Shall countervailing duties only be applied to a reasonable extent in Vietnam?

Shall countervailing duties only be applied to a reasonable extent in Vietnam?

According to Article 13 of the 2016 Law on Export and Import Duties which provides regulations on countervailing duties as follows:

Countervailing Duties

1. Conditions for applying countervailing duties:

a) Imported goods are determined to be subsidized according to legal regulations;

b) Imported goods cause or threaten to cause significant damage to domestic production or hinder the establishment of domestic industry.

2. Principles for applying countervailing duties:

a) Countervailing duties are applied only to the reasonable and reasonable extent to prevent or limit significant damage to domestic production;

b) The imposition of countervailing duties is carried out after investigation and must be based on the investigation's conclusions as prescribed by law;

c) Countervailing duties are applied to subsidized goods imported into Vietnam;

d) The imposition of countervailing measures must not harm domestic socio-economic interests.

3. The period for applying countervailing duties does not exceed 5 years from the effective date of the decision to apply. In reasonable cases, the decision to impose countervailing duties may be extended.

Thus, according to one of the above principles, countervailing duties are applied only to the reasonable extent. This means that countervailing duties are not applied in every case.

Shall countervailing duties only be applied to a reasonable extent in Vietnam? (Image from the Internet)

What are rules for applying countervailing duties in Vietnam?

Based on the provisions in Clause 3, Article 89 of the 2017 Law on Foreign Trade Management, the imposition of countervailing measures is implemented in the following four cases:

[1] In the case where the commitments in Clause 2, Article 89 of the 2017 Law on Foreign Trade Management are not met, after the investigation concludes, the Investigative Agency announces the final conclusion on the investigation contents prescribed in Article 88 of the 2017 Law on Foreign Trade Management. The final conclusion of the Investigative Agency and the main bases for making the final conclusion must be communicated appropriately to the parties involved;

[2] Based on the final conclusion of the Investigative Agency, the Minister of Industry and Trade decides whether or not to apply countervailing duties;

[3] The level of countervailing duties must not exceed the level of subsidies in the final conclusion;

[4] The duration of applying countervailing duties is not more than 5 years from the effective date of the decision to impose the countervailing duties, except for extensions as stipulated in Clause 2, Article 90 of the 2017 Law on Foreign Trade Management.

What are regulations on retroactivity of the countervailing duties in Vietnam?

According to Clause 4, Article 89 of the 2017 Law on Foreign Trade Management, the imposition of countervailing measures with retroactive effect is implemented as follows:

[1] In cases where the final conclusion of the Investigative Agency identifies significant damage or the threat of significant damage to domestic production, the Minister of Industry and Trade may decide to apply countervailing duties retroactively;

[2] Countervailing duties are applied retroactively for goods imported within 90 days prior to the application of temporary countervailing duties if the imported goods are identified as receiving subsidies;

[3] The volume or quantity of subsidized goods imported into Vietnam has increased rapidly during the period from the beginning of the investigation to the imposition of temporary countervailing duties, causing damage that is difficult to remedy to the domestic production sector.

Does the Ministry of Industry and Trade have the authority to impose countervailing duties in Vietnam?

According to Article 15 of the 2016 Law on Export and Import Duties, it is regulated as follows:

Application of Anti-dumping Duties, Countervailing Duties, Safeguard Duties

1. The application, modification, abolition of anti-dumping duties, countervailing duties, and safeguard duties are carried out as per this Law and the law on anti-dumping, countervailing, and safeguards.

2. Based on the duties level, quantity, or value of goods subject to anti-dumping duties, countervailing duties, safeguard duties, the customs declarants are responsible for declaring and paying duties according to the law on tax management.

3. The Ministry of Industry and Trade decides on the application of anti-dumping duties, countervailing duties, safeguard duties.

4. The Ministry of Finance prescribes the declaration, collection, payment, and refund of anti-dumping duties, countervailing duties, safeguard duties.

5. In cases where the interests of the Socialist Republic of Vietnam are harmed or violated, based on international treaties, the Government of Vietnam reports to the National Assembly for deciding on other appropriate protective tax measures.

Thus, according to the above regulations, the Ministry of Industry and Trade is the authority competent to apply countervailing duties.