The United States received a request for an anti-dumping and anti-subsidy investigation into pellet shell products...

1. General information about the case

- Products proposed for investigation: some hard capsule shell products (HS codes 9602.00.1040 and 9602.00.5010).

- Case code: A-552-847 and C-552-848.

- Plaintiff: Lonza Greenwood LLC.

- Application date: October 24, 2024.

- Exporting enterprises accused of dumping and subsidization: The plaintiff named 02 Vietnamese companies.

- Proposed CBPG investigation period: April 2024 - September 2024

- Proposed CTC investigation period: 2023

- Proposed damage investigation period: January 2021 - June 2024

- Export turnover: According to the plaintiff, the total import turnover of goods from Vietnam in 2023 is about 26 million USD; China is 49 million USD, India is 67 million USD and Brazil is 4 million USD. According to data from the US International Trade Commission (ITC), the import volume from Vietnam accounts for about 12% of the total import volume of products subject to investigation into the United States.

1.1. Information on alleged dumping:

- Alleged dumping margin against Vietnam: The Plaintiff proposed an anti-dumping tax rate against Vietnam of 65.97% to 89.33%.

- Surrogate country and value: Since the United States considers Vietnam a non-market economy , DOC will use the surrogate values ​​of a third country to calculate the dumping margin for Vietnam. In this case, the petitioner proposed to use Indonesia as a surrogate country because it believes that Indonesia has a similar level of economic development to Vietnam and has a significant number of hard capsule shell manufacturers (Indonesia is on the latest list of surrogate countries issued by DOC for Vietnam). The parties have a 30-day period to comment on the surrogate country before DOC issues its preliminary findings.

1.2. Information on alleged subsidies

The Plaintiff alleges that Vietnamese paper plate manufacturers/exporters have received 23 subsidy programs from the Government , causing or threatening to cause material injury to the U.S. hard capsule shell industry. The alleged subsidy programs fall into the following categories:

(1) Group of loan and guarantee programs: including preferential loan programs, factoring, export guarantees with preferential interest rates and terms of 04 state-owned joint stock commercial banks ( Agribank , Vietinbank, Vietcombank and BIDV) because these banks are subject to Government intervention; investment credit programs of the Vietnam Development Bank (VDB) and interest rate support programs of the State Bank.

(2) Sponsorship programs: include export promotion sponsorship programs and investment support.

(3) Group of corporate income tax incentive programs: including incentive programs of corporate income tax exemption and reduction for export enterprises, for enterprises located in industrial parks, economic zones, for enterprises located in areas with difficult socio-economic conditions, for new investors and accelerated depreciation programs.

(4) Group of import tax exemption programs: including import tax exemption programs for imported goods used to produce export goods, import tax refund for raw materials used to produce export goods, import tax exemption for imported goods into industrial zones, import tax exemption for foreign-invested enterprises, import tax exemption for imported raw materials for export processing enterprises located in export processing zones.

(5) Group of land incentive programs: including programs to exempt or reduce land and water surface rent/tax or rental fees for encouraged industries, enterprises in industrial parks and economic zones, and foreign-invested enterprises.

(6) Program to provide utilities at preferential prices in industrial parks and export processing zones: includes programs to provide electricity, water and other utilities to enterprises in industrial parks and export processing zones at preferential prices.

(7) Subsidy Program from the Korean Government: The Export-Import Bank of Korea Contract Performance Guarantee Program. This is a program that is accused of cross-border subsidy under the new regulations that will take effect from April 24, 2024 in the United States.

2. Further investigation procedures:

According to the US investigation regulations, there are 02 agencies participating in an anti-dumping and countervailing duty investigation case: DOC investigates dumping and subsidy behavior and is responsible for the investigation results while ITC is responsible for assessing the damage to the domestic industry. Products are only subject to anti-dumping/countervailing duty if both agencies issue affirmative conclusions. If in an anti-dumping case, only the exporting enterprise is the subject of investigation, in an anti-dumping case, the Government is also the subject of investigation.

The procedure for investigating CBPG and CTC cases is as follows:

Step 1: The Government of the investigated country (Vietnam) consults with DOC on the request for CTC investigation;

Step 2: DOC has 20 days to review the request for investigation and issue a decision to initiate/not initiate an investigation, expected on November 13, 2024. In some special cases, DOC may extend this period to a total of 40 days;

Step 3: The ITC has 45 days from the date of receipt of the petition to issue a preliminary determination of injury. In the event that the ITC makes a preliminary determination of no injury, the case will be dismissed in its entirety (although this is unlikely);

Step 4: DOC has 140 days from the date of initiation to issue a preliminary determination of dumping and 65 days from the date of initiation to issue a preliminary determination of subsidy;

Step 5: DOC has 75 days from the date of issuance of the preliminary determination to issue a final determination on dumping/subsidy;

Step 6: The ITC has 45 days from the date of DOC's final determination of dumping/subsidy to make its final determination of injury;

Step 7: DOC has 07 days to issue the Anti-dumping/Anti-subsidy Order (in case of conclusion of dumping/subsidy and injury)

(Timelines may be extended)

3. Recommendations

Above is some information related to the case of receiving dossiers requesting CBPG and CTC investigation into hard capsule shell products imported from Vietnam and some countries. To prepare to respond to the case, the Department of Trade Remedies recommends that enterprises producing and exporting related products.

- Closely monitor the next developments of the case; proactively research and master the regulations, procedures, and processes of US anti-dumping and countervailing duty investigations and plan a suitable countervailing strategy for the business (in case the DOC initiates an investigation); diversify export markets and products;

- Fully cooperate with the US Investigation Agency throughout the course of the case. Any act of non-cooperation or incomplete cooperation may result in the US Investigation Agency using available evidence to the disadvantage or applying the highest alleged tax rate to the enterprise;

- Proactively register for an IA ACCESS account at the DOC electronic portal ( https://access.trade.gov/login.aspx ) to update information and submit documents and materials related to the US Investigation Agency;

- Regularly coordinate and update information with the PVTM Department to receive timely support.

For more information, please contact: Foreign Trade Enforcement Department, Trade Enforcement Department, Ministry of Industry and Trade, 23 Ngo Quyen, Hoan Kiem, Hanoi (In charge: Nguyen Viet Ha, Phone: 024.7303.7898, Email: hanv@moit.gov.vn , ngocny@moit.gov.vn , Website: http://trav.gov.vn/

Source: https://moit.gov.vn/tin-tuc/thong-bao/hoa-ky-nhan-ho-so-de-nghi-dieu-tra-chong-ban-pha-gia-va-chong-tro-cap-doi-voi-san-pham-vo-vien-nhong-cung-nhap-khau-tu-v.html