(VietnamNet)- Ministry of Trade had officially answer to the petition of Vietnam Steel Association for Vietnam - Italy Steel Company case in document No. 2019/BTM- XNK addressed to the Prime Minister on 10th April 2007.
 
Vietnam - Italy Steel Company does not break the law.

Ministry of Trade supposes that the contract between Vietnam - Italy Steel Company and Chinese company is merchandise one under which Vietnam - Italy Steel Company allows Chinese partner to use its "VIS" trademark which has been registered in Vietnam to make products under Chinese company's order.

According to the confirmation of National Office of Intellectual Property (NOIP), Vietnam - Italy Steel Company makes contract, which allows foreign partner to label products with VIS trademark and then the company imports these products to Vietnam, is absolutely suitable with regulations of Vietnamese laws on intellectual property.

The merchandise contract between the two companies clearly stipulates technical standards which Vietnam - Italy Steel Company oppose to Chinese company to manufacture steel such as length, size, limit of endurance and melting. The quality of imported steel has been verified by Center of technique 1 (the Directorate for Standard and Quality), which confirms that the products can meet the requirements to be imported to Vietnam.

Besides it, VIS has also had the imported products verified at two independent institutions, namely the Transport Science and Technology Institute and the Construction Science and Technology Institute. The results have confirmed that the consignment of steel that VIS ordered to produce in China under VIS trademark also meets the requirements for CIII -TCVN1651-85 group.

As such, VIS's steel bars, which were made by China does not violate the current regulations on imported goods quality management.

Regarding the label, as VietNamNet has reported, every bunch of steel weighs 2.5-3 tons attached to one etiket, which shows information such as standard, technical parameters, number of consignment and date of production. As such, this label is labeled for one bunch while each bar does not write in detail.  

The Article No. 6 of the Government’s Decree No. 89/2006/ND-CP on goods label stipulates that: "The label must be attached to the product, on the product’s package at the place where regulated content of the label can be seen easily and completely without taking apart items and parts of goods. In case of not having right to or being unable to open outside package, outside packet must have label and compulsory information"

However, Article 6 of the Decree has not stimulated in detail whether it must have label on every unit of the product or not. According to merchandise contract, steel products are tied in bunches and its origin is written on etiket. In case buyers are household, they are capable of buying small bars. As such, if there were not information from manufacturer, it would be hard to know the origin and other information of products. Whistle selling large bunch of steel to construction companies, writing sub - label down the bunch is enough to know products easily. Up to now, the instruction of Decree No. 89 has not been promulgated by the Ministry of Science and Technology.

In fact, on every unit of product of VSI steel as well as locally made and other imported products do not have label as required by the Decree No. 89 and also are stuck etiket on bunches. Therefore, if VIS products are required to stick label on every unit, other companies will also have to follow the regulation as a matter of the principle on national treatment, which proves difficult to be implemented.

Article 11 of Decree No. 89 requires every bar to show contents such as product's name, name and address of organization as well as individual who are responsible for the goods and goods' origin. Moreover, clause 45, article 12, Decree No. 89 requires the product's label of merchandise has to have some other contents such as quantity, technical parameter, production month, and so on.

Ministry of Trade thinks that the imported steel is the product made under the order by VIS, meeting the technical requirements set by VIS and meeting the quality requirements for goods imported to Vietnam.

Quality Control Department has official correspondence answers to VIS company about labeling, in which points out that VIS follow some contents of labeling on products.

VIS’ representative said that the company has submitted to the Ministry of Trade the sub-label for the product as required by the article 11 of the Decree No. 89.

MOT has supposed that the imported steel is the product made under the order by VIS, meeting the technical requirements set by VIS and meeting the quality requirements to be imported to Vietnam.

If labeling on products follows the requirement of Decree No. 89 in reality, consumers will not mistake steel bar made in China for Vietnam. Now sub- label shows the origin of products is Ho Nam (China) when they are sold in the market. However, how sub- label is designed in the product when it is sold to the market should be checked by Ministry of Science and Technology and Market Management Department.

Anti-dumping investigation to be conducted if there is legal proposal

Regarding the product price, the VIS's representative says that they will sell the China-made VIS steel and Vietnam-made VIS steel at the same price levels, which will be a bit lower than the market prices. However, this cannot be seen as the basis to conclude that VIS is dumping on the domestic market.

According to the current anti-dumping laws of Vietnam, this self-protective measures will be applied when there has signal proves that China- made steel is imported massively into Vietnam and sold at low prices, accounts for more than 3% of the total bar steel imports and steel enterprises give evidence of losses from massive imports. In that case, Vietnam Steel Association (VSA) and domestic steel producers have the right to ask for the anti-dumping investigation to consider applying self-protective measures under regulations.

VIS company orders foreign country has underlying reason roots from China management policy of economy and tax. Now, the country brings mills having the capacity of less than 2 million tons per year to the verge of bankruptcy. The existing ones produce good products with high competitiveness. Regarding tax policy to ingot steel, the country imposes tariff of 10% while China refunds VAT of 8% for finished steel export

Vietnam currently imports 80% of ingot steel amount from China. Therefore, VIS ordered China-made products made a larger profit than importing ingot to produce. It seems that other producers will follow the VIS move and it can affect investment and domestic steel industry.

Ministry of Trade has proposed that in case domestic steel producers import China-made steel massively, thus affecting local production, the Ministry of Finance would consider adjusting the tax rates on bar steel imports. However, the adjustment of the tax rates would only be carried out after thoroughly considering the domestic demand for steel and market prices. The steel prices are staying at high levels, and if raising tax when there is no big threat to local production, or over rising will affect customers and reduce competitive ability of domestic steel industry. There is no need to raise the tax rates at this moment.

The Ministry of Science and Technology should promulgate the circular guiding the implementation of the Decree No. 89 soon. The circular stimulates labeling place in packing and products in detail, which will be the basis for Center of Technique under the Directorate for Standard and Quality to test the quality standard of imported steels, makes sure to prevent Vietnam from low price steel without right quality standard or unqualified ones.

The Ministry of Industry should identify goals and strategy of steel industry clearly in future and limit the construction of the low-capacity laminating steel mills using imported ingot steel, and encourage the construction of ingot steel mills to provide materials to local producers.

Because of the interest of steel industry and of the country, Vietnam Steel Association should warn enterprises to raise high consciousness; build up the strategies on ingot steel development, self-control about ingot gradually and reduce relies on imports.

Ministry of Trade says that it would be ready for the anti-dumping investigation if it receives legal requests from Vietnam Steel Association and related enterprises.