Vietnam: What are the subsidies treated as particular? What are the regulations on determining the particularity of subsidies on trade remedies?
What are the subsidies treated as particular in Vietnam?
Pursuant to Clause 1, Article 21 of Decree 10/2018/ND-CP stipulating the particularity of subsidies in Vietnam as follows:
The particularity of subsidies
1. A subsidy specified in Article 84 of the Law on foreign trade management shall be treated as particular when such subsidy is applied to a particular organization, individual or production sector, or such subsidy is applied only to the organizations, individuals or production sectors in a particular geographical area of the country under the countervailing measure investigation.
Thus, pursuant to Article 84 of the Law on Foreign Trade Management 2017 on subsidies of government or any public body within the territory of a country whose products are imported to Vietnam as follows:
Subsidies
Subsidy is a financial contribution by a government or any public body within the territory of a country whose products are imported to Vietnam via the following forms to benefit organizations and individuals receiving such subsidies:
1. A government practice involves a direct transfer of funds, potential direct transfers of funds or liabilities;
2. The government revenue that is otherwise due is foregone or not collected;
3. A government provides products or services other than general infrastructure, or purchases products;
4. A government buys products or services with the price higher than the market price;
5. A government sells products or services with the price lower than the market price;
6. A government makes payments to a funding mechanism, or entrusts or directs a private body to carry out one or multiple types of functions illustrated in Clauses 1, 2, 3, 4 and 5 of this Article which would normally be vested in the government and the practice, in no real sense, differs from practices normally followed by governments;
7. Any form of income or price support;
8. Any form of subsidies that is not mentioned in Clauses 1, 2, 3, 4, 5, 6 and 7 of this Article shall be determined according to the principle of fairness and reasonableness and not against international treaties to which the Socialist Republic of Vietnam is a signatory;
Accordingly, the above subsidies shall be treated as particular when such subsidy is applied to a particular organization, individual or production sector, or such subsidy is applied only to the organizations, individuals or production sectors in a particular geographical area of the country under the countervailing measure investigation.
What are the regulations on determining the particularity of subsidies in the countervailing investigation in Vietnam?
Pursuant to Clause 2, Article 21 of Decree 10/2018/ND-CP, the particularity of subsidies in Vietnam shall be determined as follows:
- There is a clear restriction for one or a group of organizations/individuals, or for one or a certain group of production sectors to receive subsidies;
- The objective criteria and conditions for receiving subsidies which are defined in legal documents but not automatically applied in practice;
- There is a clear restriction for organizations or individuals in a particular geographical area;
- In case the subsidy is not particular as specified in Point a, b and c this Clause, the investigating authority may still determine its particularity based on reviewing factors including the limited number of subsidized enterprises, the disproportionate allocation of subsidies and the way the authorities provide subsidies.
In addition, the subsidies specified in Clauses 1 and 2, Article 85 of the Law on Foreign Trade Management 2017 shall be considered particular subsidies:
- Subsidies upon the export performance;
- Subsidies upon the use of domestic over imported products
What are the methods of determining the subsidy value in the countervailing investigation in Vietnam?
Pursuant to the provisions of Article 22 of Decree 10/2018/ND-CP on the methods of determining the subsidy value as follows:
+ In case the subsidy is a nonrefundable allocation, the subsidy value shall be calculated on the basis of the actual value of the allocation granted to the subsidized organizations/individuals;
+ In case the subsidy is granted in the form of a loan provided by the Government or public sectors, the subsidy value shall be calculated on the basis of the difference between the payable interest rate applicable to such loan under market conditions and the interest rate actually paid by the organization/individual;
+ In case the subsidy is granted in the form of loan guarantee provided by the Government or public sectors, the subsidy value shall be calculated on the basis of the difference between the payable interest rate applicable to non-guaranteed loan and the actual interest rate applicable to guaranteed loans;
+In case the subsidy is granted in the form of share transfer or direct capital transfer by the Government or public sectors, the subsidy value shall be calculated on the basis of the capital amount actually received by the enterprise;
+ In case the subsidy is granted in the form under which the Government or public sector purchase goods/services at prices higher than the market price for the organization/individual, the subsidy value shall be calculated on the basis of the difference between the market prices and the actual prices paid by the Government or public sectors for such goods/services;
+ In case the subsidy is granted in the form under which the Government or public sector provide goods/services at prices lower than the market price to the organization/individual, the subsidy value shall be calculated on the basis of the difference between the market prices and the sale prices of the Government or public sectors to the organization/individual;
+ In case the subsidy is granted in the form under which the Government or public sectors ignore or not collect the payables of the organization/individual, the subsidy value shall be calculated on the basis of the difference between the amount payable in accordance with law provisions and the amount actually paid by the organization/individual.
In addition, the value of subsidy granted in other forms shall be calculated in an equitable, reasonable manner and not contrary to international practices.
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