Historic decision: MoIT slashes 675 investment, business procedures

Decision 3610a/QD-BCT, to be applied in the 2017-2018 period, is guided by the principle of ensuring the interests of businesses and people, and society’s sustainable development. It leaves in force 541 procedures in 27 areas under the ministry’s purview.

The Ministry of Industry and Trade (MoIT) made this historic decision following a two-week review of 1,216 conditions for business and investment. The decision was based on the following principles:

• State management should consist of inspections on the implementation of business and investment conditions.

• Business and investment conditions should be based on market access conditions specified in international commitments, to which Vietnam is a signatory. • Business and investment conditions must comply with criteria stipulated in Article 7 of the 2014 Investment Law.

• The reduction and simplification of business and investment conditions, as well as the overhaul of state management in each field, should be based on existing resources and options for stronger decentralization to give localities greater authority in management.

• The reduction and simplification of business and investment conditions should be carried out in conjunction with administrative and institutional reforms.

Prior to that, in October 2016, the MoIT abrogated 15 administrative procedures and simplified 108, equivalent to 27.8 percent of the total number of procedures in force at the time.

The internal ministry review left intact procedures in 10 fields. These include: • trading activities involving the use of industrial explosive materials and explosive pre-substances; • mine action services; • rice export; • temporary import of goods subject to excise taxes for export; • temporary import of used goods for export; • trade in minerals; • trading activities by foreign-invested companies; • oil and gas activities; • energy audit, technical audit to ensure safety of machinery and equipment; • production of uniforms for foreign armed forces.

The reduction of business and investment conditions pertains to 17 fields, among them: petroleum, gas, chemicals, alcohol, cigarette, food, electricity, temporary import of frozen food for export, franchising, logistics, industrial pre-substances, commodities exchange, commercial assessment, multi-level marketing, and e-commerce.

According to Minister Tran Tuan Anh, cutting business conditions will remain at the core of the administrative reform process, aiming to improve the business and investment environment to serve the goal of building a constructive government.

Along with simplifying business conditions, the MoIT has also been implementing Government Resolution 19/NQ-CP to facilitate business operations.

Specifically, the ministry has reduced the range of goods that must be examined prior to customs clearance by 58 percent.

The MoIT said it had dealt thoroughly with business complaints about inspections of energy efficiency, formaldehyde content, steel quality, energy labeling, and declaration on chemical substances. The ministry also noted that it had provided many of its procedures online.

Minister Tran Tuan Anh affirmed that the MoIT would continue addressing other problems facing businesses. Among the measures planned: • Further review to reduce the range of goods subject to specialized inspections prior to or after customs clearance; • For goods subject to compulsory inspections, the MoIT will carry out inspections after customs clearance and promote risk management principles; • Diversify units involved in conformity assessment; • Further simplify administrative procedures and business conditions in fields managed by the ministry; • Improve the system of Vietnamese standards and technical regulations.

In 2015, 2016 and 2017, the MoIT has fulfilled the following assignments on schedule: Reduce the range of goods subject to inspections prior to customs clearance: On September 8, 2016, the minister of industry and trade issued Decision 3648/QD-BCT announcing the list of imported goods that must be examined prior to customs clearance to ensure quality, technical standards and food safety. This decision replaces Decision 11039/QD-BCT dated December 3, 2014. As requested by the MoIT, the Ministry of Science and Technology amended a previous directive stipulating that quality examinations of steel products, except steel for production of reinforced concrete structures, would be carried out after customs clearance from October 1, 2017.

Decision 3648/QD-BCT and Circular 07/2017/TT-BKHCN have eliminated about 420 among the total of 720 Harmonized System (HS) codes that must be inspected prior to customs clearance (58.3 percent). Consequently, among the range of goods managed by the MoIT, only explosive pre-substances and food remain subject to compulsory inspections prior to customs clearance in accordance with the Law on Food Safety.

Concretize HS codes for products subject to inspections: All food and explosive pre-substances that must undergo safety inspections prior to customs clearance have been classified with eight-digit HS codes.

Eliminate monopoly, diversify inspection units: The MoIT has assigned 11 units to carry out food safety inspections at a state level. Two testing organizations with adequate equipment and facilities have also been appointed to carry out inspections of industrial explosive materials.

The MoIT has issued Circular 36/2016/TT-BCT dated December 28, 2016 to replace Circular 07/2012/TT-BCT that provides stipulations on energy labeling for transport means and energy consuming appliances. The ministry has allowed eligible domestic and foreign testing organizations, including independent testing organizations and manufacturers’ laboratories, to implement this post-customs-clearance procedure.

Apply risk management principles to reduce inspection frequency: The MoIT has applied risk management principles to reduce the frequency of safety inspections of imported food products. For consignments of the same categories and the same origins, which have been certified as meeting food safety requirements through five consecutive inspections, the results of previous inspections will be usable for the next customs clearance.

To further simplify administrative procedures and reduce the time required for specialized inspections, the MoIT is drafting a new circular amending some existing stipulations on food safety inspections. Under the draft, inspection reports for consignments of the same categories and the same origins, which have been certified as meeting food safety requirements through three consecutive inspections, will be usable for the next customs clearance. The MoIT will coordinate with the Ministry of Health and the Ministry of Agriculture and Rural Development to make a list of goods that are not required to undergo any inspection, and another list of goods with usable inspection reports, following the guidance of Deputy Prime Minister Vu Duc Dam.

In 2016 and the first half of 2017, simplified inspection procedures were applied to 2,325 consignments of food products, helping reduce the time for customs clearance from 12 working days to two working days.

Simplified inspection procedures have also helped reduce the time required for customs clearance for steel products by three to four days, and reduce testing fees by VND2 million for each consignment.

The MoIT has applied the National Single Window mechanism to deal with the following five administrative procedures:

• Granting preferential certificates of origin; • Granting automatic import licenses with respect to motorized vehicles with high cylinder capacity; • Granting import licenses with respect to substances that deplete the ozone layer; • Granting export, import licenses with respect to industrial explosive materials; • Granting Kimberley Process certificates for crude diamond.