Directive 20/2005/CT-TTg on taking initiative in foreign trade lawsuit prevention and combat

DIRECTIVE

ON TAKING INITIATIVE IN FOREIGN TRADE LAWSUIT PREVENTION AND COMBAT

Trade lawsuits are quite common in international trade practice. As our country is constantly expanding economic-commercial relations with foreign countries and intensively integrating in the international economy, we are facing many acts of trade protection and foreign trade lawsuits such as those on dumping, anti-subsidy or application of countervailing measures as well as lawsuits initiated by foreign enterprises.

This situation has prompted an urgent requirement that coordinated and effective measures be taken to prevent and combat such trade lawsuits and to protect interests of the State and enterprises. For that purpose, the ministries, branches, localities and enterprises should perform the following tasks and measures:

I. A NUMBER OF MAJOR PRINCIPLES IN FOREIGN TRADE LAWSUIT PREVENTION AND COMBAT

1. Taking initiative in trade lawsuit prevention and combat should be considered the first and foremost requirement.

2. When a lawsuit is initiated, to actively take necessary measures to handle it along the direction of minimizing negative impacts on domestic production branches and enterprises.

firmly grasp and well apply provisions of international law as well as laws of the concerned countries and our country.

4. Apart from handling legal aspects of such lawsuits, to simultaneously apply other measures, including lobbying activities, association with defendants and importing enterprises, as well as public opinions.

5. State management agencies shall have to provide information for, guide and assist enterprises; enterprises and business line associations shall play the major role in foreign trade lawsuit prevention and combat.

6. Enterprises should coordinate and associate with one another to prevent and combat trade lawsuits involving international elements.

II. MEASURES TO PREVENT AND AVOID TRADE LAWSUITS

To prevent and avoid trade lawsuits, it is necessary to take the following measures:

1. To firmly grasp and strictly implement international regulations and legal procedures as well as regulations and procedures of importing countries.

2. To ensure legality of economic-commercial contracts with foreign parties.

3. To diversify export markets, adopt a rational export mechanism for each commodity and each market; avoid any surge in export of a number of goods items to one market in a short period. In case of necessity, some interim measures may be applied to regulate exports.

4. To closely monitor and promptly forecast developments in importing countries (both State and enterprises) for early preventive measures.

5. In the course of business, to ensure the strict compliance with statistical, accounting and archiving procedures in order to have adequate necessary documents for the protection of interests if lawsuits arise.

6. To closely manage the grant of certificates of origin (C/O) by enhancing inspection and supervision of C/O grant; to combat C/O fraudulence by way of importing goods from a third country then using Vietnamese C/O for export.

7. Vietnam's business line associations, if deeming necessary and being capable, shall negotiate with associations of producers of importing countries where lawsuits may be initiated in order to make suitable adjustments to protect reasonable interests of both parties, and at the same time, coordinate with associations of importers and consumers in preventing such lawsuits.

8. In lawsuits against individual enterprises, if conditions and laws permit, the enterprises being defendants shall negotiate with the plaintiffs for compromise, avoiding bringing the cases to law enforcement agencies.

III. HANDLING MEASURES TO BE TAKEN IN CASES WHERE TRADE LAWSUITS ARISE

When lawsuits arise, it is necessary to take the following measures:

1. The Ministry of Trade shall coordinate with the Ministry of Foreign Affairs (including Vietnamese diplomatic missions in the foreign countries where the suits are initiated) in promptly providing enterprises and business line associations with all necessary information (laws of the concerned foreign countries, order of proceedings, plaintiffs...) as well as concrete guidance to carry out necessary jobs.

2. If a lawsuit involves many enterprises, business line associations shall join such enterprises and coordinate their activities.

Enterprises should meet all requirements of foreign investigative agencies in a formal and timely manner, thoroughly prepare and actively cooperate with the latter in on-spot investigations.

Enterprises should coordinate their activities closely, not hindering common activities and not acting separately for their own benefits.

3. Enterprises should appoint officials and experts with legal knowledge and experience to participate in handling of lawsuits, and, if necessary, hire domestic or foreign law consultancy companies to assist them in the course of handling the suits.

4. Enterprises (or business line associations) should seriously pursue lawsuits and appoint their competent representatives to attend hearings and trials if procedures so require or permit.

5. To actively lobby and conduct public relations activities so as to support the appeal. Responsible agencies, business line associations and concerned enterprises should take initiative in providing information and orientations for the mass media to support the settlement of the suits.

6. On a case-by-case basis and according to law provisions, lawsuits may be brought to bilateral or multilateral institutions on arbitration or conciliation, even WTO, after Vietnam's accession to this organization.

7. In the course of lawsuit settlement, negotiation for a compromise with involved parties may be conducted, if it is permitted by law and realistic.

8. After the closure of lawsuits, the concerned ministries, branches, business line associations and enterprises shall coordinate with one another in working out appropriate measures to execute judgments, draw experience and restructure production and business so as to minimize consequences (if any) for their respective business lines.

IV. DIVISION OF RESPONSIBILITIES BETWEEN STATE AGENCIES, ENTERPRISES, BUSINESS LINE ASSOCIATIONS AND SOCIAL ORGANIZATIONS

1. The Ministry of Trade

a/ To firmly grasp international law (of WTO) and the laws of host countries, which are related to international trade disputes, coordinate with other ministries, branches, business line associations and localities in disseminating and popularizing such laws to enterprises;

b/ To direct foreign-based trade offices to supply statistical data on Vietnam's export share in the markets of host countries; to probe into the situation of major exporting countries that have export goods items similar to Vietnam's and their export market shares, as well as moves of manufacturers and states of host countries so as to provide relevant information to enterprises;

d/ To receive, study and sum up initial information on lawsuits (petitions, plaintiffs, relevant, statistical data...) so as to map out timely handling measures;

h/ To coordinate with the Ministry of Foreign Affairs in lobbying and conducting public-relation activities in the concerned foreign countries in order to mobilize support for legitimate interests of Vietnamese enterprises, securing fair treatment;

i/ To coordinate with the Ministry of Foreign Affairs in setting up and consolidating trade offices in a number of countries being Vietnam's major partners so that they may fulfill their tasks in the settlement of trade disputes;

j/ To manage and closely inspect the grant of C/O, to carefully check the origin of goods before granting C/O and take resolute measures to prevent the counterfeit or wrongful grant of C/O which may result in lawsuits.

2. The Ministry of Foreign Affairs

a/ To conduct diplomatic agitation to criticize wrong viewpoints and take advantage of support for, or sympathy with, Vietnamese enterprises, ensuring that lawsuits are settled in a fair manner;

b/ In cases where a lawsuit is initiated against many countries, to join the Ministry of Trade in enhancing the mobilization of, and coordination with the countries being defendants in working out common tactics (if any) for lawsuit prevention and combat;

c/ To direct foreign-based diplomatic missions in gathering and monitoring information to assist domestic agencies, enterprises and business line associations in settling lawsuits and providing information as well as in selecting law consultancy companies or lobby companies;

e/ To consolidate diplomatic missions in countries being Vietnam's major export markets so as to meet the requirement of making contributions to the satisfactory settlement of trade disputes.

3. The Ministry of Planning and Investment

a/ To review and adjust current regulations of investment licenses (compulsory export rate, localization rate...) so as to create conditions for Vietnamese enterprises to prove that they are actually doing business according to market mechanism and in compliance with principles of the World Trade Organization (WTO);

b/ To coordinate with provincial People's Committees and management boards of industrial parks and export-processing zones in enhancing the monitoring and prevention of untransparent acts of foreign-invested enterprises, which may result in international lawsuits; to carefully examine the licensing of investment for foreign enterprises which invest in Vietnam by processing, assembling simple goods items or producing those items for which they are sued in their home countries or to which anti-dumping tax is currently applied, etc.

c/ In cases where lawsuits are against export products or services of foreign-invested enterprises, the Ministry of Planning and Investment shall, together with the Ministry of Trade, provincial People's Committees and management boards of industrial parks and export processing zones, guide and assist these enterprises in coordinating with other Vietnamese enterprises and business line associations in the settlement of such lawsuits with a view to protecting investors' legitimate interests.

4. The Ministry of Finance

a/ To coordinate with Vietnam Chamber of Commerce and Industry and business line associations in popularizing and providing information on legal documents and regulations on accounting and auditing, guiding enterprises to comply with the principle of transparent management of accounting books, which shall serve as a basis for them to protect their interests in cases where trade lawsuits are initiated;

c/ To review and perfect legal documents on Vietnam accounting standards in compatibility with international practices so as to avoid creating causes for lawsuits.

5. The relevant production-managing ministries and branches shall have the responsibility:

b/ To assume the prime responsibility for, and coordinate with the Ministry of Trade and the concerned ministries and branches in, surveying and monitoring production, business and export situation of Vietnamese enterprises on the list of those which are most likely to be sued so as to guide them how to avoid this danger;

c/ On the basis of monitoring, analyzing and evaluating market information related to products and services under their management, to intensify market forecasts, provide enterprises with necessary information on export market shares of Vietnam and other countries in the major markets so as to assist enterprises and business line associations in acquiring more information to orientate and rationally restructure their production and export;

d/ To coordinate with the Ministry of Trade and the concerned ministries and branches in guiding and assisting business line associations and enterprises in the course of handling lawsuits and addressing their consequences.

6. Other agencies

a/ The Ministry of Justice and the Ministry of Education and Training shall conduct quantitative and qualitative survey of judicial personnel and international law students, then elaborate a plan to train and foster specialized officials, including State-sponsored overseas training, for participation in handling of international trade disputes and lawsuits, so that by 2010 Vietnam will have enough qualified officials for participation in international trade lawsuits;

b/ The Ministry of Home Affairs shall coordinate with Vietnam Chamber of Commerce and Industry and a number of major business line associations in consolidating their apparatuses, operation mechanisms and qualified and capable staffs to meet requirements of the above-mentioned tasks;

c/ Each ministry or branch shall, based on their functions and tasks, coordinate with the Ministry of Trade and relevant ministries and branches in supporting business line associations and enterprises in the course of handling lawsuits.

7. The People's Committees of provinces and centrally-run cities

To coordinate with ministries and branches in:

b/ Disseminating and propagating the systems of international law and Vietnamese laws on anti-dumping, anti-subsidy and countervailing measures, etc., to producers and enterprises.

c/ Supervising production, business and export activities of enterprises in their respective localities in order to restrict acts which may cause dangers of being sued or adversely affecting the settlement and outcomes of the lawsuits;

d/ Closely coordinating with ministries, branches and business line associations in providing local producers and enterprises with forecasts on markets and policies of the countries consuming products of their respective localities, thereby to orientate exports production planning in line with changes in the world market, and avoid lawsuits;

8. Enterprises and business line associations

- To elaborate export strategies along the direction of diversifying markets and products, adopting reasonable exports structure for each market, avoiding too quick increase of export turnovers of a number of goods items with big volumes to one country, which may be a cause for initiation of trade lawsuits;

- To reach agreement on operation regulation for every business line in order to harmonize production and business among members, coordinate trade promotion activities, adopt reasonable price policies and prevent unfair competition, which may cause economic damage to Vietnamese enterprises and give rise to anti-dumping lawsuits;

- To regularly and closely monitor information on export markets: prices, volumes, kinds of goods, changes in importing countries and relevant countries so as to take initiative in regulating operations of enterprises and avoid lawsuits;

- To combat trade frauds, protect prestige and common interests of the community of Vietnamese enterprises;

- To attach importance to the training of highly qualified officers who are capable of practicing international law; to firmly grasp the laws of importing countries as well as regulations of international organizations, including the WTO, etc., so as to boost export in a safe and efficient manner, take initiative in preventing and avoiding trade lawsuits; to organize legal units and cooperate with law consultancy companies in guaranteeing the legality of economic contracts, and participate in the handling of lawsuits when they arise.

- Business line associations shall have to: (i) elaborate regulations on coordination between enterprises involving in lawsuits (share of responsibility, division of tasks, financial contribution, etc.) for concerted actions; (ii) act as the major agencies in the relationship between enterprises and State management agencies and as the official spokespersons on issues related to lawsuits; (iii) gather information through different channels such as law enforcement agencies of the suing countries, importers, Vietnamese diplomatic missions and trade offices as well as foreign consultancy companies so as to administer the lawsuit-handling process; (iv) closely associate with importers, organizations and individuals of importing countries, that have interests related to the suing countries in order to seek measures for the settlement of lawsuits; elaborate plans and mobilize petitioners to withdraw their petitions; and, (v) act as one party to lawsuits or join concerned enterprises in such lawsuits;

- Seeking, negotiating and signing contracts to hire domestic or foreign consultancy companies;

- Enterprises may set up working groups/teams/commissions to cooperate with one another in the fruitful handling of lawsuits;

- Enterprises should: (i) well perform the assigned tasks and act under general direction of business line associations; (ii) take initiative in preparing dossiers, accounting books, vouchers and arguments to prove that they have not dumped their goods, and prepare human resources to cope with and settle lawsuits; (iii) estimate funding for the settlement of lawsuits and quickly elaborate countervailing plans; (iv) cooperate with foreign parties in the course of investigation, especially at the stage of on-spot investigation; and, (v) consider the commitment on price adjustment (agreement on the minimum selling price bracket) and voluntarily restrict goods volumes in order to alleviate the pressure of the lawsuits.

Business line associations and enterprises shall coordinate with one another to minimize consequences of lawsuits (if any), including further appeal, restructuring of production and business.

9. Vietnam Chamber of Commerce and Industry (VCCI)

a/ Through its cooperative relationship with international chambers of commerce, associations and organizations representing communities of foreign enterprises to arouse objective public opinions to support Vietnamese enterprises in trade lawsuits in the countries where such lawsuits are filed and in other exporting countries being partners of Vietnam, especially in anti-dumping lawsuits and lawsuits related to countervailing measures;

b/ To assist business line associations in elaborating regulations on cooperation between member enterprises so as to take initiative in preventing and avoiding trade lawsuits, first of all major export line associations and newly-set up associations; to adopt mechanism for cooperation between VCCI and business line associations in providing supportive information on export markets and issuing warnings on the possibility of lawsuits; to propagate for and disseminate legal knowledge and experience related to trade lawsuits, etc.;

c/ With regard to lawsuits involving many business lines and in cases of necessity, if legal procedures permit, VCCI may directly participate in the trade lawsuits as one party;

e/ To closely coordinate with the Ministry of Trade and the Ministry of Foreign Affairs in the course of performing the above-mentioned tasks;

f/ Within the ambit of its assigned competence of granting C/O, to closely manage C/O grant, closely examine goods origin before granting C/O and adopt measures to disseminate information to, and guide enterprises as well as business line associations in, resolutely preventing acts of counterfeiting or wrongfully granting C/O.

V. ORGANIZATION OF IMPLEMENTATION

1. The Ministry of Trade shall assume the prime responsibility for, and coordinate with the Government Office and VCCI in monitoring, summing up and reporting to the Prime Minister on the implementation of this Directive.

2. The ministers, the heads of ministerial-level agencies, the heads of Government-attached agencies, the presidents of provincial/municipal People's Committees, and the president of VCCI shall have to organize the strict and full implementation of this Directive. In cases where problems arise beyond their competence, such must be reported to the Prime Minister for consideration and direction of implementation.