Prosecuting the biggest cashew nut smuggling case ever in Binh Phuoc province


Cashew nut processing line of Phuc An Company. Photo: N.H
Cashew nut processing line of Phuc An Company. Photo: N.H

Cashew is imported for export production

Binh Phuoc Customs Department has just issued a decision to prosecute a criminal case for smuggling of Phuc An Trading Production Co., Ltd.

According to the case file, Phuc An Company, headquartered in Phuoc Binh ward, Phuoc Long town, Binh Phuoc province, is led by Mr. Le Nhat Huy as director.

From 2013 to 2018, the company’s legal representative Le Nhat Huy informed Chon Thanh Customs Branch (Binh Phuoc Customs Department) of the production establishment, installation of machinery and equipment lines and registration of import and export declarations of cashew nuts.

Accordingly, the company opened 121 declarations to import 26,174 tons of raw cashew nuts for export production from countries such as Indonesia, India and African countries including Burkina Faso, Benin, Côte d’Ivoire, Ghana, Nigeria, Senegal, Togo and Tanzania with a total tax value of nearly VND1,116 billion.

After the import, the company opened 17 additional import declarations to revise the imported volume to 226.7 tons of raw cashew nuts and one declaration to change the use purpose into domestic consumption with type code A42 for 55 tons. Thus, as of December 11, 2018, the volume of raw cashew nuts for export production was 25,892 tons.

With the imported volume, Phuc An Company registered 149 export declarations of type code E62 (export of export production) for 2,343.5 tons of finished cashew kernels, equivalent to 11,717.5 tons of raw cashew nuts.

Of which, the company has re-imported 11 tons of exported finished cashew kernels which were returned under the import code A31 equivalent to 55 tons of raw cashew nuts. Thus, the volume of finished cashew kernel actually exported was 2,332 tons, equivalent to 11,662 tons of raw cashew nuts, so the volume number of raw cashew nuts that has not been produced yet is 14,230 tons.

Through reviewing data on the customs system, Binh Phuoc Customs Department found that the raw cashew nut inventory of Phuc An Company is still very large. Therefore, the unit inspected the inventory of raw materials, supplies and exported goods at Phuc An Company. As a result of the inspection in February 2018, the actual inventory of raw cashew nuts was 146 tons worth VND6.2 billion less than the inventory according to the customs declaration. Accordingly, Chon Thanh Customs Branch (Binh Phuoc Customs Department) issued a decision to impose a tax amount of VND310 million.

Sell cashew nuts to domestic market for profit

However, only 10 months later, during the inspection in December 2018, the volume of raw cashew nuts left in the warehouse of Phuc An Company was missing from the declared amount up to 13,285 tons, worth VND555 billion, with a temporary tax amount of VND 27.8 billion. Working with Phuc An Company, Mr. Le Nhat Huy said that the above raw cashew nuts were sold to the domestic market to repay bank loans.

According to Decree 08/2015/ND-CP (revised in Decree 59/2018/ND-CP) and Circular 38/2015/TT-BTC (revised in Circular 39/2018/TT-BTC), when transferring for domestic consumption or changing the use purpose for such a large volume of raw cashew nuts, the company must open a new customs declaration. However, Phuc An Company did not follow the prescribed procedures.

Thus, the behavior of Phuc An Company infringed on the state economic management of export and import, and committed the crime of smuggling specified in Clause 4, Article 188 of the 2015 Penal Code.

According to Binh Phuoc Customs Department, when carrying out customs procedures to transfer domestic consumption, the company has to pay import tax and present documents proving that the company has fully carried out specialized procedures for raw cashew nuts at the time of importation, namely a phytosanitary certificate and state inspection of food safety. However, many businesses have evaded these obligations to gain illicit profits.

The Customs has busted many cashew smuggling cases with a volume of up to thousands of tons of raw materials.

Most recently, from the coordination results with the Post-Clearance Audit Department – General Department of Customs, on November 22, Binh Phuoc Provincial Police issued a decision to prosecute two suspects for cashew smuggling at Thao Vy Trading, Service and Production One Member Co., Ltd (Phuoc Long Town). Accordingly, more than 575 tons of raw cashew nuts, worth more than VND27.6 billion, were imported under the customs regime of import of raw material for export production but were produced for export and sold to the domestic market for illicit profits.

Previously, also in the investigation results of the Post-Clearance Audit Department, on 1 November 2022, the Police Investigation Agency of Binh Phuoc Province decided to prosecute Hoang Van Phi, Director of Phuong Phi Trading Production Company Limited (Phuoc Long Town, Binh Phuoc Province) for the crime of “smuggling”. This company arbitrarily consumed 835 tons of raw cashew nuts as production materials for export to the domestic market without declaration with the Customs office as prescribed.

At Binh Phuoc Customs Department alone, in addition to the case of Phuc An Company, the department prosecuted four other smuggling cases with a total volume of nearly 22,000 tons of raw cashew nuts, worth over VND 680 billion.


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