Ministry of Industry and Trade proposes to amend regulations on exemption from applying trade defense measures

The Ministry of Industry and Trade is drafting a Circular amending and supplementing a number of articles of Circular No. 37/2019/TT-BCT dated November 29, 2019 of the Minister of Industry and Trade detailing a number of contents on trade defense measures.

Photo: VNA

According to the Ministry of Industry and Trade, after nearly 4 years of implementing Circular 37/2019/TT-BCT, this is a legal document that helps the Trade Remedies Authority and the Ministry of Industry and Trade have a clear legal basis in handling requests and deciding on exemptions from applying trade defense measures in a timely, reasonable and correct manner, ensuring the effectiveness of the measures in practice.

However, in the process of reviewing to improve the legal system on trade defense in general and Circular 37/2019/TT-BCT in particular, some issues need to be amended in the regulations on the decision to exempt from applying trade defense measures in Circular 37/2019/TT-BCT to suit practical requirements.

Specifically:

Regarding the scope of exemption from applying trade defense measures: According to the provisions of Article 10 of Circular 37/2019/TT-BCT, the Ministry of Industry and Trade considers exemption from applying trade defense measures in 6 cases, including the case: "Similar goods, directly competitive goods produced domestically do not meet the domestic demand".

In fact, according to the Ministry of Industry and Trade, in recent times, some enterprises have cited this provision to submit applications for exemption. Meanwhile, in most cases of investigation and application of trade defense measures, the domestic production industry cannot meet 100% of domestic demand. This shortage can still be compensated by import sources that are not subject to trade defense measures. However, if the exemption is refused, the enterprises requesting the exemption may have questions. Therefore, it is necessary to remove the provision for considering exemption in cases where similar goods or directly competitive goods produced domestically do not meet the domestic demand.

Regarding the components of the application for exemption from trade defense measures: The components of the exemption application are specified in Article 14 of Circular 37/2019/TT-BCT. This is the basis for the Investigation Agency to appraise, calculate and determine the amount of imported goods eligible for exemption based on the production capacity and the usage norms of raw materials provided by the enterprise according to a unified method.

In fact, in order for the Investigation Agency to accurately assess and verify the exempted import quantity according to the requirements, the Investigation Agency needs some additional information such as import-export inventory reports, land lease contracts, factory lease contracts, and tax reports. This information has not been specifically listed in the dossier components. These specific dossier components are actual requirements when conducting inspections and examinations of enterprises from the past to the present by inspection and examination teams after exemption, as a basis for drawing conclusions on inspections and examinations. Therefore, the dossier components requesting exemption from applying trade defense measures need to be specified in more detail so that enterprises can comply easily.

In addition, Circular 37/2019/TT-BCT is regulating the components of the dossier for requesting exemption from applying PVTM measures in a way that is not specific and separate so that individuals and organizations requesting exemption can clearly understand the obligation to provide complete documents and information in the dossier. The reality of submitting exemption dossiers shows that individuals and organizations often submit missing dossier components due to misunderstanding the list and components of the dossier. The revised Circular proposes regulations to clarify and detail the required dossier items, which are mandatory and available documents and records of enterprises related to production and business activities and exemption procedures, without wasting time or causing inconvenience to enterprises, and without creating additional administrative procedures.

Regarding post-exemption inspection . Currently, post-exemption inspection needs to be used regularly and strictly. Experience in general inspection and examination of most advanced countries shows that post-examination will promote compliance with the law at the highest level, increase strictness and eliminate fraudulent acts of inspected subjects. The declaration of subjects to request exemption is the basis for reflecting compliance with the law, honesty of the subjects and is the basis for the inspection agency to conduct post-examination. Regulations The investigation agency in the process of conducting inspection has the authority to assess and calculate the actual norms of consumable materials and the rate of loss of raw materials in production, processing and measures to handle scrap, waste, waste, raw materials, auxiliary materials, and excess supplies after production and processing.

Regarding post-exemption inspection procedures and sanctions for violations . The practice of post-exemption inspections in the past has shown that many enterprises do not fully comply with the obligations prescribed in Circular 37/2019/TT-BCT, but the post-exemption inspection procedures and sanctions for violations under this Circular are not specific and not educational and deterrent enough. Therefore, it is necessary to supplement sanctions corresponding to non-compliance/incomplete compliance with the obligations prescribed. Sanctions will be designed such as: Revoking the decision to enjoy exemption, not considering continued exemption for a specific period of time or until the applied trade remedy measures are terminated, requesting customs authorities to collect taxes on part/all of the goods that have enjoyed exemption.

Regarding the exemption period for applying trade defense measures . The current regulations on exemption periods in Circular 37/2019/TT-BCT, the Ministry of Industry and Trade clearly states that it may cause misunderstanding in some cases when explaining the wording.

The Ministry of Industry and Trade annually reviews the exemption period for applications for exemption from trade defense measures in order to control the overall effectiveness of trade defense measures. The purpose of trade defense measures is to protect and encourage the development of domestic manufacturing industries and reduce dependence on imported goods. The exemption from trade defense measures is valid for 12 months, with no limit on the number of requests for additional exemptions, while the total exemption period from trade defense measures remains unchanged.

This raises the need to clarify the regulations on the exemption period, in which the maximum period for one (1) exemption is unified based on the exemption request dossier of the enterprise and there is no limit on the number of additional exemptions to ensure the legitimate rights and interests of enterprises as well as ensure the effectiveness of trade defense measures in practice.

In addition to some of the above amendments and supplements, the Circular amending and supplementing Circular 37/2019/TT-BCT also adjusts, amends and supplements some words to unify the way of regulating a common issue or subject in a provision without changing the nature or giving rise to corresponding rights and obligations.

The Ministry of Industry and Trade stated that the development of the Circular amending and supplementing Circular 37/2019/TT-BCT aims to ensure the implementation of the provisions of Decree 10 and overcome the shortcomings and limitations of current regulations. Inheriting the relevant, advanced and effectively applied provisions of Circular 37/2019/TT-BCT, ensuring that it meets the practical requirements of exemption from trade defense measures and overcomes difficulties and obstacles in the implementation of Circular 37/2019/TT-BCT. Creating a comprehensive, reasonable and feasible legal framework to ensure that the exemption from trade defense measures is in accordance with the law, effective and of high quality, contributing effectively to the fight against, combating and handling violations of trade defense laws in a practical context.

To date, the Ministry of Industry and Trade has investigated a total of 25 trade defense cases, of which it has decided to apply trade defense measures in 23 cases (including 14 anti-dumping cases, 1 anti-subsidy case, 6 self-defense cases and 2 anti-circumvention cases). During the period from 2016 to 2023, regarding the granting of exemptions from applying trade defense measures, the Ministry of Industry and Trade has issued a total of 318 exemption decisions and 50 decisions to supplement the amount of exemptions for importing enterprises related to 10 trade defense cases.

Draft Circular amending and supplementing a number of articles of Circular No. 37/2019/TT-BCT see here

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