THE GOVERNMENT

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- Regulation scope

This Decree details the implementation of the Ordinance on safeguards in the import of foreign goods into Vietnam; prescribes safeguard measures, investigation procedures and the application of these measures in case of excessive import of goods into Vietnam, thus causing serious injury to domestic manufacturing industries.

Article 2.- Safeguard measures

Measures for safeguard in the import of foreign goods into Vietnam include:

1. Raising the import tax rates over the current import tax rates;

2. Applying the import quotas;

3. Applying the customs quotas;

4. Applying absolute tax;

5. Granting import permits to control import;

6. Imposing surcharges on import goods;

7. Other measures.

Article 3.- Determining domestic manufacturing industries

Domestic manufacturing industries mean the entire producers of similar goods or directly competitive goods within the Vietnamese territory or their lawful representatives, which represent at least 50% of such industries' total output of domestically produced goods.

Article 4.- Interpretation of concepts

In this Decree, the following concepts shall be construed as follows:

1. "Excessive import of goods" means the import of goods with volumes, quantities or value thereof increasing absolutely or relatively over the volumes, quantities or value of similar goods or directly competitive goods, which are produced at home.

2. "Serious injury to domestic manufacturing industries" means the state of such industries' marked declines in output, domestic consumption, production profits, production growth rate; the increase in goods unsaleability; adversely affecting employment, wage level, investment as well as other norms of the domestic industries producing such goods.

3. "Threat to cause serious injury to the domestic manufacturing industries" means the certain, obvious and provable possibility to cause serious injury to domestic manufacturing industries.

4. "Similar goods" mean goods, which are identical or similar in functions, utility, quality indexes, technical qualities and other basic properties.

5. "Directly competitive goods" mean goods, which may be accepted by buyers as substitutes for goods liable to the application of safeguard measures due to their advantages in prices and use purposes.

Chapter II

INVESTIGATION FOR APPLICATION OF SAFEGUARD MEASURES

Article 5.- Investigation procedures

1. The Trade Ministry is the agency responsible for the investigation before deciding on the application or non-application of safeguards measures.

2. The investigation is conducted when:

a) Organizations or individuals representing the domestic manufacturing industries file their dossiers requesting the application of safeguard measures, made according to the contents in Article 10 of the Ordinance on safeguards in the import of foreign goods into Vietnam.

b) There are evidences showing the necessity to apply safeguard measures.

3. Basing itself on the dossiers of request for the application of safeguard measures or evidences already verified, the Trade Ministry shall issue decisions to conduct investigation or not to conduct investigation according to the principles prescribed in Article 12 of the Ordinance on safeguards in the import of foreign goods into Vietnam.

4. In the course of investigation, the concerned State bodies, organizations and/or individuals shall have to coordinate with, and supply necessary information at the request of, the Trade Ministry.

5. After the completion of investigation (within the time limits prescribed in Article 18 of the Ordinance on safeguards in the import of foreign goods into Vietnam), the Trade Ministry shall publicize the investigation results.

6. On the basis of the investigation results, after the consultation among relevant parties, after consulting with the concerned ministries and/or branches, when necessary, on forms of application of safeguard measures (in case of application) and the consequences of the application of these measures, the Trade Ministry shall issue decisions to apply or not to apply safeguard measures. Such decisions must be publicized.

Article 6.- Contents of the written requests for application of safeguard measures

A written request for application of safeguard measures, prescribed by the Trade Ministry, shall include the following principal contents:

1. The detailed description of import goods according to their technical qualities and utility, goods codes under the import tariff tables together with the currently applicable import tax rates in compatibility with Vietnam's current lists of export- import goods.

2. The detailed description of similar goods or directly competitive goods according to their technical qualities and utility;

3. Names and addresses of individuals, enterprises or organizations representing the enterprises with the written requests made to their names and the representatives of producers of similar goods or directly competitive goods;

4. The percentage of imported goods over the output of domestic similar goods or directly competitive goods of individuals or enterprises with written requests made to their names;

5. The information on volume, quantity and value of the imported goods liable to investigation of the current year and each year in the period of three consecutive years before the request for application of safeguard measures was made;

6. The description of the import increase, absolute or relative, over domestic production;

7. Information related to serious damage or threat of causing serious injury to domestic manufacturing industries of the current year and each year in the period of three consecutive years before the request for application of safeguard measures is made, including:

a) The quantity, volume and value of similar goods or directly competitive goods, which are produced domestically;

b) The use coefficient of production capacity;

c) The market share;

d) The inventory;

e) The profit or loss amounts;

f) The labor productivity index;

g) The quantity of laborers, the labor and income rates in the domestic manufacturing industries;

h) The change in the situation of goods consumption: quantity, prices;

i) Other relevant necessary information.

8. Information related to the possible increase of import and the export probability or inventories of the exporting countries regarding goods liable to investigation, which threaten to cause serious injury to domestic manufacturing industries, if any;

9. The explanation on the serious injury which has already occurred, is occurring or is in danger of occurring, or possible threats to cause serious injury due to excessive import of goods;

10. The specific requirements on safeguard measures, the temporary application of safeguard measures and the time limit for application of these measures;

11. The adjustment plans of domestic manufacturing industries to raise the competitiveness with the import goods being subjects requested for investigation and application of safeguard measures.

Article 7.- The contents of decisions to conduct investigation for application of safeguard measures

The Trade Ministry's decisions to start conducting the investigation for application of safeguard measures contain the following principal contents:

1. The detailed description of import goods subject to investigation, covering their technical properties, utility, codes in the import tariff table together with the applicable import tax rates, compatible with Vietnam's current list of export and import goods;

2. The detailed description of similar goods or directly competitive goods, covering their technical properties and utility;

3. The names of enterprises and represen-tatives of domestic organizations or individuals that produce similar goods or directly competitive goods (if any) and request the application of safeguard measures.

4. The name(s) of the country(ies) of the origins of investigation-liable goods;

5. Summarized information on increase in the import of investigation-liable goods and serious injury or the threats to cause serious injury to domestic production due to import increase.

Article 8.- Contents of investigation of serious injury or threats to cause serious injury

The investigation to determine the increase in import goods, which cause or threaten to cause serious injury to domestic manufacturing industries, shall be based on the following elements:

1. The absolute or relative increase and unexpected rise in import of goods liable to investigation over the production of similar goods or directly competitive goods of the domestic manufacturing industries;

2. The impacts of the rise in the import of investigation-liable goods on domestic market shares.

3. The prices of investigation-liable goods as compared to the prices of similar goods or directly competitive goods of the domestic manufacturing industries.

4. The impacts of the rise in the import of investigation-liable goods on domestic manufacturing industries through such elements as: output, use coefficients of production capacity, sales, market shares, prices, labor productivity, profits or losses, the employment rates, incomes and other elements, which cause or threaten to cause of serious injury to domestic manufacturing industries;

5. The unsaleability, potentials, actual export capability, probability of increase in the export of goods catergories liable to investigation of one or many exporting countries;

6. Other relevant elements necessary for the investigation.

Article 9.- Information confidentiality

The Trade Ministry shall have to keep confidential the information supplied by State bodies, organizations and/or individuals, involved in the investigation process; and must not publicize them when not yet consented by the information suppliers.

Article 10.- Consultation in investigation

1. The parties involved in the investigation process are entitled to present evidences in writing; debate and express their viewpoints on socio-economic benefits upon the application of safeguard measures.

2. The Trade Ministry shall consult with the concerned parties in investigation and make records on consultations and publicize them, except the confidential information.

Chapter III

APPLICATION OF SAFEGUARD MEASURES

Article 11.- Notification on the temporary application of safeguard measures

The temporary application of safeguard measures before the completion of investigation shall comply with the principles prescribed in Article 20 of the Ordinance on safeguards in the import of foreign goods into Vietnam.

The decisions on temporary application of safeguard measures shall be publicized with the following contents:

1. The detailed description of import goods liable to investigation, covering their technical properties, utility and codes in the import tariff tables together with the applicable tax rates, compatible with Vietnam's current list of export and import goods;

2. The detailed description of similar goods or directly competitive goods, covering their technical properties and utility;

3. Names of enterprises which produce similar goods or directly competitive goods, if any;

4. Name(s) of the country(ies) of the origin of goods subject to the temporary application of safeguard measures;

5. The import tax increase rate upon the temporary application of safeguard measures;

6. The duration of temporary application of safeguard measures;

7. Information and evidences proving that the rise in the import of goods subject to investigation causes or threatens to cause serious injury to domestic manufacturing industries, if any;

8. Information and evidences proving that the delayed temporary application of safeguard measures will cause or threaten to cause serious injury to domestic manufacturing industries, which are hardly overcome.

Article 12.- Refund of import tax differences upon the temporary application of safeguard measures

1. In cases where the results of the Trade Ministry's investigation show that the temporary application of safeguard measures is not necessary or the import tax should only be increased at a rate lower than the already applied import tax increase rate, such tax difference amounts shall be returned to the tax payers. The Trade Ministry shall issue decisions thereon.

2. The tax difference amounts mentioned in Clause 1 of this Article shall be refunded within 30 days as from the date the Trade Ministry issues decisions to apply or not to apply safeguard measures.

3. The interests on the tax difference amounts mentioned in Clause 1 of this Article shall not be paid.

4. The Finance Ministry shall have to carry out procedures for tax refund under the current law provisions on the basis of the Trade Ministry's decisions as provided for in this Article.

Article 13.- Application of safeguard measures to underdeveloped countries

1. The safeguard measures may not be applied to import goods originating from an underdeveloped country if the volume of that country's goods imported into Vietnam does not exceed 3% of the total volume of goods subject to investigation for the application of safeguard measures.

2. The safeguard measures shall still be applied to import goods originating from underdeveloped countries if the total volume of those countries' goods imported into Vietnam exceeds 9% of the total volume of import goods subject to investigation for the application of safeguard measures, in spite of the provisions in Clause 1 of this Article.

3. The determination of countries to be underdeveloped countries is based on the United Nations Organization's criteria for classification of underdeveloped countries.

Article 14.- Notification on application of safeguard measures

Decisions on application of safeguard measures must be publicized with the following contents:

1. The detailed description of the import goods subject to the application of safeguard measures, covering their technical properties, utility and codes in the import tariff tables together with the currently applicable import tax rates, compatible with Vietnam's current list of export and import goods;

2. The detailed description of similar goods or directly competitive goods, covering their technical properties and utility;

3. Names of enterprises producing similar goods or directly competitive goods;

4. Name (s) of the country(ies) of origins of goods subject to the application of safeguard measures;

5. Summarized investigation results showing the necessity to apply safeguard measures;

6. Forms and extents of application of safeguard measures;

7. The effective date and duration of the application of safeguard measures;

8. The summarized contents of evidences on serious injury or threats to cause serious injury;

9. Adjustment plans of the domestic manufacturing industries which produce similar goods or directly competitive goods;

10. The refund of import tax difference during the temporary application of safeguard measures (if any);

11. Name(s) of the underdeveloped country(ies) exempt from the application of safeguard measures in compatibility with the provisions in Article 13 of this Decree.

Article 15.- Consultation before the application of safeguard measures

1. Before issuing decisions to apply safeguard measures, the Trade Ministry shall create opportunities for satisfactory consultation with the countries having considerable interests in the export into Vietnam of goods subject to the application of safeguard measures.

2. The Trade Ministry may reach agreement with countries having considerable interests as provided for in Clause 1 of this Article on forms of compensation for injury in order to overcome unfavorable consequences caused by the application of safeguard measures.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 16.- This Decree takes implementation effect 15 days after its publication in the Official Gazette.

Article 17.- Implementation responsibilities

1. The Trade Minister shall have the respon-sibility for guiding and organizing the implemen-tation of this Decree.

2. The ministers, the have of the ministerial-level agencies, the heads of the Government-attached agencies and the presidents of the provincial/municipal People's Committees shall have to implement this Decree.

On behalf of the Government
Prime Minister
PHAN VAN KHAI