Rising Worries in Vietnam on Second Term of Anti-Dumping Duties

HCM City, Vietnam – The July 15, 2010 announcement of the drop of the 34.5% anti-dumping duty on Vietnam made bikes imported into the EU, encouraged lots of former bike makers in the country to announce the re-opening of their facilities. This is triggering worries at government levels in Vietnam on a second term of anti-dumping duties imposed by the EU.

A recent report in ‘Vietnam Business News’, states that the Vietnam Competition Authority under the Ministry of Industry and Trade is greatly concerned that if the EU resumes imposing the anti-dumping duties on Vietnamese bikes, it will negatively affect the Vietnamese bicycle industry and damage Vietnam’s image in international trade.

According to the department, there are three ways to illegally transport exports: creating fake certificates of origin (C/O) to enjoy low import tax rates; importing fully-assembled bikes and then packaging them with the ‘Made in Vietnam’ trademark and applying for a C/O and investing in a small-scale factory in Vietnam, then importing all spare parts from another country, assembling the product, then applying for C/O from Vietnam.

In the face of this situation, the Competition Authority and the Vietnam Chamber of Commerce and Industry (VCCI) in collaboration with the General Department of Vietnam Customs have agreed to work out a number of solutions to stop tax evasion activities and avoid the EU’s re-imposition of the dumping duties on Vietnamese bikes.

With regard to one of the illegal actions named by the Vietnam Ministry of Industry and Trade - investing in a small-scale factory in Vietnam; importing all spare parts from another country; assembling the product, then applying for C/O from Vietnam – there’s currently a rumour going round in bike exporters circles on certificates of origin.

This rumour is about new regulations for the Generalized System of Preferences (GSP) per January 1, 2011. It’s said that these new rules stipulate bikes assembled in ‘Least Developed Countries (LDCs)’ and with that enjoying import tariff benefits only need 30% local content in future instead of the current 60%.