On 6 April 2016, Vietnam's 13th National Assembly passed a new law on export and import duties – Law No. 107/2016/QH13 (the "Law on Export and Import Duties 2016"). Taking effect on 1 September 2016, the Law on Export and Import Duties 2016 introduces, for the first time in Vietnamese tax legislation, a separate chapter on antidumping duties (AD duty), countervailing duties (CVD duty) and safeguard duties (collectively "trade remedy duties"). As Vietnamese producers have become more active in bringing trade remedy actions in recent years, this new law is of particular importance to companies who export to Vietnam, as well as Vietnamese industries suffering from unfair trade.
Currently, Vietnamese trade remedy actions are carried out in accordance with three separate Ordinances issued by the Standing Committee of the National Assembly, namely Ordinance on Antidumping No. 20/2004/PL-UBTVQH11 dated 29 April 2004, Ordinance on Countervailing Duty No. 22/2004/PL-UBTVQH11 dated 20 August 2004 and Ordinance on Safeguard Measures No. 42/2002/PL-UBTVQH10 dated 11 June 2002. The investigation procedures provided under those Ordinances are generally in line with the WTO's legal framework.
Reiterated by the Law on Export and Import Duties 2016
The Law on Export and Import Duties 2016 basically reiterates the relevant provisions under those three existing Ordinances. Accordingly, trade remedy duties are in addition to normal import duties (if any), and are applied only after an investigation into the matter has been properly conducted and has resulted in an affirmative determination. The lesser duty rule is also applied. That is, the application of the trade remedy duties should be limited only to adequately remove the injury to the domestic industry. For instance, if the calculated duty is 30 percent but the competent authority determines that a duty of 20 percent is adequate to removing any injury suffered by the domestic industry, then only 20 percent duty shall be imposed.
AD and CVD duties are to be imposed for a period of up to five years, with possible extensions. This period is consistent with the relevant provisions of the WTO's Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994. The Law on Export and Import Duties 2016, however, provides for an application period of maximum 10 years (inclusive of the original period of four years and any extensions thereof) with respect to safeguard measures. This application period seems inconsistent with Article 7.3 of the WTO's Agreement on Safeguards, providing that "The total period of application of a safeguard measure including the period of application of any provisional measure, the period of initial application and any extension thereof, shall not exceed eight years" (emphasis added).
The Ministry of Industry and Trade (the "MOIT") is tasked with investigating and making decisions on the application of trade remedy duties, while the Ministry of Finance (the "MOF") handles the collection and refund of any duties. On a related note, recalling when the country first imposed AD duties on certain cold-rolled stainless steels in 2014, there was some confusion on how to deal with AD duties assessed on the import of raw materials used for the production of goods to be exported. After much discussions, the MOF issued Official Letter No. 8300/BTC-CST dated 23 June 2014, instructing Vietnam customs to treat AD duties assessed on the import of raw materials used for the production of goods to be exported as ordinary import duty. That is, importers are granted a grace period of 275 days from the import date to pay the AD duties. If they prove to Vietnam customs that imported materials are actually consumed in the production of goods exported within that period, they are no longer required to pay the assessed AD duty.
Other Related Legislative Developments
Finally, please note that the MOIT has tabled a draft of the Law on Foreign Trade Administration. The current draft further regulates issues that have not been covered under existing regulations, such as procedures on annual reviews, new shipper reviews, changes in circumstance reviews and anti-circumvention investigations. The Law on Foreign Trade Administration would be discussed at the 14th National Assembly's meeting session, which would be held in October 2016. Once passed, this Law will repeal the existing Ordinances on trade remedies.