What should Vietnamese businesses do in the face of foreign trade defense investigations?

If not done well, without strategies to protect Vietnamese enterprises against the evasion of trade defense measures in large markets, it will also affect Vietnam's export activities. Lawyer Tran Thanh Ha - CEO of SBLaw Company shared with Cong Thuong Newspaper about this issue.

Sir, from practical experience , what is your assessment of the current trend and characteristics of trade defense investigations? What risks and challenges are these measures posing to Vietnam's export growth?

We see the current trend, in addition to applying anti-trade defense measures, anti-circumvention measures are also taking place, especially in the context of shifting production from China to Vietnam. Another trend is due to the increased application of import taxes on Chinese enterprises entering the US market, so Chinese enterprises are looking for ways to avoid by shifting production or fraudulently falsifying the origin of goods to Vietnam. Therefore, from the perspective of US and EU trade defense management agencies, Vietnam is a place for other enterprises to take advantage of, greatly affecting Vietnam's exports and the image of Vietnamese enterprises. Thus, we are put on blacklists and will greatly affect the access as well as the export of Vietnamese enterprises to markets such as the US and EU, which are all very large markets for Vietnamese enterprises.

Lawyer Tran Thanh Ha - CEO of SBLaw Company

In fact, when investigating a case, we have to publish data and work with lawyers in Vietnam as well as lawyers in the host countries, to cooperate with those investigating agencies to provide information. If we do not provide information to them, it is clear that we will be affected.

In my working experience, a case of anti-trade defense evasion or application of trade defense measures that is brought to investigation, the legal fees for the host countries can also reach millions of USD and it clearly affects the resources of Vietnamese export enterprises. If we do not do well, do not have strategies to protect Vietnamese enterprises against the evasion of trade defense measures in large markets, it will also affect Vietnam's export activities. At the same time, it also affects Vietnam's national strategy, because we are an open economy and the fact that we have signed up to 17 FTAs is also a great effort of the Government to promote export activities and reduce tariff barriers to zero.

If now people apply high tax rates on Vietnamese exports or apply trade defense measures, it will reduce the efforts of businesses. In the context of the current difficult world economy, finding a market or an export partner is very difficult, but if we cannot keep it because of applying avoidance measures, I think it is very regrettable.

How do you assess the level of interest and legal understanding of businesses in anti-tax evasion investigation measures for trade defense? To avoid losses and risks, what should businesses do to respond and avoid being sued?

From my experience in consulting directly with businesses, I see that Vietnamese businesses and associations are also interested, but often when exporting goods, they are more interested in the market price and export tax. They are often interested in whether Vietnam has signed the FDA with those countries and whether they have any advantages or not. They do not immediately think about trade defense measures and then avoid these measures. Only when there are measures from the initiator or there are rumors from the agencies applying them, do they seek advice or contact relevant agencies such as the Embassy or the Ministry of Industry and Trade to find out.

There is a difficulty for Vietnamese enterprises and associations, because the provisions of foreign laws are different from those of Vietnam, forcing Vietnamese enterprises to contact lawyers from the host country who have experience in this field for advice and the consulting costs are relatively high, sometimes beyond the ability of some enterprises, especially small and medium enterprises to pay. In addition, for enterprises, especially for associations today, in addition to paying attention to export markets, paying attention to trade defense measures in those countries is also very important.

It is also important to develop a guideline and a resolution that updates this situation in the context of Vietnam benefiting greatly from the trade war and the influx of investors. This is something that businesses, the Government and associations need to pay attention to in order to avoid Vietnam being entangled in trade defense lawsuits and being subject to high taxes that affect the market and export market share.

Vietnamese steel products often face investigations into evasion of trade defense measures - Photo: VNA

It is forecasted that the trend of investigating evasion of trade defense measures will continue in the coming years. So, in your opinion, what specific solutions and sanctions do management agencies, especially the Ministry of Industry and Trade, need to have to improve the effectiveness of the work of combating evasion of trade defense measures?

The Ministry of Industry and Trade is a state management agency and also an advisory body for the Government. In recent times, it has developed a law on foreign trade management, projects, and Government Resolutions... This is a very urgent and important task.

In the coming time, it is very important to improve legal regulations, especially the issue of preventing evasion of trade defense measures for Vietnamese enterprises when facing foreign countries. In addition, supplementing regulations, especially increasing sanctions for acts of origin fraud and trade defense evasion, is also proposed, including administrative measures.

In addition, in the project, the central role of the Ministry of Industry and Trade is set out, and coordination with other agencies such as the Ministry of Planning and Investment or local authorities, associations, and the Ministry of Public Security must also be strengthened. In the coming time, the initiative of the Ministry of Industry and Trade, associations, and industry businesses in grasping information and handling cases that pose risks to Vietnam is also very important.

For example, a decision of an agency or a country is applied to other countries, the Ministry of Industry and Trade should also use that as important data and information to provide to Vietnamese associations and who knows, we may also have risks in that case so that we can have very important preparations. There is information, introduction of partners who can support because the application of anti-circumvention measures or the application of trade defense measures mainly takes place abroad.

The Ministry of Industry and Trade, as a focal agency with strong resources, needs to closely coordinate with the Ministry of Foreign Affairs and Vietnam's trade representative agencies abroad to promote the provision of important information to businesses and industry associations. As countries may change regulations on measures to apply trade defense and anti-avoidance measures, the Ministry of Industry and Trade can also collect information from various sources to provide to associations, and promptly organize training for domestic businesses to respond promptly.

Thank you!

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