MINISTRY OF EDUCATION AND TRAINING
HANOI UNIVERSITY OF BUSINESS AND TECHNOLOGY
FACULTY OF ENGLISH

* * * * *

GRADUATION ASSIGMENT

VIET NAM CUSTOMS AND E-CUSTOMS DECLARATION
IN BAC NINH CUSTOMS

Student:

HANOI,

0


TABLE OF CONTENTS
TABLE OF CONTENTS..............................................................................1
ACKNOWLEGEMENTS..............................................................2
ABBREVIATION........................................................................3
INTRODUCTION.......................................................................4
CHAPTER I..............................................................................5
INTRODUCTION OF VIET NAM CUSTOMS...................................5
1. Functions......................................................................5
1.1. Organization structure:............................................5
2. Statement of Vietnam customs......................................6
2.1. Vision......................................................................6
2.2. Mission statement..................................................7
CHAPTER II.............................................................................8

CURRENT SITUATION OF BAC NINH E-CUSTOMS DECLARATION..8
1. Process of the application of e-customs declaration in
Bac Ninh customs..............................................................8
2. Model of e-customs declaration in Bac Ninh customs....11
3. Positive results after applying e-customs declaration...12
- Improved customs procedures:..................................13
- Modernization of customs staffs team:........................15
CHAPTER III..........................................................................18
THE

DIFFICULTIES

IN

THE

PROCESS

OF

E-CUSTOMS

DECLARATION OF BAC NINH CUSTOMS...................................18
1. The lack of information technology and infrastructure..18
2. Computer skill and professional ability of enterprises
and customs offices.........................................................23
CHAPTER IV..........................................................................24
SOLUTIONS TO IMPROE E-CUSTOMS DECLARATION OF BAC
NINH CUSTOMS.....................................................................24
1.Improvement


of

information

technology

and

infrastructure.................................................................24

1


2. The use of human resource management.....................26
CONCLUSION........................................................................30
BIBLIOGRAPHY.....................................................................31
ACKNOWLEGEMENTS

I wish to express my sincere thanks and special gratitude to Mrs.y
tutor in studying theory, who kindly supervised and gave me
encouragements at all stages of my work.

I am grateful to the leader, the heads of three teams and all
members of Bac Ninh Customs, who whole-heartedly provides
help and co-operation for my thesis.

Though I am not working in a company, the knowledge that I study
in Ha Noi University Business and technology (HUBT) is very
valuable and I am very happy to apply it to the development of Bac

Ninh Customs.

I am indebted to the HUBT for having provided me the interest to
study.

2


ABBREVIATION

GDVC: General Department of Vietnam Customs

IT

: Information Technology

LAN

: Local Area Network

WAN

: Wide Area Network

LAN

: Local Area Network

3



INTRODUCTION
Along with the rapid development of international trade in some recent
years, the quantity of imports and exports through a country is more and
more increased. The diversification of international business transaction
requires each country to improve and modernize customs procedures;
research and apply modern customs management methods to create
favorable conditions for import and export activities of companies, push up
the development of economy but still ensure the country’s security.
Vietnam customs is striving to reach: “the advanced management level of
other regional customs administrations , transparent legal system in
compliance with international standards; professional and specialized staff;
clearance system mostly based on automation and application of risk
management and modern technical equipments in order to facilitate trade
and attract foreign direct investment making active contribution to the
fostering of economic growth, national revenue collection and security”.
While considerable reform measures have been undertaken recently, Bac
Ninh customs is still considered slow, lack of information technology and
infrastructure. The Customs administration will need to change significantly
in the direction of modernization, improvement of information technology
and infrastructure.
As a citizen of Bac Ninh city, I have been watching the positive change of
my city. In term of modernization, Bac Ninh customs is now concentrating
on the implementation of electronic customs declaration, the first stage of ecustoms procedures. That is the reason for my GRADUATION
ASSIGNMENT: “Vietnam customs and E-customs declaration in Bac
Ninh customs”.

4



CHAPTER I
INTRODUCTION OF VIET NAM CUSTOMS

1. Functions

The main function of Vietnam Customs is the State management over
customs with regard to exported, imported or transited goods, transport
means on exit, entry and in transit, of foreign and domestic organizations
and individuals; and the organization and operation of the customs service.
1.1. Organization structure:
The Customs Administration has undergone several organizational and
structural changes over the last 60 years since its birth in 1945. The General
Department of Viet Nam Customs (GDVC) was established in April 1984
and placed directly under the Government’s authority but in September
2002, it was placed under the Ministry of Finance. As a result, the strategic
planning process has also been altered accordingly.
The organizational system of Vietnam Customs now consists of:
a/ The General Department of Customs;
b/ Customs Departments of provinces, inter-provinces, and centrally-run
cities;
c/ Border-gate customs sub-departments, customs control squads and
equivalent units.

5


- Task of the customs service:
+To propose policies and measures for customs-related state management
over the import, export, exit, entry and transit activities as well as tax
policies applicable to import and export goods.

+To inspect and supervise goods and means of transport;
+To prevent and combat smuggling and illegal cross-border transportation
of goods
+To organize the implementation of tax law applicable to import and export
goods
+To make statistics on import and export goods
- Principles for organization and operation of the customs:
+ Vietnam Customs shall be organized and operate according to the
principles of centralized and uniform command.
+ The General Director of Customs shall uniformly manage and execute
activities of the Customs at all levels; the Customs at lower level shall
submit to the management and direction by the Customs at higher level.
2. Statement of Vietnam customs

2.1. Vision
The Customs of Vietnam is a highly professional, modern, transparent, and
effective Customs Administration meeting requirements of actual situations
and national economic development.

6


2.2. Mission statement
+ Enforcing the effective management over imports & exports activities and
international trade, providing favorable conditions to the trade and
production development.
+ Protecting and contributing to the facilitation of development of national
economy.
+ Protecting revenues.
+ Fighting against smuggling, combat commercial fraud, protecting the

interests of consumers.
+ Contributing to the protection of economic sovereignty, national security
and community security.

7


CHAPTER II
CURRENT SITUATION OF BAC NINH E-CUSTOMS
DECLARATION.

1. Process of the application of e-customs declaration in Bac Ninh
customs
According to Decision 149/QD-TTg by the Government, the first period is
the experimenting application of e-customs procedures at Hai Phong and Ho
Chi Minh customs departments. Based on the result of the first period, the
second period will be widening to other applicable departments.
Hanoi customs department is one of those departments in the second period.
Being a sub-department of Hanoi Customs, Bac Ninh customs has been
quickly planning and implementing e-customs procedures.
The process of the application of e-customs declaration in Bac Ninh customs
was divided into two phases:
- The first phase: E-customs declaration was experimentally implemented at
industrial team (customs procedure team for managing industrial zones)
This team was equipped with one International Business Machines (IBM)
server and ten computers. Besides, there are 5 computers with ready
software of e-customs declaration for enterprises to learn and implement ecustoms declaration.
At that moment, registration customs officers are also equipped with
knowledge of e-customs declaration, so that they can not only receive and
perform their jobs with the data from enterprises, but also to some extend,


8


understand how to use e-customs declaration software. Because this
software is absolutely new to enterprises, enterprises may face difficulty in
declaring e-customs, then customs registration officer, who directly
communicate with enterprises, help enterprises solve the problem.
Hanoi customs department understood the situation, so they organized
training programs for both customs officers and enterprises, where most
worries and questions were answered by the software writer and network
administrators.
Table 1: Number of e-customs declaration form registered in first phase

Year
2007

Apri Ma Jun Jul Augus Septembe Octobe Novembe Decembe
l

y

e

y

t

r


r

r

r

361

548

706

782

Number
of ecustoms
forms

3

172 373 381 120

registere
d
(Source: Report of e-customs declaration by Industrial team)
Despite of many difficulties, it is fortunate that this program is welcome and
Bac Ninh customs received support from enterprises. Canon Vietnam Co.,
ltd – Que Vo Branch is the first enterprises to apply e-customs declaration
model in Bac Ninh, therefore, a lot of other enterprises were also eager to
take participation. The number of e-customs declaration form is therefore

increased month by month.

9


- The second phase: From the result in the first period and the requirement
of enterprises, Bac Ninh customs was accepted to implement e-customs
declaration in the expertise team since 1 January 2008, marking a
synchronous operation of e-customs declaration in the sub-department.
Another IBM server with 8 computers was installed with e-customs
declaration program. 3 more computers are ready for computers to learn and
implement this procedure right at expertise team.
Like the first phase, training programs are organized again for both customs
and officers. Bac Ninh customs itself opened some short program to instruct
enterprises and deal with the problem that enterprises are facing. Therefore,
the result in the second phase is better than that of the first phase.
Table 2: Number of e-customs declaration forms registered in second phase

Year

January Februar March April

2008
Industrial
team
Expertise
team

May


June

July

August

y
975

1058

1629

1578

1216

1537

1655

1839

116

252

542

643


549

673

681

736

(Source: Primary statistics of e-customs declaration in Bac Ninh customs)
With the right policy of Hanoi customs department and the learning lessons
from Hai Phong and Ho Chi Minh customs departments in the first period,
the application of e-customs declaration is on the right way. The operation of
e-customs declaration in both industrial team and expertise team in two
geographic regions create favorable conditions for enterprises to take part in
e-customs procedures.

10


2. Model of e-customs declaration in Bac Ninh customs
At the moment, e-customs declaration in Bac Ninh customs is working in
two different ways: First, enterprises use declaring software to declare in
their own computers and send information to customs office via Internet.
Second, enterprises declare right immediately from computer system set up
in two professional teams and send information via network.
In this process, information declared from enterprises’ computers will be
transferred to an e-customs declaration server in Bac Ninh customs through
a network system of Hanoi customs. All the information will be transmitted
via internet and saved in a database of Hanoi Customs, then transmitted

again to Bac Ninh customs to a wire network Mega Wide Area Network
(WAN).
Next, customs registration officers through a local network in Bac Ninh
customs receive the information from enterprises to perform their jobs with
the support of automatic inspection level system. This system is operating
under the analysis of the criteria declared in the customs declaration form
and use a database from General department to evaluate the risks and give a
point to each criterion. Depending on the total points, an inspection level
will be given out to the customs declaration form.
When an e-customs declaration form is accepted and a registration number
is issued, enterprises will bring a pair of paper declaration form with its
documents to customs office to continue professional procedure.
The method of e-customs declaration in Bac Ninh customs is similar and
consistent with some other sub-departments of Hanoi customs. However,
this model is somehow different to the e-customs procedures of Ho Chi
Minh and Hai Phong customs. In these two cities, all procedures of e-

11


customs are carried out at one electronic customs sub-department.
Meanwhile, Bac Ninh customs implements independent declaration under
the policy of Hanoi customs and all data from companies will be first
transferred to Hanoi customs. and then automatically transferred different
sub-department of customs like Bac Ninh.
This model differentiates from e-customs procedures mentioned in Decision
52/2007/QD-BTC that in all circumstances enterprises need to bring paper
documents to customs office (in Decision 52/2007/QD-BTC, e-customs
declaration forms in green stream are exempted from handing in
documents). The reason is the inadequacy of legal framework for electronic

documents in field of customs.
Model of e-customs declaration in Bac Ninh has one different point that
enterprises can declare right at customs office. This method is only suitable
for the first experimenting step, for a long view enterprises should declare in
their own computers to ensure the favorable functions and catch up with ecustoms model of developed countries in the world.
3. Positive results after applying e-customs declaration
Understanding of our government’s policy about building up an electronic
customs system in Vietnam, Bac Ninh customs actively has prepared
equipments, organized training programs for customs officers and
enterprises since the end of 2005. Under the official guidance of Hanoi
customs, officers of Bac Ninh customs are immediately start e-customs
procedure program. It has been more than a year from the first day of
experimenting e-customs declaration (18 April 2007), despite many
obstacles, Bac Ninh customs has overcome all difficulties, accomplished all
tasks and e-customs declaration activities have achieved remarkable results.

12


- Improved customs procedures:
Just about one and a half year ago, when talking about customs declarations,
enterprises not only in Bac Ninh provinces but also in all customs offices
imagined a long path. Most of companies only declare customs when the
goods is about to be imported or exported. The first action is to buy a pair of
customs declaration form, declare and bring to customs office. Customs
office after checking the conformity of the dossier will input the data to
computer. The matter is the irrelevance between the declared information of
enterprises and the required information of customs officers. In this case,
enterprises must come back to their company to declare again or to
amend/supplement documents. Therefore, it may take days for registering a

customs declaration form. But now, the situation is much different…
Applying e-customs procedures, enterprises can be active with both time
and the declaring content, and customs officers perform their tasks more
efficiently.
+ E-customs procedures:
Now, enterprises in Bac Ninh province are familiar with ECUS – the
popular software of e-custom declaration. With this software, enterprises can
just stay at home declare and wait for the approval of customs officers
before coming to customs office to complete the procedure. All the
information are saved and secured in the Center of data and information
technology in Hanoi Customs. Enterprises are always supported by customs
officers in field of e-customs procedures.
+ Reduced time for completing an e-customs dossier:
There is a big improvement since the application of e-customs procedures.
The increasing number of customs registration form has put tremendous

13


pressure to a limited number of customs officers. With the support of ecustoms declaration system, the period of time for completing an e-customs
dossier in step 1 has been significantly reduced, from 20-30 minutes for a
paper dossier, to just about 1 minute for an electronic dossier.
+ Prioritized policy:
One policy in Bac Ninh customs is that a dossier declared with e-customs
declaration software will have priority to that of a normal paper declaration
form. There are always customs officers to check the data from enterprises
in computers, and those electronic dossiers always have the priority to be
dealt with beforehand. Moreover, this method would also simplify liquidity
work.
- Right awareness and co-operation of enterprises:

+ The support of enterprises: Although there are hesitation to participate to
e-customs procedures, customs officers of Bac Ninh customs have
persuaded and made enterprises understand the advantages of this program.
Therefore, the number of enterprise take part in this procedure more and
more increases. Until August 2008, about 80% of enterprises in the region
have declared e-customs in the headquarters of Bac Ninh customs and Que
Vo industrial park.
+ Training program: At first, enterprises were not interested in e-customs
declaration because they just saw the expenses of installing the software but
did not understand its advantages. Through the training programs organized
by Hanoi customs and Bac Ninh customs, enterprises acknowledged the
strengths of this new declaring method. Bac Ninh customs itself organized

14


10 training courses for enterprises and the number of staffs in enterprises
taking part in one of those courses is more and more increasing.
+ Correct e-customs declaration: Apart from the high cost of the software,
the ability of staffs of enterprises was also an obstacle. At the beginning time
of its application, the number of incorrect e-customs forms to regulation was
accounted for a large part. Even having been experienced in training
courses, enterprises still declared incorrectly quite often, so they had to
declare many time, taking even more time than declaring paper. Fortunately,
this situation was changed after a short period of time with the wholehearted help from customs officers. Up to August 2008, the percentage of
incorrect e-customs declaration form has increased to 85%.
With the support and co-operation of enterprises, e-customs declaration has
been promoting its advantages, contribution the development of the customs
procedure in general.
- Modernization of customs staffs team:

+ Young customs officers:
Since 2005, beside experienced customs leaders and officers, Bac Ninh
customs staff teams are supplemented with more and more young members,
who were born from 1978 to 1985, to add up to the modernization
requirement of customs field. These young customs officers are educated
basically, and capable of using foreign languages. Moreover, they have the
perceiving ability to adapt to new problems of the modernization process. In
addition, dare to think and dare to do and dare to take responsibility with
high enthusiasm is also an advantage. The young team of customs staffs
team is taking an important role in e-customs declaration program, preparing
for e-customs clearance in the near future.

15


+ Training customs officers:
Although possessing professional and experienced customs staffs, standing
in the new era of development, especially when Vietnam joining WTO, Bac
Ninh customs officers have been participating in training programs of Hanoi
customs. The director of Bac Ninh customs also organizes some short
courses for their customs officers to capture and reinforce the knowledge. It
is especially important because Vietnam laws are considered to be
inconsistent, so the authorized organizations have to change their laws and
regulations frequently. Bac Ninh customs officers must know and
understand all documents of high level authorities to work efficiently.
Before and in the first step of implementation of e-customs declaration, Bac
Ninh customs stipulated key customs officers to participate two courses of
Hanoi customs department. For the internal education, Bac Ninh customs
held up to now 5 classes in two periods with the enthusiastic participation of
its staffs. At the moment, there are about 20 customs officers who can take

on the work of receiving e-customs declaration forms with professional
skills.
+ Professional working manner:
In addition to strengthening the ability of customs officers, building up
customs officers with professional working manner and morality are
attached special importance by the leaders of Bac Ninh customs. A modern
method of e-customs declaration, the first stage of e-customs clearance has
brought enthusiasm and professional style of work to customs officers. The
relationships between customs office and enterprises have great deal
improved.

16


After ten years of establishment and development, due to the clear-sighted
leading policy of the leaders and the determination of all customs officers,
Bac Ninh customs have achieved remarkable results. With the main
motivation to the modernization of customs, Bac Ninh customs
progressively improves customs procedure, standardizes team of customs
officers and build up a co-operative relationship between customs office and
enterprises.
After application of e-customs declaration in Bac Ninh customs. Bac Ninh
customs has achieved few positive results. Besides it faces to many
difficulties below.

17


CHAPTER III
THE DIFFICULTIES IN THE PROCESS OF E-CUSTOMS

DECLARATION OF BAC NINH CUSTOMS

Beside the positive results in more than one year of implementing e-customs
declaration, Bac Ninh customs also faced a lot of difficulties and obstacles,
not only in the operation of e-customs procedures, but also the preparation
process to e-customs clearance in the future.

1. The lack of information technology and infrastructure
* Information technology (IT):
- Declaring model through website:
This method is very useful for small enterprises or for enterprises seldom
imports and export. Enterprises just need to declare its tax code and input
the data from the customs registration form to send to customs office.
However, it actually seems to be unused in Bac Ninh customs because of the
defects of the website. The website only let enterprises declare customs form
in case of commercial contract (sell and buy through bolder gates). The type
of processing contracts and importing materials to export was not updated,
so it can be supported for liquidity. This function is important and valuable
to Bac Ninh customs, because processing contracts and importing materials
to export activities account for a big proportion of customs procedures.
Therefore, declaring through website is little known and rarely used.
- Declaring through Thai Son company’s software:

18


E-customs declaring software built by Thai Son company in comparison to
website declaring method has the ability to work with the liquidity of
processing contracts and importing materials to import types. Enterprises
buy and install the software in their own computers to declare to customs

office through Internet. The data is saved in the computer to support for
liquidity. Thank to this, computer can automatically calculate the remaining
materials left of enterprises, reducing labor force to do hand-work liquidity.
Thai Son company’s e-customs declaration software has three versions:
+ ECUS-K: for declaring e-customs with commercial contracts;
+ ECUS-G: for declaring e-customs with processing contract;
+ ECUS-X: for declaring e-customs with importing materials for
exporting products.
However, Thai Son company does not have enough ability to provide
software maintenance and support for more and more enterprises from all
regions in our country. Moreover, this program is newly written, then it has
some errors cannot update to be suitable for the real situation of Bac Ninh
customs, which leads to the worry of enterprises in buying and
implementation of the software.
- The relationships with other related organizations:
The experienced lessons in other countries show that in order to set up a
successful e-customs procedure, it is important to have an electronic
governmental basis, a management information system to combine strictly
and consistently database between customs offices and other related
organizations such as: investment authorized organizations, shipping

19


agencies… However, with limited sources of capital, this process in Vietnam
is undisciplined. Therefore, customs officers, who have responsibility to
manage the information of the company and its import/export goods but
also, have to create favorable conditions to company, actually work with
their own knowledge and experience.
- The quality of the internet line:

According to le policy of the General department of customs about
consistent management in all customs departments, the data of e-customs
declaration form from enterprises to customs office and the feedback from
customs office to enterprises is transferred through internet. The internal
Megawan line from Bac Ninh customs to Hanoi customs is very good, but
the internet line in Bac Ninh province is sometimes disconnected because of
the bad quality and small bandwidth. Enterprises in this case have to wait
and connect many times to transfer data, the advantageous function of ecustoms declaration is then lost.
- There lacks a comprehensive IT development strategy. At present, IT
planning is made only on annual basis subject to budget availability rather
than on a long-term basis setting out directions for the whole process of
reform and modernization. Moreover, IT development planning has not been
combined with business process reform planning;
- A strong and comprehensive IT system is not yet available for business
automation. At present, computerization is taken merely for the purpose of
supporting procedures processing through automating manual procedures
without considering potentials for further expansion of computer-based
activities

20


- Lack of funding for IT is also an impediment to its development.
* Financial capacity of enterprises and facilities of customs office.
- Enterprises:
Bac Ninh is now considered a province with economic potential in our
country. There are not so many big entrepreneurs here and most of them are
from the capital of foreign direct investment. Small and medium enterprises
take the minority in this region and their ability to pay for e-customs
declaration is limited. In the other hand, foreign invested enterprises with

modern working and law abiding style find it easier to implement e-customs
declaration. The complication of management mainly comes from small and
medium enterprises, who often deal with processing and importing materials
to export activities. The high cost of the software is the barrier for them to
participate in e-customs declaration. It is a difficult-to-solve problem to Bac
Ninh customs when enterprises can understand the advantages of the
software but still hesitate to buy the software.
- Customs office:
At this moment, all computers serving for e-customs declaration in Bac
Ninh customs are new, modern and appropriately arranged. However, there
are still shortages of computers for the receiving e-customs declaration
forms. In addition, Bac Ninh customs need computers for training program
and support enterprises that do not possess authorized software to declare
right at customs office. This is important because most enterprises who
declare at customs office find it difficult to use the software, and when all
computers are fully used, other enterprises have to wait to have a spare
computer.

21


In the other hand, the increasing number of customs declaration forms leads
to the overload of the 24/24 working hour servers. The other computers will
then operate with lower speed; therefore the work of customs officer is less
efficient.
It is clear that there is a need to upgrade the facilities of Bac Ninh customs.
However, state budget for Bac Ninh customs is limited. In order to have new
computers, Bac Ninh customs need to propose to Hanoi customs department
and wait for their approval
- In customs working offices, esp. at branches, there are still too many old

and poorly maintained offices - many with unsuitable layouts and
inadequate work spaces that need to be addressed by a comprehensive
investment and maintenance program
- In relation to control equipment, there is a shortage of modern control
equipment and significant redundancy of existing equipment. This
combination means that there is insufficient equipment plus the absence of a
technical maintenance system together with a homogenous business process;
as a consequence, the control capabilities are compromised.
- There lacks a scientific asset management and long-term planning
mechanism. The current system is basically confined to maintenance of an
asset register and does not have the asset management planning capability to
develop a clear longer-term infrastructure and equipment development
strategy, as opposed to the current annual requirements system of
forecasting.

22


2. Computer skill and professional ability of enterprises and customs
offices
- Staffs of enterprises
In order to create favorable conditions for enterprises to understand and
know how to use the e-customs declaration software, Bac Ninh customs
organized many classes at the most suitable time. However, the rate of
wrong declaration is still high. One reason for that bad situation is the
computer skill and professional ability of the staffs of enterprises. Most of
enterprises in Bac Ninh province are small and medium sized, the ability of
their staffs about computer skill is not very good. Therefore, companies
themselves diminish the advantages of enterprises when taking part in ecustoms procedures.
- Customs officers:

Not only staffs of enterprises but also some customs officers are not skillful
at using computer. Only 70% customs officers who are involved in ecustoms procedures are expert at professional knowledge and skilful at using
computer. The rest 30%, mostly old customs officers, find it hard to deal
with computer efficiently.

23


CHAPTER IV
SOLUTIONS TO IMPROE E-CUSTOMS DECLARATION
OF BAC NINH CUSTOMS.
1. Improvement of information technology and infrastructure
- It is necessary to amend, upgrade e-customs software to be compatible
with database system and support all types of import and export activities.
This software must possess all functions to guarantee that enterprises can
declare at any time, from anywhere and enterprises can change their data in
case of mistaken registration.
- It is also necessary to enhance the functions of the software by
encouraging more programming companies to participate and compete
actively with software of Thai Son company. The General department of
customs just announced the standards to connect to e-customs and data
exchange system. The programming companies should have close
relationships to the customs offices to understand correctly customs
procedures and the difficulties need to overcome when declaring e-customs.
- The model of declaring through website should be working and have more
functions to suit with all types of customs declaration. The fully functioning
website would help enterprises, especially small and medium enterprises,
easily participate to e-customs procedures because declaring through
website costs little for installation, maintenance, and enterprises can declare
at any time, from anywhere.

- In short term, it is necessary to develop both two models of e-customs
declaration. However, for a far outlook, to make e-customs declaration

24