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The Ministry of Public Security has given people who have bought cars from diplomats and other foreigners two months to register them in their own names by paying appropriate taxes

Cars technically belonging to diplomats seized by the Phu Tho police last year. Authorities are set to launch June 10 a nationwide verification of cars bought from diplomats and other foreigners by locals to ensure they are in their new owners' names.

A year after the first cars were seized in Phu Tho Province for carrying diplomatic license plates even after being sold to locals, authorities are set to tackle this issue nationwide.

The Ministry of Public Security has put up a statement on its website saying local owners of such cars would have to get ownership transferred by June 10.

"After that the ministry will launch a thorough investigation. Cars using foreigners' or diplomatic license plates illegally will face stringent action under the law," Nguyen Huu Danh, deputy director of the ministry's Road and Railway Traffic Police Department, said.

Registration forms are available at http://csgt.vn/csgt/index.php?act=bieumau and his agency at 112 Le Duan Street, Hanoi, can be contacted at 06941444, he said.

According to government figures, around 4,000 cars were imported into Vietnam by 2009 for use by diplomats.

Foreigners and diplomats are allowed to import cars tax-free for personal use, and they respectively have license plates marked NN (in black) and NG (in red).

When their tenure ends the owners have to take the cars out of Vietnam or sell them to locals who have to pay the taxes and fees that had been waived earlier and get a civilian license plate.

But the Ministry of Finance estimates that 1,200 of the cars are being used by locals without transferring ownership or paying the taxes.

Last year Phu Tho became the first province to seize and auction cars that had been sold to Vietnamese by foreign diplomats.

Since April last year the Phu Tho police have seized 25 of them and auctioned seven for VND9.6 billion (US$459,000).

Most of the confiscated vehicles are high-end cars like Bentley, Porsche, and Mercedes, and registered by diplomats from Cambodia, Laos, Indonesia, and Myanmar, according to Tien Phong (Pioneer) newspaper.

Last December customs authorities in Ha Tinh Province asked the police to seize two cars used by two Vietnamese-Americans accused of not paying taxes on them.

The two, Dinh Duc Huy and Nancy Pham Dinh, were permitted by the Ha Tinh customs in October 2004 to temporarily import two cars for use while working for American Vietnam Technologies Co.

According to the province People's Committee, the local government, since the end of December 2005, when their labor contracts expired, they failed to re-export the vehicles or legally sell them despite being notified several times by customs.

Dinh left Vietnam in July 2008 and Huy was reported to have left in 2010, the committee said.

But their cars have since been owned by a series of people who did not pay the relevant taxes, according to the authorities.

On Sunday (March 31) the Ministry of Public Security ordered its local offices to track down 513 cars used by foreign officials who have completed their tenure in Vietnam and sold the vehicles without completing the proper procedures.

And more than six months after they left the country the vehicles are still being used with foreigners' or diplomatic license plates, Tuoi Tre (Youth) newspaper quoted a ministry source as saying.

The cars have been registered for 42 embassies and international organizations but many for only up to 2009, and some as far back as 2004, according to news website VietNamNet.

UN Convention against Corruption

Several foreign diplomats agreed that the Ministry of Public Security's policy is a good one and that more actions are needed to end the persistent problem.

Jairo Acuña-Alfaro, anti-corruption policy advisor to the United Nations Development Program in Vietnam, said the problem was identified a long time ago, and the recent move by the ministry is good to resolve it.

"There seems to be a clear abuse of those privileges. People are not paying tax and hopefully now the warnings the authorities are giving will be able to normalize the registration for those cars. I think this is positive but a bit late," he told Vietweek.

It is believed some diplomats do not use the cars for the purpose they are intended and instead allow locals to use the license plates for a sum of money, he said.

"This is not about cars and license plates. But about not paying taxing, possible fraud and also about who are driving those cars and how these people have been allowed to be driving those cars. An abuse of power and privileges seems to be taking place and by default, taxes have not been paid.

"The problem could also be solved with transparency and access to information. Make the list of license plates and registered owners publically available in a government website, and allow citizens to verify the authenticity of the information," he said.

A Hanoi-based diplomat, who asked not to be named, said according to Vietnamese regulations, foreign diplomats are not liable in corruption and bribery cases. And that is one of the areas in which Vietnam is not compliant with the UN Convention against Corruption.

"We have to request the government to fill in the gap that foreign diplomats also should be made liable for corruption and bribery offences.

"Confiscate the cars like the Phu Tho police did. Do not let these people drive these cars until they pay taxes according to the regulations. That is the most significant deterrent policy," he said.

Diplomats enjoy complete immunity from prosecution and other action by their host country, but their own government can waive that immunity.

An Asian diplomat, who also asked not to be named, said some diplomats even sell their "quota" for a diplomatic car, and that it has been "a long-standing practice."

"The practice is illegal and benefits both parties - the seller, who usually is a diplomat from a poor country and for whom an extra US$10,000-20,000 can make a lot of difference, and also the buyer, who can evade paying import taxes, especially on very expensive cars."

She said it is good that the government is doing something about it.

"Diplomats should of course abide by the legal requirements of the country they are posted to. But I suspect that one reason why many people do not follow the law is because it is complicated and bureaucratic.

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"Therefore, just catching people is not going to solve the root cause of the problem.

"This must be followed by simplification and clarification of the procedures that foreign diplomats need to follow to ensure the buyers of their vehicles pay taxes."

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