G/C/W/760  
G/STR/Q1/VNM/6  
 
9 October 2018 
(18-6236) Page: 1/5 
Council for Trade in Goods  
Working Party on State Trading Enterprises  Original: English  
 
STATE TRADING  
NOTIFICATION OF VIET  NAM IN RESPONSE TO THE UNITED STATES' C OUNTER -NOTIFICATION  
OF VIET NAM'S  STATE TRADING ENTER PRISES PURSUANT TO P ARAGRAPH 4 OF THE  
UNDERSTANDING ON THE  INTERPRETATION OF A RTICLE XVII  
UNITE D STATES  REPLIES TO VIET NAM'S  RESPONSES1 TO UNITED STATES  
COUNTER -NOTIFICATION2 ON STATE TRADING ENT ERPRISES  
The f ollowing communication, dated 8  October 2018, is being circulated at the request of the 
Delegation of the United States . 
 
_______________  
 
 
The United States thanks Viet Na m for its response to the U.S. counter -notification and presents the 
following replies:  
 
General  
 
The United States has a number of replies and further questions based on Viet Nam 's submission, 
which are enumerated below for each entity that was counter -notified. Generally, the United States 
has three initial comments.  
 
First, Viet Nam asserts that none of the entities listed in the U.S. counter -notification are state 
trading enter prises (STEs), stating that "the Government of Viet Nam does not grant any exclusive 
or special privileges for these enterprises to import and export goods subject to the state trading 
{sic}. Therefore, based on WTO rules, these enterprises are not conside red as state trading 
enterprises and Viet Nam is not obliged to notify them to the WTO." Based on this statement, 
Viet Nam seems to believe that only enterprises holding exclusive or special rights to import or 
export certain goods are STEs. However, the " working definition" of a state trading enterprise 
contained in Paragraph 1 of the Understanding on the Interpretation  of Article XVII of the 
General  Agreement on Tariffs and Trade 1994 is broader than the concept on which Viet Nam 
appears to be basing its denials. Specifically, the working definition reads:  
 
Governmental and non -governmental enterprises, including marketing boards, 
which have been granted exclusive or special rights or privileges, including statutory 
or constitutional powers, in the exercis e of which they influence through their 
purchases or sales the level or direction of imports or exports.  
 
For example, the WTO 's explanation on its Technical Information on State Trading Enterprises 
website explains that exclusive privileges may include "a  monopoly in the production, consumption 
or trade of certain goods."3 Furthermore, even within the scope of Viet Nam 's seeming understanding 
of STEs, the U.S. counter -notification identified several entities that appear to have special or 
exclusive rights to trade a specific good. In these cases, we seek clarification from Viet Nam below.  
 
                                                
1 G/C/W/755 – G/STR/Q1/VNM/5 (dated 31 August 2018).  
2 G/C/W/750 – G/STR/Q1/VNM/4 (dated 11 January 2018).  
3 https://www.wto.org/english/tratop_e/statra_e/statra_info_e.htm . G/C/W/760 • G/STR/Q1/VNM/6  
 
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  Second, with respect to the legal form of two of the counter -notified entities (Vinapco/Skypec and 
Airimex), Viet Nam states that these companies have been transformed f rom state -owned 
enterprises into joint -stock enterprises. Regardless of legal form, publicly available information 
suggests that both companies retain whole or partial state ownership under Viet Nam Airlines.4 
Viet Nam also states that Saigon Jewlery Holdi ng Company (SJC) is an independent enterprise 
organized as a one -member limited liability company. However, a 2016 government measure 
identifies it as a state -owned enterprise of Ho Chi Minh City.5 In addition, as Viet Nam is aware, the 
working definition in the Understanding indicates that STEs may be non -governmental enterprises.  
 
Finally, as noted in our counter -notification, Viet Nam filed in 2016 its first STE notification since 
accession. Because of the discrepancy between the number of entities ident ified at the time of 
accession and the number identified in 2016, our counter -notification covered the entire period of 
2006 to 2016. The United States included entities that appeared to meet the working definition 
during that period. Thus, Viet Nam 's asse rtions that certain entities do not currently hold a special 
or exclusive privilege does not speak to whether those entities should have been notified between 
2006 and 2016.  
 
1. Vinafood I  
2. Vinafood II  
Viet Nam states that Vinafood I and II are "currently not granted any exclusive or special privileges 
from the Government in exporting rice and food." Viet Nam also states that the two companies ' 
export quantity and price "are determined on the basis of market factors such as supply and demand 
balance, crop yield , stocks, rice prices in international markets, etc."  
 
However, the legal authority cited by Viet Nam, Decree No. 109/2010/ND -CP, provides certain rights 
to traders that implement "centralized contracts", defined as a contract "signed under agreement 
betwe en a competent agency of the Vietnamese government and a foreign government or foreign 
territory, or the one signed under the Prime Minister's direction ."6 Other measures cited in the U.S. 
counter -notification, including Office of the Government Announceme nt 78/TB -VPCP7 and Ministry 
of Foreign Affairs Announcement 24/2011/TB -LPQT8, clearly designate Vinafood I and II as the 
traders responsible for implementing or negotiating specific state export contracts to Iraq and the 
Philippines, respectively. It would thus appear that minimally in these two instances, measures 
explicitly namin g Vinafood I and II establish special rights in Viet Nam 's conduct of rice export 
conducted through state (i.e., government -to-government) trading.  
 
The United States notes Viet Nam 's response to a question from Japan in its Trade Policy Review in 
2013 in  which it appears to acknowledge the exclusive rights of Vinafood II to sell to certain markets 
and to supply government -to-government contracts, but claims that the appointment of exclusive 
exporters does not constitute an exclusive right.9 Could Viet Nam  please explain why it believes that 
the apparently exclusive right granted to Vinafood II to implement a government -to-government 
MOU for the export of up to 1.5 million tons of rice per year to the Philippines between 2011 and 
2013 does not constitute an  exclusive or special privilege, in the exercise of which Vinafood II may 
have influenced, through its purchases or sales, the level or direction of imports or exports ? 
 
Additionally, each entity 's charter states that it may "{e}njoy subsidies, price suppo rts or other state 
preference policies when undertaking duties for the public interest, defense, security, food security, 
                                                
4 Both companies are owned by Vietnam Airlines, which is 86.18% state -owned. According to its 2017 
Annual Report, Vietnam Airlines owns 100% of Skypec and 41.31% of Airimex. Available at: 
https://www.vietnamairlines.com/en/about -us/investor -relations/annual -reports , at pp. 14 -15.  
5 The measure targets SJC for "equitization" to reduce state ownership to under 50%. See 
Decision  58/2016/QD -TTg dated 28 December 2016 of the Prime Minister on crite ria for classification of 
state-owned enterprises, enterprises with state capital and the list of state -owned enterprises to be 
restructured for 2016 -2020.  
6 Article 16, Government Decree 109/2010/ND -CP dated 4 November 2010 on the Rice Export Business.  
7 Office of the Government Announcement 78/TB -VPCP dated 9 March 2009 on Conclusions of Prime 
Minister Nguyen Tan Dung at meeting with the Northern Food Corporatio n and the Southern Food Corporation.  
8 Ministry of Foreign Affairs Announcement 24/2011/TB -LPQT dated 18 April 2011 on an international 
convention going into effect: Memorandum of Understanding between the Government of the Socialist Republic 
of Vietnam a nd the Government of the Republic of the Philippines regarding supply of Vietnamese rice to the 
Philippines.  
9 WT/TPR/M/287/Add.1 (dated 12 November 2013) . G/C/W/760 • G/STR/Q1/VNM/6  
 
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  natural disaster prevention or supply of products or services according to State price policy."10 For 
example, in Office of the Governm ent Announcement 5159/VPCP -KTN, the Prime Minister stated 
that "{t}he Southern and Northern Food Companies are required to immediately develop measures 
to purchase approximately 400 -500 thousand tons of rice in August 2008."11 In light of these two 
entities ' apparently exclusive or special rights or privileges, could Viet Nam please explain why it 
does not view these entities as STEs?  
 
Finally, Viet Nam asserts that Office of the Government Announcement 78/TB -VPCP and Office of 
the Government Announcement 5 159/VPCP -KTN are not legal normative documents and that they 
have no legal effect in the period of notification. Is Viet Nam representing that orders from the Prime 
Minister do not carry legal authority? 12 The United States notes that the period of the 
counter-notification is 2006 -2016, and, thus, measures issued in 2008 -2009 would fall within that 
period.  
 
3. PetroVietnam (PVN) and PV Oil  
Viet Nam states that "the Government of Viet Nam has no longer granted any exclusive or special 
privileges for PVN in impo rting and exporting crude oil" and that "{t}herefore, PVN is no longer 
considered as a state trading enterprise under WTO rules." However, as Viet N am notes, 
Law 10/2008/QH12 amending the Law on Petroleum states that PVN "is a state -owned company 
which con ducts oil and gas activities and signs petroleum contracts with organizations and 
individuals conducting oil and gas activities in compliance with laws."13 The law further grants 
PetroVietnam "the preemptive right to buy part or whole of an oil and gas cont ract to be 
transferred."14 Viet Nam 's submission additionally acknowledges that PVN engages in the export of 
crude oil. Is Viet Nam asserting that the above statutory rights are not special or exclusive to PVN? 
Furthermore, is Viet Nam asserting that the ex ercise of these rights does not influence, through 
purchases or sales, the level or direction of crude oil imports or exports?  
 
PVN subsidiary PV Oil states on its website, under the heading "Crude Oil Export – Import and 
Trading", that "PVOIL is the only company in Vietnam that handles marketing and sale services for 
crude oil from offshore Vietnam and overseas oil blocks invested by Vietnam Oil and Gas Group 
(PetroVietnam) and/or its subsidiaries; supplying Vietnamese crude oil and importing crude oil for  
Dung Quat refinery."15 In addition, a 2016 letter to potential strategic investors from the chair of 
the PV Oil board stated that "PV Oil is still the only enterprise in Vietnam that exports all Vietnamese 
crude oil extracted domestically and abroad, as we ll as importing crude oil for refineries."16 Is this 
information inaccurate? If still accurate, in light of this information and given the working definition, 
please explain how PV Oil is not a state trading enterprise.  
 
4. Viet Nam National Coal – Mineral Industries Holding Corporation Limited 
(Vinacomin/TKV)  
Viet Nam states that "{i}n fact, TKV has not been granted any exclusive or special privileges from 
the Government of Viet Nam in importing or exporting coal." However,  Office of the Government 
Announcement 346/TB -VPCP clearly states that two companies, including Vinacomin or TKV, are 
designated by the state as coal intermediaries:  
 
                                                
10 Government Decree 12/2014/ND -CP dated 25 February 2014 on the Charter for the Organization and 
Operations of the Northern Food Corporation; Government Decree 10/2014/ND -CP dated 13 February 2014 on 
the Charter on the Organization and Operations of the Sou thern Food Corporation.  
11 Office of the Government Announcement 5159/VPCP -KTN on Solutions to promote the purchase and 
consumption of the entire 2008 Summer -Autumn rice harvest in the Mekong Delta, dated 7 August 2008.  
12 The United States notes that Articl e 4.6 of the Law 80/2015/QH13 on the Promulgation of Legal 
Documents includes Prime Ministerial Decisions within Vietnam's System of Legal Documents.  
13 Article 14, Law 10/2008/QH12, Amending and Supplementing Several Articles of the Petroleum Law, 
dated 3 June 2008.  
14 Article 24.2, Law 10/2008/QH12, Amending and Supplementing Several Articles of the Petroleum 
Law, dated 3 June 2008.  
15 https://www.pvoil.com.vn/en -US/business -activities/international -trading -of-crude -oil-and-
petroleum -products .  
16 Letter no. 8973/DVN -KH dated 29 December 2016 from Nguyen Hoang Tuan representing PV Oil, 
regarding "Invitation to participate in selection pr ocess for  strategic investors." The letter is on PV Oil's website 
at: http://www.pvoil.la/thu -moi-tham-gia-qua-trinh-lua-chon-nha-dau-tu-chien -luoc, at pp. 1.  G/C/W/760 • G/STR/Q1/VNM/6  
 
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  [MOIT] shall direct Electricity Vietnam, PetroVietnam, and other enterprises with a 
need for imported coal to sign contracts with the TKV and Dong Bac General 
Corporations (the two enterprises designated as coal import intermediaries ) to 
supply coal in accordance with the law and international customs; contracts should 
include a guarantee tha t contracts will be executed, to create conditions for these 
intermediaries to find a stable source of supply with appropriate quality and price.17 
(emphasis added).  
 
Viet Nam asserts that this measure is "not a legal normative document to grant exclusive o r special 
privileges to TKV to importing or exporting coal." Again, is Viet Nam representing that directives 
from the Deputy Prime Minister do not carry legal authority? Furthermore, if Viet Nam is claiming 
that the announcement does not designate these tw o entities as exclusive importers of coal, could 
Viet Nam please explain the meaning of the language referenced above?  
 
5. Saigon Jewelry Holding Company (SJC)  
Viet Nam states that under Decree 24/2012/ND -CP, "the Government monopolizes the production 
of gold bars, the export of material gold and the import of material gold to produce gold bars."18 It 
further states that under Decision 1623/QD -NHNN, SJC "has been assigned by the State Bank of 
Viet Nam to process gold bars on the basis of the contract betwee n the State Bank of Viet Nam and 
SJC."19 Given that the State Bank of Vietnam has delegated to SJC the right to exercise its statutory 
monopoly in the production of gold bars, could Viet Nam please explain why it does not consider SJC 
to be an STE?  
 
6. Vietna m Air Petrol Company Limited (Vinapco/Skypec)  
 
Viet Nam states that "Decision 1139/QD -TTg of Prime Minister dated 31 July 2009 approving the 
plan to develop a stockholding system for crude oil and petroleum products of Viet Nam until 2015 
with a vision tow ard 2025 is not a legal normative document stipulating the Government to provide 
SKYPEC with exclusive or special privileges in exporting and importing aviation fuel." However, the 
Decision assigns to Vinapco/Skypec "temporary" responsibility for implement ation and management 
of the national reserves of jet fuel products (Jet A1).20 Furthermore, Viet Nam states in its submission 
that Skypec is engaged in export, import and supply of aviation fuel in Vietnamese airports to 
Vietnamese and international airline s. 
 
In light of Skypec's import and export activities and its apparently exclusive right to manage national 
reserves of jet fuel, could Viet Nam please explain why it does not consider Skypec to be an STE? 
Furthermore, could Viet Nam please clarify its sta tement that a Prime Ministerial Decision is not a 
"legal normative document"? Is Viet Nam asserting that decisions by the Prime Minister do not have 
legal authority?  
 
7. General Aviation Import Export Joint Stock Company (Airimex)  
 
Viet Nam notified Airimex a s an STE to the WTO in its 2006 revised notification, stating that "{t}he 
Company is the exclusive importer and distributor of spare parts of airplanes and most of {sic} other 
equipment in the aviation industry."21 The United States has not identified any l egal measure that 
has changed Airimex's status as an exclusive importer and distributor of these products. Could Viet 
Nam please identify any legal measures that have changed Airimex's status or otherwise authorized 
other enterprises to import these goods?  
 
                                                
17 Paragraph 3, Section 1, Office of the Government Announcement 346/TB -VPCP on the conclusions of 
Deputy Prime Minister Hoang Trung Hai at the meeting on the coal import situation, dated 26 August 2014.  
18 Government Decree 24/2012/ND -CP dated 3 April 2012 o n the Management of Gold Trading.  
19 State Bank of Vietnam Decision 1623/QD -NHNN dated 23 August 2012 on the organization and 
management of gold bar production of the State Bank of Vietnam.  
20 Article 1.4(b), Decision 1139/QD -TTg of Prime Minister dated 31 July 2009 approving the plan to 
develop a stockholding system for crude oil and petroleum products of Viet Nam until 2015 with a vision 
toward 2025.  
21 Accession of Vietnam: Notification on State Trading Enterprises Revision, WT/ACC /VNM/14/Rev.1 
(dated 6 Oc tober 2006), at pp. 8.  G/C/W/760 • G/STR/Q1/VNM/6  
 
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  8. Vietnam National Petroleum Group (Petrolimex)  
 
Viet Nam notes that Petrolimex is not named in the list of en terprises regulated by 
Decision  58/2016/QD -TTg dated 28 December 2016 of the Prime Minister on criteria for classification 
of state -owned enterpr ises, enterprises with state capital and the list of state -owned enterprises to 
be restructured for 2016 -2020. But that Decision also states that petroleum and gasoline importers 
controlling more than 30% of market share "contribute to balancing the econom y and stabilizing the 
market."22 According to Petrolimex's website, "{e}ach year, Petrolimex imports over 8 million metric 
tons of gasoline, accounting for around 50% of domestic market share."23 Furthermore, according 
to the Ministry of Finance, Petrolimex was the largest contributor to or user of the government's 
Petroleum Price Stabilization Fund for multiple years between 2006 and 2016.24 According to 
Decree  83/2014/ND -CP, this fund is used "on ly for the purpose of stabilizing the petroleum market 
and petroleum prices in accordance with the law."25  
 
It would thus appear that Petrolimex meets the market share threshold of Decision 58 and also in 
practice plays a role in stabilizing the domestic p etroleum market. In light of these facts, could 
Viet Nam please clarify whether Decision 58 encompasses Petrolimex, despite the company not 
being explicitly named? Additionally, in light of Petrolimex 's participation in import activities and its 
apparent r ole in stabilizing the domestic gasoline market, could Viet Nam please explain why it does 
not believe that Petrolimex is a STE?  
 
 
__________  
                                                
22 Section III, Appendix 1, Decision 58/2016/QD -TTg dated 28 December 2016 of the Prime Minister on 
criteria for classification of state -owned enterprises, enterprises with state capital and the list of state -owned 
enterprises to be r estructured for 2016 -2020.  
23 https://www.petrolimex.com.vn/nd/xang -dau/kinh_doanh_xang_dau.html .  
24 Reports on the "General situation on withdrawals and use of the Price Sta bilization Fund" covering the 
2009-2016 period are available on the Ministry of Finance website at www.mof.gov.vn . 
25 Article 37, Decree 83/2014ND -CP dated 3 September 2014 of the Government on petroleum trading.