Vietnam to control CBU car imports more tightly

The Ministry of Industry and Trade is joining forces with the State Bank of Vietnam (SBV) to control more tightly loans in foreign currencies that aim to fund imports of 1500 product items. Imported cars under the mode of complete built units (CBU) are among them.

The Ministry of Industry and Trade (MOIT) has released its list of unessential imports, plus consumer goods discouraged as imports. This includes 46 categories of goods with nearly 1500 product items that will be tightly supervised.

Of these import items, CBU auto imports will bear specific supervision methods in addition to restrictions on loans in foreign currencies to fund car import deals.

MOIT, together with the Ministries of Finance and Transport, will release an inter-ministerial circular, stipulating the ports through which car imports can go. The ministries will also set obligatory examinations on brand new CBU imports.

Sources claim that CBU auto imports will be allowed customs clearance at only five international ports, while the time-limit for examining cars for customs clearance will increase from five days to 10 days.

According to MOIT, in the first four months of 2010, CBU auto import revenues on those with less than nine seats reached $106 million, an increase of 44.7 percent over the same period of 2009. In April alone, import revenues on luxury products increased by 155 percent over the same period of 2009.

The import revenues on car parts used to make autos with less than nine seats also increased significantly, by 129 percent in the first four months of 2010 in comparison with the same period of 2009, reaching $277 million.

Also according to MOIT, imports that Vietnam must restrict gobbled up to $2.664 billion in the first four months of 2010, 44.5 over the same period of 2009. Import revenues on these items also increased by 58.8 percent, while revenue for necessary products increased by only 35 percent over the same period of 2009.

Previously, MOIT planned that import revenues on restricted products would be $6.295 billion this year. Vietnam has fulfilled 42 percent of this goal in just four months.

MOIT and relevant ministries are making every effort to reduce the import of unessential and luxury products in order to curb the trade deficit. Economists warn that the trade deficit in just the first four months is alarming, at $4.65 billion, or 23 percent of the export revenue.

Surprisingly, the Iphone 3G, which retails at tens of millions of dong and is a luxury product, is not on MOIT’s list.

To date, relevant ministries have only requested that telecom companies import 3G equipments and Iphone 3G at “bearish” levels.