What are the Process of Investigation of Imposing Trade Remedies?

Trade remedies are trade policy tool that allow governments to take remedial action against imports which are causing or threatening to cause material injury to a domestic industry. This is considered as a tool for maintaining the international trade order in a way of fairness and sound for countries when participating in free trade agreements. As Vietnam has entered a number of important free trade agreements, especially recent EU Vietnam Free Trade Agreement, it is important to understand the process of investigation of imposing trade remedies and how an international trade law firm could help representing clients in taking part in the procedures including anti-dumping, countervailing duty and safeguarding investigation of state authorities.

 

How a trade remedy case is processed?

Firstly, an organizations or individual representing a domestic industry may submit a request for applying the measure if it is found that the domestic industry is injured caused by dumping on imports, import subsidies or a surge in imports.

Secondly, after having the notification of lawful dossiers from Investigating authority, Minister of Industry and Trade would base on the proposal of Investigating authority to make decision of whether to start the investigation or not.

Thirdly, in the event of Minister of Industry and Trade decides to proceed the case, Investigating authority will issue the Questionnaire within 15 days from the date of issuing the investigating decision. However, in some cases, before sending the Questionnaire to parties, Investigating authority may send the quantity and value Questionnaire to select the sample to limit the scope of investigation.

The investigation to impose the anti-dumping measure, countervailing measure is within 12 months from the date of having the investigating decision, this duration may be extended but the total of the case does not exceed 18 months. However, the investigation period of imposing safeguard measure must be completed within 9 months, this duration may be extended but the total of the case does not exceed 12 months.

During the investigation period, Investigating authority will give an opportunity to interested parties for the consultation, specifically: (i) when having the consultation request from interested parties (ii) Before the final determination of investigation is disclosed, the investigating authority can organize the public consultation in manner that interested parties can present information and opinion related to the case.

However, Minister of Industry and Trade shall decide to terminate the investigation in the following cases:

-The applicant voluntarily withdraws the application;

-The preliminary determination of the investigating authority shows that there is no injury or threat of injury to the domestic industry or material retardation of establishment of the domestic industry;

-The final determination of the investigating authority obtains one of the following contents:

-The product under consideration imported to Vietnam is not dumped, subsidized or imported excessively;

There is no injury to the domestic industry;

There is no objective evidence of the existence of a causal link between the dumping on imports, import subsidies and the surge of imports and the injury or threat of injury to domestic industry or the material retardation of the establishment of the domestic industry;

The investigating authority reaches an agreement with the competent authority of the country which is accused of granting subsidies to its products imported to Vietnam on removing the abovementioned subsidies.

If Client needs any more information or request for legal advice or potential dispute regarding trade remedies measures including, anti-dumping, countervailing duty and safeguard measures or international trade dispute matters, our international trade attorney at Hanoi Office and Ho Chi Minh City of ANT Lawyers could be of help.

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Anti-dumping Law: The Basic Concepts

1. What is dumping?

In international trade, dumping is a phenomenon occurs when a commodity is exported at a price lower than the selling price of that item in the domestic market of the exporting country. Therefore, it is simple to understand that if the export price of a commodity is lower than its domestic prices, the product may be considered to be dumped. 

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2. Why is dumping?

There are many causes of dumping in international trade. In fact, there are many cases that seller deliberately dumping in order to achieve certain benefits such as: Dumping to eliminate competitors in the import market to become monopoly and gain market share; Selling at low price to acquire foreign currency… Sometimes, the dumping is reluctant because the manufacturer and exporter cannot sell product, the production is stalled then the long-term storage products could be corrupted… Hence, they have to sell off to recover capital.

In international trade, the anti-dumping tax may be imposed without regarding to the reason why the manufacturers dumping. Dumped into foreign markets is often perceived as a negative phenomenon because it reduces the competitiveness of prices and the market share of domestic products of importing countries.

However, dumping can have positive impacts on the economy: consumers benefit from low price goods; if dumped goods are inputs of other manufacturing sector then the low raw material prices can make certain growth of that industry… Therefore, not all acts of dumping will be applying the anti-dumping measures.

As regulated by the World Trade Organization (WTO), the anti-dumping measures can only be applied in certain circumstances and must meet certain conditions. Specifically, the anti-dumping measures are applied only when the following three conditions are met: The imported goods are dumped; the manufacturing sector of similar products of the importing countries is significantly affected; there is a causal relationship between the dumping of imports goods and losses mentioned above

3. The anti-dumping tax?

The anti-dumping tax is the additional taxes besides the normal import tax, which is imposed on foreign products that are dumped into the importing country. This type of tax is to prevent dumping and eliminate the damages caused by the dumping of imported goods. In fact, the anti-dumping tax is used in many countries as a form of “legal protection” for its domestic production. In order to prevent the abuse of this measure, the WTO member countries have together agreed on the provisions required to comply regarding the investigation and imposition of anti-dumping tax, concentrated in an Agreement of the WTO on anti-dumping, which is the ADA Agreement.

ANT Lawyers in a law firm in Vietnam, recognized by Legal500, IFLR1000. We are an exclusive Vietnam member of Prea Legal, the global law firm network covering more than 150 jurisdictions. The firm provides a range of legal services to multinational and domestic clients. For advice or services request, please contact us via email ant@antlawyers.vn, or call us +84 24 730 86 529.

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