasion as silk exported from Vietnam to India are only taxed at 5 percent, while products shipped from China have a tax rate five times higher.
Each year India imports from 2,200 to 2,500 tonnes of silk from China with a value of 750 million USD to 800 million USD.
An official of the Trade Remedies Authority of Vietnam under the Ministry of Industry and Trade (MoIT) said: “If Vietnam does not take active measures to deal with the problem of evading trade remedies, especially through origin fraud, those activities will affect businesses and industries first. In the long run, it will have a negative impact on the competitiveness of the whole economy, especially in the context of joining a series of high-demand free trade agreements (FTAs)."
The problem doesn't lie with silk products alone and from the beginning of the year, customs officials have uncovered at least 77 cases where they discovered 24 violations of origin in exporting. Customs said bicycles, solar batteries and wooden items accounted for the majority of cases.