WHAT IS CUSTOMS CHANNELS? THE MEANING OF CUSTOMS CHANNELS

In the process of carrying out customs procedures, businesses engaged in import and export must use common customs declaration software such as vnaccs/ecus to transmit information related to the customs declaration. Once the data is transmitted, the customs authority will process and determine the results of the customs channeling process.

This process directly impacts the clearance process and the outcomes for import and export businesses. Therefore, it is essential for those in this industry to fully understand customs channels and its significance in our business operations.

What is Customs Channels?

Customs channels is the process by which customs authorities decide how to handle a shipment based on various factors such as type of goods, origin, value, and location. This process ensures fairness and efficiency in import and export operations. However, it can also affect the clearance time and business activities. Therefore, businesses need to be well-versed in the procedures and regulations to ensure compliance and optimize the import-export process.

Why is Customs Channeling Necessary?

Currently, goods are usually divided into three main channels: green, yellow, and red.

Customs channeling is similar to traffic management with three signal colors: green (processed without stopping), yellow (careful inspection), and red (stop for detailed inspection). Customs authorities progressively inspect and monitor shipments from the green channel to the red channel, requiring stricter checks on both goods and documents. Customs channeling ensures compliance with regulations, prevents smuggling, and facilitates trade.

What is the Green Channel?

The green channel is typically applied to businesses that strictly comply with customs regulations and do not require detailed inspection of documents or goods.

In this case, the business is considered to be in good standing with customs regulations, and they will not be subjected to detailed checks on their documents or goods. The green channel is often applied to many export and import shipments.

Goods exported/imported are cleared based on the electronic customs declaration. The business will not have to undergo detailed checks on documents or goods, and after paying the duties, the shipment will be cleared quickly. This helps reduce storage costs and eliminate waiting times.

What is the Yellow Channel?

The yellow channel is used when customs checks the documentation but does not inspect the goods in detail. Exemptions from detailed checks may include shipments from businesses that comply well with customs regulations, goods from domestic and foreign investment projects exempt from tax, goods in free trade zones, goods specially reviewed by the Prime Minister, and many other cases.

When the customs data processing system returns a yellow channel result, the goods will undergo document inspection but not detailed checks on the goods themselves. If no violations are found in the documentation, the clearance process will continue without checking the actual goods. This is often applied in special cases where businesses strictly adhere to customs regulations.

In this case, customs will apply Article 11 of Decree 154/2005/ND-CP.
Businesses are exempt from detailed inspection for certain items under the following conditions:

• The business complies well with customs laws.
• Goods for export (except for those made from imported materials and goods subject to conditional export policies).
• Equipment and machinery used for fixed assets that are exempt from tax, such as those for foreign and domestic investment projects.
• Goods from abroad brought into free trade zones, bonded warehouses, transshipment ports, transit goods, or emergency aid as stipulated by law in Clause 1, Article 35 of the Customs Law, as well as other specific cases such as goods related to national security, humanitarian aid, and temporary import-export goods under Articles 30, 31, 32, and 37 of Decree 154/2005/ND-CP.
• Goods classified as special, as decided by the Prime Minister.
• The decree also mentions goods that are not in the above categories but, based on analysis, show no likelihood of violations. (See Article 11)

What is the Red Channel?

The red channel is when customs inspects both the documentation and the goods in detail, with varying degrees of inspection. There are three levels of physical inspection, ranging from checking the entire shipment (Level 1) to checking 5% of the shipment (Level 3).

When the red channel is decided, customs will conduct a detailed examination of the documents and goods. This is applied to cases that require strict checks to ensure compliance with customs regulations and to prevent violations. If no violations are found, the clearance process will continue. Otherwise, measures will be taken to resolve any violations.

How Can Businesses Be Assigned to the Green Customs Channels?

To be assigned to the green channel in customs procedures, several important factors must be considered. Although customs channeling is done automatically through the electronic customs system, and businesses cannot fully control this process, the following measures can increase the chances of being assigned to the green channel:

• Compliance with Regulations
  Businesses need to strictly follow customs and tax regulations. Compliance ensures that no violations occur during the import and export process.

• Accurate Documentation
  Businesses should avoid frequently amending or canceling customs declarations. Maintaining the transparency and accuracy of customs information is crucial.

• Positive and Cooperative Attitude
  Businesses should adopt a positive and cooperative attitude towards customs authorities, being ready to provide information or resolve issues when necessary.

• Update Information
  Provide necessary business information to customs authorities. This helps customs stay updated on the latest information about the business and its goods.

• Upgrade Business Status
  If possible, businesses should aim to upgrade their status to a preferred business. However, this is not always easy and depends on the customs authority’s criteria.

It is important to note that the decision to assign a green channel is based on various factors and is automatically carried out by customs authorities. Therefore, it cannot be guaranteed that every declaration will be assigned to the green channel, and businesses must accept the results from customs authorities.

We hope the information provided by Smart Link Logistics will help readers and clients gain essential knowledge about customs channels and the meanings of the green, yellow, and red channels. If you need legal support or assistance with customs procedures for import and export, contact Smart Link Logistics for prompt and efficient consultation. With over 14 years of experience in the logistics field, we are proud to be your partner throughout your journey.