What are countervailing measures? Conditions for the imposition of countervailing measures in Vietnam

What are countervailing measures? Conditions for the imposition of countervailing measures in Vietnam (Internet image)

1. What is countervailing measure?

Countervailing measure imposed on imports of Vietnam (hereinafter referred to as “countervailing measure”) 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.

(Clause 1, Article 83 of the Law on Foreign Trade Management 2017)

2. Countervailing measures in Vietnam

Countervailing measures include:

- The imposition of countervailing duties

- The undertakings between the producer or exporter or the Government thereof and the competent authority of Vietnam on the voluntary removal or reduction of subsidies or price undertakings;

- Other countervailing measures.

(Clause 2, Article 83 of the Law on Foreign Trade Management 2017)

3. Conditions for the imposition of countervailing measures in Vietnam

- A countervailing measure will be imposed on imports if all following conditions are satisfied:

+ Products are subsidized as prescribed in Articles 84 and 85 of this Law and the rate of subsidy is specific, except for the cases prescribed in Clause 2 of Article 86 of the Law on Foreign Trade Management 2017;

+ There is material injury or threat of material injury to the domestic industry or the material retardation of establishment of the domestic industry;

+ There is the existence of a causal link between the import of subsidized products prescribed in Point a of this Clause and the injury to the domestic industry prescribed in Point b of Clause 1 Article 86 of the Law on Foreign Trade Management 2017.

- The countervailing measure shall not imposed on producers or exporters of a developed country whose rate of subsidization is not more than 1% of the price of products exported to Vietnam, producers or exporters of a developing country whose rate of subsidization is not more than 2% of the export price and producers or exporter of a less-developed country whose rate of subsidization is not more than 3% of the export price.

- If the production of imports originating in a developing country accounts for not more than 4% of total imports of like products to Vietnam and the total production of imports originating in developing countries and satisfying the abovementioned conditions accounts for not more than 9% of the total imports of like products to Vietnam, these countries will be exempt from the countervailing measures.

(Article 86 of the Law on Foreign Trade Management 2017)

4. Subsidies subject to countervailing measures in Vietnam

The following subsidies shall be subject to the countervailing measure, unless other regulations specified in international treaties to which the Socialist Republic of Vietnam is a signatory.

- Subsidies upon the export performance;

- Subsidies upon the use of domestic over imported products;

- Subsidies prescribed in Article 84 of the Law on Foreign Trade Management 2017 which cause nullification or impairment of benefits accruing directly or indirectly to Vietnam in accordance with regulations of international treaties to which the Socialist Republic of Vietnam is a signatory.

(Article 85 of the Law on Foreign Trade Management 2017)

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