Firms to adhere to anti-dumping law

Pham Duy Khuong, managing director of ASL Law, talked about some important contents related to anti-dumping laws that foreign companies should pay attention to when digging into the Vietnamese market.

Anti-dumping regulations are among the important issues that Vietnamese and foreign businesses are interested in. Why is this the case, and what factors are involved in determining whether these regulations are being followed?

firms to adhere to anti dumping law

Pham Duy Khuong, managing director of ASL Law

Anti-dumping is one of the most important measures that domestic and foreign enterprises can take to ensure their rights and interests to competitors exporting identical or similar products.

At the request of domestic enterprises, Vietnam has conducted anti-dumping investigations on many products imported from abroad. However, it is not always the case that Vietnamese enterprises have favourable conditions and get the desired results when using anti-dumping measures against overseas enterprises.

For example, through a directive last year Vietnamese businesses conducted an anti-dumping investigation on some wooden fibreboards and other wood-based materials originating from Thailand and Malaysia, in which ASL Law acted as lawyer for the fibreboard business from those countries. The requesting party was a representative of the domestic manufacturing industry.

In order to draw a final conclusion on whether dumping was involved here, the investigation agency had to consider a lot of factors.

First was assessing the impact of imported goods. Pursuant to Article 3.2 of the World Trade Organization’s (WTO) Antidumping Agreement, the investigating authority considered whether or not there had been a significant increase in imports or relative to output or consumption in the importing country.

In the case of fibreboard, the review of the proportion of imports from sources indicates that goods from Thailand and Malaysia increasingly take up a larger share. This shows that the impact from imported goods on the domestic industry, if any, mainly comes from those two nations.

Second was the price impact of investigated imported goods. The Article 3.2 provided, “With respect to the price effect of dumped imports, the investigating authority must consider whether there is a significant price difference between the selling price of the dumped imported goods and of similarly manufactured goods in the country, or consider whether the impact of the imported goods under investigation have caused the price pressure at a level or prevent price increases significantly, which should have happened. None of these factors can be decisive”.

Next, economic factors are considered when determining significant losses of a domestic manufacturing industry. Article 3.4 of the agreement explains that the investigating authority must consider the impact of dumped imports on the domestic manufacturing industry and state the factors to be assessed.

Factors and suitable economic indicators are related to the status of the industry, including the decline in actual and potential revenue, profits, output, market share, productivity, rate of return, labour and wages, and much more besides. In addition, the investigating authority may consider other factors and none of them will be decisive.

Last, evaluation is taken of the cause and effect relationship. The investigating agency said that the volume and price of imports from other countries were not the cause of the domestic industry’s losses. There is no basis for the cause of the loss in the domestic industry due to exports or poor labour productivity. Increasing production costs and the supply-demand relationship are the main reasons for the decline in the profits of the domestic manufacturing industry.

On that basis, and going by the Law on Foreign Trade Administration and its guiding documents, the investigation agency recommended the minister of Industry and Trade to issue a decision to terminate the investigation of the case and not take anti-dumping measures. Objectively, this is a great victory for the market in general and partly a victory for foreign enterprises.

Under the provisions of Vietnamese law, what cases will be considered for application of anti-dumping measures? Could you please tell us the provisions relating to anti-dumping?

firms to adhere to anti dumping law

The investigation of the application of anti-dumping measures shall be conducted on the basis of Vietnamese law provisions on trade remedies.

 

These include the Law on Foreign Trade Administration No.05/2017/QH14 dated June 2017; Decree No.10/2018/ND-CP dated January 2018 detailing a number of articles of the Law on Foreign Trade Administration on trade remedies measures; 2017’s Decree No.98/2017/ND-CP on defining the functions, tasks, powers, and organisational structure of the Ministry of Industry and Trade (MoIT); Circular No.06/2018/TT-BCT dated April 2018 of the MoIT detailing a number of contents on trade remedies; and the 2017 MoIT Decision No.3752/QD-BCT defining the functions and structure of the ministry’s Department of Trade Defense.

The investigation of the application of anti-dumping measures also complies with the international commitments which Vietnam has signed or acceded to, including the aforementioned WTO Anti-Dumping Agreement, and also the ASEAN Trade in Goods Agreement.

Vietnamese businesses can conduct anti-dumping investigations with foreign enterprises if the following conditions are met:

Occupying the majority rate: Clause 1, Article 69 of the Law on Foreign Trade Administration stipulates the following, “Domestic manufacturing industry means a collection of similar goods manufacturers within the territory of Vietnam, or their representatives account for a major proportion of the total output of that industry, that is domestically produced. If a domestic manufacturer directly imports investigated goods or has relationships with exporters or importers of investigated goods, this manufacturer may not be considered a domestic producer”.

Meanwhile clauses 1 and 2, Article 4 of Decree 10 stipulates, “The determination of domestic manufacturing industry shall comply with the provisions of Clause 1, Article 69 of the Law on Foreign Trade Administration”.

It also states, “The volume and quantity of manufactured goods account for at least 50 per cent of the total volume, and the quantity of similar goods or directly competitive goods produced domestically shall be regarded as a major proportion of the total output of goods of the domestic manufacturing industry, according to the provisions of clause 1, article 69 of the Law on Foreign Trade Administration.

The investigating authority may consider the lower rate if there is evidence that such percentage is sufficient to constitute a major proportion of the total production of goods of the domestic manufacturing industry”.

What do you recommend for foreign companies to consider when distributing products in Vietnam?

The way that foreign enterprises export their goods to Vietnam should comply with the provisions of domestic law, and avoid the application of measures that may be considered dumping in accordance with Vietnamese regulations. In addition, enterprises need to monitor the growth of this market as well as closely monitor the sudden increase in export volume to the country.

In case of encountering anti-dumping investigation requests from Vietnamese investigating bodies, foreign enterprises should actively participate in the investigation process to ensure the provision of legal evidence benefiting the business and thereby partly avoiding heavy fines from the authorities.

Are Vietnam’s anti-dumping regulations similar to those of other Southeast Asian countries, and what should Vietnamese enterprises be concerned about when they tap into this market?

Vietnam’s anti-dumping regulations, on the whole, have major similarities with other countries in the region. Vietnamese enterprises exporting goods abroad and encountering anti-dumping investigations should seek the support of Vietnamese representatives in the host country and actively involve in the investigation, in order to avoid the investigator deciding to use available data and draw adverse conclusions for their business. VIR

Hoang Oanh

Vietnam's anti-dumping duties on steel products extended for 5 more years

Vietnam's anti-dumping duties on steel products extended for 5 more years

The Ministry of Industry and Trade (MoIT) has decided to extend the anti-dumping duties on cold-rolled stainless steel products originated from China, Indonesia, Malaysia and Taiwan (China) for an additional five years, starting from October 26.

Vietnam steel producers face anti-dumping lawsuits

Vietnam steel producers face anti-dumping lawsuits

The local steel industry is dealing with an increasing number of tax evasion and antidumping lawsuits in other countries, due to the allegedly fraudulent origins of steel exports, according to the Vietnam Steel Association (VSA).

 
 

Other News

.
Nine more expressway contractors suspected of construction violations
Nine more expressway contractors suspected of construction violations
BUSINESSicon  05/07/2020 

Nine more former contractors have been accused of irregularities in the construction of a 139-kilometer-long expressway whose severe deteriotion was reported shortly after its opening in central Vietnam.

VASEP decries taxes on semi-processed and processed seafood
VASEP decries taxes on semi-processed and processed seafood
BUSINESSicon  05/07/2020 

Tax agencies have slapped many firms with a corporate income tax on semi-processed seafood products at 20%, while their products for exports or domestic consumption that are mainly processed, 

Domestic property market faces uncertainty
Domestic property market faces uncertainty
BUSINESSicon  05/07/2020 

The domestic real estate market is hoped to have growth in the fourth quarter of this year and before the Lunar New Year 2021 if, by this year-end, the domestic economy is restored to levels from before the COVID-19 pandemic.

Hanoi moves towards approving construction of third Aeon Mall
Hanoi moves towards approving construction of third Aeon Mall
BUSINESSicon  05/07/2020 

The proposed construction of a parking lot and the Aeon Mall Hoang Mai Trade centre will soon be decided upon by the Hanoi People's Committee as Prime Minister Nguyen Xuan Phuc has approved the adjustment of the city's construction planning.

Pork and oil prices key to keeping inflation in VN under control: experts
Pork and oil prices key to keeping inflation in VN under control: experts
BUSINESSicon  05/07/2020 

With huge inflation pressure on the way in the remaining months of this year, a close watch must be kept on the prices of key products like oil and pork to hit the goal of keeping inflation below 4 per cent, experts have said.

US firms create record 4.8 million jobs in June
US firms create record 4.8 million jobs in June
BUSINESSicon  03/07/2020 

The reopening of businesses has spurred job growth but a rise in Covid-19 cases may hamper recovery.

Chubb Life Vietnam honored “Best Companies to Work for in Asia 2020”
Chubb Life Vietnam honored “Best Companies to Work for in Asia 2020”
BUSINESSicon  03/07/2020 

Chubb Life Vietnam has been recognized as one of the “Best Companies to Work for in Asia 2020” by HR Asia, the continent’s leading publication for Human Resources professionals.

VN government to sell stake in country’s biggest brewery
VN government to sell stake in country’s biggest brewery
BUSINESSicon  03/07/2020 

The Government will sell its 36% stake, equivalent to 230.8 million shares worth some VND37.6 trillion (US$1.6 billion), in the Saigon Beer-Alcohol-Beverage Corporation (Sabeco), the country’s biggest brewery, this year.

Fabric production an issue for Vietnam's textile industry
Fabric production an issue for Vietnam's textile industry
BUSINESSicon  03/07/2020 

Fabric production is a challenge for Vietnam's textile and garment industry when it comes to free trade agreements (FTAs) requirements on product origin.

Vietnam's FDI inflows to increase
Vietnam's FDI inflows to increase
BUSINESSicon  03/07/2020 

A new wave of foreign direct investment driven by global uncertainty such as the US-China trade war and the COVID-19 pandemic is imminent in Vietnam, 

Predatory debt collectors hustling on borrowed time
Predatory debt collectors hustling on borrowed time
BUSINESSicon  02/07/2020 

Debt-collecting businesses are to be banned in Vietnam as part of local government action to protect customers’ rights, with the upsurge of predatory lending services triggering heated debate and eroding public trust.

Vietnam draws up roadmap to eliminate monopoly in power sector
Vietnam draws up roadmap to eliminate monopoly in power sector
BUSINESSicon  06/07/2020 

A solution for the power industry has been put into discussion: selling entire power plants to investors after they are put into operation.

Proposal steers sports betting to starting line
Proposal steers sports betting to starting line
BUSINESSicon  03/07/2020 

A proposed national steering committee is expected to help Vietnam build clearer prize-winning entertainment rules and set up closer connections between government authorities and investors 

State Audit of VN notes high pay for foreign specialists in ODA projects
State Audit of VN notes high pay for foreign specialists in ODA projects
BUSINESSicon  05/07/2020 

A foreign specialist in an ODA (Official Development Assistance) project can receive VND500-700 million a month, while pay for a Vietnamese specialist is just tens of millions of VND.

EVFTA will broaden skies for aviation across Vietnam
EVFTA will broaden skies for aviation across Vietnam
BUSINESSicon  03/07/2020 

Never-before-seen activities in Vietnam’s aviation sphere are expected to come to EU businesses soon on the back of the landmark EU-Vietnam Free Trade Agreement.

RCEP benefits on horizon for ASEAN
RCEP benefits on horizon for ASEAN
FEATUREicon  02/07/2020 

With the Regional Comprehensive Economic Partnership scheduled to be signed this November, doors will soon open to attract more investment and swell Vietnam’s trade with international partners.

An abundance of advantages to diversify ops into Vietnam
An abundance of advantages to diversify ops into Vietnam
BUSINESSicon  02/07/2020 

Amidst the new wave of foreign investment and relocation after the pandemic, director general of the Foreign Investment Agency Do Nhat Hoang explained Vietnam’s outstanding advantages and how it can seize arising opportunities.

Vietnam closes in on tech app tax avoiders
Vietnam closes in on tech app tax avoiders
BUSINESSicon  02/07/2020 

Apple and Google are once again under fire over tax avoidance in Vietnam, with none of their revenues from their app markets being retained in the country. However, a new law could soon enable local authorities to take their cut.

Drugmakers fight to attain approval
Drugmakers fight to attain approval
BUSINESSicon  02/07/2020 

Switzerland’s drug maker Novartis Pharma Services AG has announced a GMP qualification for Lek Pharmaceuticals d.d. within the scope of certification for medicines in Vietnam,

PouYuen lays off thousands  due to Covid-19 difficulties
PouYuen lays off thousands due to Covid-19 difficulties
BUSINESSicon  02/07/2020 

More than 6,000 workers of the Taiwanese company, PouYuen, in HCM City have been laid off due to the company's business difficulties during the Covid-19 pandemic.

 
 
 
Leave your comment on an article

OR QUICK LOGIN