Circular No. 19/2019/TT-BCT dated September 30, 2019 of the Ministry of Industry and Trade on prescribing the application of special safeguard measures to implement the Comprehensive and Progressive Agreement for Trans-Pacific Partnership

CIRCULAR

Prescribing the application of special safeguard measures to implement the Comprehensive and Progressive Agreement for Trans-Pacific Partnership^[1]

Pursuant to the June 12, 2017 Law on Foreign Trade Management;

Pursuant to the National Assembly’s Resolution No. 72/2018/QH14 of November 12, 2018, ratifying the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and related documents;

Pursuant to the Government’s Decree No. 98/2017/ND-CP of August 18, 2017, defining the functions, tasks, powers and organizational structure of the Ministry of Industry and Trade;

Pursuant to the Government’s Decree No. 10/2018/ND-CP of January 15, 2018, detailing a number of articles of the Law on Foreign Trade Management regarding trade remedies;

At the proposal of the Director of the Trade Remedies Authority of Vietnam,

The Minister of Industry and Trade promulgates the Circular prescribing the application of special safeguard measures to implement the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

Chapter I

GENERAL PROVISIONS

Article 1.Scope of regulation

This Circular prescribes the application of special safeguard measures to implement the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, including:

1. Safeguard measures to be applied during transition periods.

2. Emergency measures applicable to textile and apparel goods.

Article 2.Subjects of application

This Circular applies to:

1. Vietnamese state management agencies which are competent to investigate, apply and handle special safeguard measures to implement the Agreement.

2. Vietnamese traders, traders of member states of the Agreement, other domestic and foreign agencies, organizations and individuals involved in the investigation, application and handling of special safeguard measures to implement the Agreement.

Article 3. Interpretation of terms

In this Circular, the terms below are construed as follows:

1. Agreement means the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

2. Member state means any State or separate customs territory for which the Agreement is in force.

3. Similar goods mean goods that have all properties resembling those of the good under investigation. If such goods are not available, similar goods are goods that have many basic properties resembling those of the good under investigation.

4. Directly competitive goods mean goods which can possibly be accepted by buyers to replace the good subject to safeguard measures for their price advantages and use purposes.

5. Transition period means, in relation to a particular good, the 3-year period beginning on the date the Agreement comes into force, except where the tariff elimination for the good occurs over a longer period of time, in which case the transition period shall be the period of the staged tariff elimination for that good.

6. Safeguard measures to be applied during transition periods (below referred to as transitional safeguard measures) means those specified in Article 99 of the Law on Foreign Trade Management and Article 6.3, Chapter 6 of the Agreement.

7. Transition period means, in relation to a textile and apparel good, the period beginning on the date the Agreement comes into force until 5 years after the date on which Vietnam eliminates duties on the textile and apparel good for exporting member states pursuant to the Agreement.

8. Emergency measures applicable to textile and apparel goods means those specified in Article 99 of the Law on Foreign Trade Management and Article 4.3, Chapter 4 of the Agreement.

9. A domestic industry means a group of manufacturers of similar goods or directly competitive goods operating within Vietnam’s territory or their representatives that constitute a major proportion of the total domestic production of that industry.

10. The effective date of the Agreement is January 14, 2019.

Article 4.Related parties in cases of investigation for application of transitional safeguard measures or emergency measures applicable to textile and apparel goods

1. Related parties in a case of investigation of transitional safeguard measures or emergency measures applicable to textile and apparel goods include:

a/ Organizations and individuals of the concerned member state(s) that manufacture(s) and export(s) the good under investigation into Vietnam’s territory;

b/ Organizations and individuals that import the good under investigation;

c/ Associations of the concerned member state(s) with a majority of their members being organizations and individuals that manufacture and export the good under investigation;

d/ The government(s) and authorities of the member state(s) that export(s) the good under investigation;

dd/ Organizations or individuals that submit dossiers of request for application of transitional safeguard measures or emergency measures to textile and apparel goods;

e/ Domestic organizations or individuals that manufacture similar goods or directly competitive goods;

g/ Domestic associations with a majority of their members being organizations or members that manufacture similar goods or directly competitive goods;

h/ Other organizations and individuals that have lawful rights and interests related to the investigation or can assist in the investigation process or representative organizations that protect consumer interests.

2. Organizations and individuals shall register with and obtain approval from the investigation body in order to become related parties in an investigation case in accordance with the Law on Foreign Trade Management regarding registration procedures.

3. Related parties in an investigation case may have access to information and documents provided by other related parties to the investigation body in accordance with Clause 2, Article 75 of the Law on Foreign Trade Management and Article 11 of the Government’s Decree. No. 10/2018/ND-CP of January 15, 2018.

Chapter II

TRANSITIONAL SAFEGUARD MEASURES

Article 5.Principles of application of transitional safeguard measures

1. Not to apply concurrently a transitional safeguard measure and one of the following measures to the same good at the same time:

a/ The safeguard measures in the import of foreign goods into Vietnam prescribed in the Law on Foreign Trade Management;

b/ The emergency measures applicable to textile and apparel goods prescribed in this Circular.

2. Not to apply transitional safeguard measures beyond transition periods.

3. Not to apply a transitional safeguard measure more than once to the same good.

4. Not to apply transitional safeguard measures to imported goods subject to tariff quotas as committed in the Agreement.

5. Not to apply transitional safeguard measures through imposition of tariff or import quota.

6. The investigation and application of transitional safeguard measures must comply with the Law on Foreign Trade Management, Decree No. 10/2018/ND-CP and Articles 6, 7 and 8 of this Circular.

Article 6.Information in dossiers of request for application of transitional safeguard measures

1. A dossier of request for application of a transitional safeguard measure (in this Chapter referred to as dossier of request) must comprise a written request for application of transitional safeguard measures and the relevant papers and documents prescribed in Article 47 of Decree No. 10/2018/ND-CP.

2. A written request for application of transitional safeguard measures prescribed in Clause 2, Article 47 of Decree No. 10/2018/ND-CP must also contain:

a/ Information describing the imported good prescribed at Point d, Clause 2, Article 47 of Decree No. 10/2018/ND-CP, which is information on the good imported from one or more than one member state against which investigation for application of transitional safeguard measures is requested, clearly stating headings and import duty rates in accordance with the Special Preferential Import and Export Tariffs for the implementation of the Agreement;

b/ Information on the volume or quantity and value of the imported good under investigation prescribed at Point e, Clause 2, Article 47 of Decree No. 10/2018/ND-CP in the period of 3 years before the date of submission of the dossier of request, including at least 6 months after the Agreement comes into force;

c/ Information on the volume or quantity and value of similar goods or directly competitive goods of the concerned domestic industry prescribed at Point g, Clause 2, Article 47 of Decree No. 10/2018/ND-CP in the period of 3 years before the date of submission of the dossier of request, including at least 6 months after the Agreement comes into force, or for the entire operation duration of the concerned domestic industry up to the time of submission of the dossier of request, in case that industry has been operating for less than 3 years;

d/ Information on the transition period of the imported good subject to investigation for application of transitional safeguard measures.

Article 7.Making dossiers of request in the absence of requesting organizations or individuals

1. In case no organization or individual files a dossier of request but there are clear signs that the excessive increase in imports from one or more than one member state into Vietnam during the transition period as a result of duty reduction or elimination under the Agreement causes or threatens to cause serious harms to a domestic industry, the investigation body may make a dossier of request for application of transitional safeguard measures and submit it to the Minister of Industry and Trade for decision on investigation.

2. The dossier of request made by the investigation body must have the contents specified in Article 6 of this Circular, except Points a, b and c, Clause 2, Article 47 of Decree No. 10/2018/ND-CP.

3. Related organizations and individuals shall coordinate with and provide necessary information at the request of the Ministry of Industry and Trade.

Article 8.Application of transitional safeguard measures

1. The Minister of Industry and Trade may decide to apply transitional safeguard measures when the investigation body’s investigation conclusion states that:

a/ There is an absolute or a relative increase in the import of the good under investigation from one or more than one member state over the volume or quantity of domestic production of such good as a result of duty reduction or elimination for such good under the Agreement.

In case of increasing imports from two or more member states under investigation, the volume or quantity of imports under investigation of each of these member states must show an absolute or a relative increase over the volume or quantity of domestic production from the date the Agreement comes into forces for such member state;

b/ The concerned domestic industry suffers serious harms or is under threat of serious harms;

c/ The increase in the import prescribed at Point a of this Clause causes serious harms or threats to cause serious harms to the concerned domestic industry.

2. Transitional safeguard measures include:

a/ Suspending the reduction of the duty rate under the Agreement for the good under investigation.

b/ Increasing the duty rate for such good to an extent not exceeding the preferential duty rate valid at the time of applying this measure or the preferential duty rate valid on the date preceding the effective date of Agreement, whichever is lower.

3. The period of application of a transitional safeguard measure must not exceed 2 years. In case the investigation body concludes that it is necessary to continue applying the transitional safeguard measure to prevent or remedy serious harms and facilitate the adjustment of the domestic industry, the period of application may be extended for at most one more year.

4. In case a transitional safeguard measure is applied for more than 1 year, it must be gradually untightened throughout the process of application.

5. After the period of application of a transitional safeguard measure ends, the import duty rate applicable to the related good must comply with the Special Preferential Import Tariffs for the implementation of the Agreement which is valid at the time of terminating the application of the transitional safeguard measure.

Chapter III

EMERGENCY MEASURES APPLICABLE TO TEXTILE AND APPAREL GOODS

Article 9.Principles of application of emergency measures to textile and apparel goods

1. Not to apply concurrently an emergency measure to textile and apparel goods and one of the following measures to the same good at the same time:

a/ The safeguard measures in the import of foreign goods into Vietnam prescribed in the Law on Foreign Trade Management;

b/ The transitional safeguard measures prescribed in this Circular.

2. Not to apply emergency measures to a textile and apparel good beyond the transition period for such textile and apparel good.

3. Not to apply an emergency measure more than once to the same good.

4. The investigation for application of emergency measures to textile and apparel goods must comply with the Law on Foreign Trade Management, Decree No. 10/2018/ND-CP and Articles 10, 11 and 12 of this Circular.

Article 10.Information in dossiers of request for application of emergency measures to textile and apparel goods

1. A dossier of request for application of emergency measures to textile and apparel goods (in this Chapter referred to as dossier of request) must comprise a written request for application of emergency measures to textile and apparel goods and the relevant papers and documents prescribed in Article 47 of Decree No. 10/2018/ND-CP.

2. A written request for application of transitional safeguard measures prescribed in Clause 2, Article 47 of Decree No. 10/2018/ND-CP must also contain:

a/ Information describing the imported good prescribed at Point d, Clause 2, Article 47 of Decree No. 10/2018/ND-CP, which is information describing the textile and apparel good against which investigation for application of emergency measures is requested, including its scientific name, trade name and common name; composition; basic physical and chemical characteristics; major use purpose(s); manufacturing process; applicable international and Vietnamese standards and regulations; and goods headings and applicable import duty rates specified in the Preferential Export Tariff or Import Tariff for the implementation of the Agreement;

b/ Information on the volume or quantity and value of the imported textile and apparel good prescribed at Point a of this Clause in the period of 3 years before the date of submission of the dossier of request, including at least 3 months after the Agreement comes into force;

c/ Information on the volume or quantity and value of similar goods or directly competitive goods of the concerned domestic industry prescribed at Point g, Clause 2, Article 47 of Decree No. 10/2018/ND-CP in the period of 3 years before the date of submission of the dossier of request, including at least 3 months after the Agreement comes into force.

d/ Information on the transition period of the imported textile and apparel good against which investigation for application of emergency measures applicable to textile and apparel goods is requested.

Article 11.Making dossiers of request for application of emergency measures to textile and apparel goods in the absence of requesting organizations or individuals

1. In case no organization or individual files a dossier of request but there are clear signs that the excessive increase in the import of a textile or apparel good into Vietnam  as a result of duty reduction under the Agreement during the transition period of such good causes or threatens to cause serious harms to the concerned domestic industry, the  investigation body may make a dossier of request for application of emergency measures to the textile and apparel good and submit it to the Minister of Industry and Trade for decision on investigation.

2. The dossier of request made by the investigation body must have the contents specified in Article 10 of this Circular, except Points a and b, Clause 2, Article 47 of Decree No. 10/2018/ND-CP.

3. Related organizations and individuals shall coordinate with and provide necessary information at the request of the Ministry of Industry and Trade.

Article 12.Application of emergency measures to textile and apparel goods

1. The Minister of Industry and Trade may decide to apply emergency measures to a textile and apparel good when the investigation body’s investigation conclusion states that:

a/ There is an absolute or relative increase in the import of the textile or apparel good under investigation from one or more than one member state over the volume or quantity of domestic production of such good as a result of enjoyment of tariff preferences under the Agreement.

b/ The domestic industry suffers or is in threat of serious harms;

c/ The increase in the import prescribed at Point a of this Clause causes serious harms or threats to cause serious harms to the domestic industry.

2. In consideration of factors including actual output, capacity, productivity,inventories, market share, exports, employment, wages, domestic selling prices, profits and investments, the investigation body shall determine serious harms or threats of serious harms to the domestic industry as prescribed at Point b, Clause 1 of this Article. Factors related to changes in technologies or consumer tastes shall not be taken into consideration.

3. Emergency measures shall be applied to a textile or apparel good in the form of increasing the duty rate applicable to such good to an extent not exceeding the preferential duty rate valid at the time of applying this measure or the preferential duty rate valid at the date preceding the effective date of the Agreement, whichever is lower.

4. The period of application of a transitional safeguard measure must not exceed 2 years and may be extended for at most 2 more years.

5. After the period of application of an emergency measure to a textile or apparel good ends, the import duty rate applicable to such good must comply with the Special Preferential Import Tariffs for the implementation of the Agreement which is valid at the time of terminating the application of the emergency measure to such textile or apparel good.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 13.Effect

1. This Circular takes effect 45 days from the date of its signing.

2. The investigation body shall consider and receive dossiers of request for application of transitional safeguard measures or emergency measures to textile and apparel goods in line with the validity of the Agreement.-

Minister of Industry and Trade
TRAN TUAN ANH