Sectors which have seen high growth in the past few years such as wooden furniture, garments and textiles, seafood and steel are being placed under special supervision by the Ministry of Industry and Trade (MoIT) to avoid having high tariffs and trade sanctions imposed by other nations.

Minister of Industry and Trade Tran Tuan Anh chairs the meeting in Hanoi.
(Photo: moit.gov.vn)

Minister of Industry and Trade Tran Tuan Anh announced the move at a conference in Hanoi on July 9 that discussed preventing trade remedies and origin fraud.

Anh said Vietnam had joined many free trade agreements (FTAs), including some new-generation FTAs which will help local businesses take advantage of preferential taxes and market access.

“However, this means that goods from foreign countries can take advantage of Vietnam to enjoy preferential tariffs before exporting to markets with which Vietnam has signed FTAs,” he said.

Last week, the US Commerce Department decided to impose duties of up to 456 percent on certain steel products produced in the Republic of Korea (RoK) or Taiwan that are then shipped to Vietnam for minor processing before being exported to the US. 

The move is a warning about Vietnam’s management of goods and tracking of product origins. It will affect businesses and sectors, and could impact the competitiveness of the whole economy.

Anh said the risks could be seen in some key export markets that have strict regulations, especially big partners such as the EU, CPTPP member countries and the US.

The minister asked the Trade Remedies Authority of Vietnam (TRAV) to build plans in cooperation with the ministries of finance, planning and investment and the Vietnam Chamber of Commerce and Industry (VCCI) to establish a centre to share information related to certificates of origin and trade remedies.

TRAV Director Le Trieu Dung said measures to prevent origin fraud were on the rise despite the ministry's efforts to tighten management and warn violators.

Dung said the Government should have strict punishments for the violations. Many businesses had engaged in very sophisticated rule breaking, in some cases only importing and exporting goods for a short time before dissolving their companies. In some cases they created fake certificates of origin (C/O).

He said punishments for these offences were not strict enough. The maximum fine for using a fake C/O is 50 million VND (2,150 USD).

Director of the MoIT’s Vietnam Directorate of Market Surveillance Tran Huu Linh said they had discovered many goods labelled "Made in Vietnam" that were actually produced elsewhere.

Linh proposed applying tracing technology for agricultural products and foods and introducing stricter punishments for violations.

Tran Duy Dong, Director of the ministry’s Domestic Market Department, agreed, saying the Government should improve people’s awareness of FTAs to protect local markets and develop trade activities.

The department is building a plan to establish big distributors and issue guidelines to domestic businesses about how to bring their goods into the distribution system to limit fraud.

Last week, Prime Minister Nguyen Xuan Phuc issued a plan to strengthen management and prevent origin fraud. It also aims to protect Vietnam in the course of international trade and improve the effectiveness of FTAs.

Under the plan, the Government will tighten management of exports, imports and foreign investment activities. It will work to improve awareness of regulations on trade remedies, origins and customs.

The Government will also review, amend and supplement legal documents on the prevention of trade remedies and origin fraud while strictly punishing violations.

The MoIT will be responsible for monitoring and updating lists of goods subjected to anti-dumping and anti-subsidy investigations by foreign countries and will report the lists to the VCCI so it can tighten control of C/O for the goods in question.

The TRAV will submit a course of action to implement the plan to the ministry before July 15.