Recently, the Vietnam Aluminum Profile Association has sent a document to the Prime Minister, ministries, branches, Hai Duong Provincial People’s Committee, proposing to develop measures to solve the situation of foreign businesses through the form of FDI investment, fraudulently avoid Vietnam’s trade remedy duty on aluminum products subject to anti-dumping duty.
According to information from the Vietnam Aluminum Profile Association, foreign businesses are looking to set up FDI registered projects in Vietnam, specifically manufacturing facilities in Vietnam after anti-dumping duty imposed by Vietnam with the amplitude from 2.49% to 35.58%.
At the end of February 2023, Xingfa – one of the major aluminum manufacturing businesses in China, the leading rival of Vietnam’s aluminum production industry, came to Hai Duong province, Vietnam to review the investment environment, looking forward to invest in aluminum and glass processing and erection factory in Cao Thang Industrial Park (Thanh Mien, Hai Duong).
Upon receiving the information, Vietnamese aluminum businesses were confused, and consequently, urgently sent documents to the competent authorities wishing for help and preventing Xingfa from penetrating into Vietnam. It is known that this enterprise was once subject to the decision to impose anti-dumping duty on aluminum products in 2019 from Vietnam.
According to the application of domestic businesses, Xingfa’s consideration of infrastructure investment in Vietnam is to avoid trade remedy duty as when they produce aluminum in Vietnam and sell it in the Vietnamese market, they will not be subject to previous anti-dumping duties.
However, the fact that behind newly established aluminum manufacturing businesses in Vietnam will have Xingfa’s support and subsidies to disrupt the market, creating a unique position in the Vietnamese aluminum market, threatening to cause serious damage to the Vietnamese market, thereby greatly affecting the stable operation and development of the aluminum market.
Thereby, the Aluminum Association said that this investment project will on the surface be beneficial to the development of Vietnam’s aluminum industry, but will actually have disadvantages in the long run, seriously affecting the domestic market.
In addition, the Association also said that they received information in the case of Xingfa Company because it was a large enterprise with far-reaching influence and was the main subject of duty imposing in the previous period. In addition to Xingfa, there are many other small businesses that implement similar investment measures to evade Vietnam’s trade remedy duty but the Association can’t have the full database.
Faced with this situation, the Aluminum Association has suggested that the competent authorities should study and consider issuing a mechanism to limit the “unclean” FDI capital as above to preserve the development of the Vietnamese market.
In addition to the effects when fragmenting the Vietnamese market, the fact that foreign businesses hide in FDI in the name of supporting Vietnamese businesses can also create consequences, such as the possibilities of foreign trade remedies agencies to impose anti-dumping duties, anti-subsidy, anti-circumvention of trade remedies for Vietnamese businesses if they decide to export products to those countries from Vietnam.
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