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Fines against smugglers rise but Vietnam officials concede problem persists

Jan 27. 2017
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SMUGGLING, a long-standing “complicated” issue in Vietnam, will likely remain a thorny problem this year, market-watch officials have warned.

In a videoconference held in Hanoi, Danang and Ho Chi Minh City to review smuggling and commercial fraud last year, the Department of Market Management (DMM) reported a surge of 1,061 smuggling cases over the 103,746 cases recorded in 2015.

Fines collected in 2016 reached 548.9 billion dong (Bt852 million), some 89.1 billion dong higher than the previous year, the DMM reported.

These numbers, however, do not mean that greater control has been exerted over the smuggling and manufacture of counterfeit goods and goods infringing intellectual-property rights. Rather, such activity has accelerated and become harder to contain as they are camouflaged under famous international brand names, the meeting heard.

Ho Chi Minh City has for long been a consumer hot spot for trafficked and counterfeit goods, the most popular being watches, handbags, clothing and shoes marked with foreign brand names like Gucci, Chanel and Adidas.

“A majority of the counterfeit goods were smuggled from China,” said Phan Hoan Kiem, head of the Ho Chi Minh City Market Management Bureau and deputy director of the local Department of Industry and Trade.

“A lot of cosmetics were faked so well that they looked like the real ones, from their boxes to the colour and the smell. But they were sold at low prices and did not ensure quality or safety,” he said.

Kiem believes that the trafficking of fake and counterfeit goods will continue because of the huge profits involved and the general preference for choosing cheap products bearing famous brand names regardless of their authenticity.

However, this also means that Vietnamese products are losing ground against fake ones because they lack diversity, are not packed as attractively, and are sold at higher prices.

Agricultural products, particularly fertilisers, were also subject to counterfeiting, the meeting heard. The number of fake and counterfeit fertiliser cases detected in 2016 shot up by 150 per cent over the previous year, according to the DMM.

The Market Management Bureau of Tien Giang province in Vietnam’s biggest rice-producing region of the Mekong Delta also reported that sub-par products tended to have delicate, beautiful packaging that made it difficult to differentiate them from the authentic ones.

Legal loopholes

Nguyen Van Truong, head of the Market Management Bureau of Lang Son province bordering China, from where most goods are smuggled into Vietnam, said smugglers were taking advantage of legal loopholes to legitimise their trade.

“If invoices are already issued and the ownership of the smuggled goods is transferred to the customer, the regulations are not clear on how to deal with such goods,” he said.

Industry and Trade Minister Tran Tuan Anh, who chaired the conference, acknowledged the legal problem, but also pointed out that the capability and ethics of law-enforcement forces were an issue.

“To fight the smuggling of fake goods and counterfeiting effectively, we should consider holding senior officials accountable for allowing trafficked goods to become |easily available in the market,” he said.


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