Expert on Supply Chain Security

USAID Trade Facilitation Program

SCOPE OF WORK

Feasibility study into a Voluntary Registration Scheme for exporters to prevent origin fraud, illegal transshipment and circumvention or evasion of trade remedies

Proposed Personnel:          National STTA Expert on Supply Chain Security

Period of Performance:      o/a April 01 – September 30, 2021

Origin/Destination:            Hanoi, Vietnam

Travel Dates:                      n/a

Activity No.                         FY 2021 Activity 2.12 – Prevention of origin fraud and illegal transshipment Sub-activity 2.12.2 – Facilitate legal trade activity by compliant businesses operating in high-risk sectors  

MEL indicator(s):                IR3.1-1, IR3.1-2, IR4.1-1, and IR4.1-2

Project Background:

The USAID Vietnam Trade Facilitation Program is a five-year project that aims to support the adoption and implementation of a more risk-based approach to customs and specialized inspection institutions in Vietnam. The program will work with the General Department of Vietnam Customs (GDVC) to strengthen the National Trade Facilitation Committee (NTFC) of Vietnam and its Working Groups; streamline border clearance procedures (including specialized inspection implemented by other line ministries and agencies); harmonize the implementation of risk-based approaches between the national and provincial levels; train national and provincial customs officers and staff from other ministries on risk management; and facilitate dialogue between customs and business and between stakeholders in Hanoi and in the provinces.

Activity Background:

Objective: The objective of this activity is to facilitate legitimate trade activities by compliant businesses operating in high-risk sectors through supporting and assisting the Ministry of Industry and Trade (MOIT) to conduct a study into the feasibility of setting up a voluntary exporter registration scheme for exports with high-risk of origin fraud, illegal transshipment or anti-dumping/countervailing duty evasion. The objective is to be achieved through the following: 

• Study and report on the feasibility and proposal for a voluntary exporter registration scheme for exports with high-risk of origin fraud, illegal transshipment or anti-dumping or countervailing duty evasion; and
• Given the challenge and the time it takes to have such a scheme approved by government, in the longer term, the Program will endeavor to support MOIT with subsequent assistance to build the case for approval of the proposed scheme, and will assist with capacity building and communication activities for the private sector. Subject to the approval and adoption of the scheme, this will support the exporting/producing community to meet the requirements and the processes needed to fully utilize the scheme.

This SOW focuses on the first activity listed above.

Context: The substantial differences in preferential tariffs and non-preferential tariffs, aggravated by the recent US-China trade war and sanctions, have made Vietnam a high-risk country for origin fraud and illegal transshipments so as to evade tariffs and circumvent any trade remedies.

In December 2019, GDVC claimed to have detected ‘many cases’ of origin fraud amongst exports, and it has identified 19 product groups with a high risk of origin fraud. GDVC has also identified 33 suspicious enterprises and put these under a watch list. Industries particularly susceptible to origin fraud include textiles, footwear and handbags, computers, electronics and electric appliances, mobile phones, seafood, bicycles and electric bikes, steel, iron, aluminum, and timber. GDVC is reported to have seized 1.8 million tons of aluminum worth more than US$4.3bn imported from China and falsely labelled as made in Vietnam, before it was due to be shipped to the US. This was an attempt to avoid punitive tariffs on China’s aluminum exports to the US (374 percent compared with only 15 percent levied on goods qualifying as Vietnamese origin).

The predicament has subjected Vietnam to an increasing number of litigations on trade remedy circumvention with 20 litigations initiated up to December 2019, of which 6 litigations were on iron and steel. The increased incidences of origin fraud will result in severe consequences to bona fide importers and exporters and could impact negatively on Vietnam trade due to sanctions from importing countries. Vietnam is now faced with the dilemma of the need to intensify enforcing measures such as inspecting high-risk products and the need to facilitate legal trade flows of compliant businesses.

To prevent the risk of origin fraud, illegal transhipments and trade circumvention, in July 2019, Prime Minister Nguyen Xuan Phuc signed Decision 824/QD-TTg approving the project on ‘Strengthening state management over the circumvention of trade remedies and fraudulent acts of origins’. Under the Decision, MOIT is assigned, among other things, to ‘monitor, compile and regularly update the list of goods subject to investigation, antidumping tax and countervailing duty from countries that frequently apply trade remedies and goods with risk of origin fraud’ and ‘to share the list to relevant agencies, including VCCI, to tighten control on C/O issuance’.

Following meetings with VCCI and MOIT to discuss the issue and opportunities for the Program to provide technical assistance and the workshop on origin fraud and illegal transshipment organized by the Program in November 2019, MOIT has sought for additional support and assistance to intensify the efforts of preventing evasion via origin fraud and illegal transshipment. Specifically, the aim is to enhance the effectiveness of governance of Certificates of Origin (C/O); and to facilitate legitimate trade activity by compliant businesses operating in high-risk sectors. The Program will therefore assist MOIT to undertake a feasibility study into a voluntary registration program for exporters of products presenting a high-risk of origin fraud, illegal transshipment or anti-dumping/countervailing duty evasion.

The Program will undertake and implement this activity in close coordination and collaboration with the Trade Remedy Authority (TRAV) of Vietnam within the MOIT and other relevant institutions such as GDVC and VCCI (Vietnam Chamber of Commerce and Industry).

Methodology:

Based on the concept of an Authorized Economic Operator (AEO) scheme managed by customs administrations, the MOIT scheme will entitle businesses, who meet compliance standards and voluntarily register, to certain benefits such as simplified procedures and fast release/clearance of goods. The MOIT scheme will be applied, but not limited, to goods that have a high-risk of origin fraud and anti-dumping/countervailing duty evasion. Participation will be on a voluntary basis.

The feasibility study will take into considerations the existing situation of trade wars and sanctions and the proliferated circumvention and evasion of the trade remedy measures involved with Vietnam businesses. The findings on existing situation will be compared with international best practices to inform scheme arrangements.

During the feasibility study, the experts will need to consult widely and appropriately about the relevant aspects of the scheme. In commenting on proposals for the recommended scheme, the experts may consider the ongoing trend to reform the AEO scheme in Vietnam so as to expand it to more relevant stakeholders.

Under the SAFE Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework) of the World Customs Organization (WCO), Customs authorities are encouraged to develop partnerships with businesses and between each other to secure and facilitate trade. The key element indispensable to a fully functional AEO scheme is the Mutual Recognition Arrangement/Agreement (MRA) between Customs authorities. An MRA ensures that businesses can receive the expected benefits of being an AEO reciprocally. The feasibility study should also consider and address the challenges in having the MOIT scheme mutually recognized by a partner country, for example by the US. The foreseeable challenges to concluding an MRA includes: (i) the political will; (ii), the Customs Mutual Assistance Agreement itself or another form of common legal basis for an MRA; and (iii) the IT system that supports exchange of information.  

Due to the Covid-19 pandemic and its consequences, the assignment will focus on desk research and consultation via video conferencing online meetings. The expert’s participation in person at face-to-face interviews and workshops will be subject to pandemic prevention measures.

Tasks & Responsibilities:

The USAID Trade Facilitation Program will mobilize resources of national and international experts to conduct the study into the feasibility of a voluntary registration program for businesses with exports having a high-risk of origin fraud, illegal transshipment or anti-dumping/countervailing duty evasion.

The National expert will work closely with the international expert, the Program’s technical team and collaborate with officials from the TRAV in MOIT to conduct the feasibility study.

The National expert shall be primarily responsible for conducting the following tasks.  

1.       Conduct the feasibility study into a voluntary registration program for businesses with exports having a high-risk of origin fraud, illegal transhipment or anti-dumping/countervailing duty evasion. Among others, this will include the following sub-tasks:

• Contribute and provide technical inputs to the feasibility study report outline and suggest the key stakeholders and approach to garner information on the existing situation in Vietnam.
• Conduct the interview of key persons/stakeholders and/or organize Focus Working Group discussion to garner information; and
• Produce report(s) consolidating the information and feedbacks from the interviews and focus group discussions with analysis and recommendations.

2.       Consultation on the recommended scheme

• Support the MOIT consultation process on the recommended scheme by presenting and providing inputs through consultative workshops; and
• Contribute and provide technical inputs for finalization of the feasibility study report in coordination with the international expert

Deliverables:

The National expert will be responsible for the following deliverables:

• Written inputs to feasibility study outline and suggested approach to information collection;  
• Report(s) consolidating the information and feedbacks from the interviews and focus group discussions with analysis and recommendations;
• Inputs in the form of slides and presentations at workshops; and
• Individual Final Report containing details of all work carried out in areas assigned.

Qualifications:

Local/National Expert

• Master's degree or higher in trade policy, international trade, international economics, international trade law, customs administration, business administration, or similar field;
• Minimum 10 years of experience coordinating with host government counterparts on programs of a similar focus, on topics such as international trade law, international trade agreements, trade facilitation, customs management and procedures, regional economic integration, etc.;
• Working knowledge, understanding and work experience with the WCO and WTO instruments such as the Revised Kyoto Convention (RKC) and the Trade Facilitation Agreement (TFA); and of relevant free trade agreement (FTAs), especially on international supply chain security, rule of origins and self-certification, anti-dumping and countervailing duty circumvention and topics commonly found in preferential origin legislation.
• Working English writing and speaking skills, and presentation skills.

Reporting:

The National STTA will report to the Customs & Trade Facilitation Expert and timely update on the work progress.

Applications should be sent to tfp.recruitment@vietnamtfp.com

by 5pm 28 March.

Application should include:

• Cover letter (no longer than 1 page)
• CVs (see attached template);
• Updated USAID 1420 form (see attached template)
• Cost proposal (See attached template)

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