Decision 2466/QD-BCT 2020 on investigation and application of anti-dumping measure and countervailing measure to cane sugar products originating from Thailand

DECISION

On investigation and application of anti-dumping measure and countervailing measure to a number of cane sugar products originating from the Kingdom of Thailand

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THE MINISTER OF INDUSTRY AND TRADE

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

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

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

Pursuant to the Minister of Industry and Trade’s Circular No. 37/2019/TT-BCT dated November 29, 2019, detailing a number of provisions on trade remedies;

Pursuant to the Minister of Industry and Trade’s Decision No. 3752/QD-BCT dated October 02, 2017 on defining the functions, tasks, powers and organizational structure of the Trade Remedies Authority of Vietnam;

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

DECIDES:

Article 1. To investigate and apply anti-dumping measure and countervailing measure to a number of cane sugar products originating from the Kingdom of Thailand, of HS codes 1701.13.00, 1701.14.00 and 1701.99.10 (case code: AD13-AS01) with specific contents as prescribed in the Notice to this Decision.

Article 2. Order and procedures for investigation shall comply with Vietnam's laws on trade remedy.

Article 3. This Decision takes effect on the date of its signing.

Article 4. The Chief of the Ministerial Office, the Director General of the Trade Remedies Authority of Vietnam and heads of units and relevant parties shall implement this Decision./.

NOTICE

ON INVESTIGATION AND APPLICATION OF ANTI-DUMPING MEASURE AND COUNTERVAILING MEASURE TO A NUMBER OF CANE SUGAR PRODUCTS ORIGINATING FROM THE KINGDOM OF THAILAND

(Attached to the Minister of Industry and Trade’s Decision No. 2466/QD-BCT dated September 21, 2020)

1. Basic information

On August 20, 2020, the Trade Remedies Authority of Vietnam, the Ministry of Industry and Trade (investigation body), received an dossier for applying anti-dumping and countervailing measures on a number of cane sugar products of HD codes 1701.13.00, 1701.14.00, and 1701.99.10 (Investigated goods) originating from the Kingdom of Thailand (Thailand). The requesting party is a representative of the domestic cane sugar industry, comprising six companies: Son La Sugar Joint Stock Company, Son Duong Sugar and Sugar Cane Joint Stock Company, KCP Vietnam Industries Limited, Can Tho Sugar Joint Stock Company, The 333 Sugar Joint Stock Company, and Soc Trang Sugar Joint Stock Company.

Based on Clause 1 Article 30 of Decree No. 10/2018/ND-CP dated January 15, 2018, detailing a number of articles of the Law on Foreign Trade Management regarding trade remedies (hereinafter referred to as Decree No. 10/2018/ND-CP), on August 26, 2020, the investigation body issued Official Dispatch No. 671/PVTM-P1 confirming that the dossier was valid and contained all required information as prescribed in Articles 28 and 29 of Decree No. 10/2018/ND-CP.

Based on Point c Clause 5 Article 70 of the Law on Foreign Trade Management, Article 5.5 of the WTO Anti-Dumping Agreement, and Article 13.1 of the WTO Agreement on Subsidies and Countervailing Measures, on August 26, 2020, the investigation body sent a notice to the Embassy of Thailand in Vietnam regarding the receipt of a valid and complete dossier and extended an invitation for consultations. On September 15, 2020, the Department of Foreign Trade, Ministry of Commerce of Thailand, provided comments regarding the alleged subsidy and dumping programs mentioned in the dossier.  The investigation body analyzed these matters in the appraisal report and will further clarify them during the investigation.

Pursuant to Articles 79 and 87 of the Law on Foreign Trade Management, regarding the basis for initiating an investigation on the application of anti-dumping and countervailing measures, the investigation body determined that:

- The requesting party meets the representativeness requirements for the domestic industry; and

- There is sufficient evidence that the imported goods were dumped and subsidized, causing material injury to the domestic industry.

Based on Article 70 of the Law on Foreign Trade Management concerning the order and procedures for investigation of trade remedy cases, and Articles 79 and 87 concerning the grounds for launching investigations for application of anti-dumping and countervailing measures, the Ministry of Industry and Trade decided to initiate an investigation and application of anti-dumping and countervailing measures on the investigated goods originating from the Kingdom of Thailand (Case Code: AD13-AS01).

2. Contents of inspection

The investigation shall be conducted in accordance with Articles 80 and 88 of the Law on Foreign Trade Management and Article 31 of Decree No. 10/2018/ND-CP, concerning the dossier appraisal as follows:

2.1. Investigated goods

a) Description of goods:

Product name: Cane sugar

Scientific name: Sucrose

Common name: Including but not limited to granulated sugar, cane sugar, refined sugar, raw sugar, and white sugar.

The cane sugar products under investigation are classified under the following HS codes:

The Ministry of Industry and Trade may amend and supplement the List of HS codes of investigated goods to conform to the description of the investigated goods and other changes (if any).

b) Origin of investigated goods: Thailand

2.2. Summary of allegations on dumping, subsidy, and domestic industry injury

a) Dossier appraisal results

(i) Regarding dossier submission conditions:

In this case, the production volume of the requesting party and the supporting party of the case constitutes over 25% of the total volume of similar goods produced domestically, and no domestic producers have opposed the case. Therefore, the requesting party meets the requirements stipulated in Clause 2 Article 79 and Clause 2 Article 87 of the Foreign Trade Management Law, which require that:

+ The production volume of the requesting party and the supporting party must account for at least 25% of the total volume or quantity of similar goods produced by the domestic industry; and

+ The production volume of the requesting party and the supporting party must exceed that of the opponent.

(ii) Regarding allegation of dumping: The requesting party has provided reasonable grounds to calculate the dumping margin of the investigated goods originating from Thailand, which is claimed to be 37.9%.

(ii) Regarding allegation of subsidy: The requesting party has provided reasonable grounds to demonstrate the existence of subsidies for the investigated goods originating from Thailand. The subsidy programs include:

+) Program for import duty exemption/reduction on machinery;

+) Program for import duty exemption for raw materials used in the production of exported goods;

+) Program for reduction of import duty on raw or essential materials;

+) Enterprise income tax exemption program;

+) Program for income tax reductions in investment promotion areas;

+) Program for additional 25% reduction in installation and construction costs;

+) Program for double deductions for companies in trade promotion zones;

+) Income tax - dividends exemption program;

+) Program for VAT exemption for exported goods;

+) Short-term, medium-term, and long-term export credit insurance programs;

+) Program for the expansion of the project “credit promotion to enhance the comprehensive efficiency of sugarcane production for the 2019-2021 period ”;

+) Loan repayment program for Krung Thai Bank to support sugarcane farmers in procuring production inputs;

+) 10 Billion Baht Farmer Support Program for 2020;

+) 70:30 Profit-Sharing Program.

(iv) Regarding allegation of injury: The requesting party has provided reasonable information proving signs of significant injury to the domestic industry. To be specific:

- Import volume from the investigated country increased both absolutely and relatively.

- Showing signs of price distortion, price suppression, and price depression.

- Indicators showing a decline in the domestic industry’s performance:  revenue, profit, sales, and production.

(v) Regarding causal relationship: The requesting party's dossier demonstrates the existence of a causal relationship between the dumped and subsidized imported goods and the material injury suffered by the domestic industry.

As a result, the investigation body determined that the requesting party’s dossier fulfills all the requirements as prescribed by the law on anti-dumping and countervailing, and recommends that the Minister of Industry and Trade decide to initiate the investigation.

b) Period of investigation (POI)^[4]

- The period for investigating dumping and subsidies:  from July 1, 2019, to June 30, 2020.

- The period for investigating injury to the domestic industry:

Year 1: from July 1, 2017, to June 30, 2018.

Year 2: from July 1, 2018, to June 30, 2019.

Year 3: from July 1, 2019, to June 30, 2020.

c) Proposed duty rate by the requesting party: ^[5]

The requesting party proposes the application of an anti-dumping duty of 37.9% on the investigated goods.

3. Investigation order and procedures

3.1. Registration of related parties

a) Pursuant to Article 6 of the Minister of Industry and Trade’s Circular No. 37/2019/TT-BCT dated November 29, 2019, detailing a number of provisions on trade remedies (Circular 37/2019/TT-BCT), organizations and individuals specified in Article 74 of the Foreign Trade Management Law may register as related parties with the investigation body to access publicly available information during the investigation, submit comments, information, and evidence related to the subject matter of the investigation as stated in this Notice.

b) Organizations and individuals registering as related parties must use the related party registration form attached in Appendix I to Circular 37/2019/TT-BCT and submit it to the investigation body within sixty (60) working days from the effective date of the investigation decision by sending an official dispatch along with the registration form via either  (i) post office or (ii) email.

c) To protect the legal rights and interests, the investigation body recommends that organizations and individuals involved in the production, importation, or use of the investigated goods register as related parties to exercise their rights to access information, provide data, and express views during the investigation.

3.2. Investigation questionnaire

Pursuant to Article 35 of Decree No. 10/2018/ND-CP, within fifteen (15) days from the date of the investigation decision, the investigation body shall send an investigation questionnaire to the following parties:

- The requesting party applying for anti-dumping or countervailing measures;

- Other domestic producers known to the investigation body;

- The parties under investigation for anti-dumping or countervailing measures known to the investigation body;

- Importers of the investigated goods;

- Diplomatic representatives of the country manufacturing and exporting investigated goods in Vietnam;

- Other relevant parties.

3.3. Sample selection for investigation

In cases where the number of foreign producers, exporters, importers, and domestic producers is large or the variety of goods under investigation is vast, the investigation body may limit the scope of the investigation. The scope of the investigation shall be limited under Article 36 of Decree No. 10/2018/ND-CP.

3.4. Language and writing

Pursuant to Article 4 of Circular 37/2019/TT-BCT:

a) The language and writing used during the investigation process shall be Vietnamese. Related parties may use their native language, provided that translation and interpretation are provided.

b) Non-Vietnamese documents submitted by related parties must be translated into Vietnamese. Related parties must ensure the authenticity and accuracy of the translation and bear legal responsibility for the content of the translation.

3.5. Information confidentiality

The investigation body shall maintain confidentiality of information in accordance with Clause 2 Article 75 of the Law on Foreign Trade Management and Article 11 of Decree No. 10/2018/ND-CP.

3.6. Cooperation during investigation

Pursuant to Article 10 of Decree No. 10/2018/ND-CP:

a) Any related party that refuses to participate in the case, fails to provide necessary evidence, or significantly obstructs the completion of the investigation, will have the investigation conclusion based on available information.

b) Any related party providing inaccurate or misleading evidence will have that evidence excluded, and the investigation conclusion will be based on available information.

c) The investigation body encourages all related parties to fully cooperate during the investigation to protect their legal rights and interests.

3.7. Import management of investigated goods

From the date of the investigation decision until the end of the investigation on anti-dumping or countervailing measures, the Ministry of Industry and Trade may impose an import declaration requirement for the investigated goods to support the investigation process and consider applying retroactive anti-dumping and countervailing duties as provided in Article 45 of Decree No. 10/2018/ND-CP.  Import declarations are not limited by quantity, volume, or value of the imported goods.

Order and procedures for import management of investigated goods shall comply with applicable regulations. The Ministry of Industry and Trade shall issue detailed notices when applying such measure.

3.8. Consultation

Related parties have the right to request private consultations with the investigation body under Clause 1 Article 13 of Decree No. 10/2018/ND-CP, provided that such consultations do not affect the investigation time limit.

Before ending the investigation, the investigation body will hold a public consultation with related parties and notify them at least thirty (30) days before the date of consultation. The public consultation will be conducted according to the procedures outlined in Clauses 2, 3, 4, and 5 Article 13 of Decree No. 10/2018/ND-CP.

4. Imposition of provisional anti-dumping and countervailing duties

Based on the preliminary investigation results, the investigation body may recommend that the Minister of Industry and Trade decide to impose provisional anti-dumping and countervailing duties under Clause 1 Article 81 and Clause 1 Article 89 of the Law on Foreign Trade Management and Article 37 of Decree No. 10/2018/ND-CP.  The provisional anti-dumping and countervailing duties must not exceed the dumping margin or subsidy level in the preliminary investigation.

5. Imposition of retrospective anti-dumping and countervailing duties

Pursuant to Clause 4 Article 81 and Clause 4 Article 89 of the Law on Foreign Trade Management:

a) In case the investigation body’s final conclusion affirms that there is material injury or a threat of causing material injury to a domestic industry, the Minister of Industry and Trade may decide to impose retrospective anti-dumping and countervailing duties;

b) Retrospective anti-dumping and countervailing duties shall be imposed on goods imported within ninety (90) days before the imposition of provisional anti-dumping and countervailing duties if the imports are concluded as being dumped; the volume or quantity of dumped imports into Vietnam sees an unusual increase in the period from the time of commencement of the investigation to the time of imposition of provisional anti-dumping and countervailing duties, causing hardly remediable injury to a domestic industry.

6. Contact information

Trade Remedies Authority of Vietnam - The Ministry of Industry and Trade

Address: No. 23, Ngo Quyen Street, Hoan Kiem District, Hanoi, Vietnam

Tel.: +84.24.7303.7898 (Ext: 111, 116)

E-mail: [email protected]; [email protected]

The Decision and Notice on the case may be access and downloaded from the website of the Ministry of Industry and Trade: www.moit.gov.vn; or the website of the Trade Remedies Authority of Vietnam: www.trav.gov.vn or www.pvtm.gov.vn.

[1] Preferential duty rate under the ASEAN Trade in Goods Agreement

[2] Preferential duty rate under the ASEAN-China Free Trade Agreement

[3] Preferential tax rate under the ASEAN-Australia-New Zealand Free Trade Agreement

[4] This is the period during which the investigation body collects information and data to determine the existence of dumping, subsidies, injury or threat of injury, or significant impediment to the establishment of a domestic industry, as well as the causal relationship between the practice and the injury.

[5] This tax rate is an allegation by the requesting party, not a conclusion of the investigation body.