our customs broker solution

1.  Why outsource to LSP
 Customs clearance in the SC
 VN commercial law
 Customs clearance activities
 All cost involved & Price structure
 Plan for phase 3

2.  Why Outsource to LSP
 Customs clearance in logistics
 Scope of service
 Price
 Plan for phase 3
Opportunity Understanding Scope & Price SOP & KPI Start-up!

3. Why Outsourcing to Logistics
Service Provider ?
 Improve your company focus
allows your company to focus on the company core functions and core competencies
 Access to world-class capabilities and new logistics technology
 Convert fixed costs to variable costs, capital re-investment
 Free-up resources
 no capital investments in logistics
 resource not available internally
 Reduce and control operating costs
 Eliminate labor problems
 Pushes risk to 3PL
 Risk pooling
cost of technology investment by 3PL provider shared among clients
 Achieves economies of scale and provides better service

4. Example 1: Why 3PL can achieve economy of scale & provide better service in transport?
Consolidation is the key!
Scenario 1: The firms performs their own logistics functions
Firm 1 2 warehouses
2 separate distribution networks
Firm 2
Scenario 2: A 3PL takes care of both firms’ logistics functions
Firm 1 1 warehouse
1 distribution network
Firm 2 3PL

5. Reduce number of transactions!
Example 2: Manufacturer to contact with participants (20 transactions)  COST MORE!
Manufacturer
Trucking company
Manufacturer
Customs officers
Manufacturer
Shipping line
Manufacturer
Supplier
Manufacturer
20 Contacts
Example 3: Manufacturer to contact through intermediary (09 transactions)  COST LESS !
Manufacturer
Trucking company
Manufacturer
Customs officers
Manufacturer Vietnam-Ship
Shipping line
Manufacturer
Suppliers
Manufacturer
9 Contacts

6. Customs clearance/transport
Your supplier 1 Bottle neck! Your customer 1
YOUR
Your supplier 2 Port/Airport FACTORY Port/Airport Your customer 2
Your supplier 3 Bottle neck! Your customer 3
Customs clearance/transport
MATERIALS FLOW
INFORMATION FLOW
CASH FLOW

7. How important is customs
clearance in the SC.
 If your goods sit on a dock awaiting customs clearance for a day, your 'speed to
market' advantage can be squandered. Incomplete or wrong customs
documentation can cause considerable delays in transportation, reducing supply
chain and delivery reliability.
Duty rates, customs clearance, and entry processes differ from country to
country. Tariff classifications, value declaration, and duty management can create
confusion and increase costs.
 It is very important to choose a trust-worthy customs broker who well
understand your business, local customs regulation.
 Our expert team ensure that the necessary government declarations are
completed accurately and on time for your import and export shipments, especially
for textile raw materials imported for processing to export. Our services in the area
include: Legal valuation of merchandise; Classification of goods ;Proper tax &
duty assessment Import/export procedure; Temporary Import/export procedure;
Consultancy services etc…

8.  Why Outsource to LSP
 Customs clearance in logistics
 Scope of service
 Price
 Plan for phase 3
Opportunity Understanding Scope & Price SOP & KPI Start-up!

9. Introduction of Vietnam Commercial Law
(revised 2005_ from article #178 – 184)
 Article 178.- Commercial processing
Commercial processing means a commercial activity whereby a processor uses part
or whole of raw materials and materials supplied by the processee to perform one or
several stages of the production process at the latter's request in order to receive
remuneration.
Article 179.- Processing contracts
Processing contracts must be made in writing or in other forms of equivalent legal
validity.
Article 180.- Goods for processing
1. Goods of all types can be processed, except for goods banned from business.
2. In case of processing of goods for foreign traders for overseas consumption,
goods banned from business, goods banned from export or import may be processed if
so permitted by competent state agencies.

10. Article 181.- Rights and obligations of processees
1. To hand over part or whole of raw materials and materials for processing in
accordance with processing contracts or transfer money for purchase of materials with
agreed quantities, quality and at agreed prices;
2. To take back all processed products, leased or lent machinery and equipment, raw
materials, auxiliary materials, supplies and discarded materials after the liquidation of
processing contracts, unless otherwise agreed.
3. To sell, destroy, donate or give as gifts on the spot processed products, leased or
lent machinery and equipments, raw materials, auxiliary materials, redundant supplies,
faulty products and discarded materials according to agreements and provisions of law.
4. To send their representatives to examine and supervise processing activities at
processing places, to assign experts to guide production technology and inspect quality
of processed products according to agreements in processing contracts.
5. To be responsible for the legality of the intellectual property rights over processed
goods, raw materials, materials, machinery and equipment for processing handed over
to processors.

11. Article 182.- Rights and obligations of processors
1. To supply a part or whole of raw materials and materials for processing as agreed
upon with processees in terms of quantities, quality, technical standards and prices.
2. To receive processing remunerations and other reasonable expenses.
3. In case of processing for foreign organizations and individuals, to be entitled to
export on spot processed products; leased or borrowed machinery and equipment, raw
materials, materials, redundant supplies, faulty products and discarded materials under
the authorization of processees.
4. In case of processing for foreign organizations and individuals, to be exempt from
import tax on machinery, equipment, raw materials, auxiliary materials and supplies,
that are temporarily imported for the performance of processing contracts according to
the provisions of tax law.
5. To be responsible for the legality of goods processing activities in cases where
goods being processed are those banned from business, export or import.

12. Article 183.- Processing remuneration
1. Processors may receive processing remunerations paid in cash or in processed
products, or machinery and equipment used for the processing.
2. In case of processing for foreign organizations and individuals, if processors receive
processing
remunerations in processed products, machinery and equipment used for processing,
regulations on import of such products, machinery and equipment must be complied with.
Article 184.- Technology transfer in goods processing with foreign organizations and
individuals.
Technology transfer in goods processing with foreign organizations and individuals
shall be carried out in accordance with agreements in processing contracts and the
provisions of Vietnamese law on technology transfer.

13.  Introduction
 Customs Formalities
 Import Duty & Tax

14. Introduction
 Import Trading rights: Vietnam, under both its WTO Commitments and its
domestic laws, extends import and export activities to “all foreign individuals and
enterprises (including foreign-invested enterprises).”
In effect, with the import right, a foreign-invested company:
 (i) can be the importer of record; and
 (ii) can sell its imported products to distributors (licensed wholesalers or
retailers) in Vietnam; but
 (iii) with just the import right alone, it cannot sell its imported products to final
consumers.
Companies that do not have their own import license must work through
licensed traders, who typically charge a commission of between one and two
percent of the value of the invoice. Under Vietnamese law, the importer is the
consignee. Therefore, it is important to identify a reliable importer with the ability
to clear merchandise through customs quickly and efficiently. If a licensed third-
party importer is used, the importer will handle customs clearance.

15. Customs Formalities
 Customs activities including of :
a. Fill in and submit the Customs declaration forms; submit, produce documents
attributed to the Customs dossiers;
b. Conduct goods and/or transport means to the designated sites for physical
inspection;
c. Pay taxes and fulfill other financial obligations as prescribed by law;
 A Customs dossier shall consist of:
a. Declaration form;
b. Commercial invoices;
c. Goods purchase and sale contract;
d. Permit of the competent State body for goods exported, imported or transited or
transport means on exit, entry or in transit, which are subject to such permit under the
provisions of law;
e. Other documents as prescribed by law for each goods item, which the Customs
declarant must submit or produce to the Customs offices.
 More information on www.customs.gov.vn

16. Vietnam Customs is tasked to inspect and supervise goods and transport means;
to prevent and combat smuggling and illegal cross-border transportation of goods;
to organize the implementation of tax legislation with regard to export and import
goods; to propose policies and measures for Customs-related State management
over the export, import, exit, entry and transit activities as well as tax policies for
export and import goods.

17. Import Duty & Tax
 Where an international agreement which the Socialist Republic of Vietnam has
signed or acceded to contains provisions different from those of this Law, the
provisions of such international agreement shall apply.
 For cases which have not yet been provided for by this Law, other legal
documents of Vietnam and international agreement which the Socialist Republic of
Vietnam has signed or acceded to, the international conventions and practices on
Customs may be applied provided that such application is not in conflict with the
fundamental principles of Vietnamese law.
 Customs tariff rates are set by Decision No. 280/ttg of 25 April 1994 and are
amended according to international changes; tariff rates range from 0 to 60%.
 Three kind of tariff rates apply to imported goods:
Ordinary tariffs apply to goods originating from countries that have not exchanged
normal Trade Relations (NTR) agreements with Vietnam;
The Preferential Tariffs are set on goods imported from countries having NTR status
with Vietnam; and
The Special Tariffs apply to goods imported from countries having exchanged special
preferential tariffs agreements with Vietnam, e.g. ASEAN member countries.

18.  WCO_World Customs Organization
Vietnam applies a six-digit tariff nomenclature basically corresponding to the
Harmonized Commodity Description (HS 96) as of 1 January 2000. Some subheadings
are further elaborated at an eight-digit level for tariff and statistical purposes.
 In line with AFTA (Asean Free Trade Agreement), Vietnam is converting its
current 6-digit tariff nomenclature into 8-digit system, i.e. the Asean Harmonized
Tariff Nomenclature (AHTN), which is based on the World Customs Organization's
HS2K.
 Other regional trade agreement
CEPT (Asean)
ACFTA (Asean – China)
AKFRA(Aean-Korea)
AJCEP(Asean – Japan)
AANZFTA (Australia-Asean-New Zealand)

19.  Why Outsource to LSP
 Customs clearance in logistics
 Scope of service
 Price
 Plan for phase 3
Opportunity Understanding Scope & Price SOP & KPI Start-up!

20. 1-Costs for import shipment
1) Delivery Order fee from shipping line
2) Import shipping handling fee from forwarder
3) Lift on & Lift off charge from port
4) Trucking charge from trucking company
5) Loading/Unloading at the port/airport
6) Customs Brokerage Handling fee from Customs Broker
7) Customs inspection fee from Vietnam Customs
8) Import customs form from Vietnam Customs
9) Terminal Handling Charge_THC from shipping line
10) Storage/demurrage charge (if any)from shipping company
11) CFS/TCS from port/airport in case of bulk-cargo
12) Others if any

21. 2-Costs for export shipment
1) Export customs form from Vietnam Customs
2) Certification of Origin_C/O form from VCCI
3) Customs Brokerage Handling fee from Customs broker
4) Trucking cost from trucking company
5) Lift-on & Lift-off charge from port
6) VN customs inspection fee from Vietnam Customs
7) Loading/Unloading charge at port/airport
8) Shipping documentation fee(B/L & AMS etc)…from shipping company
9) THC from shipping company
10)Seal fee from shipping company
11)Fumigation fee
12)Storage/Detention charge (if any) from shipping company
13)CFS/TCS from port/airport
14)Other shipping fee (if any)

22. 3-Price
structure
Customs Shipping &
brokerage Fee Customs
per Customs Documentation
register Fee (back-to-
number back)
Additional fee
for opening the
sub-contract to
customs
Our Customs Handling Fee
4-Quotation to be advised later and
import/export local charge as attached

23.  Scope of Service
 Contact Information
 Customs Handling Procedures
 Invoicing Requirements

24. 1-Service Goal
 To manage information flow from raw materials imported for processing to
export finished product
 To clear the customs formality for all import/ and export shipment
 To balance the quota between raw materials imported and production exported
2-Service Commitment
 To minimize the lead-time for customs formality and expected to be:
FCL/FCL : 2-3 working days
 LCL/LCL: 3-5 working days
 Air shipment: 1-2 working days
 To closely supervise the processing contract for balancing the quota between
raw materials imported and production exported and liquidate the processing
contract to customs at the end of process contract.

25. 3-Service Provided for
import /export shipment
1) To prepare a set of import customs 1) To prepare a set of export
documentation customs documentation
2) Fill-in the import customs form 2) Fill-in the export customs form
3) Register with customs office 3) Register with customs office
4) Customs inspection 4) Customs inspection
5) Trucking 5) Trucking
6) Cargo delivery & POD 6) Shipping
7) Invoicing 7) Invoicing
8) File the set of import 8) File the set of export
documentation documentation
4-Hours of Operation
 Business hours are defined as follows:-
Mon – Fri : 08:30 hrs to 18:00 hrs
Sat : 08:30 hrs to 12:30 hrs
Sun & Public Holidays : Closed

26.  Why Outsource to LSP
 Customs clearance in logistics
 Scope of service
 Price
 Plan for phase 3
Opportunity Understanding Scope & Price SOP & KPI Start-up!

28. Part 2

29. Part 1

30. 1-Payment term (Need to
discuss more…)
 Receive invoices 1- 20 every month
 Customer Payment Terms are Net 45
 Payment every Friday on second and forth week of month.
1-Billing set is composed of :
 VNS’ invoice
 Set of shipping documentation : POD, AWB, B/L,C/O etc..
 Customs Entry
 All other back-to-back invoice
 Other documents with completed set such as official receipt, etc