G/SCM/Q2/VNM/6  
 
27 May 2016  
(16-2884)  Page: 1/5  
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 25 May 2016, is  being circulated at the request of the 
Delegation of the Viet Nam.  
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 Question 1   
General 
 We note that Viet Nam's previous no tification covered the years 2005-2007
3, while the 
current notification (N/253) covers 2011- 2013, leaving a gap for 2008-2010. Could 
Viet Nam explain how and when it intends to address the period covering 2008-2010? 
 
Reply 
 
Viet Nam is collecting information and data for drafting the Subsidy Notification 2008-2010. 
However, due to limited resources, the drafting has been facing difficulties and Viet Nam will try to 
submit this Notification to the WTO Secretariat as soon as possible  
 Programs not included in the notification  
 
We respectfully request that Viet Nam cons ider notifying each of the programs or 
measures described below or explain why the program or measure is not subject to the 
notification requirement under Arti cle 25 of the Subsidies Agreement. 
 Question 2  
1. Law on High Technologies 
 
Viet Nam's notification did not include the Law on High Technologies  that provides for a 
number of incentives for eligib le enterprises including "the highest land, tax and other 
incentives" and the allocation of "state bu dget funds" (Article 4); "supports from the 
national hi-tech development program" (Article  10); and the creation of a "national hi-
tech venture investment  fund" (Article 25). 
 Reply 
 
Subjects entitled to incentives under this Law are enterprises having high technology activities in 
general. We think that these incentives are not specific and thus are not considered as a subsidy in the meaning of the SCM.     
 
                                               
1 G/SCM/Q2/VNM/5. 
2 G/SCM/N/253/VNM, dated 25 September 2015. ("N/253") 
3 G/SCM/N/155/VNM, dated 13 March 2013. ("N/155") G/SCM/Q2/VNM/6 
 
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  Question 3 
 2. Viet Nam Development Bank (VDB) Export Credit 
 
While Viet Nam's previous notification cove red VDB export credit among the notified 
programs, we note that Viet Nam's latest notification does not. Public information indicates that Viet Nam provides export cr edit programs through the VDB pursuant to, 
inter alia , Decree No. 75/2011/ND-CP (30 August 2011). 
 Reply 
 
Conditions and terms of credit programs provided by the VDB are in conformity with market 
criteria without any discrimination or favour granted certain enterprises, i.e. no benefit conferred. Therefore, we do not consider them as subsidies in the meaning of the SCM.   
 
Question 4  
3. Provincial Export Promotion Activities 
 
In response to questions posed by Members during Viet Nam's last Trade Policy Review4, 
Viet Nam indicated that, following the repe a l  o f  t h e  E x p o r t  P r omotion Fund, export 
promotion activities were to be directly fund ed by the provinces instead, pursuant to the 
provisions of Decision No. 72/2010/QD-TTg (15 November 2010). We note that the latest notification does not contain informat ion with regard to current export promotion 
programs, either at the nati onal or provincial levels. 
 Reply 
 The Trade Promotion Program applies to enterprises of all economic sectors, cooperatives, and trade promotion organizations of Viet Nam. The aims of this Program are not only to promote export but also to enhance trade activities in the domestic market as well as in mountainous, 
border and island regions. Therefore, Viet Nam thinks that this Program is not specific, and thus is 
not considered as a subsidy in the meaning of the SCM.     
Question 5 
 4. Policy to Support Certain Industries 
 Viet Nam's responses in response to questi ons during its Trade Policy Review indicated 
that under Decision No. 12/2011/QD-TTg (24 Fe bruary 2011), Viet Nam set out policies 
to support such industry sectors as, inter alia , electronics and informatics, automobile 
manufacture and assembly, textiles and garm ents, and high-technology", none of which 
appear to be covered by Viet  Nam's latest notification. 
 
Reply 
 
Viet Nam will take this regulation into account during the process of drafting the following Subsidy 
Notification.  
Question 6 
 5. Regulations on Industrial Zones, Expo rt Processing Zones, and Economic Zones 
 
Viet Nam's notification did not include the Regulations on Industrial Zones, Export 
Processing Zones and Economic Zones,  (29/2008/ND-CP) that provides for a number of 
incentives for eligible enterpri ses including "the best incent ives in accordance with the 
law on corporate income tax" (Article 16); "fif ty (50) per cent reduction of income tax" 
for "employees working in economic zones" (Article 16); and the application of "Any 
expenses for investment in construction, op eration or lease of apartments and social 
infrastructure facilities serv icing employees working in industrial zones and economic 
                                               
4 WT/TPR/M/287/Add.1, dated 12 November 2013. ("TPR/287") G/SCM/Q2/VNM/6 
 
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  zones" as tax deductible (Article 16). In addition, "Investment projects in important 
technical and social infrastructure of ec onomic zones shall be funded from the 
development investment capita l of the local budget and targeted support capital of the 
central budget" (Article 17). 
 
Reply 
 
Viet Nam will take this regulation into account during the process of drafting the following Subsidy 
Notification. However, please note that incentives under this Decree are not prohibited subsidies according to the WTO rules.     
Question 7  
 6. Development Support for Key Mechanical Products for the Period 2009-2015 
 Viet Nam's notification did not include the Mechanism for Development Support for Key 
Mechanical Products and a List of Key Mech anical Investment Projects for the Period 
2009-2015 , (10/2009/QD-TTg) that provides for a number of incentives for eligible 
enterprises including investment  credit from the Viet Nam Development Bank (VDB) "for 
up to 85% of the total investment of the proj ect" (Article 1); "support from the National 
Assistance Fund for Scientific and Techno logical Development to cover expenses for 
technology transfer, purchase of design copyright and software, hiring of foreign 
experts and training of human resources" (A rticle 1); state funds for "studying key 
mechanical products" (Article  1); "Ceiling import tax ra tes" for certain imported 
products (Article 2); and an "import tax rate  of 0% or the lowest import tax rate" for 
supplies and equipment imported for the ma nufacture of key mechanical products 
(Article 2). 
 
Reply 
Viet Nam will take this regulation into account during the process of drafting the following Subsidy Notification. However, please note that incentives under this Decision are not prohibited subsidies 
according to the WTO rules.  
Question 8 
 
7. Industrial Promotion 
 
Viet Nam's notification did not include the Decree  on Industrial Promotion 
(45/2012/ND-CP) that provides for a number of incentives for eligible enterprises 
including funding for "industrial promotion ac tivities" (Article 11) from the state and 
local budget.   
Reply 
This Decree applies to organizations and individuals participating in the rural industry and applying 
cleaner manufacturing procedures. Viet Nam thinks that supports under this Decree are not 
specific, and thus are not considered as subsidies in the meaning of the SCM.  
Question 9 
 
8. A Number of Fisher ies Development Policies 
 
Viet Nam's notification did not include the 2014 Decree on  A Number of Fisheries 
Development Policies (67/2014/ND-CP), and related implementing documents, that 
"prescribe investment, credit and insuranc e policies; tax incentives and a number of 
other policies for fisheries development" (A rticle 1). The state budget will support, inter 
alia, construction funds for "infrastructur e items in aquaculture zones" and 
"concentrated breeding zones"  (Article 3); insurance premiums; and an "exemption 
from license tax for organizations, househol ds or individuals engaged in aquaculture, 
fishing or fishery logistics services" and "fro m aquaculture land or water surface rental" 
(Article 6).  G/SCM/Q2/VNM/6 
 
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  Reply 
Viet Nam will take this regulation into account during the process of drafting the following Subsidy 
Notification. However, please note that these supports are provided for the development of fishery infrastructure generally only and not contingent upon export performance.  
Program duration reported in previous notifications 
 Question 10 
 
1. For the programs covered by Viet Nam's earlier notification for which the duration 
was reported as ending in 2007
5, and for which Viet Nam recently clarified that such 
date was the end of the reporting period and not an indication of the termination of the 
subsidy effective 2007, please provide an u pdate of the status of the program or 
measure. Specifically, please indicate the current status of the following programs: 
 
 a)  Support for the Shipbuilding Industry (Program XIII); 
  b)  Assistance for Commercial Developm ent in Mountainous, Island and Ethnic 
Minority Areas (Program XIV). 
 Reply 
Viet Nam will update the status of these programs in the new Subsidy Notification.  
 
Question 11  
2. For the programs covered by Viet Nam's fi rst notification for which the duration of 
this subsidy is not indicated, we respectfu lly request that Viet Nam clarify if these 
programs are still active, and whether or not enterprises that were eligible for these 
benefits can continue to receive them according to current law: 
  a) Support for Mechanical Products (Program XII);  
b) Assistance to Enterprises Facing Difficulties Due to Objective Reasons 
(Program XV). 
 
Reply 
 
Legal documents providing guidelines to implement these Programs have been no longer effective.   
 
Question 12  3. For the programs covered by Viet Nam' s most recent notification for which the 
duration was reported as "2011-2013"
6, we respectfully request that Viet Nam clarify 
whether this indicates termination of the prog ram or simply a reflection of the end of 
the reporting period. Specifically, please in dicate the current status of the following 
programs or measures: 
 
a) Preferential Import Ta riff Rates (Program I); 
 
b) Incentives on Corporate Income Tax (Program II); 
 c) Incentives on Non-Agricultural  Land Use Tax (Program III); 
 
d) Credit Program  for Doing Traders Doing Business in Disadvantaged Regions 
(Program IV); 
 
                                               
5 G/SCM/N/155/VNM, dated 13 March 2013. ("N/155") 
6 G/SCM/N/253/VNM, dated 25 September 2015. ("N/253") G/SCM/Q2/VNM/6 
 
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  e) Credit Program  for Households Manufacturing or Doing Business in 
Disadvantaged Regions (Program V). 
 Reply 
 "2011-2013" is the reporting period. Viet Nam will update the status of the Programs notified in 
the Subsidy Notification 2011-2013 in our following Subsidy Notification.  
Question 13 
 4. Investment incentives for the following programs or measures were reported as 
eliminated and/or phased out according to Viet Nam's first notification; however, it 
appears that the 2014  Law on Investment  and 2008  Law on Corporate Income Tax  
continue to provide similar incentives for eligible enterprises such as preferential 
corporate income tax, reductions in land rental, and preferential import duties for 
equipment and machinery imported to form fi xed assets. We respectfully request that 
Viet Nam consider clarifying if these pr ograms are still active, and whether or not 
enterprises that were eligible for these benefits can continue to receive them according 
to current law: 
 
a) Other Investment Incentives for Do mestic Businesses (Program IV); 
 
b) Other Investment Incentives for Foreign-Invested Enterprises (Program VI). 
 
Reply 
 Legal documents providing guidelines to implement these Programs have been no longer effective and replaced with/amended by other legal ones. In the Report of the Working Party on the WTO 
Accession of Viet Nam, Viet Nam committed to elimin ate, as of the date of Viet Nam's accession to 
the WTO, investment incentives provided to only new beneficiaries contingent upon export performance. For old beneficiaries which the Go vernment committed to provide with investment 
incentives contingent upon export performance before Viet Nam acceded to the WTO, Viet Nam 
cannot eliminate these incentives. This issue was explained by Viet Nam during the process of 
negotiation for WTO accession and Members accepted for Viet Nam to eliminate the investment incentives granted to new benefi ciaries only.          
 
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