While local export products have been facing more anti-dumping investigations and tax evasion cases in foreign countries, Vietnamese enterprises are still unaware of the risk.

Plywood is among 13 export products under investigations for
anti-dumping in foreign markets. (Photo: cafef.vn) 

On August 13, the Ministry of Industry and Trade’s Trade Remedies Authority of Vietnam (TRAV) sent a letter opposing Indonesia's draft conclusions of an anti-dumping investigation on colour-coated steel sheet products imported from Vietnam and China, adding several conclusions have yet to reflect issues related to value-added tax and overlaps in calculations.

At the end of July, the Malaysian Ministry of Trade and Industry (MITI) announced it would initiate an anti-dumping investigation on cold rolled stainless steel products originating from Vietnam and Indonesia. MITI has announced an administrative review of the 2016 anti-dumping tax order on cold rolled steel products, originating from Vietnam.

In addition to the two mentioned products, TRAV announced a monitoring list consisting of 13 export goods identified as high-risk of being investigated and sued in the US and EU markets for origin fraud and illegal transfer.

The goods included plywood from hardwood, foam cushions, wooden cabinets, artificial stones, ceramic tiles, copper pipes, truck and car tyres, electric bicycles, steel joints, steel wheels, pre-engineered steel, gas cylinders and boxed pins.

For example, plywood products are being subjected to anti-dumping tax and anti-subsidy tax on Chinese products in the US market. According to sources, China's export turnover to the US has decreased sharply from US$1.1 billion in 2016 to US$215.6 million in 2019. During the same period, Vietnam's export turnover to the US increased rapidly from US$33.4 million in 2016 to US$322.2 million in 2019.

Last year alone, Vietnam's plywood export turnover increased by 63.7% compared to 2018.

In October 2019, the US’ customs and border guard officially announced an investigation of tax evasion for a number of US companies importing plywood from Vietnam.

In June 2020, the US Department of Commerce officially initiated a tax evasion investigation on all plywood products imported from Vietnam after five months of receiving the application to initiate the investigation of tax evasion.

Phan Khanh An, Deputy Head of Legal Division under the Department of Trade Defence said that in 2020, Vietnam was dealing with 27 different trade defence cases. By the end of March 2020, there were 22 cases of tax evasion initiated by foreign countries and applied to exported goods of Vietnam.

However, An noted: “The current level of knowledge of Vietnamese enterprises about trade defence is very low.”

An quoted a recent survey showing 15.09% of enterprises do not know anything about trade defence, while up to 63.21% of them have heard of the issue but do not know enough.

While 19.81% of the local enterprises have completed preliminary studies about the matter, less than 2 percent have carefully researched the issue of trade defence.

Phung Gia Duc, deputy head of the Foreign Trade Defence Division, advised businesses that they need to proactively respond to foreign trade remedies and asked them “not to participate or abide in acts of origin fraud or illegal transmission in foreign markets.”

Duc noted that: “If Vietnamese enterprises are still unaware of trade protection in other countries, they are more likely to face anti-dumping lawsuits and tax evasion probes on their exports and it will affect the whole manufacturing industry in Vietnam.”

According to experts, with certain limitations on the origin of goods and the lack of thorough understanding of trade defence, the local enterprises would be vulnerable when faced with anti-dumping and tax evasion investigations from importing countries.

Besides avoiding anti-dumping probes in foreign countries, Chu Thang Trung, deputy director of MoIT’s Trade and Industry Department, told local media: “The capacity of self-protection against anti-dumping cases and unfair competition from imported goods in the local market is still limited. Enterprises' awareness and understanding of the matter is low.”

Trung said the recent MoIT decision No 1347 was issued to develop an equal competitive environment, remove export barriers and improve capacity for the business community and associations in the industry on the matter. It will focus on training domestic manufacturing associations and the business community on trade remedies in 2020 and in years to come.

Trung added it was to provide Vietnamese enterprises, especially small and medium enterprises, with tools to protect their legitimate interests and improve the efficiency of international economic integration.

Nguyen Thị Thu Trang, Director of the WTO Integration Centre under the Vietnam Chamber of Commerce and Industry (VCCI), told Vietnam News: “Enterprises must learn about foreign investigation mechanisms, regulations and procedures, proactively perfecting the management system and data to ensure requirements for information are met and proving the origin of raw materials; to develop a strategy to diversify products and export markets to disperse risks, avoid concentrating large-volume exports on one market.”

At the same time, Trang also suggested enterprises develop domestic raw materials to increase the added value of their products and avoid investigations.