G/SCM/Q2/VNM/3  
 
31 July 2014  
(14-4439)  Page: 1/3  
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES 
FOLLOW-UP QUESTIONS1 POSED BY UNITED STATES REGARDING THE NEW 
AND FULL NOTIFICATION OF VIET NAM2 
The following communication, dated 29 July 2014, is being circulated at the request of the 
Delegation of the United States.  
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  General Questions 
 
Question 1  
In response to Question 2, with respect to Vietnam's plans to become current in meeting its 
subsidy notification obligation, Vietnam replied that  it "has started to prepare the notification for 
the subsequent period and will submit it to the WTO Secretariat at the soonest time". Can Vietnam 
provide a more certain schedule for submitting this subsidy notification? 
 Question 2  
 
For the programs for which the duration was reported as ending in December 2007 and for which 
Vietnam recently clarified that such date was the end of the reporting period and not an indication 
of the termination of the subsidy effective December  2007, please provide an update of the status 
of the subsidy. Specifically, please indicate the current status of the following programs: 
 Program 2: Support for the Implementation of Projects Manufacturing Priority Industrial 
Products  
Program 9: Other Preferential Investment Credit for Development Program 13: Support for Shipbuilding Industry Program 14: Assistance for Commercial Development in Mountainous, Island, and Ethnic 
Minority Areas 
Program 16: Incentives for Investment Projects in Science and Technology  
Investment Incentives for Do mestic Exporting Enterprises 
 In response to Question 7, Vietnam stated that all investment incentives contingent upon export 
performance and local-content that were granted to investment projects with investment 
certificates issued before Vietnam's accession to the WTO, including projects that are granted a multi-year period extending beyond 2006, had been eliminated before 11 January 2012.  
Question 3  
 Vietnam has identified Investment Law No. 59/2005/QH-11 and Decree No. 108/2006/ND-CP as 
the legal documents which eliminated the preference s/incentives previously available to exporters. 
The Law and Decree excerpts below appear to indi cate that companies approved for and receiving 
incentives prior to the implementation of this Law and Decree, that would be adversely affected by 
the elimination of such incentives, are guaranteed to continue receiving such incentives on an 
                                               
1 G/SCM/Q2/VNM/2.   
2 G/SCM/N/155/VNM.   G/SCM/Q2/VNM/3 
 
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  ongoing basis. With specific reference to relevant portions of the Law and the Decree, please 
explain how this law and this decree accomplish the elimination of the incentives previously available for exporters.    
Investment Law No. 59/2005/QH-11 
 Article 11  Investment guarantees in the event of changes in law or policies  
  
1. If a newly promulgated law or policy contains hi gher benefits and incentives than those to which 
the investor was previously entitled, then the investor shall be entitled to the benefits and incentives in accordance with the new law as fr om the date the new law or policy takes effect.  
 
2. If a newly promulgated law or policy adversely affects the lawful benefits enjoyed by an investor prior to the date of effectiveness of such law or policy, the investor shall be guaranteed to enjoy 
incentives the same as the investment certificate or there shall be resolution by one, a number or 
all of the following methods:   
(a) Continuation of enjoyment of benefits and incentives;  
 (b) There shall be a deduction of the loss from taxable income;   
(c) There shall be a change of the op erational objective of the project;  
 (d) Consideration shall be given to paying compensation in necessary circumstances.  
 
3. Based on the provisions of the laws and commi tments in international treaties of which the 
Socialist Republic of Vietnam is a member, the Government shall make specific provisions on 
guarantee for interests of investors in the case where a change in laws or policies affects adversely 
the interests of the investors.  
 Decree No. 108/2006/ND-CP 
 
Article 20.-  Right to investment guarantee in case of changes in law and policy 
 
1. When a newly promulgated law or policy adve rsely affects legitimate interests to which 
investors are entitled before the new law or po licy takes effect, investors shall be guaranteed 
either entitlement to the preferences stated in thei r investment certificates or application of one or 
some of the following measures: 
 a/ Continued enjoyment of the existing rights and preferences; b/ Deduction of losses from taxable income; 
c/ Adjustment of the objectives of the project; 
d/ Consideration for compensation in some necessary cases.  
2. With regard to the measure of compensation refe rred to at Point d, Clause 1 of this Article, the 
investment certificate-granting agency shall submit to the Prime Minister for decision the guarantee of the investors' interests upon any change in law or policy adversely affecting the 
investor's legitimate interests. 
 Investment Incentives for Foreign-Invest ed Enterprises Contingent upon Export 
Performance 
 
In response to Question 10, Vietnam stated that all investment incentives contingent upon export performance and local-content that were granted to investment projects with investment 
certificates issued before Vietnam's accession to the WTO, including projects that are granted a 
multi-year period extending beyond 2006, had been eliminated before 11 January 2012.  
Question 4  
 With specific regard to the incentives provided under this program, please identify the measure, 
with specific reference to the relevant sections, that effected the elimination before 
11 January 2012 of preferential income tax and im port duty incentives contingent upon export G/SCM/Q2/VNM/3 
 
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  performance that were granted to investment pr ojects with investment certification before 
Vietnam's accession to the WTO, including projects that had been granted a multi-year period of benefits extending beyond 2006.   
Textile and Apparel Subsidies 
 Question 5 
 
In response to Question 20 regarding Textile and Apparel Subsidies, Vietnam replied that it "has not provided any subsidies contingent on export  performance to textile and garment industry". 
With respect to Decision No. 36/2008/QD-TTg; Decision 42/2008/QD-BCT; and 
Decision 12/2011/QD-TTg, please identify any measures (laws, decisions, etc.) related to the 
implementation of these Decisions and any su pport programs for the textile and garment 
industries established pursuant to these measures. 
 
 
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