Vietnam to crack down on ‘Made in Vietnam’ labelling of Chinese exports

A statement issued Sunday said Vietnamese customs have found scores of fake product-origin certificates and illegal transfers by companies seeking to evade U.S. tariffs amidst the ongoing U.S.-China trade dispute.

Such counterfeiting has been found in many sectors, ranging from seafood and agriculture to steel and aluminium.

Typically, goods imported from China is repackaged with "Made in Vietnam" labels, and then local authorities are requested to issue certificates of origin for export to the U.S., Europe, or Japan.

One instance mentioned in the statement was a Vietnam-based manufacturer of timber products was found to have been importing Chinese timber, relabelling it and exporting to the U.S.

"Vietnam Customs has directed provincial and municipal units to drastically strengthen inspections to prevent such violations," said the agency's chief Nguyen Van Can.

The customs agency is developing a process to better identify and impose penalties on businesses which carry out such violations, the government statement said.

Do Van Sinh, a standing member of the National Assembly's Economic Committee, warned businesses not to engage in shady deals with foreign enterprises. If this happens, the U.S. may punish Vietnam and businesses in Vietnam will have to bear the consequences, he said.

Vietnam has emerged as one of the biggest beneficiaries of the U.S.-China trade spat as businesses are shifting their supply chains away from China in order to dodge tariffs.

The country attracted a record FDI inflow in the first five months at $16.74 billion and 70 percent higher than the same period last year. Four of the six biggest newly registered FDI projects in the period were from mainland China and Hong Kong, according to the Ministry of Planning and Investment.

Vietnam also saw exports to the U.S. rise 28 percent in the five months. With an export value of $22.6 billion, the U.S. was Vietnam’s largest export market.

However, Deputy Prime Minister Pham Binh Minh warned the National Assembly last Thursday that while the trade war will increase Vietnamese exports of some items in the short term, prolonged conflict can have long-term adverse impacts on the economy as well.

Minh said the trade tension could bring the country’s GDP down by VND6 trillion ($255.54 million) over the next five years.

Vietnam has prepared responses, which include maintaining macroeconomic stability, controlling inflation, monetary stability, improving local businesses’ competitiveness and improving the investment environment, he said.