MINISTRY OF FINANCE ACADEMY OF FINANCE  Student: Phung Quang Huy Class: CQ54/05.04 GRADUATION THESIS TOPIC: [Implementing customs procedures for export plywood for business purpose at U&I Logistics – Northern Joint Stock Company] Major : Customs and Foreign Trade Student’s ID : 165D3402011906 Instructor : Dr Thai Bui Hai An HA NOI - 2020 ACKNOWLEDGMENTS I hereby declare that this thesis is my own research project, the data and results stated in the graduation thesis are honest, stemming from the practical situation of the intern Student (Sign and Name) LIST OF ABBREVIATIONS AMA : Registration of amended tax information ASEAN : Association of Southeast Asian Nations C/O : Certificate of Origin Co., Ltd : Limited Liability Company CUS : Customer Service Department EIR : Equipment Interchange Receipt HAN : Ha Noi HPH : Hai Phong JSC : Joint Stock Company LC : Letter of Credit OPS : Operations Department VNACCS : Vietnam Automated Cargo Clearance System LIST OF DIAGRAMS Diagram 2.1 2.2 Page Organization structure of U&I Logistics – Northern 15 JSC The percentage of channel into which plywood export 36 declarations are directed in 2019 LIST OF FIGURES Figure Page 2.1 Quotation 18 2.2 Communication channel - Zalo 19 2.3 VNACCS user’s information 19 2.4 Selecting qualified container 20 2.5 Export declaration form 21 2.6 Attaching export documents 22 2.7 Infrastructure fee declaration 23 2.8 Fumigation certificate 24 2.9 Phytosanitary certificate 25 2.10 Registration of amended tax information (AMA) 26 2.11 Equipment Interchange Receipt - EIR 27 2.12 Bill of Lading 28 2.13 Certificate of Origin 29 2.14 Letter of Credit – LC 30 TABLE OF CONTENTS Cover page i Acknowledgments ii Table of contents iii List of abbreviations iv List of diagrams v List of figures .vi PREAMBLE Chapter 1: THEORETICAL FRAMEWORK ON CUSTOMS PROCEDURES FOR EXPORT PLYWOOD 1.1 Theoretical framework on Customs procedures 1.1.1 Concepts of Customs procedures 1.1.2 Basic properties of customs procedures .3 1.1.3 Contents of implementing customs procedures for export goods 1.1.4 Principles of implementing customs procedures 1.2 General issues of export goods 1.2.1 Basic concepts .8 1.2.1.1 Goods .8 1.2.1.2 Means of transport 1.2.2 Location and time limit for customs procedures 10 1.3 Implementing customs procedures for export plywood 11 1.3.1 Prepare documents for export goods 11 1.3.2 Declaring and submitting customs declarations 11 1.3.3 Additional declaration of customs declaration forms 12 1.3.4 Prepare customs documents 12 1.3.5 Customs procedure at Customs Sub-Department .12 1.3.6 Customs clearance .13 1.3.7 Customs supervision performance 13 1.4 Legal basis for implementing customs procedures for export plywood 14 1.4.1 International legal basis 14 1.4.2 National legal basis .14 Chapter 2: CURRENT SITUATION OF IMPLEMENTING CUSTOMS PROCEDURES FOR EXPORT PLYWOOD AT U&I LOGISTICS – NORTHERN JOINT STOCK COMPANY 2.1 Overview of U&I Logistics – Northern JSC .16 2.1.1 General introduction about U&I Logistics – Northern JSC 16 2.1.2 Organization structure 16 2.2 Current situation of implementing customs procedures for export plywood at U&I Logistics – Northern JSC 17 2.2.1 Export plywood procedure at U&I Logistics – Northern JSC 17 2.2.2 Process of implementing customs procedures for export plywood at U&I Logistics – Northern JSC 31 2.2.2.1 Prepare documents for submitting customs declaration 31 2.2.2.2 Submitting customs declarations 33 2.2.2.3 Examining customs documents and physical condition of good .34 2.2.2.4 Additional declaration of customs declaration forms .35 2.2.2.5 Customs clearance 35 2.2.2.6 Bringing goods into customs supervision areas .36 2.2.3 Results of implementing customs procedures for export plywood at U&I Logistics – Northern JSC 36 2.3 Evaluating the process of implementing customs procedures for export plywood products at U&I Logistics – Northern JSC 38 2.3.1 Advantages in carrying out customs procedures for export plywood products at U&I Logistics – Northern JSC 38 2.3.2 Difficulties and limitations in the process of carrying out customs procedures for export plywood products at U&I Logistics – Northern JSC 39 Chapter 3: SOME SOLUTIONS TO IMPROVE EFFICIENCY OF IMPLEMENTING CUSTOMS PROCEDURES FOR EXPORT PLYWOOD PRODUCTS AT U&I LOGISTICS – NORTHERN JSC IN THE COMING TIME 3.1 Development orientation of U&I Logistics – Northern JSC .40 3.1.1 General development orientation of U&I Logistics – Northern JSC 40 3.1.2 Development orientation of export plywood products of U&I Logistics – Northern JSC in the coming time .41 3.2 Some solutions to improve efficiency of implementing customs procedures for export plywood at U&I Logistics – Northern JSC in the coming time 41 3.2.1 Improving facilities and technology 41 3.2.2 Arranging, training and improving the quality of human resources 42 3.2.3 Updating information and regulations on customs laws regularly and constantly .43 3.2.4 Improving the process of implementing customs procedures .43 3.2.5 Establishing relationships with customers and partners in the same field .44 3.3 Some recommendations to authority agencies for successfully implementation of the solutions 45 3.3.1 Recommendations to Customs authority 45 3.3.2 Recommendations to other authorities 46 CONCLUSION 47 REFERENCES 48 PREFACE The necessity of the subject: According to the Vietnam Logistics Report 2018 and 2019 published by the Ministry of Industry & Trade Publisher: Vietnam is the country with the highest export growth rate compared to other ASEAN countries such as Indonesia, Thailand, Singapore and Malaysia On the other hand, plywood and lumber are groups of goods which have the highest growth rate among all Vietnam's export groups in 2018, showing that plywood is an important export goods, which should be focused to invest by Vietnamese business Therefore, it can be seen that the need to carry out customs procedures for export plywood products will increase in the coming time, requiring a greater number of qualified human resources for this activity For those reasons, the author has chosen the topic “Implementing customs procedures for export plywood for business purpose at U&I Logistics – Northern Joint Stock Company" for the graduation thesis Plywood is common export goods Most plywood products are exported under the form of business and investment However, plywood can also be exported under export processing form Within the scope of the study, the author only studies customs procedures for exporting this product with the object of business purpose From now on, export plywood products for business purpose will be called as export plywood for short Research objectives: The research objectives are as follows: - Researching general theoretical issues about customs procedures for export goods in general and export plywood in particular - Studying the current situation of implementing customs procedures for export plywood at an enterprise - Propose some solutions to improve the efficiency of implementing customs procedures for export plywood at the enterprise in the coming time Research subject and scope: - Subject of the research: Customs procedures for export plywood at enterprise - Scope of the research: Customs procedures for export plywood at U&I Logistics – Northern JSC from 2018 to 2019 Research methodology: The topic is studied based on the method of problem analysis theoretical and practical topics in a scientific and logical way, combining interpretation with inductive, between words and illustrations, actual testing methods and drawing conclusions The structure of the topic: Besides the introduction and conclusion, the content of the thesis consists of three chapters: Chapter 1: Theoretical framework on customs procedures for export plywood 38 2.2.2.5 Customs clearance Customs officers send feedback on the System and Office OPS receives feedback from the customs office to carry out the following tasks Some common feedback directives returned by the Customs officers on the System are as follows: - Code A (Guideline for amendment): Additional declaration of description of goods - Code B (Change of export declaration): Change the physical inspection location In case customs officers after checking customs documents and the actual condition of goods accepted with the information on the customs declaration, they will respond "Decision on customs clearance of exported goods" on the System 2.2.2.6 Bringing goods into customs supervision areas In-field OPS shall print the Customs Declaration and List of eligible containers through the customs supervision area to submit the declaration to bring goods into the customs supervision area From here, the shipping line will be responsible for loading the goods on board for transportation 2.2.3 Results of implementing customs procedures for export plywood at U&I Logistics – Northern JSC Most of the declarations are accomplished customs procedures in a short time (from 01 to 02 working days), ensuring transportation time for shippers, not to miss the booked vessel A small number of declarations 39 requiring additional declaration leading to change transport vessel and costs occurrence are accepted by customers due to errors on their part Currently, on average each month, U&I Logistics – Northern JSC performs customs procedures for about 500 export declarations, and approximately 80% of them are export customs declarations of plywood For businesses making declaration for the first time, the declarations are always directed into Red channel Therefore, in order to simplify the implementation of customs procedures and reduce costs, these businesses often choose to open the first declaration at Hai Phong Port Customs SubDepartments For businesses opening a second declaration onwards, U&I choose to open declaration at Hoa Binh Customs Sub-Departments on behalf of them The declarations of plywood product with HS code 4421 are 100% directed into Yellow channel by the System However, about 0.5% of the monthly declarations are re-directed into Red channel response by customs officers, due to suspicion of the nature of goods or the application of customs Source: Management report of U&I Logistics – Northern JSC 40 Diagram 2.2: The percentage of channel into which plywood export declarations are directed in 2019 Red channel Yellow channel Green channel risk management process In 2019, U&I has implemented customs procedures for 4711 plywood export declarations, including declarations directed into Green channel, 4632 Yellow-channel declarations and 79 declarations are directed or redirected into Red channel The pie chart above illustrates the percentage of channel into which plywood export declarations are directed according to the 2019 statistics of U&I Logistics – Northern JSC 2.3 Evaluating the process of implementing customs procedures for export plywood products at U&I Logistics – Northern JSC 2.3.1 Advantages in carrying out customs procedures for exported plywood products at U&I Logistics – Northern JSC The process of implementing export customs procedures for plywood products at U&I Logistics – Northern JSC is carried out smoothly and effectively due to a reasonable and systematic division of work 41 Each department is in charge of specific tasks in accordance with the features of the job and the actual conditions For example, Office OPS take care of all the customs declaration tasks that require the assistance of information technology because they are provided with appropriate computer systems, software and equipment The In-field OPS is divided into specific groups according to the requirement of the tasks For example, a group performs customs procedures at Hoa Binh Customs Sub-Department, a group implements procedures for bringing goods into the customs supervision area in Hai Phong, a group registers phytosanitary certificate at Plant Quarantine Department V Departments keep in touch with each other through the application of information technology in communication; therefore, the work is still effectively completed despite geographical distance Thanks to the specialization and good application of information technology in business, the export process of plywood products at U&I Logistics – Northern JSC is smooth and always ensures the delivery time of customers 42 2.3.2 Difficulties and limitations in the process of carrying out customs procedures for export plywood products at U&I Logistics – Northern JSC Although there are certain advantages, however, when it comes to considering the process of customs clearance only, there are still shortcomings that exist in the company as detail: First, the Operations Department is the only department that knows all the procedures for customs clearance, so there are times when the OPS department has to consult the customers, in the context of an array of urgent declaration required are in queue This puts a great pressure on this department and can lead to delays in customs clearance Second, despite being equipped with modern and complete information technology infrastructure, U&I company is neglecting the maintenance and upgrading of infrastructure No matter how advanced the computer system and software are, if not for significant maintenance and maintenance, it can lead to the degradation of these devices If the number of failures incidentally occur at the same time, this may lead to a great delay in the process of carrying out customs procedures of goods Third, although, communication between the departments is always maintained continuously thanks to the application of information technology, the interaction between individuals in a collective is largely spontaneous and non-professional That is why there are occasional conflicts between parts, which essentially comes from a lack of understanding of each other's work 43 CHAPTER 3: SOME SOLUTIONS TO IMPROVE EFFICIENCY OF IMPLEMENTING CUSTOMS PROCEDURES FOR EXPORT PLYWOOD PRODUCTS AT U&I LOGISTICS – NORTHERN JOINT STOCK COMPANY IN THE COMING TIME 3.1 Development orientation of U&I Logistics – Northern JSC 3.1.1 General development orientation of U&I Logistics – Northern JSC Although U&I - Northern Joint Stock Company has just been established for more than 02 years, the leading team and key personnel are highly capable and experienced with over 20 years of experience in the field of logistics Right in the first year of operation, U&I has achieved an after-tax profit of more than 450 million VND and growth in the following year reached nearly 130% (according to the Financial Statements of 2018 and 2019 of U&I Logistics – Northern JSC) U&I is oriented to develop with the vision to become the most efficient provider of logistics services in Vietnam U&I's mission is to provide logistics solutions to meet the specific needs of each customer With its three core values that are "Honesty", "Discipline" and "Prestige", U&I's ambition is to become a connecting nucleus to form the largest logistics network in Vietnam before 2025 Currently, 85% of the company's profits come from carrying out customs procedures and transportation for plywood exporters In order to optimize human resources and to expand its own business, U&I needs to find more customers trading other products In the short term, it is advisable to focus on seeking commercial customers of wood products, because this is the company's strength However, in the long term, the company needs to 44 improve the quality and scale of its personnel to meet the needs of more diversity customers 3.1.2 Development orientation of export plywood products of U&I Logistics – Northern JSC in the coming time Currently, U&I is headquartered in Hanoi and two representative offices in Hai Phong and Ho Chi Minh City The number of businesses trading plywood products using U&I services is located mainly from Thanh Hoa to the Northern provinces, with big names such as: "JUNMA Phu Tho Co., Ltd", "Long Luu Plywood Production Co., Ltd", “Hai Hien Co., Ltd" Profits earned from the export of plywood products account for about 80% of the total revenue earned from goods export activities So, with the opening of a south representative office based in Ho Chi Minh City, U&I Logistics – Northern JSC can hit the southern plywood export market by taking advantage of the experienced human resources in carrying out customs procedures for exported plywood products Not only that, the mother company is U&I Investment Joint Stock Company based in Binh Duong with most of the total of over 245,000 m2 of its warehouse located in the southern, making this development direction absolutely feasible With the experience of export plywood products, U&I needs to reshape its customer segment, ignoring small businesses with low monthly export volume capability and focus on big customers, thereby attracting more customers with high export capability to use the company's services 3.2 Some solutions to improve efficiency of implementing customs procedures for export plywood at U&I Logistics – Northern JSC in the coming time 3.2.1 Improving facilities and technology 45 After building a modern information technology infrastructure, U&I Logistics – Northern JSC needs to focus more on the maintenance and levitation of its system U&I can cooperate with Thai Son Technology Development Co., Ltd, one of the leading units currently providing technology solutions in the field of customs, to synchronize the entire software platform used in the company Thereby improving staff performance and simplifying the process of maintenance, and support in the event of an incident In addition, the storage of customs documents is also extremely important, in case of detecting errors that need to be corrected later To ensure the security of information and business secrets of customers, the application of high-end technology in electronic keeping is extremely urgent The solution here is to use cloud storage technology, and one of the simple and convenient software for storage is the Owncloud software provided by LiNEX JSC and this should be put into use 3.2.2 Arranging, training and improving the quality of human resources As a young company, U&I Logistics – Northern JSC needs to have a young mindset, creating favorable conditions for young employees to develop, because this team will become the core to develop the company in the future, replacing old system To make this happen, it is necessary to coordinate and arrange personnel appropriately between young people and experienced staff Those who is experienced will mentor and guide the young team onto professional skills Meanwhile, with the critical thinking and the enthusiasm and boldness of the youth, a breakthrough in efficiency in the working process is what U&I leaders can expect 46 Moreover, the coordination of personnel from the North to the South office to conduct training and building the foundation for human resources at the new office is also urgently needed In addition, the leadership needs to organize more cohesion activities between offices in general and between members in an office in particular These activities are initially for people to express their emotions, have the opportunity to share with each other about life, thereby creating a positive atmosphere at work, increasing productivity and work efficiency Furthermore, those meetings are also an opportunity for people to discuss in order to better understand the work and the unique difficulties in each department, helping to create understanding and empathy, limit conflicts occurred because of misunderstanding Activities that can be mentioned include: company travel, team-building activities; or the assignment, rotation of work in a short time 3.2.3 Updating information and regulations on customs laws regularly and constantly The continuous and timely updating of information and legal regulations on customs is extremely important in the process of implementing customs procedures Currently in U&I Logistics – Northern JSC, the decisions and legal directives are mainly updated by the managers and report to the employees However, in order to improve work efficiency, each employee himself must establish his own private news channels to grasp the new rules of customs law as soon as possible One of the most effective channels for updating customs documents as soon as possible is https://thuvienphapluat.vn/ provided by Library of Law Co., Ltd U&I can buy a copyright package from this company and grant 47 accounts to OPS members so that they can update the customs regulations regularly 3.2.4 Improving the process of implementing customs procedures One of the biggest problems in the process implementing customs procedures at U&I Logistics – Northern JSC is the timely communication, because the procedure of customs declaration and customs examining is done at Hoa Binh Customs Sub-Department, while the procedure of customs supervision is carried out at Hai Phong Port Customs Sub-Departments Furthermore, while the CUS and the Office OPS perform their work at the office, the In-field OPS is mainly constantly moving outside This sometimes leads to gaps in communication and coordination between the two sides And mainly because information is exchanged via Zalo messages, the In-field OPS may miss the message, leading to errors in the process of customs clearance Therefore, to ensure the smooth, continuous and timely process of implementing customs procedures, it is necessary to build a more effective workflow management channel Through practical experience, a task management sheet is well advised, which clearly divides the duties and responsibilities of each individual and each department based on the existing workflow These tasks are arranged in order first and foremost, so that when each job is completed, the person responsible for that task can mark it for everyone to follow and know what work to next In order for the monitoring to be effective, it is necessary to apply information technology in developing this task management form And the most feasible way to help ensure the effectiveness of the management ticket, while minimizing the costs, is to build this sheet on the website platform However, in the early time of waiting for website construction, and to test the effectiveness of task management sheet, we can use paper form instead 48 3.2.5 Establishing relationships with customers and partners in the same field In addition, customers and partners in the same field are a good source of information to set up and maintain Not only that, in the context that foreign businesses are trying to acquire the logistics market in general and the plywood industry in particular, the close cooperation between domestic enterprises is also a way to develop and affirm the capacity of Vietnam's logistics industry Establishing a good relationship with customers is also a way to help the process of implementing customs procedures be more smoothly and quickly For example, if customers provide information and prepare documents for export goods early, the process of customs declaration can take place soon, so that departments can be more proactive in arranging booking orders and perform customs declaration When any incident arises, thanks to the good relationship that has been built earlier, customers and U&I can easily find a common voice and the most appropriate way to handle the problem 3.3 Some recommendations to authority agencies for successfully implementation of the solutions 3.3.1 Recommendations to Customs authority Currently, the basis of the Customs System and Online Customs Public Services System has been upgraded more modernly but there are occasional errors that lead to difficulties in the implementation of customs procedures For example, sometimes the service of issuing goods identification numbers on VNACCS software fails so the person who transmits the declaration must take the goods identification number on the Customs Public Services page, leading to prolonged time in customs declaration And when access becomes 49 too large, the site becomes overloaded and inaccessible, thereby not being able to get the goods identification number to submit customs declarations, resulting in a delay for shipment and occurrence of costs raising for storage and warehousing Therefore, the Customs authority should soon upgrade its System in the context of increasing export turnover of Vietnam 3.3.2 Recommendations to other authorities Currently, with the strict implementation of the Prime Minister's Directive 16/CT-TTg on the strict implementation of urgent measures to prevent and control spread of Covid-19, as well as the complicated situation of this non-vaccine epidemic, fee-paying activities at locations where tolls for infrastructure works, service facilities and public utilities in the port area are delayed and prolonged This leads to difficulties in paying infrastructure fees, which threatens to delay the shipment of exported goods, causing many costs for businesses Therefore, in order to support businesses in the urgent difficult situation, it is necessary to have solutions from the state such as collecting infrastructure fees by transferring money via banks; or allow the release of goods before paying infrastructure fees and businesses owe this fee within 30 days 50 CONCLUSION After an internship at U&I Logistics – Northern JSC, being experienced and realistic working provides me an overview of forwarder’s operations, which helps to comprehend theoretical knowledge studied at university After a careful and progressive research, it is obvious to improve efficiency and effectiveness of the act of implementing customs procedures for export plywood as there is a vivid surge in export turnover of this product The solutions, which have been drawn after a work of research, provide potential to ameliorate disadvantages occurring in U&I Logistics – Northern JSC at the moment However, they need more actual experiment to prove their effectiveness Therefore, they have a tendency to be applied more popularly to other businesses The graduation thesis contain lots of personal effort, as well as appreciative assistance from colleague at U&I Logistics – Northern JSC, especially associates in Operations Departure However, because of lack of experience, it is hard to avoid omission Therefore, the author is looking forward to receiving professional advice from Dr Thai Bui Hai An as the mentor and other valuable suggestions from readers as well 51 REFERENCES Assoc.Prof Dr Nguyen Thị Thuong Huyen (chief author) (2017), “Giao trinh Hai quan co ban”, Finance Publisher Assoc.Prof Dr Nguyen Thị Thuong Huyen (chief author) (2015), “Giao trinh tri gia hai quan”, Finance Publisher Assoc.Prof Dr Nguyen Thị Thuong Huyen (chief author) (2015), “Giao trinh kiem soat hai quan”, Finance Publisher Assoc.Prof Dr Nguyen Thị Thuong Huyen (chief author) (2019), “Giao trinh Kiem tra, giam sat hai quan”, Finance Publisher Assoc.Prof Dr Nguyen Thị Thuong Huyen (chief author) (2017), “Bai giang goc Ky thuat nghiep vu ngoai thuong”, Finance Publisher Dr Nguyen Thi Kim Oanh and Dr Thai Bui Hai An (2018), “Bai giang goc Giao nhan va van tai quoc te”, Finance Publisher Ministry of Finance (2015), “Circular No 38/2015/TT-BTC” Ministry of Finance (2018), “Circular No 39/2018/TT-BTC” Ministry of Industry & Trade Publisher (2018 & 2019), “Vietnam Logistics Report 2018” and “Vietnam Logistics Report 2019” 52 10 U&I Logistics – Northern JSC, Finance Report 2018-2019 11 U&I Logistics – Northern JSC, Comprehensive Report 2018-2019 12 U&I Logistics – Northern JSC, Management Report 2019 ... implementing customs procedures for export plywood at U&I Logistics – Northern JSC The procedure of customs clearance for export plywood at U&I Logistics – Northern JSC is similar to that of customs procedures. .. small groups, for example, customs procedures for business purpose, customs procedures for non -business purpose Based on the method of carrying out customs procedures, customs procedures are... declarations, etc 2.2 Current situation of implementing customs procedures for export plywood at U&I Logistics – Northern JSC 2.2.1 Exporting plywood procedure at U&I Logistics – Northern JSC Step 1: Customers