(October 29, 2024) Enterprises importing raw cashews from Africa face difficulties
Raw cashews imported from Africa to Vietnam must undergo quarantine before being processed. However, importing enterprises are not allowed to sell domestically. If they violate, enterprises may be charged with smuggling.
With the technical support of the Vietnam Private Sector Competitiveness Enhancement Project (IPSC), a technical assistance project funded by the United States Agency for International Development (USAID) and the Department of Enterprise Development - Ministry of Planning and Investment as the project owner, the Vietnam Cashew Association (VINACAS) organized a consultation seminar on "Identifying difficulties, obstacles and finding solutions to facilitate trade for the cashew industry" in Binh Duong on October 28. The seminar aimed to find directions and propose policy solutions to help facilitate trading enterprises, while creating raw material sources for production, processing, export and domestic consumption.
Enterprises importing raw cashew nuts from Africa caught in legal trouble
In addition, through reviewing the import and export situation of cashew enterprises, the Vietnam Cashew Association found some shortcomings. According to regulations, raw cashew nuts imported for domestic consumption must complete food safety inspection. Specifically, according to Decree No. 15/2018/ND-CP dated February 2, 2018 of the Government detailing the implementation of a number of articles of the Law on Food Safety, cashew nuts and cashew-processed products (except for cakes, jams, and candies containing cashew nuts managed by the Ministry of Industry and Trade) are subject to food safety inspection under the management authority of the Ministry of Agriculture and Rural Development. However, because African countries are not on the "List of countries registered to export food of plant origin to Vietnam" published on the website of the Plant Protection Department - Ministry of Agriculture and Rural Development, according to the current regulations of Decree No. 15/2018/ND-CP, cashew businesses importing raw materials from Africa are only allowed to produce for export, any act of selling domestically, for any reason, is a violation of the law. This is one of the regulatory problems for Vietnamese cashew businesses that has not been resolved to date. At the Seminar, businesses and business associations reflected on the practical difficulties and obstacles in implementing the provisions of Decree 15/2018/ND-CP detailing the implementation of a number of articles of the Law on Food Safety, and Project No. 431/QD-BNN - Ministry of Agriculture and Rural Development dated January 26, 2024 on approving the Project on Developing Key Industrial Crops to 2030. At the same time, experts, businesses and business associations proposed policy solutions on taxes, reducing business conditions (customs, plant quarantine, administrative procedure reform, etc.) to facilitate trade for the cashew industry, while creating a source of cashew raw materials for production, processing, export and domestic consumption. According to Decree No. 15/2018/ND-CP dated February 2, 2018 of the Government detailing the Law on Food Safety, imported plant products used as food must meet the requirements of originating from a country or territory with a food safety control system that meets Vietnam's regulations; and be included by a competent authority of Vietnam in the list of countries and territories registered to export food of plant origin to Vietnam. Meanwhile, African countries exporting cashew nuts to Vietnam are not on the list published on the website of the Plant Protection Department (Ministry of Agriculture and Rural Development).
Many enterprises are not granted state inspection certificates on food safety when importing. Therefore, raw cashews imported from Africa are only allowed to go through procedures under the type of processing and production for export.
Meanwhile, Binh Phuoc province is the capital of Vietnam's cashew industry; accounting for nearly 50% of the country's cashew area and output. Cashew processing is the key industry, the strength of Binh Phuoc province. Each year, this industry contributes from 27-45% of the total export turnover, creating jobs for many workers in the province.
According to the Binh Phuoc Provincial Customs Department, domestic raw materials only meet a small part. Most businesses have to import raw cashews, and are having difficulty importing raw materials from some African countries. In order to produce and consume products, businesses must complete food safety inspections for these imported raw materials. In fact, in Binh Phuoc, there are very few businesses with a complete chain from import - processing - exporting finished products.
Mr. Nguyen Van Lich, Director of Binh Phuoc Customs Department, said that during the production and business process, due to some objective reasons, enterprises could not export products, and there was a need to change the purpose of use for domestic consumption.
According to Mr. Lich, in the past, many enterprises selling imported cashews under the form of import for export production have been criminally prosecuted. Binh Phuoc Customs Department alone has prosecuted 9 cases from 2022 to present. On the other hand, the processed cashew products for export of Binh Phuoc enterprises have not received any feedback on product quality and food safety conditions.
"Therefore, it is necessary to have a solution to remove obstacles so that cashew processing enterprises have raw materials for production; enterprises do not violate the law and at the same time, Customs collects budget for the state", Mr. Lich shared.
Finding solutions for raw cashew imports from Africa
Mr. Bach Khanh Nhut - Permanent Vice President of VINACAS Association said that for many years, Vietnam has always held the world's number 1 position in terms of cashew export volume. The area of cashew trees in Vietnam is limited to 300,000 hectares, the domestic supply of raw cashews currently only ensures 10-12% of the export processing needs of Vietnamese enterprises, the remaining 88% -90% depends on imported raw cashews
However, in actual operations, enterprises still face some difficulties and problems. In particular, the regulation at Point a, Clause 1, Article 14 of Decree 15 causes the operations of enterprises in the cashew industry to be "stuck".
According to Mr. Nhut, this regulation is correct, aiming to create technical barriers, ensuring food safety for imported food products. But in the cashew industry, of the nearly 2.9 million tons of raw cashews imported as raw materials (in 2023), more than 2.2 million tons were imported from African countries that are not on the "list of countries and territories registered to export food of plant origin to Vietnam".
Imported raw cashews must be quarantined before being processed. But for whatever reason, they cannot be sold domestically. If violated, they can be charged with smuggling. And many businesses and businessmen have been prosecuted and imprisoned for violating this regulation.
At the seminar, the Binh Phuoc Provincial Customs Department proposed: Cashews originating from African countries should be allowed to be imported and consumed in Vietnam. The import regulations stipulate the applicable tax rate policy to protect the Vietnamese cashew industry; Only manage the quality of cashews to ensure food safety according to regulations on food and foodstuffs when exported. Because the processed cashew products have been converted into cashews of Vietnamese origin.
According to Mr. Do Anh Tuan, Deputy General Secretary of the Vietnam Federation of Commerce and Industry, if it is necessary to amend Decree 15, this is a good opportunity because Decree 15 is chaired by the Ministry of Health and is still in the process of amendment, so Mr. Tuan believes that the role of VINACAS is very important in proposing to amend Decree 15.
Mr. Ta Quang Huyen, General Director of Hoang Son 1 Company, one of the cashew processing manufacturers in Binh Phuoc, suggested: one is to still allow imports for export production to be exempted from tax, two is to allow imports for commercial production but not exempted from tax and always taxed on input, three is to allow businesses to change the purpose if they have declared import declarations for export production but when the market turns bad they cannot export, then they are allowed to resell to other businesses, then change the declaration and pay tax to the State. This will bring advantages to the Vietnamese cashew industry.
Based on the results of the Seminar, the Vietnam Cashew Association will synthesize and develop policy documents to the Prime Minister, the Ministry of Agriculture and Rural Development and relevant ministries and branches
Quang Minh
Source: Consumer Special Page - Electronic Economic & Urban Newspaper.
