G/SCM/Q2/VNM/2  
 
14 July 2014  
(14-4020)  Page: 1/6  
Committee on Subsidies and Countervailing Measures  Original: English  
 
  SUBSIDIES 
REPLIES TO QUESTIONS POSED BY THE UNITED STATES1 REGARDING THE  
NEW AND FULL NOTIFICATION OF VIET NAM2 
The following communication, dated 10 July 2013, is being circulated at the request of the 
Delegation of Viet Nam.  
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  General questions  
 
Question 1 
 
In the Report of the Working Party on the Accession of Viet Nam (para. 288), Viet Nam 
committed to provide notice of the measures  terminating certain prohibited subsidy 
programs. These programs, in particular, incl uded the program that provided investment 
incentives contingent upon export perf ormance for domestic businesses and the 
program that provided invest ment incentives contingent upon export performance for 
foreign-invested enterprises. Has Viet Nam prov ided this notice? If not, it is encouraged 
to do so. 
 
Reply 
 
Viet Nam already notified the elimination of prohibited subsidies in its Subsidies Notification for the 
period of 2005-2007.  
Question 2 
 
We note that the reporting period in Viet  Nam's notification is 2005-2007. What are 
Viet Nam's plans to get up to date in meeting its subsidy notification obligation? 
 
Reply 
 
Since the submission of the notification on subsidies for the period 2005-2007, Viet Nam has 
started to prepare the notification for the subs equent period and will submit it to the WTO 
Secretariat at the soonest time.  
 
Question 3 
 Regarding any programs for which the duration of the subsidy is shown as ending in 
December 2007, please clarify whether this indicates termination of the program or 
simply a reflection of the end of the reporting period.  
Reply 
 
The duration ending in December 2007 mentioned in the Notification for the period of 2005-2007 
is simply a reflection of the end of the reporting period. 
                                               
1 G/SCM/Q2/VNM/1. 
2 G/SCM/N/155/VNM (13 March 2013).   G/SCM/Q2/VNM/2 
 
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Page 5, Program 2 – Support for the implemen tation of projects manufacturing priority 
industrial products  
Question 4 
 
Please clarify whether the "pri ority industrial products" eligible for support under this 
program include any products or industrial sectors other than those identified under 
Programme II of document WT/ACC/VNM/13/A dd.2, and provide a list identifying the 
other products or industrial sectors. (In the future, it would be helpful if the information 
on to whom and how the subsidy is provided is given in the narrative of the subsidy 
notification under review, rather than by referencing an earlier document.) 
 Reply 
 Priority industrial products are only those set forth in legal documents which are mentioned in the notification on subsidies for the period 2005-2007 (e.g. mechanical, electric and electronic 
products and vessels). 
 Page 6, Program 3 – Investment incentiv es for domestic exporting enterprises 
 
Question 5 
 
Please identify the law, regulation or measure by which preferences under these 
incentives were eliminated as of 25 Octobe r 2006, or otherwise explain the official 
mechanism by which these incentives were eliminated.  
Reply 
 
Viet Nam has seriously and fully implemented its commitments regarding the elimination of all of the prohibited subsidies in accordance with para graph 288 of the Report of the Working Party on 
Viet Nam's accession to the WTO. The legal documents by which preferences under these 
incentives were eliminated include the Investment Law No. 59/2005/QH-11 adopted in November 2005 and Decree No. 108/2006/ND-CP guiding the implementation of the Investment 
Law. 
 
-  The Investment Law removed all the subsidies contingent upon export performance 
and the use of domestic over imported goods. According to this law, projects whose 
investment licenses have been granted since Viet Nam's WTO membership have been no longer granted with any investment preferences which are contrary to the Agreement on Subsidies and Countervailing measures of the WTO. 
 
-  Decree No. 108/2006/ND-CP, which has been in effect since 25 October 2006, 
supersedes the following legal documents:  
 
 Decree No. 35/2002/ND-CP dated 29/3/2002 providing eligibility for investment 
preferences;  
 
 Decree No. 51/1999/ ND-CP dated 8/7/1999 providing forms of investment 
incentives; 
 
 Decree No. 164/2003/ ND-CP dated 22/12/20 03 providing the list of sectors and 
regions eligible for investment preferences; and  
 
 Decree No.152/2004/ ND-CP dated 6/8/2004. 
 Question 6 
 Please clarify what was eliminated: the variou s incentives themselves (i.e. the land-use 
tax, corporate income tax and import duty ex emptions or reductions) or only the export 
ratio thresholds. 
 G/SCM/Q2/VNM/2 
 
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  Reply 
 
All the incentives (e.g. exemptions or reductions of land-use tax, corporate income tax and import duty) which were contingent upon ex port performance were eliminated.  
 
Question 7  
 
Given that some of these incentives were or iginally granted for periods of up to 15 
years, explain how the 2006 elimination of  preferences affected the benefits to 
companies that were granted a multi-year pe riod of benefits extending beyond 2006. 
 
Reply 
 
All investment incentives contingent upon export performance and local-content that were granted 
to investment projects with investment certification before Viet Nam's accession to the WTO, 
including projects that are granted a multi-year period of benefits extending beyond 2006 had been eliminated before 11 January 2012.  
 
This elimination has caused severe impacts on the projects that are granted with incentives contingent upon export performance or local content, resulting in massive adjustment of business plans. Therefore, it would be appreciated if the US could provide technical assistance to Viet Nam 
to come up with workable and WTO-consiste nt solutions for the affected projects.  
 Page 13, Program 5 – Investment incentives for foreign-invested enterprises contingent 
upon export performance 
 Question 8 
 Please identify the law, regulation or me asure by which the incentives under this 
program were eliminated as of 25 October 2006  (preferential corporate income tax) and 
1 January 2006 (preferential import duty ra te), or otherwise explain the official 
mechanism(s) by which these incentives were eliminated. 
 Reply 
 Please see the answer to Question 5.  
 
Question 9 
 
Please clarify what was eliminated: the various incentives themselves (i.e. the 
preferential tax and duty rates) or on ly the export performance thresholds. 
 
Reply 
 
Please see the answer to Question 6.  
 Question 10 
 Given that these incentives were originally gr anted for periods of up to 15 years, explain 
how the 2006 elimination of these preferences affected the benefits to companies that were granted a multi-year  period of benefits extending beyond 2006. 
 
Reply 
 
Please see the answer to Question 7. 
 G/SCM/Q2/VNM/2 
 
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  Page 21, Program 7 – Preferential investment  credit for development contingent upon 
export criteria  Question 11 
 Please identify the dates on which the short- term and state export credits, and the post-
investment interest rate support, were terminated. 
 
Reply 
 The short-term and state export credits, and the post-investment interest rate support have been 
terminated since 16 January 2007, when Decree No. 151/2006/ND-CP dated 20/12/2006 came 
into effect.   
Question 12 
 
Please clarify what was terminated: the vari ous incentives themselves (i.e. the short-
term and state export credits and the post-inv estment interest rate support) or only the 
export performance thresholds.  Reply 
 Credit incentives and all other incentives contingent upon export performance have been eliminated since the effective date of Decree No. 151/2006/ND-CP dated 20/12/2006. 
 
Question 13 
 
Please identify the law, regulation or measure by which these incentives were 
eliminated, or otherwise explain the official  mechanism by which these incentives were 
eliminated.  
Reply 
 
These incentives were eliminated according to the Decree No. 151/2006/ND-CP dated 20/12/2006 
of the Government regarding investment and export credit. 
 Page 21, Program 8 – Preferential developmen t credit for investment contingent upon 
localization ratios 
 Question 14 
 
Please identify the law, regulation or me asure by which the incentives under this 
program were terminated as of 1 January 2006 (investment loans) and 11 January 2007 (post-investment interest rate support and in vestment credit guarantee), or otherwise 
explain the official mechanism(s) by wh ich these incentives were terminated. 
 Reply 
 Please see the answer to Question 13.  Question 15 
 Please clarify what was terminated: the in centives themselves (i.e. the loans and 
guarantee and the interest rate support) or only the localization ratios.  
 
Reply 
 
Since 16 January 2007, when the Decree 151/2006/ND-CP dated 20/12/2006 came into effect, 
export performance and the use of domestic over imported goods have no longer been considered in the evaluation process of investment loan capital, investment loan guarantee or post-investment interest rate support projects. 
 G/SCM/Q2/VNM/2 
 
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  Page 27, Program 10 – Export Promotio n (Updating Program XII of the SCUM 
Notification 2003-2004)  Question 16 
 Please identify the law, regulation or me asure by which the incentives under this 
program were eliminated as of 1 January  2007, or otherwise explain the official 
mechanism(s) by which these incentives were eliminated. 
 Reply 
 
The incentives under Program 10 – Export Promotion were eliminated by the Decision No. 
124/2008/QD-TTg dated 8/9/2008 of the Prime Minister, which supersedes Decision No. 
195/1999/QD-TTg dated 27/9/1999 on the establishment, use and management of the Export 
Promotion Fund.  
 Page 28, Program 11 – Trade Promotion (Upd ating Program XIII of the SCM Notification 
2003-2004) 
 Question 17 
 
Please identify the law, regulation or me asure by which the incentives under this 
program were eliminated as of 1 January  2006, or otherwise explain the official 
mechanism(s) by which these incentives were eliminated. 
 
Reply 
 
Please see the answer to question 16. 
 Page 30, Program 13 – Support for the shipbuilding industry   
Question 18 
 
Please identify the "specific conditions" und er which an enterprise qualifies for the 
15%-20% reduced income tax rates under this program. 
 Answer: 
 According to the Decree No. 24/2007/ND-CP dated 14/2/2007, "specific conditions" under which an enterprise qualifies for the 15%-20% reduce d income tax rates under this program are as 
follows: 
 
1. A facility set up by an investment project in the shipping industry belonging to the list 
of sectors eligible for investment incentives or the list of regions with difficult socio-
economic conditions will be eligible for a corporate tax rate of 20% for 10 years. 
 
2. A facility set up by an investment project in the shipping industry which meets both of 
the above-mentioned conditions will be eligible for a corporate tax rate of 15% for 
12 years. 
 Wind power support 
 
Question 19 
 
According to public press reports, the Vi etnamese government will provide financial 
support to wind power projects. According to the press report, this program became 
effective on 20 August 2011. Under this gove rnment decision, wind power projects will 
benefit with loans at low interest rates, fr ee tariffs on equipment and material imports, 
and a reduction on corporate income taxes. Please confirm the date this program/policy 
was implemented, describe the legal author ity under which the program was established 
and the types of assistance provided, and id entify the government entities that will 
administer this program. G/SCM/Q2/VNM/2 
 
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Reply 
 Decision No. 37/2011/QD-TTg on a mechanism to support wind power projects was issued on 
29 June 2011 by the Prime Minister. It has been in effect since 20 August 2011. According to this 
Decision, wind power projects in Viet Nam will be granted incentives in terms of land use payment, land rental, corporate income taxes and import taxes. Relevant agencies involved in this program 
include the Ministry of Finance, the Ministry of  Industry and Trade and the Ministry of Natural 
Resources and Environment.   Textile and apparel subsidies 
 
Question 20 
 
We note that the legal measures listed be low relating to the textile and apparel 
industries appear to have been implemente d since Viet Nam's accession to the WTO. 
These measures appear to target export grow th and describe potential financial support 
to textile and apparel industry. For each meas ure or policy listed below, please describe 
the policy objectives and the nature of any subsidy(ies) provided under these programs, and identify all other measures (laws, decisi ons, etc.) related to the implementation of 
these programs. 
 
- Decision No. 36/2008/QD-TTg (10 March 2008), Approving the Strategy on 
Development of Viet Nam's Textile and Garment Industry to 2015, and Orientation 
Towards 2020 
 - Decision No. 42/2008/QD-BCT (19 November  2008), Approval of Plans to Develop 
the Garment and Textile Industry to 2015, and Orientation Towards 2020 
 - Decision No. 12/2011/QD-TTg (24 February 2011), Policy on Developing Support 
for a Number of Industries. 
 
Reply 
 
Strategies to develop the textile and apparel sector are not legal documents. They provide only 
guidance and recommendations regarding policies to develop this sector. Based on the objectives introduced in these strategies, the Government of Viet Nam issued specific policies, which are 
drafted in a manner consistent with the country's international commitments, to meet the sectoral 
development goals. Therefore, the Strategy and Plan on development of Viet Nam's textiles and 
garment industry mentioned in this question, which are not legal documents, only provide orientations and recommendations to develop the industry. In fact, the Government has not 
provided any subsidies contingent on export performance to textiles and garment industry.  
 
 
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