Unlocking the Value of Entrusted Import Service Contracts to Mitigate Risks of Unlawful Actions when using IOR services

The Value of Entrusted Import Service Contracts in Vietnam

Are you considering importing products into Vietnam using an importer of record (IOR) service? If so, understanding the significance of Entrusted Import Service Contracts is crucial for seamless operations and compliance with Vietnamese regulations.

Certain products, such as ICT devices containing civil cryptography may necessitate the expertise of an IOR provider for importation, particularly when dealing with licenses. 

Per Vietnamese regulations (regulated in Article 159 of the Commercial Law No. 36/2005/QH11), engaging an IOR service requires that the Entrusted Import Service Contract must be made in writing or in another form with equivalent legal value. This agreement is essential for both demonstrating the purpose of importation to the Customs Authority (regulated in Article 1 - Term 5 of Circular No. 39/2018/TT-BTT, the mandatory documents we must provide to the Customs Authority for Clearance) and establishing ownership of the goods.

Companies considering utilizing Importer of Record (IOR) services for Vietnamese imports should prioritize the establishment of a formal contract. The absence of such a contract can expose your organization to potential legal vulnerabilities.

Certain practices, such as declaring imports solely under the IoR Vendor name without disclosing the Vietnamese recipient in customs documentation, or utilizing a separate IOR without a documented entrustment agreement, can raise concerns during post-clearance inspections.

These concerns may escalate to accusations of smuggling or tax evasion.

Moreover, lacking proper documentation, especially the Entrusted Import Service Contract could significantly impact your business continuity and reputation. Customs authorities may scrutinize your operations, particularly if you're operating in a Free Tax Zone, leading to delays and potential legal consequences.

Furthermore, without adequate documentation, repatriating devices for maintenance or repair outside Vietnam becomes a daunting task. This is particularly concerning for businesses relying on expensive equipment that may not be readily serviced within the country. The absence of proper documentation could impede your ability to reclaim these assets or liquidate them upon the closure of operations.

While adhering to Vietnamese regulations may seem daunting, it's essential for safeguarding your business interests and reputation. At Tron Chan, we prioritize providing our clients with premium services that ensure compliance with all relevant regulations. Our commitment to regulatory compliance ensures that our clients can focus on their core operations without worrying about potential legal issues down the line. As your partner in navigating Vietnam's regulatory landscape, we're dedicated to providing comprehensive support to ensure your business operates smoothly and efficiently.