WHAT IS OFFICIAL IMPORT? ADVANTAGES AND DISADVANTAGES YOU NEED TO KNOW?

 
 A. WHAT IS FORMAL IMPORT?
 
Formal goods is a term used to refer to goods that are imported and exported in accordance with the provisions of law, have completed all customs procedures and tax obligations. This type of goods is transported through international or main border gates, under the supervision of competent authorities, ensuring legality and transparency in transactions. Formal import plays a key role in foreign trade, ensuring legality, product quality and compliance with market standards. Applying official channels helps parties avoid the risk of counterfeit and poor quality goods, build trust and promote sustainable trade. Although there is no specific legal definition, official and unofficial channels are understood through characteristics. Official import and export always have contracts, complete documents (invoices, bills of lading, C/O...), large volume, high value, payment through banks, and transportation through international/main border gates. In contrast, "informal" trade often lacks contracts/documents, is small in scale, has low value, is paid in cash/barter, and goes through secondary border gates/openings.
* Note: The above characteristics are only relative; some informal shipments still have large volumes or are paid through banks.

B. ADVANTAGES AND DISADVANTAGES OF OFFICIAL IMPORT

Compared to informal import, official import offers many superior guarantees.

+ Advantages of official import

Official import is a transparent and professional international trade method, applicable to all individuals/organizations that meet legal and financial conditions. This is a legal import method recognized by the state, ensuring legal safety, product quality and tariff preferences (if origin conditions are met).

Main features:

- Foreign trade contract: An official contract between Vietnamese and international partners is required.

- Full set of documents: Including Invoice, Packing List, Bill of Lading, C/O, C/Q...

- Electronic customs declaration: Implemented through the VNACCS/VCIS system.

- Tax obligations: Pay full import tax, VAT, special consumption tax (if any).

- Inspection and supervision: Goods are subject to strict inspection by customs and specialized agencies.

Competitive advantages:

- Reputation and legality: Full documents help prove origin, build a professional image, create trust.

- Legal protection: Goods are not worried about confiscation or fines; are supported by law in case of disputes.

- Access to large distribution channels: Meet the criteria for entering supermarkets and e-commerce platforms; VAT invoices are convenient for large contracts.

- Tariff incentives: Enjoy import tax exemption/reduction from FTAs ​​(EVFTA, CPTPP...) with valid C/O, helping to reduce costs and increase profits.

- Easy quality inspection and declaration: Convenient for making quality declaration documents, specialized inspection, market expansion.

- Proactive marketing: Freely promote and communicate products without fear of violations, building long-term trust.

+ Disadvantages of official imports

Besides the outstanding advantages, official imports also have some limitations that businesses need to pay attention to:

Complicated process: Many procedures, requiring preparation time and goods are only received after customs clearance (except in special cases).
Higher costs: Incurring taxes, full customs fees and other compliance costs compared to small-scale imports.
Strict control: Goods are subject to strict supervision, less flexibility in transportation and handling.

C. TYPES OF OFFICIAL IMPORTS

With the strong development of the Logistics industry and the trend of global economic integration, the form of official imports is increasingly expanded and classified more flexibly to meet the diverse needs of the market. In which, the two main types are most popular: direct official imports and official imports through consignment. So what is the difference between these two forms of official imports?

+ Direct official imports

Direct official imports are the form in which the company/enterprise prepares and handles all import procedures according to the regulations of the customs authority. So what are the official import procedures? Accordingly, with the direct official import form, the enterprise/company must proactively contact and negotiate with foreign suppliers, sign foreign trade contracts, prepare import documents, declare customs and pay taxes.

Although the direct official import form does not incur intermediary costs, it requires the importer to have a clear understanding of the import-export process and regulations, and is prone to risks if there is not much experience.

+ Official import form through consignment

Official import through consignment is a form in which a company/enterprise cooperates with a reputable intermediary unit providing international import services and authorizes the entire import process. Simply put, the authorized unit will represent the negotiation with the supplier, sign the contract, declare customs, pay full taxes and deliver the goods to the agreed location with the customer.

Thus, official import through consignment will help businesses no longer worry about cumbersome procedures, risks arising and fully protect their rights if an incident occurs, but they need to pay a certain service fee.

D. ACCURATE PROCEDURE FOR IMPORTING OFFICIAL GOODS

Step 1: Prepare import documents

When conducting official import, the Import Representative must prepare a complete set of documents including:

  • Commercial contract,
  • Commercial Invoice,
  • Packing List,
  • Bill of Lading,
  • Customs declaration,
  • Letter of Credit (L/C - if any),
  • State budget payment receipt,
  • Certificate of origin (Form E or equivalent forms),
  • Shipping invoice,
  • Quarantine certificate (for required goods).

Step 2: Declare the customs import declaration

The official importer registers an electronic customs account, declares the imported goods information to the General Department of Customs, waits and receives the green, red or yellow inspection results. So what is the meaning of the official goods inspection colors?

- If the green channel is marked with inspection code number 1, the goods are cleared immediately.

- If the yellow channel is marked with inspection code number 2, it is necessary to carry out an additional step of document inspection.

- If the red channel is marked with inspection code number 3, it is necessary to check the documents and goods.

Step 3: Pay tax and fill in the delivery order

Based on the HS code determined for the imported goods, the importer looks up the import tax to be paid, pays it through the bank or treasury and waits to receive the order to receive the goods from the shipping line. When getting the delivery order, the importer needs to prepare:

Introduction letter, notice of arrival of goods.

Container loan document (if withdrawing goods from a private warehouse) or empty container unloading document (if the container has been returned).
Bill of lading.
Delivery order and commercial invoice.

Step 4: Handling customs clearance procedures

After receiving the delivery order and preparing all the documents, the importer brings the documents to the port to complete customs clearance procedures, ensuring the information is consistent and complete to avoid being returned.

Step 5: Print the delivery receipt - pick up the goods

After the goods have been cleared through customs, the importer prints the declaration barcode and EIR to clear the declaration at the customs supervision area and then transports the goods to the warehouse.

Step 6: Receive the container deposit back

The importer brings the empty unloading document and related documents to the shipping line to get the deposit back (if any) with the control of the container not being damaged.

Step 7: Complete the documents and make bank settlement

This is the step to complete the international payment obligation between the buyer and seller through the banking system. Specifically, the importer (buyer) needs to compile relevant documents and send them to the bank to complete payment confirmation. Or pay all remaining costs in full if paid later and close the file, as a basis for completing accounting books and financial reports.

☞If you still have questions, or want to export or import goods officially - Contact Heart logistics today for advice and support on full official import procedures, saving time and costs?