Despite strict regulations, car imports from unofficial distributors still flock to VN

With the Circular No 20 which stipulates strict regulations on the procedures for importing cars, experts believe that only the products to be distributed by authorized resellers can go through the border. However, in reality, luxury cars from different sources still have been flocking to Vietnam.

The information that Hung Long, a private car company, not any other authorized distributors in Vietnam such as Toyota, Ford, Honda or Mercedes Vietnam, imported cars after June 2011, the time when the circular No 20 took valid, stirred up the public.

Luxury imports slip through the net

Just within one month since the day the Circular No 20 became valid, Hung Long Company made customs declarations for 46 Lexus cars. The imports quickly got through customs agencies and were sold out.

Only after the cars got customs clearance, on October 11, 2011, Deputy Minister of Industry and Trade Nguyen Thanh Bien sent a dispatch to the General Department of Customs (GDC), affirming that the documents shown by Hung Long could not satisfy the regulations of the Circular 20.

However, not only Hung Long could import luxurious cars with less than nine seats to Vietnam in such a strict control, GDC has found out that the Hai Phong Customs Agency has reported it has cleared many other consignments of cars for 8 other importers. In fact, the number of cars that went through the customs agencies was higher than the reported number.

Many other companies have also got car imports cleared, including Toan Thinh Trade and Production Company, Vietnam Auto Investment and Service Company, Phong Thuy Trade Service Company, Viet Nhat Import-Export Company, THien Lam Company, Duc Phat Construction and Import-Export Company.

Most of the importers are private enterprises, not the sales agents or the enterprises authorized to import and distribute products in Vietnam. Therefore, no one can understand why the enterprises can obtain necessary documents to import cars.

Meanwhile, Akito Tachibana, General Director of Toyota Vietnam, the enterprises which is authorized to distribute Toyota’s products in Vietnam, has confirmed a principle of the manufacturer that only one enterprise is authorized to distribute products of the manufacturer in one market.

Most recently, Japanese Toyota Group has affirmed that Toyota Vietnam is the exclusive importer and distributor of Toyota products in Vietnam.

What to do with the imported cars?

While relevant agencies still argue about which one needs to take responsibility for the illegal imports, they have to deal with another problem: what to do with the imported cars?

Under the current laws, the illegal imports must be forced for re-export, or they will be confiscated. However, it is really not easy to seize the consignments worth hundreds of billions of dong. Meanwhile, it is also impossible to force enterprises to re-export the products, because they said all the cars have been sold.

An official of the Hai Phong Customs Agency has revealed that the customs agency has proposed to “ignore” the 46 cars which were imported and sold by Hung Long. Meanwhile, the cars being kept at the ports will be forced to re-export.

However, Nguyen Ba Hoc, Director of Hung Long Company, said that besides the 46 cars the company has sold, it still has another consignment of 16 cars which were imported in September 2011, which were waiting for customs clearance. This is the consignment the company imports under the mode of definitive purchase; therefore, it cannot re-export them.

Hoc complained that after three months of letting the imports lying at the ports, all the money of the enterprise have gone (it paid import tax worth 16 billion dong). Therefore, the enterprise has fallen into a deadlock.

However, what will happen if GDC lets Hung Long pass, i.e., it violates the legal document?