The Vietnamese government on December 31, 2019 issued Resolution No.119/NQ-CP with an aim to address rampant cases of origin fraud and illegal transshipment, in a move to show its determination to ensure fair trade with major partners.

Illustrative photo.

The resolution is a necessary move to ensure sustainable development of Vietnam’s exports and lawful rights of local compliant traders, particularly with the enactment of new free trade agreements such as the Comprehensive Progressive Trans – Pacific Partnership (CPTPP) and the EU – Vietnam Free Trade Agreement (EVFTA) in the context of the ongoing US – China trade war, the Ministry of Industry and Trade (MoIT) said in a statement on its portal.

Additionally, the resolution is expected to attract foreign investment in hi-tech projects with greater added value, helping local firms to further integrate in the global supply chain.

To fulfil such objectives, the resolution proposed a number of measures:

Firstly, the government would continue to perfect the legal framework related to origin of goods and products, while enhancing capabilities in identifying and preventing cases of illegal transshipment, origin fraud and evasion of trade safeguard measures.

Secondly, taking stricter measures against cases of trade frauds.

Thirdly, raising awareness related to trade fraud.

Fourthly, showing Vietnam's determination to cooperate with international partners in preventing and tackling trade fraud activities.

Due to the US – China trade war, US-bound Chinese goods such as plastics, optical items, electronics that are subject to US anti-dumping duties have decreased in volume, but transshipment of such goods to the US via third countries, including Vietnam, is surging.

A report from the Vietnam Steel Association suggested Vietnam’s steel industry has been at the center of trade probes from other countries following the escalation of the trade war.

In late October, the General Department of Vietnam Customs (GDVC) timely prevented a US$4.3-billion Chinese aluminum batch forging Vietnamese origin from being exported to the US.

“If not properly addressed, illegal transshipment would increase the risk of Vietnamese compliant traders facing slower export procedures in the US, as well as higher customs duties,” stated a USAID expert.