Environmental Protection Deposit is required while import the scrap

​Level of deposit for environmental protection fund while import scrap

Deposit 10-20% of total shipment value

Decree No. 08/2022 detailing a number of articles of the Law on Environmental Protection stipulates: Organizations and individuals that import scrap from abroad for use as production materials must deposit at the Vietnam Environmental Protection Fund, the Fund Provincial-level Environmental Protection Agency or deposit-receiving credit institutions. Deposits are made for each shipment or for each contract.

The deposit level for imported iron and steel scrap under 500 tons is 10%; from 500 tons to less than 1 thousand tons is 15%; over 1,000 tons is 20% of the total value of imported goods. For paper and plastic scrap, imported under 100 tons must make a deposit equal to 15%; from 100 tons to less than 500 tons must make a deposit equal to 18%; over 500 tons must make a deposit equal to 20% of the total value of the imported scrap shipment. Scraps that do not belong to the two groups above, the deposit is equal to 10% of the total value of the imported shipment.

Sharing about this regulation, Mr. Phan The Hung, legal representative of YFY Co., Ltd. located in Long Thanh District said that every year the company has to import a lot of pulp and mixed paper for the production of sheet paper and cartons. The State promulgates the above regulation to limit the import of "junk" to Vietnam, forcing businesses to be responsible for imported goods. However, it is necessary to have clear criteria for the types of paper scrap to be imported, to avoid tightening regulations that make it difficult for businesses to import production materials, and have to wait too long during customs clearance procedures for shipments that enhance the warehouse cost. The procedure should be switched from pre-inspection to post-inspection, it means tightening compliance with environmental regulations such as waste water and emission standards, etc. instead of controlling input materials, because enterprises import scrap for production rather than for trading.

Reduce environmental risks

Director of Dong Nai Environmental Protection Fund Hoang Thi Nhung said that currently, Dong Nai Environmental Protection Fund has not received instructions to implement this new regulation. If the same applies to other trades and goods being deposited, enterprises must deposit before importing the shipment. The Provincial Environmental Protection Fund receives the deposit and returns it after the goods have been cleared. In case the imported scrap is not cleared for customs because it does not meet the national technical standards on the environment for imported scrap and cannot be re-exported, the deposit will be used to pay the handling costs, or destroy. During the deposit period, organizations and individuals are entitled to interest rates as prescribed.

Environmental experts said that the regulation on depositing the Environmental Protection Fund for imported scrap is to ensure that organizations and individuals are responsible for handling the risks of environmental pollution that may arise from the shipment of scrap imported. Limiting the backlog of scrap containers at seaports without anyone taking responsibility for handling, reducing waste with harmful environmental elements entering Vietnam.

In addition to the above reasons, promoting the responsibility of handling risks for the import of scrap paper, plastic, iron and steel as production materials is one of the forms of facilitating the development of the recycling industry of Vietnam. At that time, businesses must consider each shipment, each import contract, consider finding a source of raw materials on the spot to reduce transportation costs, reduce procedures and time related to the deposit. Encourage businesses to actively seek new sources of raw materials that can replace imported scrap.

 Nam Vu