September 22, 2019 06:35

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Trade remedies a major challenge for both domestic and export markets

10:18 | 11/09/2019

VCN - Joining a series of new-generation free trade agreements (FTAs) is opening up great opportunities for Vietnamese goods. However, besides opportunities, there are also challenges. In particular, trade remedies are a major challenge for both domestic market and export market. Customs Newspaper spoke with Le Trieu Dung, Director of Trade Remedies Authority under the Ministry of Industry and Trade on this issue.  

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trade remedies are a major challenge for both the domestic market and export market
Le Trieu Dung, Director of Trade Remedies Authority under the Ministry of Industry and Trade

Recently, many Vietnamese export goods Vietnam have been investigated by foreign countries to prevent trade remedies evasion and origin fraud. How do you assess this issue, especially in the context of Vietnam joining a series of new-generation FTAs?

Recently, there has been a phenomena that when facing trade remedies, the affected manufacturers seek to overcome this problem by taking the production out of the country/economy subject to the remedies. Due to favourable policies for foreign investment, Vietnam is one of destinations for those manufacturers. However, after receiving new production capacity, Vietnam’s exports increased rapidly, making Vietnam easy to become the object of supervision, investigation and application of additional trade remedies by importing countries.

The main cause of this problem is that importing partners suspect goods of failing to meet the condition of "significant transformation" in Vietnam. In particular, the suspects mainly focused on items, which are subject to safeguard tax and are exported in large quantities or suddenly increased to other countries, or items, which are suspected to be of Vietnam’s production capacity.

From 2000 to 2016, there were 15 investigation cases of safeguard tax evasion for Vietnam’s exported goods. However, in 2017 and 2018, three cases were investigated each year. It is predicted that this trend will continue to increase when Vietnam has shown signs of investment movement while the scope and number of items subject to safeguard measures are increasing.

If we do not have positive measures to remove the problem of illegal evasion of trade remedies, especially through origin fraud, it may affect specific businesses and industries. In the long run, it could also negatively affect the competitiveness of the whole economy, especially in the context of Vietnam joining a series of FTAs ​​with high requirements on origin. For items such as steel, aluminium, agricultural products, seafood, to minimise the risk of application of trade remedies, a comprehensive and long-term strategy to develop production chains and improve added value for Vietnam's exported goods is required.

To prevent trade remedies evasion and origin fraud, what has the Ministry of Industry and Trade done to protect Vietnam's rights and interests in international trade and protect the interests of legitimate enterprises?

The ministry has carried out many measures to prevent trade remedies evasion and origin frauds. Specifically, since 2017, the Ministry has built a list of goods subject to the warning of tax evasion; sent information to relevant agencies (Customs and VCCI ) to enhance inspection and supervision; coordinated with foreign investigating agencies in investigating cases of tax evasion; actively disseminated regulations on tax evasion and origin fraud; and regularly studied and notified businesses of legal changes related to investigations of tax evasion and origin fraud of foreign countries.

In addition, the Ministry of Industry and Trade has also regularly arranged delegations to inspect and verify the goods origin for exports of automobile tires, painted steel, shrimp, solar panels to the EU; aluminium, plywood, cold rolled steel, corrosion-resistant steel and ceramic tiles. In these cases, after inspecting suspected cases and clarifying information, the Ministry made recommendations and transferred them to the relevant units; and coordinated with the investigating agencies of the United States (DOC), EU (OLAF) in the investigating process.

Recently, many cases of foreign goods forging Vietnamese origin to evade trade remedies have been identified. What are solutions to solve this problem?

Recently, although the ministries and agencies have made efforts to notify evasive acts, tighten management and supervision, the risk of trade remedies evasion and origin frauds has been increasing, especially in the context of escalation of the US-China trade war and Vietnam joining many new-generation FTAs ​​such as the CPTPP and the EVFTA.

The Ministry of Industry and Trade has worked with relevant ministries and agencies to formulate and submit to the Prime Minister for promulgation of Decision No. 824 / QD-TTg dated July 4, 2019, scheme on strengthening State management on prevention of trade remedies evasion and origin fraud. The scheme sets two main target groups, including: strengthening the State management for import and exports activities and foreign investment activities through three main groups of measures: early warning, preventing acts of trade remedies evasion and origin frauds; accelerating the fight against origin fraud by enhancing the effectiveness of C / O issuance and inspection and intensifying inspection to combat trade fraud on goods origin; improving the efficiency of state management through perfecting regulations on consideration and handling of foreign investment registration, management of foreign investment projects in the fields of production and business of goods at risk of trade remedies evasion and origin fraud.

In addition, enhancing the effectiveness of law enforcement on anti-evasion, origin and customs through five main groups of measures including: enhancing the coordination ability among ministries, sectors, localities, business community and Vietnamese representative agencies in foreign countries; strengthening disseminating regulations on rules of origin, anti-evasion, risk of being applied with trade remedies measures and enhancing response ability of sectors and the business communities; working with concerned countries in preventing evasive acts and fraudulent acts of origin, illegal transformation; reviewing, amending and supplementing legal documents on prevention of evasion and origin frauds; preventing and strictly handing acts of evasion and origin fraud.

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After the scheme was issued, the Ministry of Industry and Trade drastically implemented actions, including: promulgating Decision No. 2094A / QD-BCT dated July 15, 2019 on the action plan of the Ministry of Industry and Trade; sending dispatches to ministries and local authorities for coordination and elaboration of implementation plan; promulgating Decision No. 2092 / QD-BCT dated July 12, 2019 establishing an interdisciplinary working group on the prevention of trade remedies evasion and origin frauds; building up the list of goods subject to early warning under the scheme; requesting local market surveillance departments to intensify the inspection and supervision of goods at risk of trade remedies evasion and origin frauds; working with relevant ministries and agencies to develop a mechanism of coordination and implementation.

By Nguyen Hue/ Huyen Trang