The United States receives a request for an anti-dumping and anti-subsidy investigation into hard capsule shells.

The United States has received a request for anti-dumping and anti-subsidy investigations into hard capsule shells imported from Vietnam.

According to the Department of Trade Defense, Ministry of Industry and Trade , on October 24, 2024, the US Department of Commerce (DOC) announced that it had received a request for anti-dumping and countervailing duty investigations on hard capsule shells imported from Brazil, China, India and Vietnam. In this case, the above-mentioned products from all four countries were proposed for both anti-dumping and countervailing duty investigations.

The Trade Defense Department recommends that relevant parties closely monitor the next developments of the case; proactively study and master the regulations, procedures, and processes of anti-dumping/anti-subsidy investigations of the United States. Illustrative photo

General information about the case

Products proposed for investigation: certain hard capsule shell products (HS codes 9602.00.1040 and 9602.00.5010). Case numbers: A-552-847 and C-552-848. Plaintiff is Lonza Greenwood Company Limited. Date of filing: October 24, 2024.

Accordingly, two Vietnamese export enterprises were accused of dumping and subsidizing.

Proposed anti-dumping investigation period: April - September 2024; proposed countervailing investigation period is 2023; proposed injury investigation period is January 2021. June 2024.

According to the plaintiff, the total import turnover of the item from Vietnam in 2023 was about 26 million USD; China was 49 million USD, India was 67 million USD and Brazil was 4 million USD. According to data from the US International Trade Commission (ITC), the import volume from Vietnam accounted for about 12% of the total import volume of the product subject to investigation into the United States.

Information on alleged dumping

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

In addition, because the United States considers Vietnam a non-market economy country, the US Department of Commerce will use third-country surrogate values ​​to calculate the dumping margin for Vietnam.

In this case, the plaintiff proposed to use Indonesia as a surrogate country because 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 the US Department of Commerce for Vietnam). The parties have 30 days to comment on the surrogate country before the US Department of Commerce issues its preliminary determinations in the case.

Subsidy Allegations Information

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:

Group of loan and guarantee programs: Including preferential loan programs, factoring, export guarantees with preferential interest rates and terms of 4 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.

Sponsorship program: Including programs to sponsor export promotion and investment support. Group of corporate income tax incentive programs: Including incentive programs to exempt and reduce corporate income tax for exporting 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.

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.

Group of land incentive programs: Including programs to exempt/reduce rent/tax or land and water surface rental fees for encouraged industries, enterprises in industrial parks and economic zones, and foreign-invested enterprises. Program to provide utilities at preferential prices in industrial parks and export processing zones: Including programs to provide electricity, water and other utilities to enterprises in industrial parks and export processing zones at preferential prices. Subsidy program from the Korean Government: The Export-Import Bank of Korea's contract performance guarantee program. This is a program accused of cross-border subsidies based on new regulations that will take effect from April 24, 2024 in the United States.

Investigation procedure

According to US investigation regulations, there are two agencies involved in an anti-dumping and countervailing duty investigation. Specifically, the US Department of Commerce investigates dumping and subsidy practices and is responsible for the overall investigation results while the US International Trade Commission is responsible for assessing the injury to the domestic industry. Products are only subject to anti-dumping/countervailing duties if both agencies issue affirmative conclusions. While in an anti-dumping case, only the exporting enterprise is the subject of investigation, in an anti-subsidy case, the Government is also the subject of investigation.

Procedures for anti-dumping and anti-subsidy investigations:

Step 1: The government of the country under investigation (Vietnam) consults with the US Department of Commerce regarding the request for an anti-subsidy investigation.

Step 2: The US Department of Commerce 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, the US Department of Commerce may extend this period to a total of 40 days.

Step 3: The US International Trade Commission has 45 days from the date of receipt of the petition to issue a preliminary injury determination. If the US International Trade Commission makes a preliminary determination of no injury, the case will be dismissed in its entirety (although this is unlikely).

Step 4: The U.S. Department of Commerce 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: The U.S. Department of Commerce has 75 days from the date of issuance of the preliminary determination to issue a final determination of dumping/subsidy.

Step 6: The U.S. International Trade Commission has 45 days from the date the U.S. Department of Commerce issues its final determination of dumping/subsidy to make its final determination of injury.

Step 7: The US Department of Commerce has 7 days to issue an Anti-dumping/CVD Order (in case of dumping/subsidy and injury).

To prepare for the incident, the Trade Defense Department recommends that businesses producing and exporting related products: Closely monitor the next developments of the incident; proactively research and master the regulations, procedures, and processes of US anti-dumping/anti-subsidy investigations and plan a lawsuit strategy suitable for the business (in case the US Department of Commerce initiates an investigation); diversify export markets and products; fully cooperate with the US investigation agency throughout the course of the incident.

The Department of Trade Remedies emphasizes: 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 US Department of Commerce's electronic information 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 for the Department of Trade Remedies to receive timely support.

Source: https://congthuong.vn/hoa-ky-nhan-ho-so-de-nghi-dieu-tra-chong-ban-pha-gia-va-chong-tro-cap-vo-vien-nhong-cung-355551.html