VCA anti-dumping ruling too sluggish

The Vietnam Competition Authority has admitted weaknesses in anti-dumping rules Photo: Le Toan

On September 5, Vietnam concluded its first anti-dumping investigation with the decision to impose a tax of between 3.07 and 37.29 per cent on stainless steel imported from Malaysia, Indonesia, China and Taiwan. The decision came a year and four months after Vietnam’s Posco VST and Inox Hoa Binh, whose combined output accounts for 80 per cent of the country total, submitted their petition claiming material injury.

The process to arrive at this decision, according to the investigating Vietnam Competition Authority (VCA) revealed several weaknesses both in regulations and agency capability.

According to the anti-dumping law passed in 2004 by the National Assembly’s Standing Committee, the time between the start of investigation and the preliminary decision should not exceed five months and a preliminary tax rate would be applied for four months.

The regulation therefore led to a window existing between the end of the preliminary period and the final decision for importers to continue exporting steel into Vietnam without any levy being imposed.

“Firms waited for the preliminary tax to become invalid to import stainless steel from the three investigated countries and one territory in huge volumes,” said Pham Chau Giang, head of the investigation team, citing the General Department of Vietnam Customs.

If the regulations were not changed, the VCA would be forced to conclude any investigation within nine months, which was too short a time frame, she said.

A second weakness is the disagreement between Vietnamese and WTO regulations in technical matters such as determining the dumping margin and injury and investigation procedures. The incongruence significantly slowed down the process.

A third weakness, which resulted in firms, especially those from China, getting a better tax rate than they deserved, is agreements between these countries to recognise each other as market economies. The agreements disallowed Vietnam from using a proxy country to make fairer dumping margin calculations.

The final weakness is the investigation agency’s lack of experience. “Our people need an understanding not only in the field but also of the way foreign firms work,” said Giang. Checking the data provided by a foreign firm proved difficult especially when the firm used a different language and system of accounting, she explained.