Directive No. 20/2005/CT-TTg on taking proactive measures to prevent and combat foreign trade disputes

DIRECTIVE

Regarding the proactive prevention and combating of foreign trade disputes

In international trade, trade disputes often arise. Our country increasingly expands its economic and trade relations with foreign countries, integrating more deeply into the global economy, and thus must face many forms of trade protectionism, such as foreign trade disputes including anti-dumping lawsuits, countervailing duties, and safeguard measures, as well as lawsuits from foreign enterprises.

This situation demands urgent and comprehensive measures to prevent and combat the aforementioned trade disputes, protecting the interests of the State and businesses. For this purpose, ministries, sectors, localities, and enterprises need to implement the following tasks and measures:

I. SOME KEY PRINCIPLES IN THE PREVENTION AND COMBATING OF FOREIGN TRADE DISPUTES

1. It is necessary to view the proactive prevention of trade disputes as a top priority.

2. When a dispute arises, it is essential to actively and proactively implement necessary measures to handle the dispute in a way that minimizes negative impacts on domestic production industries and enterprises.

3. It is crucial to thoroughly understand and effectively apply international legal provisions as well as relevant laws of the involved countries and domestic laws.

4. Besides addressing legal aspects, it is necessary to adopt a coordinated approach involving lobbying, cooperation with defendants and importing enterprises, as well as public opinion campaigns.

5. State management agencies are responsible for providing information, guidance, and support to enterprises; enterprises and industry associations play a primary role in preventing and combating foreign trade disputes.

6. Enterprises need to cooperate and collaborate to prevent and combat international trade disputes.

II. MEASURES TO AVOID FOREIGN TRADE DISPUTES

To avoid foreign trade disputes, the following measures should be implemented:

1. Thoroughly understand and strictly comply with international legal regulations and import procedures of importing countries to prevent the emergence of trade disputes.

2. Ensure the legal soundness of economic and trade contracts with foreign partners.

3. Diversify export markets, have a reasonable export structure for each product and market; avoid sudden increases in the export of certain products to a single market within a short period. If necessary, temporary measures can be applied to regulate export flows.

4. Closely monitor and timely forecast the actions of importing countries (both government and business entities) to promptly take preventive measures.

5. During business operations, strictly adhere to regulations regarding statistics, accounting, and record-keeping to ensure sufficient evidence for protection when disputes arise.

6. Strictly manage the issuance of Export Certificates (C/O): strengthen inspection and supervision of C/O issuance; prevent fraud by importing goods from third countries and using Vietnam's C/O for export.

7. If deemed necessary and feasible, Vietnamese industry associations may negotiate with the producers' associations of the importing country expected to initiate a lawsuit to adjust appropriately to ensure reasonable benefits for both parties, while coordinating with importers' and consumers' associations to prevent the emergence of disputes.

8. In individual enterprise disputes, if conditions and laws permit, the defendant enterprise should negotiate with the plaintiff to reach a compromise solution, avoiding litigation through legal enforcement bodies.

III. MEASURES TO HANDLE FOREIGN TRADE DISPUTES WHEN THEY OCCUR

When a dispute occurs, the following measures should be taken:

1. The Ministry of Trade shall coordinate with the Ministry of Foreign Affairs (including diplomatic missions in the country where the dispute arises) to promptly provide enterprises and industry associations with all necessary information (local laws, dispute proceedings, plaintiffs...), and guide them comprehensively on the actions required.

2. If the dispute involves multiple enterprises, the industry association shall coordinate and direct the activities of these enterprises.

Enterprises must fully and properly respond to all requirements set by the foreign investigating authority within the prescribed format and deadlines, prepare thoroughly, and actively cooperate with the foreign investigating authority during on-site investigations.

Enterprises must closely coordinate their activities, not create difficulties for joint efforts, and refrain from acting unilaterally for individual benefit.

3. Enterprises should appoint knowledgeable and experienced legal staff to participate in handling disputes, and if necessary, hire domestic or foreign legal consulting firms to assist in resolving the dispute.

4. Enterprises (or industry associations) should rigorously pursue the dispute, sending authorized representatives to hearings and trials if required or permitted by procedure.

5. Actively engage in lobbying and public relations activities to support the defense against the lawsuit. Responsible agencies, industry associations, and related enterprises should proactively provide information and direction to media outlets to support dispute resolution.

6. Depending on specific circumstances and legal provisions, disputes may be resolved through bilateral or multilateral arbitration or mediation mechanisms, including at the WTO after our country's accession.

7. During dispute resolution, if legal provisions allow and are feasible, negotiations with relevant partners on compromise solutions should be conducted.

8. After concluding the dispute, relevant ministries, industry associations, and enterprises should cooperate to develop appropriate measures to enforce judgments, learn from experiences, and reorganize production and business operations to minimize adverse effects (if any) on their respective industries.

IV. ASSIGNMENT OF RESPONSIBILITIES BETWEEN STATE AGENCIES, ENTERPRISES, INDUSTRY ASSOCIATIONS, AND SOCIAL ORGANIZATIONS

1. Ministry of Trade

Assumes the role of coordinating among Ministries and sectors in preventing and resolving trade disputes with foreign countries.

a) Master international laws (WTO) and local laws related to international trade disputes, coordinate with Ministries, sectors, industry associations, and localities to disseminate and popularize these laws for enterprises;

b) Direct overseas permanent missions to provide statistical data on Vietnam's export market share in the host country; investigate the situation of major exporting countries with similar products to Vietnam and their export market shares, the dynamics of local production enterprises and state authorities... to supply this information to enterprises;

c) Issue early warnings about the possibility of a lawsuit, advise enterprises and industry associations to make appropriate adjustments and prepare to counter the lawsuit;

d) Receive, study, and compile initial information on lawsuits (complaints, plaintiffs, relevant statistical data...) to take timely measures;

đ) Coordinate with production management Ministries and relevant agencies to develop solutions to resolve lawsuits, support Vietnamese enterprises in preparing necessary documents;

e) Support enterprises and industry associations in developing market strategies to prevent international trade disputes. Guide enterprises in implementing judgments and mitigating the negative impacts of lawsuits;

g) Investigate information on legal consulting firms and lobbying companies to provide to enterprises;

h) Coordinate with the Ministry of Foreign Affairs to conduct lobbying and public relations activities in host countries to support the legitimate rights of Vietnamese enterprises and ensure fair treatment;

i) Coordinate with the Ministry of Foreign Affairs to establish and strengthen commercial offices in some major partner countries to effectively handle trade disputes;

k) Strictly manage and inspect the issuance of Certificate of Origin (C/O), thoroughly check the origin of goods before issuing C/O and take resolute measures to prevent forgery or incorrect issuance of C/O leading to lawsuits.

2. Ministry of Foreign Affairs

a) Conduct diplomatic lobbying to refute incorrect views, seek support or understanding for Vietnamese enterprises, ensuring fair handling of the case;

b) In cases where multiple countries are sued simultaneously, work closely with the Ministry of Trade to enhance lobbying efforts, coordinate with affected countries to develop common strategies (if necessary) to prevent and counter lawsuits;

c) Direct overseas diplomatic missions to collect and monitor information to assist domestic agencies, enterprises, and industry associations in resolving lawsuits, providing information and supporting enterprises in selecting legal consulting firms and lobbying companies;

d) Closely monitor and compile media commentary during the development of the lawsuit, proposing solutions;

đ) Strengthen overseas diplomatic missions in major export markets to meet the requirements of adequately addressing trade disputes;

3. Ministry of Planning and Investment

a) Review and adjust current regulations stated in investment licenses (mandatory export ratio, localization ratio...), aiming to facilitate proof that enterprises are genuinely operating under market mechanisms consistent with World Trade Organization (WTO) principles;

b) Coordinate with provincial People's Committees, Industrial Park Management Boards, Export Processing Zone Management Boards to strengthen monitoring and prevention of activities by foreign-invested enterprises that may lead to international lawsuits; carefully consider granting investment permits to foreign enterprises investing in Vietnam for simple assembly or production of goods currently being sued or subject to anti-dumping duties in their home countries;

c) In cases where foreign-invested enterprises' exported products or services are sued, the Ministry of Planning and Investment, together with the Ministry of Trade, provincial People's Committees, and Industrial Park Management Boards, have the responsibility to guide and assist these enterprises in cooperating with Vietnamese enterprises and industry associations to address the lawsuits mentioned in this Directive, protecting the legitimate rights of investors;

4. The Ministry of Finance

a) Coordinate with the Vietnam Chamber of Commerce and Industry and industry associations to disseminate and provide information on accounting and auditing regulations, guiding enterprises to comply with transparent accounting principles as a basis for self-defense if trade disputes arise;

b) Assist enterprises in resolving financial and accounting issues, explaining related documents when requested;

c) Review and improve Vietnamese accounting standards to align with international practices to avoid becoming grounds for lawsuits;

5. Relevant Ministries and Sectors Managing Production Have the Responsibility

a) Guide and support enterprises in developing export strategies to avoid the risk of being sued;

b) Lead and coordinate with the Ministry of Trade and relevant Ministries and Sectors to survey and monitor the production, business, and export situation of Vietnamese enterprises at high risk of being sued, guiding preventive measures;

c) Based on monitoring and analyzing market information for products and services under their management, strengthen market forecasting, providing enterprises with necessary information on Vietnam's and other countries' export market shares in key markets to help enterprises and industry associations adjust production and export structures reasonably.

d) Cooperate with the Ministry of Commerce and related ministries and sectors to guide and support industry associations and enterprises during the process of handling lawsuits and dealing with the consequences of such lawsuits.

6. Other agencies

a) The Ministry of Justice and the Ministry of Education and Training shall survey the quantity and quality of current legal officers and international trade law students; based on this, develop training and capacity-building plans for specialized staff to participate in handling international commercial disputes and litigation, including those abroad through state scholarships, aiming to have sufficient staff in both quantity and professional competence to participate in international commercial lawsuits by 2010;

b) The Ministry of Home Affairs shall cooperate with the Vietnam Chamber of Commerce and Industry and major industry associations to strengthen organizational structures, operational mechanisms, and staff with adequate qualifications and capabilities to meet the aforementioned tasks;

c) Each ministry and sector, within their respective functions and responsibilities, shall cooperate with the Ministry of Commerce and related ministries and sectors to support industry associations and enterprises during the process of handling lawsuits.

7. People's Committees of provinces and centrally-administered cities shall coordinate with ministries and sectors:

a) Support enterprises in handling lawsuits;

b) Promote and disseminate information to producers and enterprises about international and Vietnamese laws related to anti-dumping, anti-subsidy, and self-defense measures;

c) Monitor production, business, and export activities of enterprises within their jurisdiction to minimize actions that may lead to lawsuits and negatively impact the handling and outcome of lawsuits;

d) Closely coordinate with ministries, sectors, and industry associations to provide producers and enterprises within their jurisdiction with market forecast information and policies of importing countries regarding local products, thereby guiding the planning of export production in line with global market fluctuations to avoid falling into lawsuits;

đ) Coordinate with ministries, sectors, and industry associations to handle the consequences of lawsuits; support producers and enterprises in overcoming difficulties;

8. Enterprises and industry associations

a) Measures to prevent being sued

- Develop an export strategy towards diversifying markets and products, with a reasonable product structure for each market, avoiding rapid increases in export value of certain goods in large quantities to a single country, which could serve as grounds for initiating commercial lawsuits;

- Agree on industry operation regulations to regulate production and business among members, coordinate in promoting trade and reasonable pricing policies to avoid unfair competition causing economic losses to Vietnamese enterprises, thus preventing the emergence of anti-dumping lawsuits;

- Closely monitor export market information regularly: prices, quantities, types of goods, import trends of importing countries and related countries to proactively adjust enterprise activities and avoid lawsuits;

- Combat commercial fraud, protect the reputation and common interests of the Vietnamese business community;

- Focus on training high-level professionals with expertise in international law, knowledge of importing countries' laws, and regulations of international organizations including the World Trade Organization to promote safe and effective exports, actively prevent and avoid commercial lawsuits; establish legal units and cooperate with foreign law firms to ensure strict economic contracts and participate in handling lawsuits when they arise;

b) Measures to address lawsuits when there is a risk or they have already occurred

- Industry associations shall be responsible for: (i) establishing coordination rules among participating enterprises (sharing responsibilities, assigning tasks, financial contributions...), to unify actions; (ii) serving as the main point of contact between enterprises and state management agencies, acting as the official spokesperson before the public on issues related to lawsuits; (iii) collecting information from various channels such as enforcement agencies of the initiating country, importers, diplomatic and trade representative offices of Vietnam, and foreign consulting companies to manage the lawsuit resolution process; (iv) closely linking with import partners and organizations and individuals in the importing country with vested interests to find solutions to resolve lawsuits; developing plans and advocating for the initiating party to withdraw the lawsuit; and (v) participating in lawsuits either independently or together with related enterprises;

- Seek, negotiate, and sign contracts with domestic or foreign legal consulting companies;

Enterprises can establish action groups to collaborate and proactively resolve lawsuits effectively;

- Enterprises need to: (i) fulfill assigned tasks and act according to the industry association's directives; (ii) prepare good documentation, accounting records, certificates, and self-proving arguments to refute dumping allegations and maintain human resources to counter and resolve lawsuits; (iii) budget funds for lawsuit resolution and quickly develop protective strategies; (iv) cooperate with foreign parties during investigations, especially during on-site investigations; (v) consider committing to price adjustments (minimum selling price agreements) and voluntarily limiting quantities to reduce the pressure of lawsuits;

c) Measures after the final judgment of the lawsuit Industry associations and enterprises shall cooperate to minimize the consequences of lawsuits (if any), including continuing appeals, reorganizing production and business operations;

9. Vietnam Chamber of Commerce and Industry (VCCI)

a) Through cooperative relations with international chambers of commerce, associations, and organizations representing business communities in other countries, create favorable public opinion supporting Vietnamese enterprises in commercial lawsuits in the initiating country and in exporting countries, particularly in anti-dumping and self-defense measures lawsuits.

b) Support industry associations in establishing cooperation regulations among member enterprises to proactively prevent trade disputes, primarily for leading export industries and newly established industry associations; establish a cooperation mechanism between the Vietnam Chamber of Commerce and Industry and industry associations to provide market export information support and warn about potential lawsuits; disseminate and popularize knowledge and experiences related to trade disputes...

c) For cases involving multiple industries and in certain necessary situations, if legal procedures permit, the Vietnam Chamber of Commerce and Industry may directly participate as a party in trade disputes;

d) Assist enterprises in selecting lawyers, foreign consulting companies, lobbying, and public relations;

đ) Closely coordinate with the Ministry of Trade, the Ministry of Foreign Affairs during the implementation of the above tasks;

e) Within the scope assigned for issuing Origin Certificates (C/O), strictly manage the issuance of C/Os, carefully check the origin of goods before issuing C/Os, and take measures to publicize and guide enterprises and industry associations to resolutely prevent the forgery or incorrect issuance of C/Os.

V. IMPLEMENTATION

1. The Ministry of Trade shall be responsible for coordinating with the Government Office and the Vietnam Chamber of Commerce and Industry to monitor, compile, and report to the Prime Minister on the implementation of this Directive.

2. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial People's Committees under the central government, and the Chairman of the Vietnam Chamber of Commerce and Industry are responsible for strictly and fully implementing this Directive. In case issues arise that exceed their authority, they must report to the Prime Minister for consideration and guidance on how to implement them.