CHAPTER 8: PERFORMANCE OF THE IMPORT - EXPORT CONTRACT

An exceptionally important thing after signing a purchase agreement is to perform

that agreement.
To perform an export contract, Seller needs to execute the following:
- Export license application
- Initial work related to payment.
- Goods preparation (production or procurement of goods).
- Pre shipment inspection.
- Customs clearance
- Arranging carriage.
- Arranging cargo insurance.
- Making delivery.
- Setting up the payment documents.
- Claims (if any)
- Contract liquidation.
To perform an import contract, Seller needs to execute the following:
- Import license application
- Initial work related to settlement.
- Transport arrangement.
- Cargo insurance.
- Taking delivery.
- Customs clearance.
- Post shipment inspection.
- Claims (if any).
- Settlement.
- Contract liquidation

8.1. Performance of the export contract

8.1.1. Export license application
Export license is a major legal premise to implement other steps in each export
shipment and must be subject to the government’s import-export controls in the certain
period of time.
Procedures for import and export license in Vietnam have changed a lot in the past
time, from complicated to simple. Before 1st Sep 1998, enterprises had to get license from
Ministry of Commerce (now Ministry of Industry and Trade) so as to conduct the import-
export business. Today, rights to conduct the business of import and export and

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procedures for import and export are subject to Decree No. 69/2018/ND-CP detailing the
implementation of the Commercial Law regarding the international sale and purchase of
goods, sale and purchase agency, processing and transit with foreign parties.
1. For goods exported or imported under permits, export or import traders must
obtain permits of the concerned ministries and ministerial-level agencies.
2. For goods exported or imported under the conditions, exporters or importers
must satisfy the conditions prescribed by law.
3. For goods on the list of import or export goods subject to inspection under the
provisions of Article 65 of the Foreign Trade Management Law, merchants exporting or
importing goods shall be under inspection by the competent bodies in accordance with
the law.
4. For goods not falling into the cases specified in Clauses 1, 2 and 3, traders shall
only have to settle the import or export procedures at the customs offices.
Licensing dossiers include:
a) Written request for license of the trader: 1 original.
b) Investment certificate or business registration certificate, enterprise
registration certificate: 1 copy with the seal of the trader.
c) Relevant papers and documents as prescribed by law.
The licensing process is as follows:
a) Traders shall send one set of dossiers directly or by post or online (if
applicable) to the ministries and ministerial-level agencies competent to grant
permits.
b) If the dossier is incomplete or improper, or needs to be supplemented with
explanatory documents, within 3 working days after receiving the dossier, the
ministry or ministerial-level agency shall notify such to the traders to complete
the dossier.
c) Unless otherwise provided for by law, the time limit for issuance of a license
shall be 10 working days from the date of receipt of the complete and correct
dossier, the ministry or ministerial-level agency shall reply the trader in
writing.
d) Where the law stipulates that the ministry or ministerial-level agency
competent to issue permits must exchange opinions with the concerned
agencies, the dossier processing time shall be counted from the time of
receiving the replies of concerned agencies
e) The grant, amendment, supplementation or re-grant of permits due to their loss
or misuse shall be effected according to the following principles: - Traders
shall only have to submit papers related to the contents to be amended or
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 supplemented. - The time limit for issuance, amendment, re-grant shall not be
longer than the time of granting export or import permits. - In case of refusal to
amend, supplement or re-issue permits, ministries or ministerial-level agencies
shall reply in writing, clearly stating the reasons therefor.
8.1.2. Initial work related to payment
Payment is a critical link in the whole process of performing import-export
contracts. Exporter only keeps his mind on delivery if payment is surely to be made.
Initial work, therefore, needs to be done adequately. Different methods of payment will
have different jobs:
a) In case payment is made by L/C, the seller needs:
 Remind the buyer to open a letter of credit as agreed.
 Check that L/C.
After checking the L/C, the seller will make delivery if the L/C is compatible with
the contract, if not, inform the buyer and the L/C issuing bank to amend it until it’s in
conformity with the contract.
b) In case payment is made by CAD, the seller needs to remind the buyer to
open a Trust account as required. When the Trust account is opened, the seller contacts
the bank to check payment terms. The seller needs to take types of documents, issuers,
numbers of copies … into consideration. The seller only makes delivery when everything
after checking is suitable.
c) In case payment is made by advance T/T, the seller reminds the buyer to
make full payment. After receipt of “Credit” notice from the bank, the seller executes
delivery.
For other methods of payment like deferred T/T, Clean Collection, D/A, D/P, the
seller must make delivery before implementing work related to payment.

8.1.3. Goods preparation (production or procurement of goods).

Goods preparation is a critically important job and can be different in terms of the
subject.
❖ For exporters be manufacturers:
a. Production units need to scrutinize carefully the market and produce products
with quality, design, model … in response to the buyers’ taste. Finished products need to
be checked in quality, packing, marking … in order to conform to the contract.
b. Producers who don’t want or are unable to export their products directly can
authorize another business entity to export.
Import and export of goods by authorized dealers.

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 A business entity [the principal] shall be permitted to authorize another business
entity [the authorized dealer] to import or export or to act as the authorized dealer
receiving import or export from another business entity of all types of goods, except for
goods on the lists for which import and export is prohibited or temporarily suspended.
Import and export by authorized dealers of goods subject to issuance of a
permit
With respect to import and export goods subject to issuance of a permit, as
stipulated in this Decree, the principal or the authorized dealer must have an import or
export permit prior to either party signing the contract of authorized dealership.
❖ For exporters be import-export traders:
a) These traders cannot wait for others to authorize import-export, but must be
active in finding goods sources, explore thoroughly export sources by different methods:
* Buy under obligations (according to plans, orders of Government …) and buy out
of obligations.
* Invest directly to produce exports.
* Process.
* Sell materials and buy finished products.
* Order.
* Exchange goods...
b) Vietnamese Government encourages all export activities, which is expressed
in Law on Commerce 2005 and other legal documents.
Legal basis to bind import – export traders and manufacturers is economic contracts
under Law on Commerce 2005 of Vietnam:
* Definitive contract.
* Processing contract.
* Barter contract.
* Entrusted export contract.
After signing the contract, receipt of goods to export, packing, marking … is done.

8.1.4. Pre-shipment inspection

Before delivery, exporters are obliged to inspect the goods in quality, quantity,
weight.
If the goods are animal, plan and foodstuff, they must be quarantined.
Inspection and quarantine will be done at grassroots level and at border.
- At grassroots level: play a decisive role.
- A border: for re-verification.

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 Inspection at grassroots level will be done by KCS, but the unit’s manager is still
responsible for the goods’ quality. Therefore, there are two signatures on the certificate,
one of KCS, and the other of the unit’s manager.
Quarantine at grassroots level will be done by Plant Protection Department or
Veterinary Station, Quarantine – Diagnosis For Animal Centre.
In many cases, according to the buyer’s requirements, inspection must be done by
an independent agency like Vinacontrol, Foodcontrol, Cafecontrol, Davicontrol, Saigon
Inspection Company (SIC), Viet Minh Company, SGS (Société Générale de Surveillance
S.A), ADIL (Adil International Surveyors Co. Ltd) – Bangkok, OMIC (Overseas
Merchandise Inspection Company) – Japan, …
Procedures for goods checking and inspection are as follows:
1. Application for inspection. Documents include:
● Application form.
● Contract + annex (if any)
● L/C and L/C amendment (if any).
2. Inspection office executes on-site inspection.
● Analyze samples in the laboratory.
3. Inspection office informs the result and grants temporary certificate to
clear Customs (if any)
4. Cargo hold checking (for rice, agricultural products …)
5. Supervising goods delivery
● At the plant, warehouse …
● On site
6. Inspection office issues official certificate.
If the goods need to be fumigated, the exporter must submit an application to
“Fumigation Company – phytosantitary department” to fumigate the goods. After being
fumigated, the goods will be granted a fumigation certificate.

8.1.5. Customs clearance

❖ Customs formalities
According to Article 21 of Law on Customs of Vietnam 2014 on customs
formalities a customs declarant shall:
a/ Declare and submit customs declarations; submit documentary evidence of customs
documents prescribed in Article 24 of this Law;
b/ Send goods and vehicle to proper places for physical inspection;
c/ Pay taxes and fulfill other financial obligations in accordance with the laws on taxes,
charges and fees and other corresponding regulations of law.
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 While conducting customs formalities, customs authorities and customs officials
shall:
a/ Receive and register customs documents;
b/ Verify customs documents and conduct physical inspection of goods and vehicle;
c/ Collect taxes and other amounts payable in accordance with the laws on taxes, charges
and fees and other corresponding regulations of law;
d/ Decide grant of customs clearance for goods, release of goods and certification of
completion of customs formalities applied to vehicle.
❖ Customs document: As stipulated in Article 24 of Law on Customs of
Vietnam 2014 on customs document
1. A customs document comprises:
a/ A customs declaration or documentary evidence in substitution;
b/ Relevant documentary evidence.
As the cases maybe, a customs declarant shall submit sale contract, commercial invoice,
bill of lading, certificate of origin of goods, import or export permit, notice of specialized
inspection results or exemption from specialized inspection, and documentary evidence
related to goods as prescribed by corresponding regulations of law.
2. Documents in customs documents may be paper or electronic documents.
Electronic documents must ensure the integrity and format prescribed in regulations of
law on e-transactions.
Customs documents shall be submitted to customs authorities at their head
offices. In case of application of the national single-window mechanism, specialized
regulatory bodies shall send import or export permits and notices of specialized
inspection results or exemption from specialized inspection in the electronic form via the
integrated communication system.

8.1.6. Arranging carriage

8.1.6.1 By sea
If the seller is obliged to contract for carriage to convey the goods to the destination
under the contract of sale (in case delivery terms are CIF, CFR, CPT, CIP, DAP DAF,
DDP), the exporter must arrange for carriage.
If the contract of sale stipulates that delivery is taken place at the exporter’s country,
the importer must arrange for carriage to bring goods home (delivery terms: EXW, FCA,
FAS, FOB).
Booking space is not an easy operation which requires expert experience in price
situation, freight rates, and provisions of charter-party. In many cases, export entities

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often authorize charter for brokers – Charter transport company (Vietfracht, Vinaschart,
Vosco, Gemartrans, Viconship Saigon …)
In each certain case, exporters can choose one of the following methods of charter:
* Liner.
* Voyage charter.
* Time charter.
❖ Liner:
Ship-owner is also carrier. The relation between carrier and shipper is regulated by
liner B/L.
Liner is also called Booking Shipping Space which means shipper through his
broker or by himself requests ship-owner to let one part of the ship for charter to transport
the goods from this port to another port.
Liner has some features: the goods’ quantity is not much, mainly dry goods, packed
goods, fixed trade routes under uniform rates and common terms available on the back of
printed B/L.
Under this method of charter, formalities are simple, but freight rate is high.
Procedure to hire a liner is as follows:
• Step 1: The owner of the goods through the broker asks the broker to search for
the ship to transport the goods.
• Step 2: The broker asks the ship by sending a liner booking note. The liner
booking note is usually printed in a form, which contains the information needed
to be filled in. Liner booking may be for an individual shipment and also for a
large consignment shipped regularly.
Shippers may book for the entire quarter or full year by a contract with the shipping
company.
• Step 3: The broker and the shipowner negotiate some key provisions in handling
and shipping.
• Step 4: The broker informs the goods owner of the result of the booking.
• Step 5: The goods owner carries the cargo to the port as scheduled.
• Step 6: After the goods have been loaded onto the ship, the shipowner or the
shipowner's representative shall issue to the goods owner a set of bills of lading at
the request of the goods owner.
❖ Voyage charter:
Under this method, the charterer hires the whole vessel or only a part of the vessel
to convey the goods from one port to some other ports. The relation between the ship-
owner and the charterer is regulated by Voyage Charter Party.
Features:
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 - The goods are often conveyed full of the vessel (from 90 – 95%).
- The goods are often in mass quantity like grain, mineral, fertilizer …
- Two parties must negotiate to sign charter-party.
- Bill of lading is Charter Party B/L.
- Brokers are often used.
- Freight rate is low, but formalities are complicated and requires the charterer
to have expert experience and relevant information.
Procedure to hire a ship under voyage charter is as follows:
 Step 1: The charterer may hire a ship to transport the cargo via a logistics company,
the charterer must provide information on the goods, the name of the cargo, the
package, the quantity and the journey so that the logistics company has a reasonable
basis to find an appropriate ship.
 Step 2: On the basis of the information of the charterer, the logistics company will
find a ship to suit the cargo demand.
 Step 3: After finding the right vessel, the logistics company will negotiate with the
shipowner on terms of the contract.
 Step 4: The logistics company announces the results of negotiation to the charterer
to prepare for the signing of the contract
 Step 5: The charterer will sign the contract with the shipowner
 Step 6: After the contract is signed, the charter party will become valid. The
charterer will transport the goods to the port of loading and load them on board.
Then, the shipowner will issue the bill of lading to the charterer.
❖ Time charter:
Time charter is that charterers hire vessels for a specific period of time from the
ship-owners to transport the goods or to re-hire the vessels.
 Under time charter party contracts, ship-owner remains responsible for the
technical operation of the vessel, but commercial control of the vessel is
handled by the charterer.
 Under time charter party contracts, ship-owner must cover all costs associated
with crewing, maintenance of the vessel and insurance, but vessel fuel
consumption and port charges will be compensated by the charterer.
 Time charter party contracts are signed for a limited period of time without
dictating a fixed route to the charterer. During the charter party contract period,
the charterer could operate the vessel commercially within allowed routes
freely.
 Under a time charter the owner will receive hire based on the period of the
charter or per dead-weight tonne per month.
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 After a period of charter, the charterer must return the vessels in good technical
condition at the stipulated port and time.
Procedure for a time charter is as follows:
• Step 1: The charterer through a broker (Broker) find a vessel to operate in certain
areas. At this stage, the charterer must provide the broker with all information
about the type of vessel, the size, technical specifications, the intended cargo, the
area of operation, etc., for the broker to find a suitable vessel.
• Step 2: On the basis of information about the vessel and the area of operation
provided by the charterer, the broker will find a vessel to suit the needs of the
charterer.
• Step 3: The broker negotiates with the ship owner.
The shipowner and the broker will negotiate with each other all terms of the charter
party such as technical equipment, repair, fuel consumption, freight / day rates, the time
of hiring, the place of delivery, the area of exploitation, the status of the crew, ...
• Step 4: The broker informs the result of the negotiation with the charterer. After
the result of negotiations with the shipowner, the broker will inform the result of
the negotiation to the charterer so that the charterer knows and prepares for the
signing of the charterparty.
• Step 5: The charterer and the shipowner sign the contract. Before signing the
contract, the charterer must review all terms of the contract.
• Step 6: Perform the contract.
After the contract has been signed, the charter contract will be executed.

8.1.6.2 By air
If delivery is done by air, the exporter after signing a contract with a carrier will
deliver the goods to the carrier and get an airway bill.
In Vietnam, air shipment is mainly done through a freight forwarder, a
transportation agency … like Vietrans, Gemartrans, KWE … It is easier for consigners to
execute delivery procedures.

8.1.7. Cargo insurance

Under CIF, CIP, or D terms, the seller is obliged to arrange for insurance.
Following are needed to put into consideration:
❖ Choose insurance clauses:
Under CIF or CIP delivery term, the seller must make a contract of insurance in
conformity with the contract of sale or terms in L/C (if any). If there is no specific term

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related to insurance in L/C or in the contract, the seller only need to obtain insurance on
minimum cover.
Under D terms of Incoterms, the seller should consider to choose insurance terms to
both guarantee the goods and get the highest economic result.
❖ Write Insurance request:
On the basis of the contract of sale and L/C (if any), the seller fill all following
contents in the insurance request:
 The Insured’s name.
 Commodity insured.
 Type of packing, marking of insured commodity.
 Weight or quantity of insured commodity.
 Vessel name or means of transport.
 Ways to arrange insured commodity on the vessel (on board, under the hold …)
 Place of departure, place of transshipment and place of taking delivery the insured
commodity.
 Date of departure of the means of transport on which the insured commodity is
transported.
 Amount insured.
 Insurance conditions.
 Place of claiming.
In addition, the insured needs to inform the insurer of other important situations so
that the insurer can help the insured predict risks.
❖ Pay Insurance premium and obtain Insurance policy/ certificate
After submitting the Insurance request, the insurer will define the premium. The
exporter will pay the premium, obtain Insurance certificate (or Insurance policy), endorse
it and send to the importer.
Insurance certificate must be a document. There will be no later supplement to any
clauses in the insurance certificate. Especially, in case payment is made by L/C,
insurance certificate must comply with L/C requirements, or else the paying bank will not
accept payment.

8.1.8. Making delivery

❖ By sea – not in container:
1. Basing on details of the export goods, the consigner forms a Cargo list
including consignee, mark, B/L number, description of cargoes, number of packages,
gross weight, measurement, named port of destination …

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 2. Basing on the Cargo list and booking, the shipping company will form a
shipping order (S/O) and a Cargo plan or stowage plan in order that the port authority can
order the cargo and calculate related charges.
Normally, cargo plan is not given directly to the consigner. However, to ensure
safety for the cargo, the consigner needs to require the carrier to deliver the cargo plan. If
the cargo is placed in unfavorable place, the consigner can request a change.
3. Delivery and Stowage will be done by the port with the charge at the
consigner’s account. However, the consigner should supervise stowage on site to solve
any problems arising. Therefore, the consigner should ask for date and time of delivery
from the port authority to assign a representative to supervise stowage.
4. While loading the goods on board, Tally man of the port always supervise the
goods, and, on the basis of documents and the real quantity, forms Tally report. After
each code on board, Tally man will check and sign on that. On the vessel will there also
Tally man of the port, result of goods on board will be expressed in Tally sheet. The
content of tally sheet is similar to the one of tally report.
5. After loading the goods on the vessel, the port authority and the carrier set up
reports of delivering and receiving goods and a document confirming the goods placed on
the vessel. The mate issues a mate’s receipt in which confirms number of packages,
marks, goods condition, port of destination … for the consigner.
6. The consigner exchanges the mate’s receipt for B/L.
❖ By sea –in containers:
 FCL (Full Container Load)
FCL/FCL is a standard (twenty or forty-foot) container that is loaded and unloaded
under the risk and account of the consigner or consignee.
Procedures of FCL shipment:
1. Container will be provided by the carrier or hired by the consigner. The
consigner will pack the goods at his premise or another domestic place. After
being checked by the customs, the container will be sealed.
2. The sealed container will be transported to Container yard (CY) of the port or of
the carrier (according to the agreement between the consigner and the carrier)
and loaded on the vessel by the carrier.
3. At the port of destination, the carrier will unload containers and deliver them to
CY at its own expense.
4. The consignee must be responsible for import clearance and discharge the
goods out of the container at its own account.
Responsibility of the consigner: bear all costs to transport the empty container to the
place of packing, pack, and discharge the goods out of the container.
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 Responsibility of the carrier:
1. Be responsible for sealed containers received from CY on.
2. Load containers on the vessel, discharge containers from the vessel and move
them to CY.
The carrier completes its responsibility after delivering containers to the consignee
at the CY.
 LCL (Less than container load)
Under an LCL cargo, where in a shipper does not have enough goods to
accommodate in one full container, he books cargo with a carrier/ consolidator to console
his goods along with goods of other shippers. This type of shipment is called LCL
shipment. The said carrier/ consolidator arranges a fully loaded container, and consoles
the shipments of other shippers and deliver each shipment to final destination by
separating each shipment at final destination.
Procedures of LCL shipment:
1. Goods of different shippers will be received by a carrier at a container freight
station (CFS) appointed by him.
2. The carrier will console the goods into the container at his own expense.
3. The carrier loads the goods onto the vessel.
4. At the port of destination, the carrier will carry the container to CFS and then
separate the goods out of the container to deliver to the consignee.
Responsibility of the carrier: Under this method, the carrier will arrange the goods
into the container under his own expense, load the container onto the vessel, unload the
container at the port of destination, discharge the goods out of the container and deliver
them to the consignee. The carrier’s responsibility finishes after the goods are delivered
to the consignee at the CFS.
Notice: Shippers can deliver their goods through LSP (Logistics service provider)
instead of a carrier. The procedure will be different from the previous one. The shipper
will receive a House B/L.
❖ By air
If delivery is done by air, the exporter after signing a contract with a carrier will
deliver the goods to the carrier and get an airway bill.
In Vietnam, air shipment is mainly done through a freight forwarder, a
transportation agency … like Vietrans, Gemartrans, KWE … It is easier for consigners to
execute delivery procedures.
- After contacting a freight forwarder, the consigner will carry the goods to the
airport, the operation division of the freight forwarder together with an airport officer to
receive the goods, weigh the goods, clear customs, packing, marking …
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 - Or, the freight forwarder will receive the goods at the consigner’s warehouse and
transport them to the airport, clear customs, weigh, measure, mark … deliver the goods to
the carrier basing on proforma invoice issued by the consigner. Basing on the
measurement and weighing results, the carrier will issue a Master Airway Bill for the
whole consignment and the consignee on MAWB is the freight forwarder. For the freight
forwarder, he will issue a House Airway Bill for each shipment of each shipper.

8.1.9. Setting up the payment documents

After delivery, the exporter prepares and presents full set of documents as stated in
the contract or L/C to the bank to demand payment.
A set of documents often include:
- Bill of exchange.
- Clean B/L.
- Insurance document (under CIF or CIP term)
- Commercial invoice.
- Quality certificate.
- Quantity certificate.
- Weight certificate.
- Certificate of origin.
- Packing list.
- Phytosanitary certificate (if any)
…
❖ Bill of exchange: See Part 4.1.1 of this lecture
❖ Bill of lading: Bill of lading issued by the carrier for the shipper at the time the goods
are loaded onto a vessel for international transit.
The 2 types of Bills of Lading are: 1) House Bill Of Lading, and 2) Master Bill Of
Lading.
A House Bill of Lading serves on the buyer/seller layer. It is issued by the Freight
Forwarder or Non-Vessel Operating Common Carrier (NVOCC), but the actual shipper
and actual consignee will be listed on the HBL. The Notify on the HBL could be the
same as the Consignee, but it could be any other party as dictated on the Letter Of Credit.
The Master Bill of Lading is issued by the carrier or shipping line and details the
shipper as the NVOCC, their agent, or the Freight Forwarder. The consignee will usually
be the destination agent or counterpart of the NVOCC (the Freight Forwarder/NVOCC in
the foreign country the goods are being shipped to/from.)
❖ Airway bill:
• Prepare the airway bills
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 Warsaw Convention 1929, Articles 5 and 6 defined as follows: each carrier may
request the consignor to make and give her a certificate, called the airway bill (the Decree
Hague in 1955 renamed it as the airway bill), every consignor has the right to require the
carrier to accept this document.
The shipper must make the airway bills into 3 copies (original) handed with the
goods. The first is for the carrier and signed by the shipper. The second copy is for the
consignee, issued by the consignor and signed by the carrier and the consignor and
attached with the goods. The third is signed by the carrier and delivered to the consignee
after the carrier’s receipt of goods to transport.
The carrier will sign the bill of lading as a receipt of the goods. The carrier’s signature
can be stamped and the consignor’s signature may be signed or stamped.
At the request of the consignor, if the carrier set AWBs, the carrier shall be deemed
doing so to replace the consignor, unless there is the contrary proof.
Thus, under the Warsaw Convention 1929 and the consignor is responsible for
making the bill of lading.
The shipper is responsible for the accuracy of the information and statements relating
to the goods written on the bill of lading.
The shipper is responsible for all the damages that the carrier or any others incurred
because of inaccurate, incomplete, not under-the-rules statements related to the goods,
whether the bill of lading is issued by the consignor or any person on behalf of the
consignor, including the carrier or agent of the carrier is authorized to do so.
On the other hand, that the consignor has signed bills of lading means he has
confirmed that he agrees with the conditions of the contract of carriage written on the
back of the bills.
• Distribute the airway bills
Airway bills for a shipment are issued into many copies upon issuance. A set of bills
can range from 8 to 14 copies, usually 9, in which always includes three (3) originals, and
some subs (copy), numbered from 4 to 14. AWBs are distributed as follows:
The original No.1, for the carrier, green color, used for payment purpose and as an
evidence of the carriage contract. This copy is signed by the consignor.
The original No. 2, for the consignee, pink color, together with the shipment is sent to
the final destination and delivered to the consignee on delivery.
The original No. 3, for the consignor, used as an evidence of the carrier to transport
the goods and as an evidence of the carriage contract. This copy is signed by both the
carrier and the shipper.

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 The copy No. 4, a delivery receipt, available at the destination. This copy is signed by
the consignee and kept by the final carrier as a delivery receipt and a proof of fulfilment
of the carriage contract.
The copy No. 5, for and available at the destination airport.
The copy No. 6, for the third carrier, used when the goods are transported at the third
airport.
The copy No. 7, for the second carrier, used when the goods are transported at the
second airport.
The copy No. 8, for the first carrier, kept by the cargo division of the first carrier
when making the goods.
The copy No. 9, for the agent, kept by the issuing agent or the issuing carrier.
The copy No. 10 to 14, used for the transportation when necessary.
❖ Commercial invoice:
Commercial invoice is issued by the seller to the buyer after delivery of goods. It’s a
payment request from the seller to the buyer based on the total goods written on the
invoice.
Contents of a commercial invoice: include the date of issue, name and address of the
seller and the buyer, name of the goods or services, quantity, unit price, total amount.
Besides, there are also number and kind of packages, marking, net weight, gross weight,
contract number and date, date of shipment, terms of delivery, terms of payment.
❖ Packing list
Packing list is an itemized list of articles usually included in each shipping package,
giving the quantity, description and weight of the contents, prepared by the shipper/
exporter and sent to the consignee for accurate tallying of the delivered goods.
* Contents: A packing list may indicate name of the seller; name of the goods; the
invoice number; the ordinal number, weight, volume of packs, or name of the factory, the
packer, and the technical inspector.
Packing list is issued into 3 copies:
+ one in the pack for comparing the goods in reality with the one sent by the seller.
+ one accompanied with other packing lists to make a full set of packing lists of the
consignment which will be put in the first pack for easy check.
+ one accompanied with other packing lists to make another full set of packing lists
which will be sent to the export company. Then the company will enclose the packing
lists with the commercial invoice upon presentation of the documents to the bank to
demand payment.
❖ Insurance document:
Insurance invoice
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 An insurance invoice is a document issued by an insurance company.
* Effects:
- Confirming that an insurance contract and its terms and decisions are signed.
- Confirming that the premium has been paid.
- A necessary document to claim the insurance company and to receive payment.
* Contents: An insurance invoice indicates general and regular terms and special
conditions.
- General and regular terms regulate the responsibilities of the insurer and insured
party according to each insurance condition. These terms are pre-printed.
- Special conditions include:
+ Insured object: name of the goods, quantity, marking, and means of
transportation.
+ Insured value: insurance coverage must be at least 110% of the CIF or CIP value
of the goods.
+ Insured conditions: AR (All Risks), WA (War Risk), FPA (free from particular
average, SRCC (Strikes, Riots, and Civil Commotion)
+ Insured premium
Insurance Certificate
An insurance certificate is a certificate issued by an insurance company for the
insured party to insure a specific consignment.
* Effects:
- Substitute the insurance invoice.
- A proof of a signed insurance contract.
- A proof of an insurance coverage which is a necessary document in insurance
document of the insurance company.
* Contents: same as the insurance invoice, however this one does not include general
and regular terms. It shows the value and details of the shipment, and the risks covered. It
is a standard form prepared by the insurance company, filled in and signed by the
exporter. Then the certificate will be countersigned by the insurance company. It is
normally used with an open policy. The certificate describes, among other information,
the shipping details and makes reference to the open policy.
Depending on each case, an insurance document also can be:
 Cover note – this is issued by an insurance broker to provide notice that steps are
being taken to issue an insurance policy or certificate. Hence, it is not a legally valid
insurance document and in documentary credit transactions is not acceptable by UCP
600.

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  Insurance policy – it gives full details of the risks covered and is evidence of a
contract of insurance between the insurance company (insurer) and the customer
(insured). It is used for single consignments.
 Open policy – in doing business, a seller may have to ship goods on a regular basis.
To insure against damage or loss to the goods, he may have to purchase an insurance
policy whenever he ships the goods. This is inconvenient for the seller. Instead of
purchasing several successive insurance policies, he can take out an open policy.
An open policy allows the seller under one policy to cover all shipments (up to a limit
per shipment) under the same terms and conditions in a given period of time.
Under open policy cover, the seller (the insured) must advise the insurance company of
all the details of each shipment by entering the details of the goods in an Insurance
Certificate. When the seller has taken an open policy, he is authorized to issue an
Insurance Certificate (a pre-printed) form designed and given by the insurance company).
❖ Inspection certificate: See part 8.1.4
❖ Certificate of origin
A certificate of origin is a document declaring in which country the commodities or
goods are manufactured. The certificate of origin contains information regarding the
product’s destination and the export country and is required by many treaty agreements
before being accepted into another nation.
When a credit requires the presentation of a certificate of origin issued by the
beneficiary, the exporter or the manufacturer, this condition will also be satisfied by the
presentation of a certificate of origin issued by a Chamber of Commerce or the like such
as but not limited to Chamber of Industry, Association of Industry, Economic Chamber,
Customs Authorities and Department of Trade or the like, provided it indicates the
beneficiary, the exporter or the manufacturer as the case may be.
When a credit requires the presentation of a certificate of origin issued by a
Chamber of Commerce, this condition will also be satisfied by the presentation of a
certificate of origin issued by a Chamber of Industry, Association of Industry, Economic
Chamber, Customs Authorities and Department of Trade or the like.
* Contents: include name and address of the buyer, the seller; name of the goods,
quantity, weight, marking, the goods owner’s statement, and the Chamber of
Commerce’s authentication on the origin of the goods.
There are many types of certificates of origin:
- Form A: a preferential Certificate of Origin signed on the basis of a kind of tariff
preference systems — Generalized System of Preferences that provided by developed
countries to developing countries. The certificate applies A form with yellow color and is
usually called FORM A or GSP FORM A for short in the foreign trading.
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 - Form B: used for all countries.
- Form O: used for exporting coffee to countries of the World Coffee Association
(America, Thailand, Singapore…)
- Form X: used for exporting coffee to other countries not of the World Coffee
Association.
- Form T: used for exporting Vietnamese textile products into EU.
-…
* How to get C/O from Vietnam Chamber of Commerce and Industry (VCCI)
Pursuant to Decree No. 31/2018 / ND-CP, effective from July 1, 2018.
Step 1:
1. Traders applying for certificates of origin must first register their trader dossiers
(Download here) with VCCI's C / O team and shall only be considered for issuance of
certificates of origin once registering full and valid trader profile. Traders' profiles
include:
a) Registration of specimen signatures of the representative at law of the trader or
the person authorized to sign the application for the certificate of origin, sign the
certificate of origin and the seal of the trader;
b) A copy of the enterprise registration certificate (with the trader's official seal);
c) List of establishments producing goods requesting the issuance of certificates of
origin (if any).
2. The trader dossiers shall be declared via the website: comis.covcci.com.vn
3. Any changes in the trader dossiers must be updated at the website:
comis.covcci.com.vn. In case of no change, the trader profile should still be updated
every 2 years
Step 2:
1. For traders applying for the first-time certificates of goods origin or for products
newly exported for the first time or for non-fixed products (with changes in norms of
quantity, weight norms and codes HS, value and supply of raw materials for both input
materials or output products each time issuance certificates of goods origin), dossiers of
application for certificates of goods origin shall include:
a) An application for a certificate of origin of goods, which is fully and validly
declared, made according to a set form (not printed herein); it shall be declared via
website: comis.covcci.com.vn;
b) The corresponding form of the certificate of origin of goods already declared;
c) The printed copy of the export customs declaration. Where the exported goods
are not required to be declared by the customs according to the provisions of law, copies
of the customs declarations are not required;
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 d) A copy of the commercial invoice (seal of the trader's original seal);
e) A copy of the bill of lading or a copy of the transport document (certified true
copy by the trader) in case traders do not have a bill of lading. Traders are considered not
required to submit these documents in the case of export of goods in the form of delivery
of goods without using bill of lading or other transport documents in accordance with the
provisions of law or international practice;
f) The detailed list of export goods meeting the preferential origin criteria or the non-
preferential origin criteria according to the set form;
g) The origin declaration of the producer or supplier of origin materials or goods of
home-made origin, made according to a set form, if such raw materials are used for a
subsequent stage. to produce another commodity;
h) A copy of the goods production process (affixed with the trader's true copy);
i) In case of necessity, VCCI's C / O team shall conduct field inspection at traders'
production establishments; or request the trader applying for a certificate of origin to
submit additional documents in the form of a copy (seal of the trader's original seal) such
as customs declaration for import of raw materials and auxiliary materials to produce
goods for export (in case raw materials and accessories are used in the production
process); sales contracts or value added invoices for purchase and sale of domestic raw
materials and auxiliary materials (in cases where domestic raw materials and / or
auxiliary materials are used in the course of production); Export permit (if any); and other
necessary documents.
2. For traders producing and exporting fixed products (no change in norms of
quantity, weight norms, HS codes, value and supply of raw materials for input materials
and products), the dossiers of application for certificates of origin of goods for the first
time must be made according to the provisions in Clause 1.
3. In cases where the documents mentioned at Points c and e of Clause 1 are not yet
available, traders requesting the grant of certificates of origin shall be allowed to submit
these documents later, but not later than 15 working days as from the date of issuance of
the Certificate of Origin. After this time limit, if the trader fails to submit additional
documents, the VCCI C/O shall request the withdrawal or cancellation of the granted
certificate of origin.
4. VCCI's C/O team may request traders to supply originals of documents in
dossiers of application for certificates of origin according to Clauses 1, 2 and 3 for
inspection. Checking and reconciling in case of doubt about the authenticity of these
documents.
5. VCCI's C/O team shall consider and issue certificates of origin of goods for
export goods to bonded warehouses to member countries under international treaties
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which Vietnam has signed or acceded to. Apart from the documents specified in Clause
1, traders shall also submit the following documents: a) Copies of the goods declarations
warehoused or ex-warehoused with the customs office's certification of goods arriving at
export border gates (seal of traders' original copy); b) A copy of the contract or document
specifying that the Vietnamese trader shall deliver goods to the importer in the country or
group of countries or territories which Vietnam has signed or acceded to under
international treaties true copy of the trader).
6. VCCI's C/O team shall consider the grant of certificates of origin of goods for
export or import goods from export processing enterprises, export processing zones,
bonded warehouses, non-tariff areas and marine areas. Other import and export relations
with the inland where the goods meet preferential rules of origin or non-preferential rules
of origin.
❖ Phytosanitary certificate
Step 1: Register the account via online
• To register new account at registration department of Phytosanitary agency
(Branch of Phytosanitary Zone II for the South), it will issue 2 samples including
the account registration information letter (take 01 day to activate the account),
and Phytosantitary registration letter.
• Fill in 2 letters and sign in Phytosantitary website.
Step 2: Register phytosanitary certificate
Shippers or authorized persons register phytosanitary certificate 1-2 days before the
shipment date at the phytosanitary agency (Branch of Phytosanitary zone II for the South)
The documents include:
1) Phytosanitary registration form (declare full information on the quarantine
shipment)
2) Sales contract along with bills of lading, invoice, and packing lists (if any)
3) Attorney letter of the owners (if the party is registered as authorized shippers)
4) Samples of quarantine shipment (if any)
• In case samples of quarantine are submitted, reception department will check the
documents and samples. If the documents are valid, the owners or authorized
persons will receive a receipt number.
• In case samples of quarantine or documents are not submitted or invalid, the
reception department will forward all documents to the supervisor at the loading
port so that the supervisor will check the goods and issue a receipt number.
Then, the goods owners or authorized persons will declare all information related to
quarantine shipment via the website of Branch of phytosanitary zone II (shipper,

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 consignee, description, quantity, port of loading, port of destination, etc.). Within 24
hours, the quarantine agency will send a draft phytosanitary by email to their owners
or authorized persons.
Step 3: Submit full documents to get phytosanitary certificate
• The goods owners or authorized persons receive the draft of phytosanitary, check
with the consignee and get his confirmation.
• The goods owners or the authorized persons revise the draft’s information and
submit complete documents to phytosanitary agency within 1-2 days (after getting
the receipt number)
• The goods owners or the authorized persons pay quarantine fee for the accounting
department according to the price list applicable to the weight and each item.
• The goods owners or the authorized persons then submit documents to the
reception department
Documents include:
1) The receipt number signed by supervisor
2) the initial documents submitted for registration (phytosanitary registration
letter, sales contract)
3) Draft phytosanitary was declared online
4) Bill of lading contains the most accurate information and confirmation by
shippers.
5) Commercial invoice, packing list.
Step 4: In case full documents are submitted, phytosanitary agency will issue the
phytosanitary certificate to owners or authorized persons within 1-2 hours. If
documents are incomplete or invalid, the owners or authorized persons need to
supplement documents.

8.1.10. Claims (if any)

a) Sellers make claims:
In case the buyer breaches the contract, the seller has a right to claim. Documents
include:
- Letter of complaint.
- Relevant documents: Contract, B/L, Tally sheet, Report on receipt of cargo,
Certificate of short-landed cargo, Cargo outturn report, Survey record, Customs
inspection report.
b) Buyers or related offices make claims

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 If receiving complaint documents from the buyer or any relevant offices, the seller
must promptly study the documents and find solutions.

8.1.11 Contract liquidation

8.2. Performance of the import contract

8.2.1. Import license application
Regulations on the goods for which import or export is prohibited, goods for which
import and export is subject to issuance of a permit, goods for which import and export is
subject to issuance of a permit by the ministry managing the specialized industry.
Each good must follow certain regulations of Government or the authority
managing the specialized industry on export license/ procedure.

8.2.2. Initial work related to settlement

a) In case payment is made by L/C: the importer needs to:
❖ write and submit a Letter of Credit application to a bank.
❖ deposit money to open a L/C.
b) In case payment is made by CAD: the importer needs to open a Trust
account at a bank to pay the exporter.
c) In case payment is made by advance TT: the importer needs to transfer
money as stipulated in the contract.
d) In case payment is made by Collection or Deferred TT: the importer will
only make payment after the export’s delivery.

8.2.3. Transport arrangement

In case the importer must arrange for carriage under EXW, FAS, FCA, FOB
delivery terms, it must do so.
(See more in 8.1.6 for how to hire transportation means)

8.2.4. Cargo insurance

When purchasing goods under EXW, FCA, FAS, FOB, CFR, CPT delivery terms,
the importer needs to buy insurance for the goods. Following are needed to put into
consideration:
❖ Choose a suitable insurance condition:
The importer bases on the goods’ features, packing, means of transport … to choose
suitable insurance condition that guarantees the goods and get highest economic results.
❖ Write Insurance request: (see more in 8.1.7)

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 ❖ Pay Insurance premium and obtain Insurance policy/ certificate
After submitting the Insurance request, the insurer will define the premium. The
importer will pay the premium and obtain Insurance certificate (or Insurance policy)

8.2.5. Customs clearance

(See in 8.3)

8.2.6. Taking delivery

Under the Government’s regulations, transport authorities (station, port) have
obligations to receive imported cargo on means of transport from oversea, keep the cargo
in good condition during discharging, storage, and deliver it to the importer according to
Delivery order (D/O) of transport companies (shipping company, shipping agency …)
which received the cargo.
Therefore, when the cargo reaches the port, shipping company will take the cargo
from the port authority and bring it to a safe place (warehouse or yard).
Before the vessel’s arrival, shipping agency or shipping company will send an
“Arrival Notice” to the consignee so that he can receive D/O at the shipping agency. To
get D/O, the consignee needs to submit Original B/L, the company’s Letter of
recommendation. The shipping agency will keep the original B/L and deliver 03 copies of
D/O to the consignee. When holding D/O, the importer needs to carry out taking his
consignment. If the importer takes delivery late, he will bear high storage cost and all
arising risks.
In case the documents come later than the consignment, the importer has two
solutions: (1) keep on waiting for the documents, (2) ask for a Letter of Guarantee from
the issuing bank
Procedures of taking delivery:
a) Bulk cargo (not full container) or LCL cargo:
Goods owner pays storage fee and handling charge to get a warehouse receipt at the
port or the ship owner (if the ship owner subscribes the warehouse), then submit the
warehouse receipt, 03 D/O, Invoice and Packing list at a shipping agency in the port to
confirm D/O and find the goods’ position. One D/O is kept for recording here. The
goods’ owner brings two remaining receipt to the Warehouse division to make Stock-out
slip. This division keeps 01 D/O and delivers 02 Stock-out slips for the goods owner.
Two Stock-out slips are used for stock-out procedure. The goods will be separated to wait
for customs check. Taking delivery at the port will be done under the supervision of
customs. After confirmation of customs “complete customs formalities”, the goods will
be stocked out of the port to the stipulated place.
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 b) FCL cargo, customs inspect at a separate warehouse:
If the goods owner wishes to receive full container and be checked at a separate
warehouse, he needs to:
- make and submit a Request for the goods to be checked at a separate
warehouse with a set of documents for customs formalities. Container is only
allowed to bring back to a separate warehouse in case registration is made in
advance and the warehouse meets the customs’ standard and is licensed.
- proceed to borrow container at the shipping company, deposit money, pay
handling and transporting container from the port to the separate warehouse
charges.
- Present a set of documents to the shipping agency to get a Container-out-of-
the-yard permission slip. Documents include:
+ 03 D/O with signature of customs officer at Formality Registration
division and stamp “Declaration received”.
+ Handling and transport charge receipt of the shipping company.
+ Demurrage charge receipt.
+ Approved Letter of borrowing container.
 The shipping agency will keep one D/O.
 The goods owner with an officer of the container yard finds the container
in the yard, check the container and seal.
 The goods owner receives 02 “Transport order” from the officer of the
yard.
 The goods owner submits all documents to the customs to check and
confirm container number, seal number, declaration and transport order.
 The goods owner takes the container out of the yard, submits one
transport order to the customs officer at the gate, one to the port’s
security, and transport the container to his own warehouse.
 The goods owner comes to Customs Control and Supervision
Department of City Customs to fetch a customs officer to check the
goods.
 After being checked by the customs officer, if there is no problem, the
goods will be granted “Complete Customs Formalities”.
c) Whole ship cargo or cargo in large quantity:
After receiving D/O, submitting documents to customs, receiving NOR (Notice of
readiness), the goods owner carries out receiving the goods. Before opening the hold,
there must be:
- The importer/ goods owner
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 - Seller’s representative (if the seller has its representative in the importer’s
country)
- Inspection organization
- The ship’s representative, shipping agency
- Customs control and supervision department officer
- The port’s representative
- Insurer (if there is any doubt about damages on the goods)
During the process of receiving the goods, the importer needs to supervise the
scene, update data every month, every shift, every day to handle timely all arising
problems.
Inspection organization takes a sample and analyzes it to determine whether its
quality and quantity is in conformity with the contract or not.
Insurance company will define the degree of loss and make Survey Report.
The port authority will make a Cargo out turn report, Report on receipt of cargo and
Certificate of short overlanded cargo and outturn report.
Finally, after finishing delivery, the importer signs in a Final report on receipt of
cargo.

8.2.7. Post shipment inspection

Under the Government’s regulation, the imported goods will be carefully examined
when imported into the country.
For all imported goods, every authority will have its own function to execute
inspection.
The port/station checks the seal before discharging the goods out of the means of
transport. If the goods are not in right position as stated in B/L or in loss, the port/station
will invite Inspection Company to make Survey Report. If the goods transported by sea
are in loss or shortage, there must be a “report on receipt of cargo” with the port. If the
goods by sea are in damage, there must be “report on damage”.
For the importer, he needs to set up a Letter of Reservation if there is any suspicion
about loss, requires to make a Survey Report if the goods are in damage, shortage and do
not conform with the contract.
Quarantine Authority must quarantine the goods if the imported goods are animals
or plants.

8.2.8. Claims (if any)

Claim is one of two ways to solve disputes arising in foreign trade. By claiming,
parties can negotiate directly to solve disputes.
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 a) Claim the seller:
The buyer has a right to claim the seller when the seller does not deliver the goods
or deliver the goods late, or the goods are in shortage …or the goods’ quality is not in
conformity with the contract, bad packing, wrong marking, or the technical material is
not delivered or delivered late.
Documents for claim include:
- Letter of Complaint made by mail, fax or telex. There must be a letter of
confirmation if fax or telex is used.
- Purchase agreement.
- Bill of lading
- Survey report.
Contents of the Letter of complaint include:
- Claimer’s name and address.
- Defendant’s name and address.
- Legal basis of claim (contract number ...)
- Reasons of claim
- Specific demands from the seller.
b) Claim the transporter.
Claim the transporter when it breaches the transport contract: the vessel does not
come or come late; the goods are in loss, damage or shortage because the transporter’s
fault.
Documents include: Letter of complaint and other documents such as:
- Contract of transport
- Bill of lading
- Checking sheet of deliverer and consignee.
- Report on receipt of cargo (ROROC)
- Certificate of shortlanded cargo (CSC)
- Draft survey
- Cargo outturn report (COR)
- Report on stowage of cargo
- Inspection report of customs.
c) Claim the insurer
Necessary documents for claim include:
- Original insurance certificate/policy
- Original bill of lading
- Copy of original contract or invoices
- Certificate of quality, quantity
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 - Letter of complaint in which includes claiming amount.
Other documents for specific cases:
1) For damaged or lost goods:
- Survey report issued by insurance company or insurance agency.
- COR

2) For shortlanded goods in full container

- ROROC
- CSC …
3) For general average:
- Notice of general average of ship-owner.
- Allocation of general average expenditures of adjuster
- Other related documents
4) For total loss:
- Notice of total loss of transporter
- Certificate of transport about the goods on the vessel.
- Letter of complaint for shipping company (if any)
Claiming documents must be presented directly to insurance company or insurance
agency as soon as possible but not later than 9 months (if related to a third party) since
the goods are discharged out of the vessel named in the contract of insurance unless
otherwise stated.

8.2.9. Payment
Payment is the main obligation of the buyer. According to each method, payment
procedure is different.
If payment is made by L/C, when receiving documents from the seller, the issuing
bank will examine them carefully. If presentation is complied with L/C, the issuing bank
will make payment and inform the buyer to reimburse the bank and receive documents. If
documents are not perfect, the issuing bank will ask for advice from the buyer and have a
specific resolution for each discrepancy.

8.2.10 Contract liquidation

8.3. Customs formalities

8.3.1. Legal basis
- Law on Customs of Vietnam No. 54/2014/QH13 dated 23rd June 2014.

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 - Decision 08/2015/ND-CP dated 21st Jan 2015 providing specific provisions and
guidance on enforcement of the customs law on customs procedures, examination,
supervision and control procedures.
- Decision 59/2018/ND-CP dated 20th April 2018 amending and supplementing
some articles of the Decision 08/2015/ND-CP.
- Circular 38/2015/TT-BTC on customs procedures; customs inspection and
supervision; export tax, import tax and tax administration for export and import goods.
- Circular 39/2018/TT-BTC amending Circular 38/2015 / TT-BTC providing new
guidance on a wide range of customs compliance areas including customs procedures,
supervision, inspection; import and export duty, administration of imported goods and
exported goods.
- Decree No. 134/2016/ND-CP of 01st September 2016, detailing a number of
articles of the Law on Import Duty and Export Duty
- Decree No. 43/2017/ND-CP of 14th April 2017 of the Government on labelling
of goods.

8.3.2. Customs formalities for export and import goods

According to Article 21 of Law on Customs:
1. While following the customs formalities, a customs declarant shall:
a/ Declare and submit customs declarations; submit documentary evidence of customs
documents prescribed in Article 24 of this Law;
b/ Send goods and vehicle to proper places for physical inspection;
c/ Pay taxes and fulfill other financial obligations in accordance with the laws on taxes,
charges and fees and other corresponding regulations of law.
2. While conducting customs formalities, customs authorities and customs officials
shall:
a/ Receive and register customs documents;
b/ Verify customs documents and conduct physical inspection of goods and vehicle;
c/ Collect taxes and other amounts payable in accordance with the laws on taxes, charges
and fees and other corresponding regulations of law;
d/ Decide grant of customs clearance for goods, release of goods and certification of
completion of customs formalities applied to vehicle.
8.3.2.1 Customs formalities
1. Declare and submit customs declarations; submit documentary evidence
of customs documents:
a. Time limits for declaration and submission of customs declarations and
relevant documents
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 According to Article 25 and 69 of Law on Customs of Vietnam:
(1) After goods are transported to places notified by customs declarants and at least
4 hours before the exit of vehicle regarding to exported goods; at least 2 hours before the
exit of vehicle regarding exported goods delivered by express delivery services;
(2) Before goods arrive at border checkpoints or within 30 days after goods arrive at
border checkpoints regarding to imported goods;
(3) For vehicle in transit, immediately after their arrival at the first entry border
checkpoint and before they go through the last border checkpoint for exit;
(4) For seagoing vehicle on entry, within 2 hours after the port authorities announce
that these vehicles have arrived at the places for pilot embarkation; for seagoing vehicle
on exit, within 1 hour before they exit;
(5) For air vehicle on exit or entry, immediately after their arrival at the border
checkpoint and before carriers stop carrying out formalities for receiving exported goods
and passengers on exit;
(6) For railway, land and river way vehicle on exit or entry, immediately after their
arrival at the first entry border checkpoint and before they go through the last border
checkpoint for exit.
b. Places of customs formalities
According to Article 22 of Law on Customs of Vietnam
Places of customs formalities are places where customs authorities receive, register
and verify customs documents and conduct physical inspection of goods and vehicle.
Places where customs documents are received, registered and examined are head
offices of Customs Departments or Customs Sub-Departments.
Places of physical inspection of goods include:
a/ Places of inspection at the land border checkpoints, international railway stations,
international civil airports; international post offices; seaports and inland waterway ports
where import, export, exit, entry and transit operation are carried out; inland ports of
importation or exportation of goods;
b/ Head offices of Customs Sub-Departments;
c/ Places of centralized inspection under decisions of the General Director of
Customs;
d/ Places of inspection at facilities or works; places where trade fairs or exhibitions
are held;
đ/ Places of inspection at bonded warehouses, tax suspension warehouses and
container freight stations;
e/ Places of joint inspection by Vietnam Customs and Customs Service of
neighboring countries at the land border checkpoints;
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 g/ Other places decided by the General Director of Customs in case of necessity.
c. Customs documents
According to Article 24 of Law on Customs of Vietnam, a customs document
comprises:
a/ A customs declaration or documentary evidence in substitution;
b/ Relevant documentary evidence.
As the cases maybe, a customs declarant shall submit sale contract, commercial
invoice, bill of lading, certificate of origin of goods, import or export permit, notice of
specialized inspection results or exemption from specialized inspection, and documentary
evidence related to goods as prescribed by corresponding regulations of law.
Documents in customs documents may be paper or electronic documents.
Electronic documents must ensure the integrity and format prescribed in regulations of
law on e-transactions.
Customs documents shall be submitted to customs authorities at their head offices.
In case of application of the national single-window mechanism, specialized regulatory
bodies shall send import or export permits and notices of specialized inspection results or
exemption from specialized inspection in the electronic form via the integrated
communication system.
The Minister of Finance shall set the customs declaration form, use of customs
declarations and documents in substitution of customs declarations, and cases in which
relevant documents
❖ Documents for export goods:
● Basic documents include:
- Customs declaration: 02 originals.
- Commercial invoice or other equivalent legal documents: 01 photo
● As the cases maybe, a customs declarant shall submit some other documents:
- In case there are lots of types of goods or packages are not
homogeneous: packing list in 01 original and 01 photo.
- In case goods must have export permit under the law: Export permit 01
copy (original in case of one-time export or photocopy in case of many-time
export and original must be presented to check).
- In case goods imported for export processing and production: Bill of
materials of the HS code 01 original (only submit one time when exporting that
product).
- Other documents prescribed in regulations of law: one original.
❖ Documents for import goods:
● Basic documents include:
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 - Customs declaration: 02 originals.
- Sale contract or other equivalent legal documents: 01 photo.
- Commercial invoice: 01 original and 01 photo.
- Bill of lading: 01 photo or 01 copy Bill of lading.
● As the cases maybe, a customs declarant shall submit some other
documents:
- In case there are lots of types of goods or packages are not
homogeneous: 01 original and 01 photo of packing list
- In case import goods subject to quality inspection: 01 original of
Registration for state inspection of goods’ quality or Notice on being
exempt from state inspection issued by competent regulatory bodies.
- In case the goods are released on the basis of inspection result: 01
original of Inspection certificate.
- In case the goods must be declared in Declaration of Value: 01 original
of Declaration of Value of imports.
- In case the goods must have Import Permit under Law: 01 copy of
Import Permit issued by a competent regulatory body (original in case of
one-time import or photocopy in case many-time import and the original
must be presented for comparison).
- In case the goods owner wishes to enjoy preferential import tariffs: 01
original and the third copy of Certificate of Origin.
- In case the imported consignment has the total value (FOB) not more
than USD 200, the goods owner does not need to present Certificate of
Origin.
- Other documents prescribed in regulations of law: one original.
8.3.2.2 Inspection of export and import goods.
1. Places of physical inspection of goods include:
a/ Places of inspection at the land border checkpoints, international railway stations,
international civil airports; international post offices; seaports and inland waterway ports
where import, export, exit, entry and transit operation are carried out; inland ports of
importation or exportation of goods;
b/ Head offices of Customs Sub-Departments;
c/ Places of centralized inspection under decisions of the General Director of
Customs;
d/ Places of inspection at facilities or works; places where trade fairs or exhibitions
are held;

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 e/ Places of inspection at bonded warehouses, tax suspension warehouses and
container freight stations;
f/ Places of joint inspection by Vietnam Customs and Customs Service of
neighboring countries at the land border checkpoints;
g/ Other places decided by the General Director of Customs in case of necessity
2. Physical inspection of goods:
* Exemption from physical inspection of goods:
The following goods are exempted from physical inspection:
a/ Goods used for urgent demands;
b/ Goods exclusively used for national defense and security purposes;
c/ Goods used for other special cases as decided by the Prime
Minister.
d/ An enterprise fully satisfies the following requirements:
d.1 Strictly observe the customs and law on taxation for 2 consecutive years;
d.2 Earn an annual export and import value reaching the prescribed level;
d.3 Carry out e-customs formalities and e-tax formalities; have an information
technology program for managing its export and import activities connected with
the customs authority’s network;
d.4 Make via-bank payment;
d.5 Have its internal control system;
d.6 Strictly observe accounting and audit regulations.
* Physical inspection of goods:
There are two methods of physical inspection:
+ Method 1: Percentage-random check: not more than 10% of the imported,
exported goods. If the goods are packaged, not more than 10% of packages. If the goods
are in containers, 10% of containers or not more than 10% of packages in the container.
+ Method 2: Full and complete inspection: in case the goods owner has violated
the customs law many times or the consignments have following signs of violation:
- The goods owner has violated the customs law many times and has been
fined for administrative violations more than 3 times within 2 years from the
date of executing customs formalities and 1 year for export.
- There is a sign of violation in quantity and types of goods in percentage-
random check.
3. Physical inspection of goods may be conducted by customs officials manually
or with the aid of machines, technical equipment or by other professional measures.
The physical inspection of goods shall be conducted in the presence of customs
declarants or their legal representatives after customs declarations are registered and
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goods are transported to places of inspection, except the cases prescribed in Article 34 of
Law on Customs of Vietnam:
a/ For security protection;
b/ For hygiene and environmental protection;
c/ Upon detection of law violation;
d/ The customs declarants have not conducted customs formalities at the border
checkpoint although the imported goods arrive over 30 days;
e/ Other cases prescribed in regulations of law.
Physical inspection of goods in the absence of customs declarants shall be
conducted in the following forms:
a/ Non – intrusive inspection;
b/ Inspection with technical equipment and other operational measures of customs
authorities;
c/ Opening goods for direct inspection in the presence of representatives of the
government authorities at the border checkpoint, the transportation enterprises and the
enterprises trading ports and depots. An inspection record shall be made and signed by
related parties.
8.3.2.3 Paying export and import taxes
a. Declaration obligation
Customs declarant declares and calculates taxes and must be responsible for his
declaration.
Within 6 months from the time of declaration, if customs declarant finds out any
mistakes in declaration, he must inform customs authority to adjust the amount payable.
b. The time of tax calculation
According to HS codes and tax policies applicable to imported and exported
goods, the determination of tax rates for imported and exported goods shall be effective
at the time of tax calculation.
Import and export duties are calculated basing on the tax rate, customs value, the
exchange rate for tax calculation at the time of declaration of imported and exported
goods.
Customs declarations are valid for customs formalities within 15 days from the
day on which they are registered. If after 15 days from the date of customs declaration,
there are no exported or imported goods, that customs declaration will be invalid. When
there are exported or imported goods, tax payer must do customs declaration formalities,
time of tax calculation is the date of the next declaration.
c. Time limit for tax payment
For exported goods:
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 Tax is paid within 30 days from the date of customs declaration.
For exported goods without purchase agreement or exported goods of border
citizens, tax is paid before the goods are exported.
* For imported goods:
For consumer products in the List published by Ministry of Industry and Trade,
tax must be paid before taking delivery (except the goods for national defense, security
purposes, scientific research, education and training subject to duty exemption.
For imported goods, the time limit for tax payment is 30 days from the date of
registering customs declaration.
For goods being materials and supplies imported for export processing and
production (including consumer goods in the list of immediate tax payment), the time
limit for tax payment is 275 days from the date of registering customs declaration.
For imported goods without purchase agreement or imported goods of border
citizens, tax is paid before the goods are imported.

8.3.3. Electronic customs formalities (VNACCS)

Electronic customs formalities allow customs declarants to send information and
electronic documents for following customs formalities and formalities of regulatory
bodies related to imported and exported goods through an integrated communication
system. Regulatory bodies shall decide goods that are permitted to be imported, exported
and transited; customs authorities shall make decisions about granting customs clearance
and releasing goods on the integrated communication system
NACCS/VCIS (Vietnam Automated Cargo Clearance System) is a new electronic
customs clearance system integrated with one single window policy. This is sponsored by
the Japanese government and will be officially applied from 1 April 2014. The system is
centralized based on encoding operations and information criteria. Main modules of the
new system include e-Declaration, e-Manifest, e-Invoice, e-Payment, e-C/O, selectivity,
management of risk documents, management of import/export enterprise, customs
clearance, control and supervision.
 Customs documents: Electronic documents must ensure the integrity and format
prescribed in regulations of law on e-transactions.
Specialized regulatory bodies shall send import or export permits and notices of
specialized inspection results or exemption from specialized inspection in the
electronic form via the integrated communication system.
 Time limit for submission of customs documents:
When customs authorities conduct examination of customs documents and physical
inspection of goods, customs declarants shall submit paper documents in customs

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documents, except documents which are already available in the national single- window
communication system.
 Registration of customs declarations:
E- customs declarations shall be electronically registered

SUMMARY
1. Performing customs formality is an important part in a series of foreign trade
contract performance.
2. Customs formalities include:
- Declare and submit customs declarations; submit documentary evidence of
customs documents prescribed in Law on Customs of Vietnam;
- Send goods and vehicle to proper places for physical inspection;
- Pay taxes and fulfill other financial obligations in accordance with the laws on
taxes, charges and fees and other corresponding regulations of law.

REVISION QUESTIONS
1. To master customs formalities for export and import, which documents do
enterprises need to read?
2. Present the customs formalities for export goods (by using mechanic and
documents)
3. Present the customs formalities for import goods (by using mechanic and
documents)
1. Give comments on Customs formalities of Vietnam.
2. Give solutions to improve customs formalities of Vietnam.

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