Tax evasion alert
In February, Thailand issued the final conclusion of an anti-dumping investigation on iron or steel pipes and pipes originating or imported from Vietnam (including including 169 HS codes). The Thai Commission on Dumping and Subsidy decided to impose anti-dumping duties of 6.97% -51.61% (CIF price) on imported steel products under investigation to prevent significant damage to the domestic industry.
At the end of March, Malaysia’s Ministry of Industry and International Trade (MITI) announced the initiation of an anti-dumping investigation on a number of galvanised steel (galvanised iron) products originating from Vietnam. The range of alleged dumping for Vietnam is up to 39.27%. The Canadian Border Agency (CBSA) also announced preliminary conclusions and the temporary imposition of anti-dumping and anti-subsidy investigations against corrosion-resistant steels from several countries, including Vietnam. Vietnamese businesses dumped the steel products into the Canadian market with amplitude of 36.3% to 91.8% (the tax rates vary for each specific enterprise).
Also in March, Vietnamese steel received more information; the Australian Anti-dumping Commission (ADC) initiated an anti-dumping and subsidies investigation for steel pipe and pipe products originating from Vietnam, China, Korea, and Taiwan.
On May 13, the US Department of Commerce initiated an investigation to apply tax evasion measures against stainless steel sheet products imported from Vietnam. This is the case the US Department of Commerce initiated an investigation based on information on allegations that stainless steel products are showing signs of evading trade safeguard measures the US is applying with similar goods. China’s since 2016 with a tax rate of 139% – 267%.
According to the Ministry of Industry and Trade, “the fact that the US authorities are not based on the requirements of US businesses, initiating their own investigations is relatively rare. This shows that the US is strengthening the management of goods that have been subject to trade taxes to ensure effective implementation of the measures already applied.” In addition to initiating its own investigation of the case, the US is also open to requests for tax evasion investigations, even though the plaintiff in the case has filed a deadline. In addition, Vietnam’s sued products are not limited to industrial products, but are also at increased risk for agricultural products.
Le Trieu Dung, Director of Trade Safeguard Department (Ministry of Industry and Trade) said that among 22 cases investigated by foreign countries against tax evasion, origin fraud, and steel products are the most sued with six cases, accounting for 30%. Most cases of tax evasion investigations with steel products are conducted by the US of which, specifically for corrosion-resistant steels (CORE) and cold-rolled steel (CRS), the US has conducted a total investigation of fivecases.
In all the cases mentioned above, the US concluded that CORE and CRS steel of Vietnam made from imported materials from countries/territories were evading measures that US commercial PV applied was due to invest.The conversion during the production of this steel product in Vietnam was negligible. With the conclusion that tax evasion exists, the US applies an anti-avoidance tax equivalent to that applied to Chinese, South Korean and Taiwanese (Chinese) goods exported to the US.
Developing input production
Talking to a reporter of Customs Newspaper, steel industry expert Nguyen Van Suaanalysed: In recent years, trade protectionism has emerged in the world. Vietnam’s steel industry has been sued by many markets against trade safeguard. These cases come from relatively large markets, which are the “backbone” of steel exports. Typically the US market, the EU, some countries in the ASEAN region, even the Eurasian Economic Union.
“Steel is the raw material for all industries and construction. This is a strategic material, so many countries pay attention. Besides, in recent years, Vietnam’s steel industry has grown rapidly. In addition to expanding in the domestic market, steel exports also achieved good results. The exports with a fast growth rate caused Vietnamese steel to be noticed by countries and they applied trade safeguard measures to protect domestic production,” Sua explained why Vietnamese steel is increasingly involved in trade safeguard lawsuits.
The Vietnam Trade Administration recommends that steel enterprises should have plans to prevent and handle trade safeguard lawsuits when developing export strategies. In addition, businesses also need to pay more attention to understanding mechanisms, regulations and procedures of investigating countries. In recent years, major export markets such as the US, the EU andCanada often change the regulations and procedures in the direction of easier investigation initiation and application. In many cases, investigating agencies (such as US Customs and Border Protection) can take the initiative to investigate without making them public. Regulations on “significant transformation” or “cooperation” and “information” requirements may also vary from case to case.
Further analyzing the case of anti-evasion taxation in the US market, the Ministry of Industry and Trade stated: From the US perspective, the target of the avoidance of anti-avoidance duty is not Vietnam’s steel but to ensure its effectiveness implementing current trade remedy measures. Steel products manufactured from Vietnamese raw materials or imported materials from other sources will be allowed to use the declaration mechanism to enjoy immunity from tax evasion. “Therefore, in fact, the conclusion of the anti-evasion cases will not have a significant impact on Vietnam’s export situation in the near future if we develop upstream industries (input production),”, emphasized a Ministry of Industry and Trade representative.
The Australian Anti-dumping Commission has moved to initiate anti-dumping and anti-subsidy investigations into steel pipe products which …
Affirming that the risk of Vietnamese steel being investigated for fraud of origin is increasing, especially in major export markets such as the US, the EU and Canada, Le Trieu Dung stated, the practice shows that if these acts are detected, the importing country will apply a severe “punishment”, in many cases the enterprise will lose the entire export market. Therefore, steel enterprises need to raise awareness about the risk of being sued, investigated, and groups of goods are often sued; not participating, abetting the frauds of origin and illegal transmission.
By Thanh Nguyen/ HuuTuc
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