The scope of the exemption applies primarily to both provisional and formal trade remedies. For goods subject to investigation for application of trade remedies, if falling into one of the following cases, organizations or individuals that import/use such goods will be allowed to submit an application for exemption. The importer or manufacturer could consult with international trade lawyers to present the case to the authority to submit application for exemption if meeting the conditions as regulated by laws.
After the 2017 Law on Foreign Trade Management was promulgated with a more comprehensive and comprehensive system of legal provisions on trade remedies, the Ministry of Industry and Trade issued Circular No. 06/2018/TT-BCT in order to provide specific and detailed regulations in this field, including content of the scope of exemption from application of trade remedies. However, based on Clause 1, Article 9 of this Circular, the Ministry of Industry and Trade has only given four (04) exemptions.
After considering the actual situation, on November 29, 2019, the Ministry of Industry and Trade replaced Circular 06/2018/TT-BCT with Circular No. 37/2019/TT-BCT, which stipulates all six (06) types of goods which are exempted from trade remedies. Specifically, Article 10 of Circular No. 37/2019/TT-BCT allows the Minister of Industry and Trade to consider exemption from application of temporary trade remedies and official trade remedies for a number of goods. Imported goods are subject to trade remedy measures in one of six (06) cases.
First, goods cannot be produced domestically.
With this addition, it is understandable that Vietnamese law, in addition to protecting the domestic manufacturing industry, also considers allowing Vietnam to import important goods that cannot yet be produced on its own, in order to ensure to fully and promptly meet the development needs of all aspects, especially the economy and society of the country. The granting of a trade remedy waiver for goods that cannot be produced in the country may initially be seen as preventing the formation of a domestic industry producing the goods. However, the introduction of a new product into the Vietnamese market is a test for the tastes and needs of customers, through which the importation can assess the development potential and profit of that industry in Vietnam, thereby stimulating the investment and production of domestic manufacturers.
Second, goods have distinctive characteristics from domestically produced goods that cannot be substituted for domestically produced goods.
The exemption from trade remedies for different goods that cannot be substituted by domestically produced goods also ensures the supply of special goods, prevents the scarcity of goods, the supply of goods and the supply of goods that cannot be replaced enough demand in the market.
Third, goods are special products of like products or directly competitive goods produced in the country.
Special products are products with the same physical and chemical characteristics as like products or directly competitive goods are domestically produced but have some characteristics, appearance or product quality that are different from those like products, directly competitive goods produced in the country. Basically, this explanation also causes some confusion with the above-mentioned case of goods with differences that cannot be substituted by domestically produced goods, making it difficult to determine the exemption case. However, only goods that fall into one of the six cases can apply for an exemption, so the applicant only needs to prepare sufficient evidence to prove that the goods they import/use in a case that satisfies the condition for an exemption.
Fourth, like products, directly competitive goods produced in the country are not sold on the domestic market under the same usual conditions.
Normal conditions directly affect the quality, efficiency of use, etc. of the goods. Therefore, the difference in normal conditions has brought special features to goods from abroad that are imported/used into Vietnam, which is the basis for exemption from trade remedies, in order to meet the needs of the domestic market.
Fifth, like products, directly competitive goods produced in the country do not meet the amount of domestic use.
With the priority criteria for the development of the domestic manufacturing industry, acts of importing/using foreign goods that cause damage or threaten to cause damage to the domestic industry will be investigated and applied for defensive measures commerce. However, in cases where the domestic industry cannot meet the demand for like products, the relaxation of trade remedies is essential to ensure supply and market balance.
Sixth, imported goods are included in the total amount requested for exemption from regulations for research and development purposes and other non-commercial purposes.
With this regulation, it can be seen that in the future, the goals of science and technology development, technical level development, research and non-commercial purposes will be increasingly focused and encouraged instead of just economic goals as before. Therefore, it can be understood why state agencies allow the import/use of goods for research, development and other non-commercial purposes, even though they are likely to negatively affect the economy domestic production.
Accurate identification of cases where imported/used goods are exempted from trade remedy measures is extremely important and has great significance for foreign importers and manufacturers. Therefore, before submitting an application for an exemption, it is necessary to base on the above provisions and consult with international trade lawyers in trade remedies to accurately determine the scope of the exemption, in order to avoid wasting time and money.
If Client needs any more information or request for legal advice or potential dispute regarding trade remedies measures including, anti-dumping, countervailing duty and safeguard measures or international trade dispute matters, our competition, anti-dumping, and countervailing duty lawyers of International trade and tax practice at ANT Lawyers, a law firm in Vietnam always follow up anti-dumping cases and its development to update clients on regular basis.
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