Vns customs brokerage solution


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Vns customs brokerage solution

  1. 1.  Why outsource to LSP  Customs clearance in the SC  VN commercial law  Customs clearance activities All cost involved & Price structure  Plan for phase 3
  2. 2.  Why Outsource to LSP  Customs clearance in logistics  Scope of service  Price  Plan for phase 3Opportunity Understanding Scope & Price SOP & KPI Start-up!
  3. 3. Why Outsourcing to LogisticsService Provider ? Improve your company focus allows your company to focus on the company core functions and core competencies Access to world-class capabilities and new logistics technology Convert fixed costs to variable costs, capital re-investment Free-up resources  no capital investments in logistics  resource not available internally Reduce and control operating costs Eliminate labor problems Pushes risk to 3PL Risk pooling cost of technology investment by 3PL provider shared among clients Achieves economies of scale and provides better service
  4. 4. Example 1: Why 3PL can achieve economy of scale & provide better service in transport? Consolidation is the key! Scenario 1: The firms performs their own logistics functions Firm 1 2 warehouses 2 separate distribution networks Firm 2 Scenario 2: A 3PL takes care of both firms’ logistics functions Firm 1 1 warehouse 1 distribution network Firm 2 3PL
  5. 5. Reduce number of transactions!Example 2: Manufacturer to contact with participants (20 transactions)  COST MORE! Manufacturer Trucking company Manufacturer Customs officers Manufacturer Shipping line Manufacturer Supplier Manufacturer 20 ContactsExample 3: Manufacturer to contact through intermediary (09 transactions)  COST LESS ! Manufacturer Trucking company Manufacturer Customs officers Manufacturer Vietnam-Ship Shipping line Manufacturer Suppliers Manufacturer 9 Contacts
  6. 6. Customs clearance/transportYour supplier 1 Bottle neck! Your customer 1 YOURYour supplier 2 Port/Airport FACTORY Port/Airport Your customer 2Your supplier 3 Bottle neck! Your customer 3 Customs clearance/transport MATERIALS FLOW INFORMATION FLOW CASH FLOW
  7. 7. How important is customs clearance in the SC. If your goods sit on a dock awaiting customs clearance for a day, your speed tomarket advantage can be squandered. Incomplete or wrong customsdocumentation can cause considerable delays in transportation, reducing supplychain and delivery reliability.Duty rates, customs clearance, and entry processes differ from country tocountry. Tariff classifications, value declaration, and duty management can createconfusion and increase costs. It is very important to choose a trust-worthy customs broker who wellunderstand your business, local customs regulation. Our expert team ensure that the necessary government declarations arecompleted accurately and on time for your import and export shipments, especiallyfor textile raw materials imported for processing to export. Our services in the areainclude: Legal valuation of merchandise; Classification of goods ;Proper tax &duty assessment Import/export procedure; Temporary Import/export procedure;Consultancy services etc…
  8. 8.  Why Outsource to LSP  Customs clearance in logistics  Scope of service  Price  Plan for phase 3Opportunity Understanding Scope & Price SOP & KPI Start-up!
  9. 9. Introduction of Vietnam Commercial Law(revised 2005_ from article #178 – 184) Article 178.- Commercial processing Commercial processing means a commercial activity whereby a processor uses part or whole of raw materials and materials supplied by the processee to perform one or several stages of the production process at the latters request in order to receive remuneration.Article 179.- Processing contracts Processing contracts must be made in writing or in other forms of equivalent legal validity.Article 180.- Goods for processing 1. Goods of all types can be processed, except for goods banned from business. 2. In case of processing of goods for foreign traders for overseas consumption, goods banned from business, goods banned from export or import may be processed if so permitted by competent state agencies.
  10. 10. Article 181.- Rights and obligations of processees 1. To hand over part or whole of raw materials and materials for processing in accordance with processing contracts or transfer money for purchase of materials with agreed quantities, quality and at agreed prices; 2. To take back all processed products, leased or lent machinery and equipment, raw materials, auxiliary materials, supplies and discarded materials after the liquidation of processing contracts, unless otherwise agreed. 3. To sell, destroy, donate or give as gifts on the spot processed products, leased or lent machinery and equipments, raw materials, auxiliary materials, redundant supplies, faulty products and discarded materials according to agreements and provisions of law. 4. To send their representatives to examine and supervise processing activities at processing places, to assign experts to guide production technology and inspect quality of processed products according to agreements in processing contracts. 5. To be responsible for the legality of the intellectual property rights over processed goods, raw materials, materials, machinery and equipment for processing handed over to processors.
  11. 11. Article 182.- Rights and obligations of processors 1. To supply a part or whole of raw materials and materials for processing as agreed upon with processees in terms of quantities, quality, technical standards and prices. 2. To receive processing remunerations and other reasonable expenses. 3. In case of processing for foreign organizations and individuals, to be entitled to export on spot processed products; leased or borrowed machinery and equipment, raw materials, materials, redundant supplies, faulty products and discarded materials under the authorization of processees. 4. In case of processing for foreign organizations and individuals, to be exempt from import tax on machinery, equipment, raw materials, auxiliary materials and supplies, that are temporarily imported for the performance of processing contracts according to the provisions of tax law. 5. To be responsible for the legality of goods processing activities in cases where goods being processed are those banned from business, export or import.
  12. 12. Article 183.- Processing remuneration 1. Processors may receive processing remunerations paid in cash or in processed products, or machinery and equipment used for the processing. 2. In case of processing for foreign organizations and individuals, if processors receive processing remunerations in processed products, machinery and equipment used for processing, regulations on import of such products, machinery and equipment must be complied with.Article 184.- Technology transfer in goods processing with foreign organizations andindividuals. Technology transfer in goods processing with foreign organizations and individuals shall be carried out in accordance with agreements in processing contracts and the provisions of Vietnamese law on technology transfer.
  13. 13.  Introduction Customs Formalities Import Duty & Tax
  14. 14. Introduction Import Trading rights: Vietnam, under both its WTO Commitments and itsdomestic laws, extends import and export activities to “all foreign individuals andenterprises (including foreign-invested enterprises).” In effect, with the import right, a foreign-invested company:  (i) can be the importer of record; and  (ii) can sell its imported products to distributors (licensed wholesalers or retailers) in Vietnam; but  (iii) with just the import right alone, it cannot sell its imported products to final consumers.Companies that do not have their own import license must work throughlicensed traders, who typically charge a commission of between one and twopercent of the value of the invoice. Under Vietnamese law, the importer is theconsignee. Therefore, it is important to identify a reliable importer with the abilityto clear merchandise through customs quickly and efficiently. If a licensed third-party importer is used, the importer will handle customs clearance.
  15. 15. Customs Formalities Customs activities including of : a. Fill in and submit the Customs declaration forms; submit, produce documents attributed to the Customs dossiers; b. Conduct goods and/or transport means to the designated sites for physical inspection; c. Pay taxes and fulfill other financial obligations as prescribed by law; A Customs dossier shall consist of: a. Declaration form; b. Commercial invoices; c. Goods purchase and sale contract; d. Permit of the competent State body for goods exported, imported or transited or transport means on exit, entry or in transit, which are subject to such permit under the provisions of law; e. Other documents as prescribed by law for each goods item, which the Customs declarant must submit or produce to the Customs offices. More information on
  16. 16. Vietnam Customs is tasked to inspect and supervise goods and transport means;to prevent and combat smuggling and illegal cross-border transportation of goods;to organize the implementation of tax legislation with regard to export and importgoods; to propose policies and measures for Customs-related State managementover the export, import, exit, entry and transit activities as well as tax policies forexport and import goods.
  17. 17. Import Duty & Tax Where an international agreement which the Socialist Republic of Vietnam hassigned or acceded to contains provisions different from those of this Law, theprovisions of such international agreement shall apply. For cases which have not yet been provided for by this Law, other legaldocuments of Vietnam and international agreement which the Socialist Republic ofVietnam has signed or acceded to, the international conventions and practices onCustoms may be applied provided that such application is not in conflict with thefundamental principles of Vietnamese law. Customs tariff rates are set by Decision No. 280/ttg of 25 April 1994 and areamended according to international changes; tariff rates range from 0 to 60%. Three kind of tariff rates apply to imported goods: Ordinary tariffs apply to goods originating from countries that have not exchanged normal Trade Relations (NTR) agreements with Vietnam; The Preferential Tariffs are set on goods imported from countries having NTR status with Vietnam; and The Special Tariffs apply to goods imported from countries having exchanged special preferential tariffs agreements with Vietnam, e.g. ASEAN member countries.
  18. 18.  WCO_World Customs Organization Vietnam applies a six-digit tariff nomenclature basically corresponding to the Harmonized Commodity Description (HS 96) as of 1 January 2000. Some subheadings are further elaborated at an eight-digit level for tariff and statistical purposes. In line with AFTA (Asean Free Trade Agreement), Vietnam is converting itscurrent 6-digit tariff nomenclature into 8-digit system, i.e. the Asean HarmonizedTariff Nomenclature (AHTN), which is based on the World Customs OrganizationsHS2K. Other regional trade agreement CEPT (Asean) ACFTA (Asean – China) AKFRA(Aean-Korea) AJCEP(Asean – Japan) AANZFTA (Australia-Asean-New Zealand)
  19. 19.  Why Outsource to LSP  Customs clearance in logistics  Scope of service  Price  Plan for phase 3Opportunity Understanding Scope & Price SOP & KPI Start-up!
  20. 20. 1-Costs for import shipment1) Delivery Order fee from shipping line2) Import shipping handling fee from forwarder3) Lift on & Lift off charge from port4) Trucking charge from trucking company5) Loading/Unloading at the port/airport6) Customs Brokerage Handling fee from Customs Broker7) Customs inspection fee from Vietnam Customs8) Import customs form from Vietnam Customs9) Terminal Handling Charge_THC from shipping line10) Storage/demurrage charge (if any)from shipping company11) CFS/TCS from port/airport in case of bulk-cargo12) Others if any
  21. 21. 2-Costs for export shipment1) Export customs form from Vietnam Customs2) Certification of Origin_C/O form from VCCI3) Customs Brokerage Handling fee from Customs broker4) Trucking cost from trucking company5) Lift-on & Lift-off charge from port6) VN customs inspection fee from Vietnam Customs7) Loading/Unloading charge at port/airport8) Shipping documentation fee(B/L & AMS etc)…from shipping company9) THC from shipping company10)Seal fee from shipping company11)Fumigation fee12)Storage/Detention charge (if any) from shipping company13)CFS/TCS from port/airport14)Other shipping fee (if any)
  22. 22. 3-Pricestructure Customs Shipping & brokerage Fee Customs per Customs Documentation register Fee (back-to- number back) Additional fee for opening the sub-contract to customs Our Customs Handling Fee4-Quotation to be advised later andimport/export local charge as attached
  23. 23.  Scope of Service  Contact Information Customs Handling Procedures  Invoicing Requirements
  24. 24. 1-Service Goal To manage information flow from raw materials imported for processing toexport finished product To clear the customs formality for all import/ and export shipment To balance the quota between raw materials imported and production exported2-Service Commitment To minimize the lead-time for customs formality and expected to be: FCL/FCL : 2-3 working days  LCL/LCL: 3-5 working days  Air shipment: 1-2 working days To closely supervise the processing contract for balancing the quota betweenraw materials imported and production exported and liquidate the processingcontract to customs at the end of process contract.
  25. 25. 3-Service Provided forimport /export shipment1) To prepare a set of import customs 1) To prepare a set of export documentation customs documentation2) Fill-in the import customs form 2) Fill-in the export customs form3) Register with customs office 3) Register with customs office4) Customs inspection 4) Customs inspection5) Trucking 5) Trucking6) Cargo delivery & POD 6) Shipping7) Invoicing 7) Invoicing8) File the set of import 8) File the set of export documentation documentation4-Hours of Operation Business hours are defined as follows:- Mon – Fri : 08:30 hrs to 18:00 hrs Sat : 08:30 hrs to 12:30 hrs Sun & Public Holidays : Closed
  26. 26.  Why Outsource to LSP  Customs clearance in logistics  Scope of service  Price  Plan for phase 3Opportunity Understanding Scope & Price SOP & KPI Start-up!
  27. 27. Part 2
  28. 28. Part 1
  29. 29. 1-Payment term (Need todiscuss more…) Receive invoices 1- 20 every month Customer Payment Terms are Net 45 Payment every Friday on second and forth week of month.1-Billing set is composed of : VNS’ invoice Set of shipping documentation : POD, AWB, B/L,C/O etc.. Customs Entry All other back-to-back invoice Other documents with completed set such as official receipt, etc