Trade remedies in Vietnam

When participating in the process of international economic integration, every country voluntarily cut off the trade barriers for goods to easily circulate among each other. However, in the legal framework of World Trade Organization (WTO), the countries are allowed to impose trade remedies if satisfying certain conditions. Vietnam has officially become a member of WTO since July 11 2007 and the imposing of these trade remedies are regulated in Law on foreign trade management 2018.

 

Anti-dumping Law Firm in Vietnam

According to Law on foreign trade management 2018, trade remedies includes anti-dumping measure, countervailing measure and safeguard measure. Specifically, (i) Anti-dumping measure imposed on imports into Vietnam is a measure imposed on products that are dumped when being imported to Vietnam, which causes material injury or threaten to cause material injury to domestic industry or retard the establishment of the domestic industry; (ii) Countervailing measure imposed on imports into Vietnam is a measure imposed on products that are subsidized when being imported to Vietnam, which causes the material injury or threat of material injury to the domestic industry or retards the establishment of the domestic industry; (iii) Safeguard measure imposed on foreign products imported into Vietnam is measure imposed on increased imports of particular products to Vietnam, which causes the serious injury or threat of serious injury to the domestic industry.

The domestic industry mentioned above refers to the producers as a whole of the like products within the territory of Vietnam or those whose collective output of the like products constitutes a major proportion of domestic production of those products. Besides, the injury to domestic industry shall be determined on each level: (i) Material injury to domestic industry; (ii) threat of material injury to domestic industry; (iii) material retardation of establishment of a domestic industry; (iv)serious injury to domestic industry; (v) threat of serious injury to domestic industry.

Due to the imposing of these remedies directly affecting to foreign producer/exporter as well as domestic industry, thus, it is required to comply to six following rules when imposing these remedies:

Firstly, impose measures within the reasonable scope and level for a certain period of time to protect domestic industry, prevent or limit the injury to it;

Secondly, only impose measures after the investigation is carried out transparently and fairly in accordance with regulations of law and based on determinations of the investigation;

Thirdly, decisions on the investigation and the imposition of trade remedies shall be published;

Fourthly, if the duty rate of an official trade remedy is higher than those of a provisional trade remedy, the difference of duty will not be collected;

Fifthly, if the duty rate of an official trade remedy is lower than those of the provisional trade remedy, the difference of duty will be returned; 

Sixthly, if the Minister of Industry and Trade does not impose an official trade remedy, the duty of provisional trade remedy that has been collected or the amount for ensuring the payment of temporary trade remedy duties shall be returned.

If Client needs any more information or request for legal advice regarding trade remedies measures including: anti-dumping, countervailing duty and safeguard measures or international trade dispute matters, Our international trade and tax lawyers, and antitrust lawyers in Vietnam at ANT Lawyers, a Anti-dumping law firm in Vietnam have always followed the development of situation and update the clients on relevant matters.

 

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Anti-dumping Law: The Basic Concepts

1. What is dumping?

In international trade, dumping is a phenomenon occurs when a commodity is exported at a price lower than the selling price of that item in the domestic market of the exporting country. Therefore, it is simple to understand that if the export price of a commodity is lower than its domestic prices, the product may be considered to be dumped. 

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2. Why is dumping?

There are many causes of dumping in international trade. In fact, there are many cases that seller deliberately dumping in order to achieve certain benefits such as: Dumping to eliminate competitors in the import market to become monopoly and gain market share; Selling at low price to acquire foreign currency… Sometimes, the dumping is reluctant because the manufacturer and exporter cannot sell product, the production is stalled then the long-term storage products could be corrupted… Hence, they have to sell off to recover capital.

In international trade, the anti-dumping tax may be imposed without regarding to the reason why the manufacturers dumping. Dumped into foreign markets is often perceived as a negative phenomenon because it reduces the competitiveness of prices and the market share of domestic products of importing countries.

However, dumping can have positive impacts on the economy: consumers benefit from low price goods; if dumped goods are inputs of other manufacturing sector then the low raw material prices can make certain growth of that industry… Therefore, not all acts of dumping will be applying the anti-dumping measures.

As regulated by the World Trade Organization (WTO), the anti-dumping measures can only be applied in certain circumstances and must meet certain conditions. Specifically, the anti-dumping measures are applied only when the following three conditions are met: The imported goods are dumped; the manufacturing sector of similar products of the importing countries is significantly affected; there is a causal relationship between the dumping of imports goods and losses mentioned above

3. The anti-dumping tax?

The anti-dumping tax is the additional taxes besides the normal import tax, which is imposed on foreign products that are dumped into the importing country. This type of tax is to prevent dumping and eliminate the damages caused by the dumping of imported goods. In fact, the anti-dumping tax is used in many countries as a form of “legal protection” for its domestic production. In order to prevent the abuse of this measure, the WTO member countries have together agreed on the provisions required to comply regarding the investigation and imposition of anti-dumping tax, concentrated in an Agreement of the WTO on anti-dumping, which is the ADA Agreement.

ANT Lawyers in a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

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Update on Anti-dumping for Some Monosodium Glutamate (MSG) under Case AD09

From March 2016, MSG product imported into Vietnam has been imposed trade remedies according to petition of Vedan Vietnam Enterprise Corp.,Ltd. Safeguard duty adding to import tax rate is imposed on additional levels converted into 4.33 million dong/ton from the first year and descending only 3,2 million dong/ton by 2020. From March 25th, 2020, imported MSG tax shall return 0 dong if plaintiff no longer extends the safeguard measure.

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On August 19th, 2019, Trade Remedies Authority of Vietnam (TRAV), Ministry of Industry and Trade received request dossier for applying the anti-dumping measures (AD) on MSG product with HS code 2922.42.20 (“Goods under investigation”) originating from People's Republic of China (“China”) and Republic of Indonesia (“Indonesia”). Plaintiff accused MSG imported from above two countries of having been dumping into Vietnam market, causing considerable damage to domestic MSG manufacturing.

On September 4th, 2019, TRAV issued official dispatch no. 760/PVTM-P1 on requiring the Requesting Party to supplement the dossier.

On September 23rd, 2019, Requesting Party fully supplemented the required information.

On October 8th, 2019, Investigating Body confirmed that Dossier is valid, complete according to regulations of law on trade remedies.

On October 31st, 2019, Ministry of Industry and Trade promulgated Decision 3267/QD-BCT on conducting an investigation to apply anti dumping measure on some MSG products with HS code 2922.42.20 originating from China and Indonesia.

On November 15th, 2019, TRAV issued investigation questionnaire for domestic producers and importers to collect information and data for the case.

Investigation results showed that although safeguard measures was imposed absolutely at VND 3,201,039/ton, the quantity of imported goods after the applying the safeguard duty shows signs of dumping in large quantities, from 2.88 million dong/ton to more than 6.3 million dong/ton on goods imported from China and Indonesia, corresponding to the highest dumping margin being over 28%. Such level of dumping illustrates that imported goods is continuing to threaten causing considerable damage to domestic MSG manufacturing. Since 2016,  MSG manufacturing of some countries has been oversupplying and inventory has been increasing dramatically which results in promoting heavily the export to other countries, including Vietnam. This export makes domestic manufacturing find it difficult and pressuring due to dramatic increase of goods under investigation imported into Vietnam for the past time. In addition, Vietnam is the second largest export market of China and the fourth largest export market of Indonesia. Therefore, when the safeguard duty expires, goods from these both countries will be enhanced to export into Vietnam market which threatens causing considerable damage to domestic manufacturing. Besides, MSG product from China and Indonesia also have been imposed anti dumping measures by USA, European Union. China exporters likely seek alternative markets, including Vietnam.

On March 18th, 2020, Minister of Industry and Trade promulgated Decision No. 881/QD-BCT on applying temporary anti-dumping duty on some MSG products originating from China and Indonesia. Accordingly, MSG products originating from China and Indonesia shall be imposed absolutely in the range from 2,889,245 VND/ton to 6,385,289 VND/ton. Application duration of temporary anti dumping measure shall be 120 (one hundred and twenty) days from the effective date of temporary anti dumping duty (unless extended). Above Decision on temporary anti dumping shall take effect since March 25th, 2020.

ANT Lawyers in a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

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Anti-dumping Case AD06 Relating to Fiberboard of Wood Products Ended

Requesting Party of Anti-dumping case AD06 comprises of 04 companies representing the domestic industry: (i) VRG Kien Giang MDF Joint Stock Company; (ii) VRG Dongwha MDF Joint Stock Company; (iii) MDF VRG – Quang Tri Wood Joint Stock Company and (iv) Kim Tin MDF Joint Stock Company. Requesting Party accused fiberboard of wood imported from Thailand and Malaysia of having been dumped into Vietnam market with dumping margins from 18,59% to 50,6% and this dumping is the main cause of significant injury to manufacturing of industrial wooden planks of Vietnam.

Products under investigation: some fiberboard of wood or other ligneous materials, whether or not assembled with glue or other organic adhesives, uncoated and unwrought, with the HS codes 4411.12.00, 4411.13.00, 4411.14.00, 4411.92.00, 4411.93.00, 4411.94.00 originated from Thailand and Malaysia. 

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The investigating period: (1) The investigating period to determine dumping activities: from Jan 01st, 2018 to Dec 31st, 2018; (2) The investigating period to determine the damages of the domestic industry: from Jan 01st, 2015 to Dec 31st, 2018.

On Oct 23th, 2018,  Trade Remedies Authority of Vietnam (TRAV) received Dossier of request for investigation, application of anti-dumping measures.

TRAV has issued official dispatch No. 963/PVTM-P1 dated Nov 6th, 2018 and official dispatch No. 48/PVTM-P1 dated Jan 16th, 2019, requiring the Requesting Party to supplement the dossier.

On Jan 27th, 2019, Requesting Party fully supplemented the required information.

On Feb 01st, 2019, Investigating authority issued official dispatch No. 105/PVTM-P1 confirming that Dossier is valid, complete and send letter to Royal Thai Embassy and Embassy of Malaysia in Vietnam, informing about the receipt of complete and valid dossier.

On Mar 18th, 2019, the Ministry of Industry and Trade issued Decision No. 623/QD-BCT on the extension of the decision of investigation for another 30 days.

On Apr 18th, 2019, the Ministry of Industry and Trade issued Decision No. 940/QĐ-BCT on investigation of the application of anti-dumping measures on fiberboard of wood products or other ligneous materials, whether or not assembled with glue or other organic adhesives, uncoated and unwrought, originated from Thailand and Malaysia (case number AD06).

On May 02nd, 2019, Investigation Questionnaire is issued for domestic importers, producers and foreign exporters, producers in AD06 case. The time limit to answer Investigation Questionnaire is 17h00, Jun 10th, 2019 (Hanoi time).

To ensure relevant enterprises’ rights and interests, the Investigation authority asks that all of relevant domestic importers, producers should participate to fully cooperate throughout the investigation of the case. The contents’ Investigation Questionnaire shall be basis for the Investigation Body to consider the conclusion.

On Jan 14th, 2020, Minister of Industry and Trade signed the decision of termination the investigation and no application anti-dumping measures on some fiberboard of wood products (fiberboard of wood MDF) imported from Thailand and Malaysia.

Over 7 months of investigation according to regulations of World Trade Organization, Law on foreign trade management 2017 and other relevant regulations, Ministry of Industry and Trade has examined and carefully evaluated the losses of domestic industry, level of dumping of producers from Thailand and Malaysia, as well as considered and calculated the impact on the industry and consumers of fiberboard of wood products. The results of investigation show that the domestic industry has not been significantly damaged or threatened to be significantly damaged because of imported goods from Thailand and Malaysia.

Therefore, according to regulations of Vietnam law relating to trade remedies and Anti-Dumping Agreement of World Trade Organization, Ministry of Industry and Trade decided not to apply anti-dumping measures on fiberboard of wood products imported from Thailand and Malaysia. Ministry of Industry and Trade will coordinate with the relevant authorities to watch closely the import situation, sign of dumping of foreign producers/exporters as well as operation, production and trading reality of domestic fiberboard of wood industry to recommend the necessary measures according to regulations.

Our international trade and tax lawyers in Vietnam, and antitrust lawyers in Vietnam at ANT Lawyers, a law firm in Vietnam have always followed the development of situation and update the clients on relevant matters.

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