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www.chongbanphagia.vn www.antidumping.vnNo 7, Quarter III – 2015

Wto CenterVietnam Chamber of Commerce and Industry

Anti-dumping, Countervailing, Safeguard measures

Newsletter

ANTI-DUMPING

Risks from limitations of Accounting and data systems

“Trade Remedies Newsletter” is the quarterly publication of theTrade Remedy Council (TRC) – WTO Center – Vietnam Chamber ofCommerce and Industry. The News Column of this Newsletter will provide you with updatedinformation on the situation and proceedings of trade remedy cases(including Anti-dumping, Anti-subsidy and Safeguard measures) ap-plied in Vietnam as well as worldwide affecting directly or directlyVietnamese exports.The In-Focus Column concentrates on analyzing emerging traderemedies cases; researching and commenting on hot trade remedyissues which have significant effects on Vietnamese businesses. Inaddition, the Column entails provisions on proceedings and proce-dures of trade remedy investigation that enterprises may concern.We do hope that the Newsletters on “Trade Remedies” will becomean useful publication for businesses to enhance their understandingand ability as trade remedy investigation overseas as well as accus-tome to trade remedy tools against unfair imported goods. The newsletter is edited with the co-operation of IDVN Lawyers.

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No. 7, Quarter III/2015 TRADE REMEDIES 1

ContentNo. 7, Quarter III/2015www.chongbanphagia.vn www.antidumping.vn

NEWS

2 Overview of the world’s anti-dumping, anti-subsidy, safeguard investigations in the thirdquarter of 2015

IN FOCUS

11 ANTI-DUMPING

Risks from limitations of Account-ing and data systems

7 Vietnam launches safeguard investigation on-monosodium glutamate

8 Trade remedy cases relevant to exports fromVietnam in quarter III/2015

Weaknesses in accounting system and soft-ware

Difficulties in reconciling process under verifi-cation period

Limitations in preparation and reporting

Solutions and recommendation for Vietnameseexporters10 Malaysia imposes provisional anti-dumping

duty on Vietnam’s prepainted, painted or colorcoated steel coild

10 Australia terminated investigation, not anti-dumping duty imposed on Zinc Coated (Gal-vanised) Steel imported from Vietnam

2 TRADE REMEDIES No. 7, Quarter III/2015

News

Overview of the world’s anti-dumping, anti-subsidy,safeguard investigations in thethird quarter of 2015

India1 Vietnam, Taiwan,Malaysia,Thailand

27/07/2015 Measuring Tape

INVESTIGATION RELATING TO VIETNAM

NoInvestigatingCountry

Investigated Country

Date of Decision Product Actions

Initiate an anti-dumping investi-gation

Australia2 Vietnam,India

30/07/2015 Zinc Coated (Galvanised) Steel

Terminate the anti-dumping investigation

United States

3 Vietnam 24/07/2015 Polyethylene Retail Carrier Bags

USDOC’s final affirmative determination on subsidy, subsidy margin: 5,28%. USITC will conduct further investigation.

United States

4 Vietnam,China,Indonesia,Malaysia,Thailand, Taiwan

13/07/2015 Polyethylene Retail Carrier Bags

USDOC’s affirmative determination after sunset review on dumping, dumping margin: Vietnam - 76,11%, China - 77.5,%, Indonesia - 85,17%, Malaysia - 101,74%, Thailand - 122,88%, Taiwan - 95,81%. USITC will conduct further investiga-tion on injury.

Indonesia5 Vietnam, Republic of Korea, Japan, China, Taiwan

04/09/2015 Cold-Rolled Coils Conduct a sunset review of anti-dumping duty

Indonesia6 Vietnam, Thailand

02/09/2015 Biaxially Orented Polypropylene (BOPP)

Initiate an anti-dumping investiga-tion

The full list of trade remedy actions in this quarter will be found on the website:www.antidumping.vn


Newsletter

www.chongbanphagia.vn www.antidumping.vn

INVESTIGATION RELATING TO VIETNAM




Malaysia7 Vietnam, China

25/09/2015 Prepainted, Painted or Colour Coated Steel Coils

Impose temporary anti-dumping duty, dumping margin: 5,68 – 16,45%

Thailand9 Vietnam, Republic of Korea, China, Taiwan

17/09/2015 Stainless Steel Pipe and Tube


Thailand10 Vietnam 11/09/2015 Cold Rolled Steel Plated or Coated with the Alloy of Aluminum-hot Dipped Galvanized


Thailand11 Vietnam 11/09/2015 Cold Rolled Steel, Plated or Coated with an Alloy of Aluminum and Hot Dipped Galvanized and Painted


India1 China 27/07/2015 PVC Flex Film Conduct a sunset-review on anti-dumping duty

India2 China,Indonesia

22/07/2015 Viscose Staple Fibre Conduct a sunset-review on anti-dumping duty

Vietnam13 Countries in relevant

01/09/2015 Monosodium Glutamate

Initiate a safeguard investigation

Malaysia8 Vietnam, China, Republic of Korea

27/08/2015 Cold Rolled Coils of Alloy and Non-alloy Steel


India3 China 08/07/2015 Seamless Tubes, Pipes Initiate an anti-dumping investiga-tion

Turkey12

China,Sri Lanka,Taiwan,Vietnam

Vietnam15/07/2015

Bicycle tyres

Motobike tyres

Conduct a sunset-review of anti-dumping duty

THE INVESTIGATIONS AGAINST CHINESE PRODUCTS COULD BE AFFECTED TO VIETNAM


News




India4 China 07/07/2015 Glass Fibre Conduct a sunset-review on anti-dumping duty

Australia5 China 12/08/2015 Rod in Coils Initiate an anti-dumping investiga-tion


Australia6 China 09/07/2015 Polyvinyl Chloride FlatElectric Cables

Terminate the anti-dumping investigation because there is no dumping

Australia7 China 01/07/2015 Steel Reinforcing Bar Initiate an anti-dumping investiga-tion

Brazil8 China 14/09/2015 Non-alloy Carbon Steel Pipes


Canada9 China 28/08/2015 Carbon and alloy steel line pipe

Initiate anti-dumping and subsidy investigations

Canada10 China 13/08/2015 Steel Grating Conduct a sunset-review on anti-dumping and subsidy duties

EU11 India, China

10/09/2015 Open Mesh Fabrics of Glass Fibres

Continue imposing anti-dumping duty

EU12 China 01/09/2015 Silicon Conduct a partial interim review of anti-dumping duty

EU14 China 14/08/2015 Solar Glass Change anti-dumping duty after reinvestigation, 17,5 - 75,4%

EU13 China, Taiwan

China

27/08/2015

24/07/2015

Stainless Steel Cold-Rolled Flat Products

Impose anti-dumping duty, China: 24,4 - 25,3%; Taiwan: 6,8%

Terminate subsidy investigation due to petitioner’s withdrawal

EU15 China 14/08/2015 Ceramic Foam Filters Initiate an anti-dumping investiga-tion


Newsletter






EU16 China 12/08/2015 Sodium Cyclamate Initiate an anti-dumping investiga-tion

EU17 China 07/08/2015 Certain Candles, Tapers

Terminate anti-dumping duty after sunset review

United States

18 China 22/09/2015 Certain Crepe Paper Products

Continue imposing anti-dumping duty after sunset review, dumping margin: 266,83%

United States

19 China 18/09/2015 Diamond Sawblades Continue imposing anti-dumping duty after sunset review, dumping margin: 164.09%

United States

20 China 18/09/2015 Ironing Tables and Certain Parts

USITC votes to continue imposing anti-dumping duty after sunset-review

United States

21 China 11/09/2015 Cold-Rolled Coils Initiate an anti-dumping investigation

United States

22 China 04/09/2015 Potassium Phosphate Salts

Conduct sunset-review on anti-dumping and subsidy duties

United States

23 China 04/09/2015 Steel Grating Conduct sunset-review on anti-dumping and subsidy duties

United States

24 China 04/09/2015 Tissue Paper Conduct sunset-review on anti-dumping duty

United States

25 China, Chile,India, Indonesia

02/09/2015 Preserved Mushrooms

Continue imposing anti-dumping duty after sunset-review, average margin: China - 198.63%, Chile - 148.51%, India - 243.87%, Indonesia - 16.24%

United States

26 China, Spain

01/09/2015 Chlorinated Isocyanurates

Conduct the second sunset-review on anti-dumping duty

United States

27 China 01/09/2015 Potassium PermaRussianate

Conduct the fourth sunset-review on anti-dumping duty

United States

28 China 19/08/2015 Hand Trucks and Certain Parts Thereof

Continue imposing anti-dumping duty after sunset-review, average dumping margin 383,6%


News





United States

28 China, India, Oman

10/08/2015 Polyethylene Terephthalate Resin

USDOC’s preliminary affirmative determination on subsidy, subsidy margin: China: 4,27 - 18,88%; India: 5,5 - 115,04%. Negative determina-tion on subsidy against Oman’s products.

United States

32 China 07/08/2015 Hydrofluorocarbon Blends and Components

USITC’s preliminary affirmative determination on injury due to dumping

United States

33 China, Mexico

03/08/2015 Magnesia Carbon Bricks

Conduct the first sunset-review on anti-dumping duty of products imported from the two mentioned above countries and countervailing duty of products imported from China

United States

34 China, Taiwan

03/08/2015 Narrow Woven Ribbons with Woven Selvedge

Conduct the first sunset-review on anti-dumping duty of products imported from two countries/ territories and countervailing duty of products imported from China

United States

31 China

15/09/2015

17/08/2015

Boltless Steel Shelving

USITC’s final affirmative determina-tion on injury due to dumping

USDOC’s final affirmative determina-tion on dumping and subsidy, dumping margin: 17,55 - 112,68%; subsidy margin: 12,40 - 80,45%

United States

30

China, Brazil, IndiaRepublic of Korea, Russia

Japan, Netherlands United Kingdom

19/08/2015

Cold-Rolled Steel Flat Products

Initiate anti-dumping and subsidy investigations

Initiate an anti-dumping investigation

United States

29 China, Australia,Brazil, Indonesia, Portugal

20/08/2015 Certain Uncoated Paper

USDOC’s preliminary affirmative determination on dumping, and imposing temporary measure, Australia: 40,65%; Brazil: 33,09-42,42%; China: 97,35-193,17%; Indonesia: 34,50-51,75%; Portu-gal: 29,53%


Newsletter


On 01 September 2015, Minister ofMinistry of Industry and Trade signedDecision No. 9269/QĐ-BCT on initi-ating safeguard investigation on theimports of monosodium glutamate(MSG) following the application for asafeguard measure from the VedanVietnam Joint Stock Limited Com-pany (Vedan Vietnam) submitted onJune 9, 2015. The subject good is Monosodium Glu-tamate under HS Code: 2922.42.20. After examining the properly docu-mented application, Vedan Vietnam’sapplication showed that there was anincrease of volume of import of thesubject good that causes or threaten

to cause a serious injury to the do-mestic industry producing similarproducts. According to Vedan Vietnam’s appli-cation, the import volume of MSG in-creased rapidly in the period2012-2014. MSG mainly importedfrom China (76%), Thailand (13%),and India (11%). This is the third safeguard investiga-tion initiated by Vietnam which fol-lows the safeguard investigation offloating glass (2009) and vegetable oil(2012). In addition, this investigationis the fourth trade remedy investiga-tion initiated by Vietnam.

Vietnam launches safeguard investigation on monosodiumglutamate

This is the third safeguardinvestigation initiated byVietnam which follows thesafeguard investigation offloating glass (2009) andvegetable oil (2012)





United States

35 China 16/07/2015 Certain Hydrofluorocarbon Blends and Certain Single Hydrofluorocarbon Components


Turkey36 China 16/09/2015 Welding Machines Impose anti-dumping duty about 29-154 USD

Turkey37 China,Slovakia,Russia,Japan

28/08/2015 Hot-Rolled Coil Steel Impose temporary anti-dumping duty

Turkey38 China,Taiwan

22/08/2015 Cold-rolled Stainless Steel Flats


In quarter III/2015, Vietnam’s ex-ports continuously faced with sixtrade remedy cases in some foreignmarkets. All of them are anti-dump-ing cases, including 03 cases in Thai-land, 01 case in Malaysia, 01 caseIndonesia and the last in India. Four of six goods covered in the initi-ated investigations of quarter III aresteel products, which are: cold rolledsteel plated or coated with the alloyof aluminum-hot dipped galvanized(in Thailand), cold rolled steel, platedor coated with an alloy of aluminumand hot dipped galvanized andpainted (in Thailand), stainless steelpipe and tube (in Thailand). The oth-ers are BOPP (in Indonesia), andmeasuring tape (in India). It could be determined that Vietnamsteel industry in Vietnam face withsignificant trade barrier in many mar-kets, especially ASEAN countries’smarkets. According to the assessmentof Trade Remedy Council - VietnamChamber of Commerce and Industry(VCCI), that these situation in traderemedy investigations does not meanthat these products compete unfairly,but indicates the rough competitionin the foreign markets, especially inASEAN market which are using traderemedy to handle with Vietnam en-terprises. This situation is common inmany countries with overproductionindustry and tendency to abuse traderemedies to protect domestic manu-

facturing.In general, the risk of export productsrelevant in a trade remedy casse areincreasing, because: (i) Vietnam andother ASEAN countries have similareconomic structures; (ii) the domes-tic manufacturing industries of somecountries is seeking protection in theusage of trade remedies under WTOlaw, when ASEAN Economic Commu-nity’s implementation and someother FTAs require to eliminate tariffbarriers. Hereinafter is some specific informa-tion of these cases:

Antidumping investigation onmeasuring tape in IndiaOn July 27, 2015, Directorate Generalof Anti-Dumping & Allied Duties(DGAD) under Ministry of Commerceand Industry of India officially an-nounced to initiate an anti-dumpinginvestigation against the imports ofMeasuring Tape from Vietnam,Malaysia, Thailand and Taiwan. Theapplication has been filed by FMILimited, Ludhiana.This investigation targeted measur-ing tape which classified in Hamo-nized System statistical reportingnumbers 9017; 9017.80; 9017.90.Period of investigation is from April01, 2014 to March 31, 2015. DGAD’sanalysis and conclusion will rely ondata collected in this period.


News

Trade remedy cases relevant to exportsfrom Vietnam in quarter III/2015

Anti-dumping investigation onCold Rolled Coils of Alloy andNon-alloy Steel in Malaysia:On August 27, 2015, the Ministry ofInternational Trade and Industry(MITI) officially announced to initi-ate an anti-dumping investigationon the imports of cold rolled coils ofalloy and non-alloy steel orginatedin or exported from China, Republicof Korea and Vietnam. The applicantof this case is CSC Steel Sdn. Bhd.

India is one of the most frequentlyinitiatation of anti-dumping cases inthe world with high rate in applyinganti-dumping duty, about 68% anti-dumping measures imposed in theinitiated investigation. India appliedanti-dumping duty on the imports ofmeasureing tape from China in 2003.This measure has extended secondtimes after the sunset-review. SinceMay 05, 2015, the imports of meas-uring tape from Chine have been im-posed tarriff at rate from 1,33-2,83USD/kg. Hence, Vietnam enterprisesare considered to have high risk in

this case.


Newsletter


This subject good is cold rolled coils ofalloy and non-alloy steel, with thick-ness from 0.2 mm to 2.6 mm andwidth from 700 mm to 1300 mm,under the HS code: 7209.15 000,7209.16 000, 7209.17 000, 7209.18290, 7209.18 900 and 7225.50 000.This is the fourth investigation and thethird one in 2015 initiated by Malaysiaagainst exports from Vietnam. Threeother cases targeted on BOPP (in2012), prepainted, painted or colourcoated steel coils (in 2015), and coldrolled stainless steel (in 2015)Anti-dumping investigation onBiaxially Oriented Polypropylene(BOPP) in Indonesia On September 02, 2015, Komite AntiDumping Indonesia (KADI) officiallyannounced to initiate anti-dumpinginvestigation on the imports of BOPPfrom Thailand and Vietnam. The ap-plication is filed by PT TriasSan-tosaTbk and PT. Lotte Packaging.This case targets on Biaxially OrientedPolypropylene (BOPP) under the HSCode: 3920.20.10 and 3920.20.90. This is the second anti-dumping inves-tigation initiated by Indonesia againstexports from Vietnam, the last anti-dumping case initiated against coldrolled coils of alloy and non-alloy steelin 2011. This is also the second anti-dumping investigation on Vietnam’sexports of BOPP, the previous case ini-tiated by Malaysia in 2012 in whichthe anti-dumping duty is from 2,59%to 12,37%.Three anti-dumping investiga-tions in ThailandAll of these investigations were initi-ated in the mid weeks of September2015, including stainless pipe andtube; cold rolled steel plated or coatedwith the alloy of aluminum-hot dippedgalvanized; and cold rolled steel, platedor coated with an alloy of aluminum

and hot dipped galvanized and paintedoriginated in/exported from Vietnamand some other countries.Two anti-dumping investigations oncold rolled steel plated or coated withthe alloy of aluminum-hot dipped gal-vanized; and cold rolled steel, plated orcoated with an alloy of aluminum andhot dipped galvanized and painted: OnSeptember 11, 2015, the Ministry ofCommerce in Thailand announced toinitiate two anti-dumping investiga-tions on two products exported fromVietnam. The applicant of these casesis NSW. BlueScope. The alleged dumping margin of theimports of Cold rolled steel plated orcoated with the alooy of aluminum-hot dipped galvanized; and Coldrolled steel plated or coated with thealooy of aluminum and hot dippedgalvanized and painted are respec-tively 86,04% and 89,58%.Anti-dumping investigation of stain-less pipe and tube: On Semptember07, 2015, the Ministry of Commerce

of Thailand announced to initiate ananti-dumping investigation againstthe import of stainless pipe and tubefrom Vietnam, Republic of Korea,China and Taiwan. The applicant ofthis case are Thailand - German Prod-ucts Company Limited and PuertoThe Millennium Company. This investigation targets on stainlesspipe and tube under the HS code:7305.31.10.000; 7306.11.10.000;7306.11.90.000; 7306.21.00.000;7306.40.10.010; 7306.40.10.020;7306.40.20.010; 7306.40.20.020;7306.40.30.010; 7306.40.30.020;7306.40.90.010; 7306.40.90.020;7306.61.00.021 and 7306.61.00.022.Up to October 2015, Thailand has ini-tiated four anti-dumping investiga-tions against Vietnam exports. Thefirst case initiated on cold rolled steelin 2012. Hence, it could be concludedthat all of these cases targeted onsteel products.

HS code

Cold rolled steel plated or coated with the alooy of aluminum-hot dipped galvanized

7210.61.11.011; 7210.61.11.012;

7210.61.11.013; 7210.61.11.014;

7210.61.11.021; 7210.61.11.022;

7210.61.11.023; 7210.61.11.024;

7210.61.11.031; 7210.61.11.032;

7210.61.11.033; 7210.61.11.034;

7210.61.11.090; 7210.61.91.031;

7210.61.91.032; 7210.61.91.033;

7210.61.91.034; 7210.61.91.090;

7225.99.90.090; 7212.50.21.000;

7212.50.22.000; 7212.50.29.000;

7226.99.19.090 và 7226.99.99.090

Cold rolled steel plated or coated with the alooy of aluminum and hot dipped galvanized and painted

7210.70.10.012; 7210.70.10.013;

7210.70.10.014; 7210.70.10.015;

7210.70.10.022; 7210.70.10.023;

7210.70.10.024; 7210.70.10.025;

7210.70.10.032; 7210.70.10.033;

7210.70.10.034; 7210.70.10.035;

7210.70.10.042; 7210.70.10.043;

7210.70.10.044; 7210.70.10.045;

7210.70.10.052; 7210.70.10.053;

7210.70.10.054; 7210.70.10.055;

7210.70.10.062; 7210.70.10.063;

7210.70.10.064; 7210.70.10.065;

7210.70.10.090; 7210.70.90.030;

7210.70.90.040; 7210.70.90.050;

7210.70.90.060; 7225.99.90.090;

7212.40.10.090; 7212.40.20.090;

7212.40.90.090; 7226.99.19.090; và

7226.99.99.090

Products

l Information of Subject Products


News

On September 25 2015, the Ministry of International Trade andIndustry of Malaysia (MITI) oficially announced the preliminaryaffirmative determination of the anti-dumping investigation onprepainted, painted or colour coated steel coils export from Viet-nam and China. Accordingly, the provisional anti-dumping dutyapplying on exports from Vietnam ranges from 5,68% to 16,45%.This duty rate imposes on those of China is 52.1%. The Decisionon imposing of the provisional anti-dumping duty takes effectfrom September 26, 2015 to January 23, 2016, as following:

This subject good is prepainted, painted or colour coated steelcoils, under HS code 7210.70 210, 7210.70 290 and 7210.70 900and AHTN code 7210.70.10 00, 7210.70.90 20 and 7210.70.9090.MITI initiated this investigation on April 28, 2015 in response tothe application filed by FIV Steel Sdn.Bhd.. According to the in-vestigation schedule, after 12 months from the initiated date,MITI must make the final determination. On July 30, 2015, Australian Anti-Dumping Com-mission announced the Notification No. 2015/93on termination of anti-dumping investigation onzinc coated (galvanised) steel imported fromVietnam and India. After 12 months from the ini-tiation date, zinc coated (galvanised) steel offi-cially get out of the anti-dumping duty inAustralia market.This investigation was initated on July 11, 2014,cover zinc coated (galvanised) steel which is clas-sified under HS code: 7210.49; 7212.30;7225.92; and 7226.99.In the termination notification, the investigationagency of Australia determined that the productimported from Vietnam was not dumped, andthere is no injury; and consequencely, there is noanti-dumping duty applied on this product. Asconsequence, zinc coated (galvanised) steel is nolonger under the anti-dumping investigation.

Malaysia imposes provisionalanti-dumping duty on Vietnam’sprepainted, painted or colorcoated steel coild

Australia terminated in-vestigation, not anti-dumping duty imposedon Zinc Coated (Gal-vanised) Steel importedfrom Vietnam

Maruichi Sun Steel Joint Stock Company 16.45%Nam Kim Steel Joint Stock Company 5.68%NS BlueScope Vietnam Limited 10.83%

Other producers and exporters of Vietnam 16.45%

The Ministry of InternationalTrade and Industry of Malaysiaoffiicially announced the provi-sional anti-dumping duty apply-ing on exports from Vietnam

ranges from

After 12 months from theinitiation date, zinc coated(galvanised) steel offi-cially get out of the anti-dumping duty in Australia

market

5,68% - 16,45%


In Focus

ANTI-DUMPING

Dinh Anh Tuyet, Nguyen Tuan Vu from IDVN

Risks from limitations of Accounting anddata systems

Newsletter



In Focus

Anti-dumping is not a new term to Vietnam.Since 2002, anti-dumping investigations initi-ated against imports from Vietnam have been ahuge problem causing headache to Vietnameseexporters. It is, however, not easy for companiesto fully understand all aspects of an anti-dump-ing investigation and to be able to develop an ef-fective defending strategy. This fact is evidencedby relatively high antidumping margins in manyanti-dumping cases. Having experiences formore than 10 years of defending Vietnameseand foreign companies in antidumping cases, inthis article, we will identify fundamental prob-lems within investigated companies, whichhave been the main causes of high (deadly) anti-dumping duties and suggest solutions for thoseproblems.Technically, Anti-Dumping investigation is theprocess of calculating and comparing betweenexported prices against normal value of theproduct subject to investigation. The results ofthis process, i.e., dumping margins, are techni-

cally extracted from manufacturing data, salesdata recorded in accounting system of investi-gated companies. Therefore, the success of aninvestigation significantly depends on howcompanies prepare, report data and providesupporting evidences to investigating authority.In recent years, more than 50% of the cases inwhich exporters were imposed high dumpingmargins (more than 10% and can go up to ashigh as 100% or more) were caused by failurein reporting “proper” data and providing sup-porting documents. While this result is partlycontributed by the competency of law firm anddata analysts hired by investigated companies,fundamental issues were the quality of data andrecords (mostly accounting records) kept bythose companies. Experience showed thatmany exporters from Viet Nam having difficul-ties in reporting the required data because oftheir accounting and records systems, whichmake their defense risky and challenging in an-tidumping proceedings.


Newsletter


Weaknesses in accounting system and software

In any anti-dumping investigation, dumping margin whichis difference between exported price and normal value ofa product, which is normally determined by a “code”,which can be “Product code” or “PCN” as used by EU in-vestigating authority or “Connum” as used by the U.S. De-partment of Commerce. This code essentially representsphysical and chemical characteristics of the product, itsprocessing style, technical specifications, and sometimes,packing style of the product, which might be created by theinvestigated company or be generated as required in theQuestionnaires issued by the investigating authority.The preparation of sales and costing reports categorizedby markets, product codes requires detailed breakdownof data so that they could be used to calculate exportedprice and normal value of each product. The calculationswould be more complicated if the investigating authorityapplies Non-economy market methodology, as in anti-dumping cases against Viet Nam initiated by the UnitedStates, EU, Turkey or India, because it will require the in-vestigated company to provide detailed costing report byproduct codes. This methodology makes it more difficultto prepare and prove the reliability of data if companiesdo not maintain an accounting system capable of extract-ing detailed reports on each inputs used for producingeach product, which may include: direct raw materials,packing materials, direct labor cost, delivery cost, electric-ity and water, cost of warehousing and other costs. Fur-thermore, companies must develop or use a “reasonable”cost allocation method to accurately and reasonably allo-cate production cost to individual product code. Thismethod also needs to be proved as acceptable in accor-dance with anti-dumping laws, rules and practicesadopted by investigating authority. In recent anti-dumpingcases on steel and seafood products, proper and decentcost allocation method has resulted in low rate of anti-dumping duties for exporters (0%-4%)Accounting systems and software used by most Viet-namese exporters, or even FDI companies are not fully ca-pable of reporting data required in an antidumpinginvestigation. Many companies in Viet Nam used account-ing software simply to record accounting entry and to pre-pare annual financial statement. As a result, when they aresubject to an AD investigation, they have to prepare datareports required by the investigating authority manuallyinstead of having those reports automatically generated

from their records and systems. Problem with manual re-porting is that their reports often have many mistakes thatcould not be fully detected and corrected within the shortdeadline given by investigating authority (from 30 to 45days). For example, packing style report for a unit of aproduct code in excel requires information from produc-tion departments, accounting departments, warehouse de-partments so that the data could be processed to calculateconsumption quantity of packing materials on a unit basis.After that, the report must be reconciled to accountingvalue recorded in accounting software. Mistakes in datacould make significantly adverse impact on anti-dumpingduty, for example: mistake in raw material data could affectto 80% of the final results in anti-dumping cases on frozenwarm-water shrimp.With the existing weaknesses of accounting system andsoftware as above-mentioned, defending Vietnamese ex-porters in antidumping cases become risky because thereis not enough time to extract, analyze, report and reconciledata as required by the investigating authority during ver-ification, even with the supporting from lawyers and dataanalysts. Besides, when correct data is not fully provided,lawyers and analysts will not be able to evaluate data andto decide the most beneficial reporting method to achievelower rate for companies.

(0%-4%)

In recent anti-dumping caseson steel and seafood prod-ucts, proper and decent costallocation method has re-sulted in low rate of anti-

dumping duties for exporters


In Focus

Difficulties in reconciling process under verification period

In an anti-dumping investigation, investigating authoritywill visit factories of investigated companies being manda-tory respondents to verify their questionair responses. Ver-ification process is essentially for checking the submitteddata and information against the companies’ actual ac-counting and production records as well as their normaloperations. The purpose of verification is to prove the reli-ability of information and data that company submitted.For example, to verify a sale transaction, the investigatedcompany must provide a full package of sale document,normally including: contract, invoice, payment note, de-tailed accounting ledger with explanation as well as finan-cial statements and other relating documents as requestedby investigating authority. A mandatory respondent hasonly 3 to 5 days for verification process. If verification fails,companies will get a “fact available” or punishment an-tidumping rate, which is very high.

As mentioned above, may companies have accounting sys-tems that fail to match data from raw materials to produc-tion process to finished products. This problem makes thereconciling process during verification more difficult, time-consuming and sometimes impossible due to the differ-ences in data generated from different systems. ManyVietnamese companies maintain two separate systems:one system is used to track actual production record inquantity and one system is used to record accounting value.Especially, there was case when the company manuallyrecords data in hardcopy or excel which make the recon-ciling process highly risky. It is important to remember thatif a company cannot prove the reliability of submitted databy providing supporting documents, the submitted datawill be rejected. In that case, investigating authority will, in-stead, calculate anti-dumping duty using adverse factswhich always results in very high dumping duty rate.

Limitations in preparation and reporting

Trade remedy cases in general and anti-dumping cases inparticular require information reported in certain formatsand ways as specified in Questionnaires issued by inves-tigating authorities. Furthermore, all information must bepresented in foreign language (English and/or languagesof investigating countries). Thus, to prepare responses,ones must have ability to prepare data files in excel(and/or other software as required by the investigatingauthorities) and expertise in data analysis to detect andcorrect possible mistakes and to meet short deadlines. Inaddition, responses in general and data reports in partic-ular need to be prepared with full understanding of thetrade remedy law and practices of the investigating coun-try, relevant WTO rules as well as accounting rules andrelevant laws of the country of the investigated compa-nies. Companies therefore need helps from lawyers and pro-fessional AD data analysts to prepare responses to thequestionair issues by investigating authorities because

those requirements make it too difficult even for big com-panies with decent internal system and human resources,even for those having experiences in anti-dumping de-fenses. Generally, companies are incapable of preparingnecessary documents for verification and do not have suf-ficient knowledge for determining whether certain infor-mation is favorable or adverse to them in antidumpingcases. In addition, most companies in Viet Nam do notkeep proper and detailed production and accountingrecords relating to important production factors such aspacking standards or actual production yields as requiredin antidumping investigations. To solve these problems,companies need to use a team of professional lawyers andanalysts specializing in trade remedies, who have knowl-edge and experiences of trade remedy law and practicesof investigating countries, relevant law and accountingrules of Viet Nam to effectively and timely prepare re-sponses and defend them.


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Solutions and recommendation for Vietnamese exporters

In order to improve the accounting system and records inorder to get better results in antidumping cases, Viet-namese exporters should have pay more attention and in-vestments to their accounting and records systems toassure that the systems can meet the technical require-ments as discussed above . Specifically, companies should update and maintain theiraccounting software to make sure that data is fullyrecorded and could be extracted accurately when neces-sary. It will help to reduce mistakes as well as the time inpreparation of questionair responses and verification.Manual records make it risky, difficult and sometimes im-possible to survive, in defending antidumping investiga-tions.In addition, companies should improve internal controlsystem by training and monitoring compliance of theirstaff and systems in order to make the reporting and rec-onciling data process more efficient and accurate.In anti-dumping case in market that is “life-to-death” tocompanies, it is very important that companies use expe-rienced and reputable lawyers and data analysts fromcredible law firms in investigating countries, who havepartnership firms in Viet Nam. Lawyers and data analystswill help to ensure that responses and data submitted notonly accurate but also be presented for the best interestsof the companies and to help companies passing verifica-tion. Lawyers will also prepare legal brief to defend thecompanies before investigating authorities and to help inother related activities such as media campaigns or lob-bying to properly defend the companies during investiga-tions and related legal proceedings. Moreover, reputationof law firms will add more creditability to the companies’responses and make it easier in verification. Support andadvice from local lawyers and accounting experts havingknowledge and experiences in antidumping cases are alsoimportant because they will help to resolve specific localissues and practices of the companies and their account-ing systems, to provide quality translation and to supportforeign experts and companies’ staff in preparing re-sponses and during verification. In many cases, experi-enced lawyers can help companies from being passive injust responding to questionnaires to investigating author-ities, to actively develop effective strategy, to guide andconvince investigating authority to the advantages of theinvestigating companies.

If a company cannot prove the re-liability of submitted data by pro-viding supporting documents, thesubmitted data will be rejected. Inthat case, investigating authoritywill, instead, calculate anti-dump-ing duty using adverse availablefacts which always results in very

high dumping duty rate

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