According to the Trade Remedies Administration, the US Department of Commerce (DOC) received an application from the domestic industry demanding an inquiry into anti-selling tax evasion on November 18, 2021, about Vietnam’s anti-corrosion steel products (CORE) are produced from imported Japanese cold rolled steel (CRS) and hot rolled steel (HRS).

Some background information about the case

• Steel Dynamics, Inc. (SDI) is the case’s plaintiff.
• Accused products: certain products under HS codes 7210.30.00, 7210.41.00, 7210.49.00, 7210.61.00, 7210.69.00, 7210.70.60, 7210.90.60, 7210.90.90, 7212.20.00, 7212.30.10, 7212.30.30, 7212.30.50, 7212.40.10, 7212.40.50, 7212.50.00, 7212.60.00; and HS codes: 7210.90.10, 7215.90.10, 7215.90.30, 7215.90.50, 7217.20.15, 7217.30.15, 7217.90.10, 7217.90.50, 7225.91.00, 7225.92.00, 7225.99.00, 7226.99 .01, 7228.60.60, 7228.60.80, 7229.90.10.
• Plaintiff alleged that after the US investigated and imposed anti-dumping duties on Japanese cold rolled steel (CRS) and hot rolled steel (HRS) imports in 2015, the amount of CRS-HRS imports from Japan into the US dropped significantly, whereas CORE imports from Vietnam increased rapidly. The US alleged that Vietnam imported CRS-HRS from Japan to produce the product under investigation, and that this manufacturing process was not considered a “substantial transformation” because the manufacturing process in Vietnam only added a small portion of the total value of CORE steel products exported to the US. Currently, the US is maintaining an anti-dumping tax rate with CRS imported from Japan at 71.35% and HRS at 26.81%.

Previously, in 2018, the US investigated anti-dumping tax evasion with CORE steel imported from Vietnam due to suspicions of tax evasion from China, Taiwan, and South Korea, all of which reached the final conclusion. There is also tax evasion, with the applicable tax rate being the current tax rate of the dodging nation (Taiwan, China, Korea). Anti-tax avoidance procedures will not apply if it is proven that the production materials are from Vietnam or other countries/territories other than the above 03 sources (ie no tax).

The DOC will have 30 days to consider the complaint and will issue a final decision within 300 days of the complaint being filed, according to US laws.

Some suggestions for responses

The Trade Remedies Department recommends that the Association and related manufacturing/exporting enterprises actively review the export activities of steel products under investigation to the United States; research and learn the US anti-tax evasion regulations, orders, and procedures.

Furthermore, associations and corporations must adhere to rigorous timeframes for responding to and giving information to the US Department of Commerce, as well as frequently coordinating and exchanging information with the Trade Remedies Administration to get assistance in the event of a need.

ASL LAW is the top-tier Vietnam law firm for Anti-dumping & countervailing. If you need any advice, please contact us for further information or collaboration.