Judgment no. 357/2017/HC-PT dated december 21, 2017 on filing a lawsuit against administrative decision

SUPERIOR PEOPLE’S COURT IN HANOI

JUDGMENT NO. 357/2017/HC-PT DATED DECEMBER 21, 2017 ON FILING A LAWSUIT AGAINST ADMINISTRATIVE DECISION 

On December 21, 2017, at the office of the Superior’s People’s Court in Hanoi, an appellate trial is conducted to hear the administrative case No. 11/2016/TLPT-HC dated March 23, 2016, based on the appeals of petitioner and respondent against the First Instance Administrative Judgment No. 01/2016/HCST dated January 20, 2016 of People’s Court of Hanoi City. According to the Decision to Bring the Case to Trial No. 4126/2017/QD-PT dated December 5, 2017 between litigants:

* The petitioner:  Company C;

Head office: No. 16, Road H, Suite 304, Belize City, Belezie.

Legal representative of petitioner: Mr. Loh Mun S - Director; address: No. 15 C1, 10 - 01 H1, Singapore 229.815.

Authorized representative: Mrs. Phan Thi Huong T4 - Lawyer of H2 Law Firm Ltd, member of Bar Association of Hanoi City;

Address: 768M, Ward V, District B, Hanoi City.

* Respondent:  Director of Anti-Smuggling and Investigation Department - the General Department of Customs.

Authorized representative:  Mr. Nguyen Van T1 - Deputy Director of Anti-Smuggling and Investigation Department - the General Department of Customs.

The protector of legitimate rights and interests of the aggrieved party:

1. Mrs. Tong Thi Hoa Q - Deputy Manager of Handling of Violations - Anti-Smuggling and Investigation Department - the General Department of Customs.

2. Mrs. Le Thi Phuong T2 - Officer of Smuggling Prevention Team of Northern region - Anti-Smuggling and Investigation Department - the General Department of Customs.

3. Mrs. Pham Thi Thu T3 - Officer of Handling of Violations - Anti-Smuggling and Investigation Department - the General Department of Customs.

* Person with related interests and obligations: Q1 Co., Ltd; address: No. 7 Le Quy D, City H3, Quang Ninh Province.

Authorized representative:  Mr. Dang Dinh H4 and Mrs. Luong Thu H5.

THE CASE

B1 Trading and Service Co., Ltd. (Company B1) in Hai Phong signed a sales contract with 2 foreign partners: purchasing 38 bales of Martell Cordon Blue from Hongkong-based Company P and 311 bales of Remy Martin VSOP of Company S1 (Belize), worth USD 176,869.58, shipping term CFR Hai Phong. Company B1 concluded a warehouse lease contract with Company Q1 (1^st time) to import shipments to the bonded warehouse of Company Q1 and re-export them to a third country.

On June 17, 2013, Company Q1 opened a declaration to import bonded warehouse No. 310/KNQ/C20D at the Sub-department of Customs C2, Quang Ninh Province. Detailed declaration of shipment: 38 bales of Martell Cordon Blue and 311 bales of Remy Martin, worth USD 176,869.58. However, this declaration was not accepted by the Region III Hai Phong Customs Port, so the shipment was not allowed to be transferred from Hai Phong to C2: Company B1 does not have a code for temporary import business of goods subject to special excise duty, so it is not permitted to rent a bonded warehouse of Company Q1 to store goods.

Company B1 asked Company Q1 to cancel the declaration No. 310 to negotiate with 2 foreign partners. On June 18, 2013, Company B1 signed 2 annexes of contracts with 2 foreign partners to change shipping term from CFR Hai Phong to delivery at bonded warehouse of Company Q1 and introduced a partner to Company Q1 to sign a bonded warehouse lease contract. On June 19, 2013, Company Q1 signed 2 bonded warehouse contracts No. 13-06WI/NS-BW and No. 13-05WI/NS - BW with Company P and Company S1 (2^nd time) dated June 14, 2013.

On June 19, 2013, Company Q1 opened 2 declarations No. 311/KNQ/C20D and No. 312/KNQ/C20D (2^nd time) at Sub-department of Customs C2. However, when Company Q1 came to Hai Phong Port to carry out procedures to transfer goods to their bonded warehouse, both declarations 311 and 312 were rejected by the Ship and Warehouse Supervision Team of Sub-Department of Customs of Region III Hai Phong Port for the reason: The shipment only has 1 bill of lading, so it is impossible to open 2 declarations.

Company Q1 contacted with C2 Port Customs which received two declarations 311 and 312 to cancel these two declarations and informed both foreign partners about the incident. Two foreign partners agreed: Because Company S1 is named in the bill of lading No. CSPU3121880 as a Consignor, S1 INC Company will sign a single warehouse lease contract with Company Q1 to send the shipment of 349 bales of spirit to the bonded warehouse of Company Q1. On June 19, 2013, Company P made a power of attorney for Company S1 to act on its behalf to sign the warehouse lease contract with Q1 for its 38 bales of spirit and deal with goods-related issues in accordance with Vietnam’s law.

On June 20, 2013, Company Q1 opened a declaration No. 313/KNQ/C20D, showing that: Good’s owner is Company S1; bonded warehouse’s owner is Company Q1. The good includes: 38 bales of Martel Cordon Blue and 311 bales of Remy Martin VSOP, worth USD 176,869.58. Declaration No. 313 was accepted by C2 Customs and Q1 Company is permitted to carry out the procedures for the good transfer from Hai Phong port to warehousing.

On June 21, 2013, when Company Q1 was putting the good into the warehouse, the Northern Region Anti-Smuggling Control Team - Anti-Smuggling and Investigation Department affiliated to the General Department of Customs (Team 1) came to inspect with customs authority of C2 Customs Port. Company Q1’s representative signed a record of certification of goods in warehouse exactly as declared in declaration No. 313.

On June 22, 2013, under the authorization of Company S1, Company Q1 conducted procedures for re-exporting the spirit shipment according to the bill of lading No. CSPU3121880 but Sub-department of Customs C2 rejected it because Team 1 suspected that the documents presented to open the declaration 313 were forged. Until October 14, 2013, Anti-Smuggling and Investigation Department issued a Decision No. 01/QD-DTCBL on suspension of procedures for the shipment of the declaration 313.

On October 24, 2013, Anti-Smuggling and Investigation Department issued a decision to prosecute the case No. 14/QD-DTCBL and referred it to the Police Investigation - the Ministry of Public Security (C46) to investigate documents presented of the declaration 313 showing forging signs to put the shipment into the bonded warehouse of Company Q1.

On October 22, 2014, Investigation Police - the Ministry of Public Security issued a decision No. 09/C46-P10 to suspend the investigation of criminal case of alcohol smuggling occurring at the bonded warehouse of Company Q1 because: “the act did not constitute the offence” and issued an official dispatch No. 2431/C46-P10 dated December 9, 2014, regarding transfer of documents and exhibits to Anti-Smuggling and Investigation Department to handle.

On February 6, 2015, Director of Anti-Smuggling and Investigation Department of the General Department of Customs issued a decision No. 01/QD-DTCBL on penalties for administrative violations in customs sector against Company Q1.

On April 22, 2015, Director of Anti-Smuggling and Investigation Department of the General Department of Customs issued a decision No. 01/QD-DTCBL on confiscation of exhibits of administrative violations whose owner is unidentified, thereby confiscate 38 bales of Martel Cordon Blue and 311 bales of Remy Martin VSOP stored at the bonded warehouse of Company Q1.

On May 8, 2015, Company C as the owner of the good was informed by the Company Q1 about the decision No. 01/QD-DTCBL dated April 22, 2015.

On May 26, 2015, Mr. Loh Mun S, the authorized representative of Company C (former name S1) submitted a petition to Director of Anti-Smuggling and Investigation Department of the General Department of Customs (amendments to the petitions made on September 1, 2015 and December 14, 2015), requested the Court to cancel the decision No. 01/QD-DTCBL dated February 6, 2015 on penalties for administrative violations in customs sector against Company Q1 and decision No. 01/QD-DTCBL dated April 22, 2015 on confiscation of exhibits of administrative violations whose owner is unidentified and request Director of Anti-Smuggling and Investigation Department of the General Department of Customs to pay damages of VND 20,042,800. Reason for filing the lawsuit:

S1 INC Company (Company S1) has a certificate of incorporation and business registration under the Law on International Trading Company issued by the international trading company registration office in Belize City, Belize No. 118, 370 dated May 14, 2012. The certificate of change of the name to C was issued by the international trading company registration office in Belize City, Belize on November 13, 2014.

The above administrative decisions were issued according to the expired legal documents. In specific: Ordinance on Handling Administrative Violations 2002 (amended in 2008) expired on July 1, 2013. Decree No. 97/2007/ND-CP dated June 7, 2007 of the Government expired on December 15, 2013 when Decree No. 127/2013/ND-CP dated October 15, 2013 of the Government on penalties for administrative violations and enforce the implementation of administrative decision in customs sector comes into force. Thus, the promulgation of 2 administrative decisions No. 01/QD-DCBL dated February 6, 2015 and No. 01/QD-DTCBL dated April 22, 2015 of Director of Anti-Smuggling and Investigation Department should have based on the Law on Handling Administrative Violations and Decree No. 127 above (if any).

Pursuant to the Law on Handling Administrative Violations and Decree No. 127/2013/ND-CP dated October 15, 2013 of the Government, the Director of Anti-Smuggling and Investigation Department does not have authority to issue the decision No. 01/QD-DTCBL dated April 22, 2015 to confiscate the shipment of Company C, because the value of the alcohol shipment under the bill of lading CSPU3121880 dated June 9, 2013 is USD 176,869.58 (equivalent to VND 3.7 billion).

Pursuant to Article 77 of the Law on Customs in Viet Nam on post-customs clearance inspection, the fact that the Anti-Smuggling and Investigation Department verified the customs dossier of declaration No. 313 dated June 20, 2013 after customs clearance goes beyond its authority, because the shipment of above bill of lading completed customs procedures to enter into the bonded warehouse.

Pursuant to Clause 1 Article 18 of Decree 127, Company C claims that both decisions No. 01  were not issued within the statutory time limit. The Official Dispatch No. 830/HQCL-TT of Sub-department of Customs Port C2 shows that: On June 21, 2013, Anti-Smuggling and Investigation Department inspected the shipment of declaration No. 313/KNQ/C20D into the bonded warehouse of Company Q1 but it did not make a record of administrative violations committed by International Company Q1 in terms of forged documents in the customs dossier until January 29, 2015 and did not issue the decision No. 01/QD-DTCBL on confiscation of shipment until April 22, 2015. It did not comply with statutory time limit for issuing a decision on administrative penalty.

Representation of authorized representative of the defendant:

Regarding the opening of the declaration form for importing procedures for the shipment according to the bill of lading No. CSPU3121880 dated June 9, 2013 of the Company Q1: On June 17, 2013, Company Q1 opened the declaration No. 310/KNQ/C20D for alcohol shipment under bill of lading No. CSPU3121880 at the Sub-department of Customs Port C2, as the Company declared and presented bonded warehouse lease contract No. 13-04WI / SB-BT dated June 14, 2013, the owner was B1 Trading and Service Co., Ltd. (Company B1), the good consists of 38 bales of Martell Cordon Blue and 311 bales of Remy Martin VSOP worth USD 176,869.58.

Since Company B1 does not have a temporary import code for alcohol products, it is not allowed to import the good into the bonded warehouse and not allowed to hire other enterprises to open the declaration, so Hai Phong Customs (Port III) refusing to receive the customs dossier in accordance with Circular 05/2013/TT-BTC dated February 18, 2013 of the Ministry of Finance.

After the declaration No. 310/KNQ/C20D has not been accepted, Company Q1 and B1 have revised the customs dossier to continue opening the declaration No. 311/KNQ/C20D and 312/KNQ/C20D dated June 19, 2013 to import the alcohol shipment. In specific: Company B1 has changed its dossier, signed 02 additional annexes with 02 foreign partners on June 18, 2013 to change shipping term (delivery at bonded warehouses of Company Q1). Thus, even in the case where 02 annexes of this contract are valid and the shipment’s ownership is transferred, not until June 18, 2013, S1 INC Company would become the owner of shipment and be eligible to sign a bonded warehouse lease contract. However, the date of signing of bonded warehouse lease contract of S1 INC Company is June 14, 2013.

After that, Company Q1 modified the documents and signed contracts with two foreign companies as follows: Contract No. 13-06WI/NS-BW dated June 14, 2013, the owner is Company P, the good includes 38 bales of Martell Cordon Blue worth USD 48,184 and Contract No. 13-05WI/NS-BW dated June 14, 2013, the owner is S1 INC, the good includes 311 bales of Remy Martin VSOP worth USD 128,685.58. Although the annex of Company B1 was signed with 02 foreign partners on June 18, 2013 but the bonded warehouse lease contract was signed on June 14, 2013 and the Company Q1 continued to use bill of lading No. CSPU3121880 and 02 contracts signed with two foreign partners on June 14, 2013 to open declaration No. 311/KNQ/C20D and 312/KNQ/C20D dated June 19, 2013 to put the alcohol shipment into the bonded warehouse.

However, when Company Q1 came to Hai Phong to carry out procedures to deliver goods to the bonded warehouse, Hai Phong Customs (Port III) still did not accept it because the same bill of lading (same container) could not open 2 declarations.

Company Q1 continued to modify the customs dossier to submit to the customs authority to import the good to the bonded warehouse, specifically: On June 20, 2013, Company Q1 continued to open the declaration No. 313/KCQ/C20D to import the above shipment into the bonded warehouse, presented the bonded warehouse lease contract No. 13-07WI/NS-BW dated June 14, 2013, the contract shows that the good’s owner is Company S1, including 38 bales of Martell Cordon Blue and 311 bales of Remy Martin VSOP, worth USD 176,869.58, submitted the bill of lading CSPU3121880 dated June 9, 2013 but does not show information about the consignee and freight payment term as mentioned in the bill of lading issued by the carrier. Hai Phong Region III Sub-department of Customs Port agreed to let the Company Q1 take the good out of the port in the form of movement to another custom post outside the checkpoint area. The shipment is currently stored at the bonded warehouse of Company Q1 at Port C2, City H3, Quang Ninh Province.

The working result of the Anti-Smuggling Investigation Department of the Company Q1 regarding the documents of the shipment under the bill of lading No. CSPU3121880 dated June 9, 2013, the Director of the Company Q1 affirmed: The bonded warehouse lease contract between Company Q1 and the good’s owner S1 INC Company was signed by fax due to inadequate information, the two parties have re-signed by mail (after 2-3 days, the Company deleted it to avoid confusion with other consignments of good); invoice, packing list, bill of lading for opening declaration No. 313/KNQ/C20D dated June 20, 2013 sent by the foreign good’s owner to Company Q1.

On June 15, 2013, the good’s owner, S1 Inc, issued a written authorization to the Company Q1 to carry out the procedures for receiving the good at Hai Phong Port and customs procedures to send the good to the foreign bonded warehouse at Port C2; S1 INC Company sent a written authorization to the Company Q1 via email. On June 21, 2013, the owner, S1 Inc, issued a document authorizing Company Q1 to deliver the good to Company D. However, Company Q1 could not produce the original documents to the investigation agency as required.

On October 24, 2013, the Anti-Smuggling Investigation Department issued Decision No. 14/QD-DTCBL to prosecute a criminal case of smuggling occurring at bonded warehouse of Company Q1 and transfer all documents to the Police Investigation Agency - Ministry of Public Security (C46) to continue investigation as prescribed.

On October 22, 2014, the Investigation Police Department - Ministry of Public Security issued Decision No. 09/C46-P10 to suspend the investigation of criminal case of alcohol smuggling which occurred at the bonded warehouse of the Company Q1, Ha Long, Quang Ninh.

On December 25, 2014, records and exhibits of the case were returned to the Anti-Smuggling Investigation Department, General Department of Customs according to Official Dispatch No. 2431/C46-P10 dated December 9, 2014 of the Police Investigation Agency affiliated to the Ministry of Public Security to take administrative actions according to its competence.

Based on verification documents in the case file and opinions of the Supreme People's Procuracy (Department 1); the Police Investigation Agency affiliated to the Ministry of Public Security (C46) has enough grounds to assert that Company Q1 has falsified the customs dossier to import the good but not to the extent of criminal handling. Therefore, the decision on penalty No. 01/QD-DTCBL dated February 6, 2015 of the Director of the Anti-Smuggling Investigation has valid grounds and in accordance with laws and regulations. Decision No. 01/QD-DTCBL dated February 6, 2015 on penalty against Company Q1 for the act of counterfeiting customs documents to import goods that is not an offense.

Based on the documents submitted by Company Q1 to customs authorities for import procedures according to declarations 310, 311, 312, 313, it is found that: When opening the declaration No. 310/KNQ on June 17, 2013, Company Q1 declared that the owner is Company B1; when opening the declaration No. 311 and 312 on September 20, 2013, the Company Q1 declared the good’s owner as Company P and Company S1; when opening declaration 313, Company Q1 declares the owner as Company S1. Thus, the warehouse lease contract submitted by Company Q1 to the customs authority with one shipment in 01 day changes 03 owners, each time opening the declaration Company Q1 declared a different owner. Based on the results of working with the shipping line and inspection results at the Institute of Criminal Science - Ministry of Public Security, the entire dossier that the Company submitted to the customs authority for opening declaration No. 313 on June 20, 2013 is fake. Therefore, there is no basis to determine if Company S1 is the owner of the shipment.

The verification process, the Anti-Smuggling Investigation Department has requested the shipping company, Company Q1 notifies the owner and has sent an invitation to Company S1 to work with the Customs Agency during the investigation period to provide proof of shipment, and explain the shipment. However, Company S1 does not send people to work as required.

Pursuant to the provisions of Clause 2, Article 35 of the Government's Decree No. 97/2007/ND-CP in Viet Nam of June 7, 2007, on penalties for administrative violations and enforcing administrative decisions in the customs sector. The Anti-Smuggling Investigation Department issued a notice on finding the owner of the alcohol shipment of the bill of lading No. CSPU3121880 dated June 9, 2013, which was being kept at the bonded warehouse of Company Q1 in Lao Dong Newspaper and Hai Quan Newspaper issued on December 30, 2014. After 30-day time limit as prescribed by law, no individual or organization came to work with the Anti-Smuggling Investigation Department to claim owner of the shipment.

Based on the results of verification and documents available in the case file, based on the opinion of the Supreme People's Procuracy, the Police Investigation Department affiliated to the Ministry of Public Security; the result of notification of finding the owner of the shipment beyond the time limit prescribed by law, but no one comes to claim owner of the shipment. On April 22, 2015, the Department of Anti-Smuggling Investigation - General Department of Customs issued Decision No. 01/QD-DTCBL on confiscation of the entire shipment because its owner cannot be determined in accordance with law. .

Since the entire dossier which Company Q1 submitted to the customs authority is counterfeited, there is no document proving that S1 INC Company is the owner. Therefore, S1 INC Company has no right to sue against Decision No. 01/QD-DTCBL dated April 22, 2015 of the Anti-Smuggling Investigation Department - General Department of Customs.

Pursuant to Clause 1, Article 15 of the Law on Handling of Administrative Violations in Viet Nam, Company C is not an organization facing the penalty for administrative violation by Decision No. 01/QD-DTCBL dated February 6, 2015 of the Anti-Smuggling Investigation Department - General Department of Customs and failed to claim the owner of the good, so it has no right to sue against this decision.

Regarding papers provided by Mr. Loh Mun S, proving that the S1 INC Company has existed and changed its name to C, according to the certificate granted by Belize's authority in Belize; the letter of authorization was made in Belize, so to be considered and recognized for use in Vietnam such certificate must be certified by Ministry of Foreign Affairs of Belize, then consularly legalized by the Vietnamese Embassy in Mexico and Belize (certification of signature, position and seal of the Ministry of Foreign Affairs of Belize). Thus, based on the opinion of the Consular Department affiliated to Ministry of Foreign Affairs, based on the provisions of Decree 111/ND-CP dated June 16, 2015, the Department of Anti-Smuggling Investigation - General Department of Customs saw the documents granted in Belize, however, was sealed in Canada so there was no basis to be accepted and used in Vietnam.

From the above-mentioned bases, the Department of Anti-Smuggling Investigation - General Department of Customs requests the Administrative Court - Hanoi People's Court to dismiss petition of the Company C.

Representation of representative of people with related rights and obligations Company Q1:

Regarding the content of the case, Company Q1 agreed with the content of the presentation of Company C. Company Q1 agrees with the Company C to sue the Director of the Anti-Smuggling Investigation Department and requests the People's Court of Hanoi City to annul 02 administrative decisions, including: Decision No. 01/QD-DTCBL dated February 6, 2015 on penalty for administrative violation in the field of customs against Company Q1 and Decision No. 01/QD- DTCBL on April 22, 2015 on confiscation of exhibits of administrative violation due to unidentified owner of the Anti-Smuggling Investigation Department affiliated to the General Department of Customs because legal documents serving as a basis for promulgating 02 above-mentioned administrative decisions have expired, violate the competence, the time limit and the order of issuing decisions.

In the First Instance Administrative Judgment No. 01/2016/HC-ST dated January 20, 2016, the People’s Court of Hanoi City judged:

1. Accept a part of the petition request of Company C filed by Mr. Loh Mun S

- Director; Address: No. 15 C1, 10-01 H1, Singapore 229.815, representative. Annul the decision No. 01/QD-DTCBL dated April 22, 2015 on: "Confiscation of exhibits of administrative violations due to unidentified owner" of the director of the Anti-Smuggling Investigation Department - General Department of Customs. 2. 2. Dismiss request to sue the Company C by Mr. Loh Mun S - Director who is the representative of the company proposing to cancel Decision No. 01 / QD-DTCBL dated February 6, 2015 on "Penalty for administrative violation in the field of customs “of Director of Anti-Smuggling Investigation Department - General Department of Customs.

3. Suspend the case resolution of the claim for damages in the administrative case of Company C filed by Mr. Loh Mun S - Director, the representative.

In addition, the Court of First Instance also decides on court fees and notifies the right to appeal in accordance with the law.

On February 10, 2016, the petitioner, Mr. Loh Mun S appealed a part of the judgment

On February 2, 2016, the respondent, the Director of the Anti-Smuggling Investigation Department - the General Department of Customs appealed a part of the judgment.

At the appellate court hearing:

The representative of the petitioner withdraws the appeal and requests the Trial Panel to uphold the first-instance judgment.

The protector of legal rights and interests for the respondent keeps the viewpoint presented as an appeal, but requests to cancel the first-instance judgment due to serious violations of proceedings.

The representative of person with related rights and obligations agrees with presentation of the representative of the petitioner. Company Q1 does not appeal.

The representative of the Superior People's Procuracy in Hanoi participating in the trial asks the Trial Panel to suspend appellate trial for the appeal of the representative of the petitioner, to dismiss the appeal of the respondent, upholds the decision of the first instance judgment.

Based on the evidence and documents examined at the trial, based on the adversarial process, on the basis of full and comprehensive consideration of the evidence and opinions presented by the parties, of the Procurator,

JUDGMENT OF TRIAL PANEL

[1] In terms of court proceedings:

The representative of the Director of Anti-Smuggling Investigation Department said that representative of Company C does not have the right to initiate a lawsuit, because at the time of signing a document to initiate a lawsuit, Mr. Loh Mun S was no present in Vietnam. Thus, Mr. Loh Mun S wrongly signed the petition. The Trial Panel finds that:

According to the Certificate of Establishment of S1 INC Company No. 118, 370 dated May 15, 2012; certificate of name change dated November 13, 2014; the letter of authorization of Company C dated February 26, 2015 (both are consularly legalized on April 6, 2015). Mrs. A has the right to file a petition in Vietnam Court as a representative of Company C. Mr. Loh Mun S is the authorized representative of Company C to sign a petition to propose the Court to annul the Decision No. 01/QD-DTCBL on February 6, 2015 on penalty for administrative violation in the field of customs; Decision No. 01/QD-DTCBL dated April 22, 2015 on confiscation of exhibits of administrative violation with unidentified owner of the Director of Anti-Smuggling Investigation Department affiliated to the General Department of Customs and the claim for damages due to illegal issuance of administrative decision, not in accordance with Clause 2 Article 105 the Law on Administrative Procedures 2015. However, Mr. Loh Mun S, who is currently the Chairman of the Board of Directors of the Company C, continues to resolve the case. Therefore, errors of the Court of First Instance do not affect the interests of the litigants. Pursuant to the provisions of Article 30, Article 32 and Article 116 of the Law on Administrative Procedures 2015, People's Court of Hanoi City’s acceptance the case to resolve the case within its competence, ensuring the conditions and prescriptive period for initiating lawsuits. Therefore, it is not necessary to cancel the first instance judgment of the Hanoi People's Court.

[2]. The application of legal documents to resolve the case

The time when the incident occurred in June 2013, the applicable legal documents on administrative violations in the field of customs took effect are the Ordinance on Handling Administrative Violations in Viet Nam and Decree No. 97/2007/ND-CP dated June 7, 2007 of the Government (amended according to Decree 18/2009/ND-CP dated February 18, 2009 of the Government).

From July 1, 2013, the Law on Handling of Administrative Violations comes into force and the Government issued Decree No. 127/2013/ND-CP in Viet Nam dated October 15, 2013 on Penalties for Administrative Violations and Enforcing Administrative Decisions in the customs field, thereby annulling Decree No. 97/2007/ND-CP dated June 7, 2007 and Decree 18/2009/ND-CP in Viet Nam dated February 18,2009 of the Government.

According to the provisions in Clauses 1 and 4, Article 83 of the Law on Promulgation of Legislative Documents in Viet Nam:  "Article 83. Application of legislative documents:

Legislative documents apply from the time of entry into force.

A legislative document is applied to behavior that occurs at the time that document is in effect. In case the document is retroactive, it will prevail.

In case a new legislative document does not provide for legal responsibility or lighter legal liability for acts occurring before the effective date of the document, the new document will prevail ”.

Comparing the regulations on the competence to handle administrative violations, the legal provisions in the Law on Handling of Administrative Violations are lighter than prescribed under the Ordinance on Handling of Administrative Violations (a fine of VND 50,000,000 compared to VND 70,000,000, confiscation of instruments and means of violations according to the Law on Handling of Administrative Violations, the value must not exceed the fine). Thus, the representative of Anti-Smuggling Investigation Department’s claim that the handling of administrative violations and enforcement of administrative decisions in the customs field shall comply with the Ordinance on Handling of Administrative Violations and the Decree 97/2007/ND-CP dated June 7, 2007 of the Government under the authority of the Director of the Anti-Smuggling Investigation Department affiliated to the General Department of Customs is not correct, contrary to the provisions of Clause 4, Article 83 of the Law on Promulgation of Legislative Documents. This case falls under the jurisdiction of the General Director of Customs.

[3]. The Department of Anti-Smuggling Investigation, General Department of Customs said that the owner of alcohol shipment of the bill of lading CSPU3121880 on June 9, 2013 cannot be identified, so the shipment should be confiscated according to the decision No. 01/QD-DTCBL dated April 22, 2015. This statement has not enough justifiable bases, because:

- - All of the alcohol products are temporarily imported and re-exported, Company Q1 signed a bonded warehouse lease contract with a foreign partner; the case was prosecuted by the Anti-Smuggling Investigation Department affiliated to the General Department of Customs as criminal case and the Police Investigation Department of the Ministry of Public Security, after investigating to determine that the act does not constitute crime, issued a decision on suspension of criminal case.

- The fact that the Company Q1 made declarations No. 310, 311, 312 and 313/KNQ/C20D based on contracts and documents provided by the partners; the provision of these documents has been confirmed by the petitioner at the investigating agency and the Court.

- Before the Department of Anti-Smuggling Investigation affiliated to the General Department of Customs issued a decision to confiscate the good, Company Q1 has repeatedly worked with the Anti-Smuggling Investigation Department and provided documents and evidence confirming that Company C is the owner of this shipment; moreover, from February 4, 2015 to April 20, 2015, representatives of Company C have exchanged more than 10 times via e-mail with officers of the External Relations Department affiliated to the General Department of Customs to provide information and propose handling of alcohol shipment that the Anti-Smuggling Investigation Department is handling and stored in bonded warehouse of Company Q1.

- The documents related to the shipment which the Company Q1 submitted to the Customs office all show that the owner of the shipment is S1 INC, in specific: Customs declaration No. 313/KNQ/C20D dated June 20, 2013 opened by Company Q1 for the alcohol shipment,  consisting of 349 bales packed in containers with lead seal under the bill of lading No. CSPU3121880 dated June 9, 2013, showing that the bonded warehouse tenant is Company S1 INC, bill of lading No. CSPU3121880 issued by carrier Company F on June 9, 2013 for shipment of 349 bales contained in Container No. EMCU329788S at Singapore loading port, carried on the ship VIN ALINES 0 PIONEER V2828N also stated the consignor: S1 INC Company. The determination of the good’s owner status of Company S1 is also shown on the commercial invoice, packing slip and no dispute over the status of the owner of the shipment.

- Considering the Official Dispatch No. 1563/LS-HPH dated June 4, 2015 and the Official Dispatch No. 2177/CV-LS-HPH dated July 28, 2015 of the Consular Department affiliated to Ministry of Foreign Affairs, the Trial Panel adjudicates: The reply of the Consular Department affiliated to the Ministry of Foreign Affairs in these two dispatches are completely non-contradictory. All documents have been consularly legalized by the Embassy of Vietnam in Canada on November 21, 2013 and April 6, 2015 (Ministry of Foreign Affairs, Trade and Development of Canada authenticates signatures of representative of A & p Intertrust Corporation, certifying that S1 INC Company was incorporated, renamed according to International Trading Company Law of Belize dated November 14, 2013 and March 20, 2015) relating to S1 INC company, including: a copy of the certificate of incorporation, a copy of the certificate of name change, a copy of the letter of authorization, a copy of the certificate of good operation, the Consular Department concludes the consular legalization of the above documents is consistent with the provisions of the consular legal procedures in Article 15.d Decree 111/2011/ND-CP in Viet Nam dated December 5, 2011 of the Government.

Company C presents a certificate of change of name from S1 INC Company to Company C, which is consularly legalized by the Vietnamese Embassy in Canada under Article 15d of Decree 111/2011/ND-CP dated December 5, 2011 of the Government, so there are valid grounds to determine that Company C is the former Company S1.

In Official Dispatch No. 161/DTCBL-P4 dated February 13, 2015 of the Anti-Smuggling Investigation Department, it is shown that the Department knows Mr. Loh Mun, representative of Company C complaining about the shipment under the bill of lading CSPU3121880. On March 6, 2015, Mr. Loh Mun S provided legal documents and the certificate of changing the name from Company S1 to Company C to the Anti-Smuggling Investigation Department. On April 27, 2015, Company Q1 handed out a set of original documents, including a certificate of change of name consularly legalized by the Embassy of Vietnam in Canada.

Thus, on April 20, 2015, the two sides are still exchanging views regarding the request of the representative of Company C to re-export the shipment stored in the bonded warehouse of the Company Q1.

The Director of the Anti-Smuggling Investigation Department affiliated to the General Department of Customs decided the confiscation of exhibits of administrative violations due to unidentified owner. He/she violated power to issue decision and had no firm grounds to determine that the owner of the confiscated exhibits is unknown. The Court of First Instance annulled Decision No. 01/QD-DTCBL on April 22, 2015 on: "Confiscation of exhibits of administrative violations with unidentified owners" of the Director of the Anti-Smuggling Investigation Department Customs Department with justifiable grounds. However, the Court of First Instance did not force state agencies or competent persons in state agencies to perform their tasks and public duties according to the provisions of Point b, Clause 2, Article 193 of the Law on Administrative Procedures in 2015 but this error could be corrected by the Court of Appeal, so it is not necessary to quash the First Instance Judgment.

[4]. On making record of administrative violations.

On October 24, 2013, the Anti-Smuggling Investigation Department issued Decision No. 14/QD - DTCBL to prosecute a criminal case of smuggling occurring at bonded warehouse of Company Q1 and transfer all documents to the Police Investigation Agency affiliated to Ministry of Public Security (C46) to continue accepting investigation according to regulations.

On October 22, 2014, the Investigation Police Department - Ministry of Public Security issued Decision No. 09/C46-P10 to suspend the investigation of criminal case of alcohol which occurred at the bonded warehouse of the Company Q1, Ha Long, Quang Ninh.

On December 17, 2014 and December 25, 2014, records and exhibits of the case were returned to the Anti-Smuggling Investigation Department affiliated to General Department of Customs according to Official Dispatch No. 2431/C46 -P10 dated December 9, 2014 of the Police Investigation Agency affiliated to the Ministry of Public Security for administrative handling according to its competence. On January 29, 2015 Northern Region Anti-Smuggling Control Team made a record of administrative violations. Thus, the time limit from the date of receiving the dossier to the date of making the violation record is 1 month 4 days. Representative of the Anti-Smuggling Investigation Department said that due to the time of notification of finding owner is 01 month, there is no violation of the time limit for making minutes under Clause 3 Article 63 Law on Handling of Administrative Violations 2012.

[5] The Court of First Instance dismissed the petition of Company C filed by Mr. Loh Mun S - Director who is the representative of the company, proposing cancellation of Decision No. 01/QD-DTCBL dated February 6, 2015 on "Penalty of administrative violations in the field of customs” of Director of Anti-Smuggling Investigation Department affiliated to General Department of Customs. The representative of Company C appealed the request to cancel the above decision. At the appellate trial, the representative of Company C withdraws the appeal on this matter. Pursuant to Article 218 and Point c, Clause 1, Article 229 of the Law on Administrative Procedures, it is necessary to suspend adjudication of appeal of the litigants.

[6]. With regard to the claim for damages of the petitioner

At the first instance trial, the authorized representative of the petitioner, Mr. Loh Sang, through an interpreter and a protector of legal rights and interests, voluntarily withdraw the entire claim for damages. The petitioner withdraws this petition voluntarily, not contrary to law and social ethics, so the Court of First Instance accepts the withdrawal of this petition of the litigant and suspends the resolution of the case lawfully.

[7] Regarding appellate court fees: Because the appeal of Company C is accepted so Company C is not subject to the appeal court fee. The Director of Anti-Smuggling Investigation Department affiliated to the General Department of Customs shall have to pay an appeal court fee of VND 200,000 (two hundred thousand dong).

Based on the above-mentioned facts and matters,

HEREBY DECIDES

Pursuant to Clause 2, Article 241 of the Law  on Administrative Procedure in Viet Nam; Article 218 and Point c Clause 1 Article 229 Law on Administrative Procedures.  Resolution No. 326/2016/UBTVQH14 in Viet Nam of Standing Committee of the National Assembly dated December 30, 2016 on court fees and charges, exemption, reduction, collection, transfer, management and use thereof:

[1]. Correct a part of the first instance judgment, in specific:

Dismiss the appeal of the Director of Anti-Smuggling Investigation Department affiliated to General Department of Customs and uphold the decision of the first instance judgment on:

Accept a part of the petition request of Company C filed by Mr. Loh Mun S No. 15 C1, 10-01 H1, Singapore 229.815, the representative. Annul the Decision No. 01/QD-DTCBL on April 22, 2015 on: "Confiscation of exhibits of administrative violations with unidentified owner" of the Director of the Anti-Smuggling Investigation Department affiliated to the General Department of Customs.

Director of Anti-Smuggling Investigation Department affiliated to General Department of Customs performs tasks and duties according to the provisions of law.

[2]. Accept withdrawal of appeal of Company C. Suspend appellate trial against the appeal of Company C requiring the cancellation of Decision No. 01 / QD-DTCBL dated February 6, 2015 on "Penalty for administrative violations in the field of customs" of the Director of the Anti-Smuggling Investigation Department affiliated to General Department of Customs. In the First Instance Administrative Judgment No. 01/2016/HC-ST dated January 20, 2016, the People’s Court of Hanoi City judges: Dismiss petition of the Company C filed by Mr. Loh Mun S - Director who is the representative of the company proposing cancellation of Decision No. 01/QD-DTCBL dated February 6, 2015 on "Penalty for administrative violations in the field of customs “of Director of Anti-Smuggling Investigation Department affiliated to General Department of Customs.

[3] Other decisions of the Court of First Instance which do not have any appeal will remain legally effective from the expiry of time limit for the appeal.

[4] Regarding appellate court fees:  Company C is not subject to appeal court fee. Refund the advance payment of fee 200,000 VND to Company C according to the receipt No. 04367 dated February 19, 2016 of the Department of Civil Judgment Enforcement of Hanoi City.

Director of Anti-Smuggling Investigation Department affiliated to General Department of Customs has to pay the appellate court fee of 200,000 VND, the advance payment of appellate court fee 200,000 VND paid by Mr. Nguyen Phi H6 according to the receipt No. 4963 dated February 5, 2016 of the Department of Civil Judgment Enforcement of Hanoi City, will be deducted from the amount payable.

The Appellate Administrative Judgment shall take legal effect from the date of pronouncement.