Introduction
\nOne of the questions I hear most frequently from international manufacturers is:
\n\u201cWhat happens if Vietnamese Customs audits our operations?\u201d
\nThe better question is different.
\n\u201cAre we already operating today as if the audit were taking place tomorrow?\u201d
\nCustoms audits should not be viewed as extraordinary events.
\nThey are an integral part of modern customs administration.
\nWell-prepared companies generally view audits as manageable compliance exercises.
\nPoorly prepared companies often discover weaknesses that originated years earlier\u2014sometimes before production even commenced.
\nThe difference is almost always preparation.
\nCustoms Compliance Begins Before the First Shipment
\nMany companies believe customs compliance begins when goods arrive at the Vietnamese border.
\nIt actually begins much earlier.
\nCompliance starts when management decides:
\n\u2022\twhere production will occur;
\n\u2022\thow products will be manufactured;
\n\u2022\twho owns the goods;
\n\u2022\twhich customs procedure will be used;
\n\u2022\twhich contracts will govern production.
\nEvery one of these decisions may later be reviewed during a customs audit.
\nWhat Will Customs Authorities Typically Review?
\nAlthough every audit is different, manufacturers should expect questions regarding:
\n\u2022\tHS classification;
\n\u2022\tcustoms valuation;
\n\u2022\torigin of imported materials;
\n\u2022\tproduction records;
\n\u2022\tinventory reconciliation;
\n\u2022\tmanufacturing activities;
\n\u2022\texport documentation;
\n\u2022\timport declarations;
\n\u2022\taccounting records;
\n\u2022\tsupplier documentation.
\nThe objective is normally to verify that the legal structure accurately reflects operational reality.
\nThe Five Documents Every Manufacturer Should Always Be Able to Produce
\nRegardless of industry, every manufacturer should be able to produce immediately:
\n1. Bills of Materials
\nThese demonstrate precisely which components were incorporated into each finished product.
\n2. Manufacturing Records
\nAuthorities frequently wish to understand what manufacturing actually occurred in Vietnam.
\n3. Supplier Documentation
\nThe origin and commercial history of imported components should be traceable.
\n4. Customs Documentation
\nImport and export declarations should remain consistent with operational records.
\n5. Internal Procedures
\nCompanies should be able to demonstrate that compliance forms part of normal business operations.
\nCommon Findings During Customs Audits
\nExperience shows that audit findings frequently involve:
\n\u2022\tinconsistent documentation;
\n\u2022\tincorrect tariff classification;
\n\u2022\tincomplete production records;
\n\u2022\tinsufficient origin evidence;
\n\u2022\tdiscrepancies between commercial documents and customs declarations;
\n\u2022\tpoor inventory reconciliation.
\nInterestingly, many issues arise from documentation rather than intentional misconduct.
\nHow Should Companies Prepare?
\nPreparation should become part of ordinary business management.
\nI generally recommend:
\n\u2022\tperiodic internal customs reviews;
\n\u2022\tindependent verification of HS classifications;
\n\u2022\tregular origin reviews;
\n\u2022\tdocumentation audits;
\n\u2022\tsupplier compliance reviews;
\n\u2022\temployee training.
\nWaiting until an audit begins is usually too late.
\nAudits Can Also Be Opportunities
\nA well-managed audit allows a company to demonstrate the strength of its compliance systems.
\nCompanies that maintain accurate records and transparent procedures often complete audits efficiently and continue operations with minimal disruption.
\nPreparation therefore protects both legal compliance and commercial continuity.
\nFinal Thoughts
\nManufacturing excellence depends upon precision.
\nThe same principle applies to customs compliance.
\nThe companies that consistently succeed in Vietnam are not necessarily those with the largest legal departments.
\nThey are those that recognise that customs compliance is part of operational excellence.
\nGood documentation.
\nGood procedures.
\nGood governance.
\nThose three principles remain the strongest preparation for any customs audit.
\nUltimately, the best customs audit is the one for which your company has already prepared\u2014long before the authorities arrive.
\n***
\nFor more information on the above, please do not hesitate to contact the author Dr. Oliver Massmann under omassmann@duanemorris.com. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.<\/p>\n","protected":false},"excerpt":{"rendered":"
Introduction One of the questions I hear most frequently from international manufacturers is: \u201cWhat happens if Vietnamese Customs audits our operations?\u201d The better question is different. \u201cAre we already operating today as if the audit were taking place tomorrow?\u201d Customs audits should not be viewed as extraordinary events. They are an integral part of modern … <\/p>\n
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