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Anti-Dumping Measures Imposed on Imported Products in Vietnam

Anti-Dumping Measures Imposed on Imported Products in Vietnam
Anti-Dumping Measures Imposed on Imported Products in Vietnam

Owing to the globalization of economy, Vietnam has been actively negotiating, signing, and ratifying international trade agreements. With opportunities and development potential, Vietnam’s economy also faces great challenges by opening the domestic market to foreign investment. One of the challenges is the issue of anti-dumping against unfair competition practices which cause damage to domestic enterprises. This article provides an overview of anti-dumping measures on goods imported into Vietnam in the commercial sector.

Anti-dumping on goods imported into Vietnam

In international trade, anti-dumping is the phenomenon that occurs when a good is exported from one country to another country at a price lower than the selling price of similar goods in the domestic market of the exporting country. The WTO considers this an unfair competition practice of foreign manufacturers and exporters against the domestic industry in the importing country. The principles of anti-dumping laid down in the ‘General Agreement on Tariffs and Trade (GATT)’, the ‘Agreement on Anti-Dumping’, and ‘Anti-dumping measures’ are aimed at limiting this unfair competition practice. 

On the basis of general principles of the WTO, Vietnam has developed its own legal framework against dumping issue. According to the provisions of the ‘Law on Foreign Trade Management 2017’, “Anti-dumping measure imposed on imports of Vietnam (hereinafter referred to as “anti-dumping measure”) is a measure imposed on products that are dumped by importing to Vietnam which cause material injury or threaten to cause material injury to the domestic industry or retard the establishment of the domestic industry”.

Accordingly, “A product is determined as dumped if price of this product imported to Vietnam is less than the comparable price of its alike products sold in the domestic market exporting country or third country under common commercial conditions or the price that is self-calculated by the investigating authority”.

Conditions for application of anti-dumping measures

Not all foreign goods dumped in the importing country attract anti-dumping measures. According to the provisions of the ‘Law on Foreign Trade Management 2017’, in order to apply anti-dumping measures, the competent authority needs to conduct an anti-dumping investigation and draw conclusions affirming the existence of all three of the following conditions:

  • Imports of Vietnam are dumped with specific dumping margins (dumping margin is not less than 2%).
  • There is material injury or threat of material injury to the domestic industry or material retardation of establishment of the domestic industry.
  • There exists a causal link between the dumping of goods (imports) and injury to the domestic industry.

In case imported goods originating from a country whose volume or quantity of products does not exceed 3% of the total volume or quantity of similar goods imported into Vietnam and the total volume or quantity of exported goods originating from countries meeting the above conditions accounts for 7% or less of the total volume or quantity of similar goods imported into Vietnam, these countries will be exempt from anti-dumping measures.

Basis for investigation and application of anti-dumping measures

According to the provisions of the ‘Law on Foreign Trade Management 2017’, the investigation and application of anti-dumping measures shall be carried out when there is a dossier from the organization or individual representing the domestic manufacturing industry requesting the application of anti-dumping measures. Accordingly, organizations and individuals submitting dossiers to request for application of anti-dumping measures shall be considered as representatives of the domestic industry upon fulfilling the following conditions:

  • The total production of similar products produced by the applicant(s) and domestic producers supporting the application is greater than those produced by domestic producers objecting to the application.
  • The total production of similar products produced by the applicant(s) and domestic producers supporting the application accounts for at least 25% of total production of similar products in the domestic industry.

However, it is not necessary for an organization or individual representing the domestic manufacturing industry to submit a dossier requesting the application of anti-dumping measures or anti-dumping investigation. According to the provisions of ‘Decree 10/2018/ND-CP’, in the absence of the requesting party, when there are clear signs that the dumped or subsidized goods imported into Vietnam are causing or threatening to causing significant damage to the domestic manufacturing industry, the investigating authority has the right to compile a dossier requesting the application of anti-dumping and anti-subsidy measures and submit it to the ‘Minister of Industry and Trade’ for consideration and decision.

The Minister of Industry and Trade shall decide whether there is obvious evidence that the import of such dumped products causes the material injury or threat of material injury to the domestic industry or retardation of establishment of the domestic industry.

Anti-Dumping Measures

According to the ‘Law on Foreign Trade Management 2017’, anti-dumping measures include:

  • Imposition of anti-dumping duty.
  • Undertaking to implement measures against dumping carried out by organizations and individuals producing and exporting products subject to anti-dumping measures by the investigating authority of Vietnam or domestic producers with the approval of the investigating authority.

Some noteworthy points for enterprises

Enterprises need to have a general understanding of the risk of being sued for anti-dumping measures. Accordingly, enterprises need to maintain clear accounting records and comply with international accounting standards so that their data is accepted for calculation of the dumping margin by the investigating authority. In addition, enterprises also need to keep all data and documents as evidence that can prove non-dumping behavior.

In addition, enterprises need to cooperate with the investigating authority and actively exercise their procedural rights and obligations in the investigation process to calculate their own dumping margin that better reflects reality of its business. There shall be no fraud during and after the anti-dumping investigation to ensure a healthy and progressive business environment.

This article is based on the current laws at the above recorded time and may no longer be relevant at the time readers access this article due to changes in applicable law and specific cases which the readers want to apply. Therefore, this article is for reference only.

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