DECISION

APPLICATION OF MEASURES TO PREVENT THE AVOIDANCE OF

TRADE REMEDIES

-----------------------------

MINISTER OF INDUSTRY AND TRADE

Pursuant to the Foreign Trade Management Law No. 05/2017/QH14 dated June 12, 2017;

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

Pursuant to the Decree 98/2017/ND-CP dated August 18, 2017 of the Government defining the functions, tasks, powers and organizational structure of the Ministry of Industry and Trade;

Pursuant to the Circular No. 06/2018/TT-BCT dated April 20, 2018 of the Minister of Industry and Trade detailing a number of contents on trade remedies;

Pursuant to the Decision No. 3752/QD-BCT dated October 2, 2017 of the Minister of Industry and Trade defining the functions, tasks, powers and organizational structure of the Trade Remedies Authority of Vietnam;

Pursuant to the Decision No. 2622/QD-BCT dated July 26, 2018 of the Minister of Industry and Trade on the investigation and application of measures to prevent the avoidance of trade remedies;

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

DECIDES:

Article 1.To apply the measures to prevent the avoidance of trade remedies for steel coil, steel wire products with HS codes 7213.91.90, 7217.10.10, 7217.10.29, 7229.90.99, 9839.10.00 imported into Vietnam from different countries/regions, with detailed contents stated in the Notice attached to this Decision.

Article 2.Procedures for applying measures shall comply with the law on foreign trade management.

Article 3.This Decision takes effect 15 days after the day of its signing.

Article 4.The Director of Trade Remedies Authority of Vietnam, the Chief of the Ministry Office, and the heads of the concerned units, organizations and individuals shall implement this Decision./.

NOTICE

RE.: APPLICATION OF MEASURES TO PREVENT THE AVOIDANCE OF TRADE REMEDIES

(Attached to the Decision No. 1230/QD-BCT dated May 13, 2019 of the Minister of Industry and Trade)

According to the Foreign Trade Management Law No. 05/2017/QH14 dated June 12, 2017 (“Foreign Trade Management Law”); Decree No. 10/2018/ND-CP dated January 15, 2018 of the Government detailing a number of articles of the Foreign Trade Management Law regarding trade remedies (“Decree No. 10/2018/ND-CP”); and Circular No. 06/2018/TT-BCT dated April 20, 2018 of the Minister of Industry and Trade detailing a number of contents on trade remedies (“Circular No. 06/2018/TT-BCT”), the Ministry of Industry and Trade announces details of the application of measures to prevent the avoidance of trade remedies

(phòng vệ thương mại) for steel coil, steel wire products with HS codes 7213.91.90, 7217.10.10, 7217.10.29, 7229.90.99, 9839.10.00 imported into Vietnam (Case Number AC01.SG04) as follows:

1. Basic information

On July 18, 2016, the Ministry of Industry and Trade issued Decision No. 2968/QD-BCT on the application of official safeguard measures for steel billet and long steel products imported into Vietnam.

On the basis of the Plaintiff s Request Document, the Ministry of Industry and Trade issued Decision No. 2622/QD-BCT dated July 26, 2018 on conducting investigation and application of measures to prevent the avoidance of trade remedies for steel coil, steel wire products with HS codes 7213.91.90, 7213.99.90, 7217.10.10, 7217.10.29, 7229.90.99, 9839.10.00, 9839.20.00 imported into Vietnam.

On January 25, 2019, the Ministry of Industry and Trade issued Decision No. 171/QD-BCT on the first extension of the time of investigation and application of measures to prevent the avoidance of trade remedies for steel coil, steel wire products imported into Vietnam.

On February 26, 2019, the Ministry of Industry and Trade issued Decision 410/QD-BCT on the second extension of the time of investigation and application of measures to prevent the avoidance of trade remedies for steel coil, steel wire products imported into Vietnam.

2. Goods subject to application of measures to prevent the avoidance of trade remedies

Subjects of application of measures to prevent the avoidance of trade remedies are steel coil, steel wire products with HS codes 7213.91.90, 7217.10.10,

7217.10.29, 7229.90.99, 9839.10.00 imported into Vietnam from different countries/regions. Steel coil, steel wire products with one of the following characteristics shall be excluded from the scope of application of measures to prevent the avoidance of trade remedies:

(i)               Steel containing one of the elements with a percentage (%) of content by weight in the following scope: Carbon (C)> 0.37%; Silica (Si)> 0.60%; Chromium (Cr)> 0.60%; Nickel (Ni)> 0.60%; Copper (Cu)> 0.60%.

(ii)             Steel containing at the same time the elements with a percentage (%) of content by weight in the following scope: Manganese (Mn) - from 0.70% to 1.15%; Sulfur (S) - from 0.24% to 0.35%.

(iii)          Steel with circular cross-section of 14mm or more.

(iv)          Steel products are not yet produced in the country.

For organizations and individuals that import steel products under sections (i), (ii) and (iii): In order to be excluded from the application of measures to prevent the avoidance of trade remedies, when importing goods, they must submit the required documents to the Customs Sub-Department where the procedures are carried out to prove that the imported goods meet the criteria for exclusion of application of measures to prevent the avoidance of trade remedies as above.

For organizations and individuals that import steel products under section (iv): In order to be excluded from application of measures to prevent the avoidance of trade remedies, when importing goods, they must submit the Decision on exemption from application of measures to prevent the avoidance of trade remedies, issued by the Ministry of Industry and Trade, to the Customs Sub-Departments where the procedures are carried out. The procedures for exemption are implemented in accordance with Decree 10/2018/ND-CP and Circular 06/2018/TT-BCT. Organizations/individuals that import steel products under section (iv) shall refer to the Exemptions procedure in the Annex to this Notice.

3. Tax rates for prevention of avoidance of trade remedies

Goods subject to application of measures to prevent the avoidance of trade remedies under the provisions of Section 2 of this Notice shall be subject to application of measures to prevent the avoidance of trade remedies in the form of additional import tax (trade remedies tax) at the tax rate of 10.9% since the Decision on application of measures to prevent the avoidance of trade remedies for steel coil and steel wire products is valid until March 21, 2020 (if the initial safeguard measure is not extended). In the event that the safeguard measure is renewed, the Ministry of Industry and Trade will have the next specific notice.

The order and procedures for declaration, collection, payment, refund, exemption of the trade remedies tax shall comply with the provisions of the Export Tax and Import Tax Law No. 107/2016/QH13 dated April 6, 2016 and current regulations.

4. Complaints

In cases where the organizations/individuals have grounds to show that this Decision on application of measures to prevent the avoidance of trade remedies violates the current provisions of law, then the organizations/individuals have the right to appeal this Decision according to the Complaint Law No. 02/2011/QH13 dated November 11, 2011.

5. Contact information

For more information on the Decision on application of measures to prevent the avoidance of trade remedies for steel coil and steel wire products, please visit the websites of the Ministry of Industry and Trade (http://www.moit.gov.vn) and Trade Remedies Authority of Vietnam (http://www.pvtm.gov.vn).

Any questions and opinions of organizations/individuals on the application

ANNEX I

Process for exemption from application of measures to prevent the avoidance of trade remedies

1.                Subjects for exemption from application of measures to prevent the avoidance of trade remedies

Under the provisions of Article 10 of Circular 06/2018/TT-BCT

2.                Application file for exemption from application of measures to prevent the avoidance of trade remedies

Under the provisions of Article 12 of Circular 06/2018/TT-BCT

3.                Process of exemption from application of measures to prevent the avoidance of trade remedies

This is implemented under the provisions in Article 7 of Decree 10/2018/ND-CP and Article 13 of Circular 06/2018/TT-BCT as follows:

Step 1:Ministry of Industry and Trade (Trade Remedies Authority of Vietnam) shall give a notice on receipt of exemption records. The notice can be accessed at the websites of the Ministry of Industry and Trade (http://www.moit.gov.vn) and Trade Remedies Authority of Vietnam (http://www.pvtm.gov.vn).

Step 2:The subjects requesting exemption shall submit a dossier of application for exemption from application of measures to prevent the avoidance of trade remedies (dossier) to Trade Remedies Authority of Vietnam in one of the following ways:

-                     Via online public service:

(https://dichvucong.moit.gov.vn/HomePage.aspx)

-                     Directly at the Office of Trade Remedies Authority of Vietnam;

-                     By post;

Step 3:Trade Remedies Authority of Vietnam notifies about the completeness and validity of the Exemption Dossier. Enterprises shall supplement their dossiers in necessary cases (under Clause 3, Article 7 of Decree No. 10/2018/ND-CP and Clause 5, Article 13 of Circular No. 06/2018/TT-BCT).

Step 4:Trade Remedies Authority of Vietnam reviews the Exemption Dossier and issues the Exemption Decision (under Clause 4 Article 7 of Decree 10/2018/ND-CP and Article 11, Article 14 of Circular 06/2018/TT- BCT).

-                     Trade Remedies Authority of Vietnam presides over and coordinates with relevant units to verify the Exemption Dossier and then report to the Ministry s leaders for consideration of exemption approval/disapproval within 30 days from the date of receiving the full and valid Exemption Dossier. In case of necessity, the time limit for considering an exemption decision may be prolonged; but in all cases, it will not exceed the time limit prescribed in Clause 4, Article 7 of Decree No. 10/2018/ND-CP. In the case of exemption disapproval, Trade Remedies Authority of Vietnam shall notify the reasons for exemption disapproval.

-                     Refund of trade remedies tax: In cases where imported goods are exempted from application of measures to prevent the avoidance of trade remedies, the exempted organizations/individuals shall be entitled to a refund of the trade remedies tax already paid for batches of imported goods with registered customs declarations during the exemption period of exemption decision.

Procedures for refunding the trade remedies tax are applied in accordance with the current law.

Step 5:Periodic reports: The exempted organizations/individuals must submit periodic reports on the situation of import of exempted goods and compliance with exemption conditions and obligations to Trade Remedies Authority of Vietnam (according to Article 16 of Circular 06/2018/TT-BCT).

Step 6:Post-exemption inspection: Trade Remedies Authority of Vietnam may conduct post-exemption inspection for the purpose of assessing the compliance of the exempted organizations/individuals with respect to the conditions and legal provisions of exemption. In case the exempted organizations/individuals do not comply with the provisions and conditions for exemption, the Ministry of Industry and Trade has the right to revoke the exemption decision and notify the customs office to handle according to the law.

ANNEX II

Summary of investigation conclusion

Clause 3, Article 73 of Decree 10/2018/ND-CP and Clause 4, Article 81 of Decree 10/2018/ND-CP stipulate the expansion of scope of application of trade remedies and investigation to prevent the avoidance of trade remedies with the following contents:

(i)               Goods under investigation for avoidance of trade remedies have insignificant differences compared to goods currently subject to trade remedies;

(ii)             The volume of imported goods under investigation for avoidance of trade remedies increases significantly compared to the volume of imported goods currently subject to trade remedies. This significant increase in imported goods takes place immediately before or from the date of the decision to investigate the application of trade remedies;

(iii)          Damage of the domestic manufacturing industry or the reduction of the effectiveness of trade remedies is in effect.

On the basis of analyzing the goods subject to investigation for avoidance of trade remedies, trade flows, production and business situation of domestic steel coil and wire producers, the Ministry of Industry and Trade (Trade Remedies Authority of Vietnam - Investigation Agency) concludes the following:

1. Goods under investigationfor avoidance of trade remedies

-                     Imported goods with HS codes 7213.91.90, 7217.10.10, 7217.10.29, 7229.90.99, 9839.10.00 that are steel coil and steel wire products subject to investigation for avoidance of trade remedies have insignificant differences compared to steel coil and steel wire products currently subject to trade remedies (safeguard measures).

-                     Goods with HS codes 7213.99.90, 9839.20.00: The Investigation Agency concludes that imported goods described with these HS codes have different technical characteristics from goods subject to safeguard measures and domestically-produced goods because these steel products have a circular cross-section diameter of 14mm or more. Therefore, the Ministry of Industry and Trade decides to eliminate this type of HS code from the scope of application of measures to prevent the avoidance of trade remedies.

The Investigation Agency concludes that goods subject to investigation for avoidance of trade remedies are similar and directly compete with domestically produced steel coil and steel wire products. However, the Investigation Agency determines that among imported goods under investigation for avoidance of trade remedies, there are some types of products that cannot be produced domestically (including but not limited to high quality structural steel, rolled steel for supporting industries, automobile and motorbike industries) and therefore should be excluded from the scope of application of measures to prevent the avoidance of trade remedies. Details of the exclusion shall be outlined in Section 2 of this Notice.

2. Significantly-increased imports

The volume of imported steel coil and steel wire products under investigation for avoidance of trade remedies has increased significantly compared to the volume of imported steel coil and steel wire products subject to safeguard measures. This significant increase in imports only occurs after the Minister of Industry and Trade decides to investigate the application of safeguard measures on steel coil and steel wire products imported into Vietnam (Case Number SG04). In particular, the increase in imports is not expected immediately after safeguard measures are applied to steel coil and steel wire products. Therefore, the Investigation Agency concludes that there are acts to avoid trade remedies for some steel coil and steel wire products through negligible changes in goods being subjected to trade remedies.

3. Impact of acts to avoid trade remedies

In order to assess the impact of acts to avoid trade remedies on the domestic steel coil and steel wire manufacturing industry, the Investigation Agency has sent a questionnaire to enterprises steel coil and steel wire products in Vietnam. The survey results show that from 2016 to 2018, imported goods under investigation for avoidance of trade remedies have reduced the effectiveness of safeguard measures (in terms of price and quantity) being applied.

The investigation conclusion (public version) is sent by the Investigation Agency to parties related to the case.