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Transcription

MINISTRY OF INDUSTRY AND TRADE
VIETNAM COMPETITION AUTHORITY
Statistics on antidumping
cases involving
Vietnam up to November 2011
EARLY WARNING SYSTEM The supporting tool for
enterprises to prevent
antidumping cases
VCA held Competition Advocacy
Seminars regarding Abuse of
Dominant and Monopoly
Position in Danang and
Hanoi with JICA
BULLETIN
No. 30 - 2011
The Vietnam Competition Authority (VCA) is an entity established by the Government under the
organization of the Ministry of Industry and Trade, with the responsibility to implement the Competition
Law, the Consumer Protection Law, Ordinance on Antidumping, Ordinance on Anti Subsidy, and Ordinance
on Safeguards
With the functions, obligations and rights provided by Decree No 06/2006/ND-CP dated 9 January
2006, the VCA works to encourage and maintain an effective competition environment for enterprises of
various economic sectors, and to protect the legitimate rights and benefits of enterprises and consumers.
The VCA's leaders include one Director General appointed by the Prime Minister based on a proposal
of the Minister of Industry and Trade and Deputy Directors General appointed by the Minister of Industry
and Trade.
VCA’S ORGANISATION CHART
VIETNAM COMPETITION
AUTHORITY
VCA’s Leaders
Antitrust
Investigation Board
Competition Policy
Board
Unfair Competition
Investigation Board
Centre for Competition
Information and Data
Office
Centre for Investigator
Training
Branch Office
in Ho Chi Minh City
Branch Office in
Danang City
Consumer Protection
Board
Promoting a fair competition environment
Protecting enterprises and consumers’ interests against conduct restricting competition
l Preventing unfair competition practices
l Consumer protection
l Supporting domestic industries to prevent and combat against
foreign anti-dumping, anti-subsidy and safeguard cases
l
l
Trade Remedies
Board
International
Cooperation Board
2
COMPETITION & CONSUMER
No. 30 - 2011
V C A
BULLETIN
ON COMPETITION AND CONSUMERS
by Vietnam Competition Authority
Letter from the EDITORIAL BOARD
Statistics on antidumping
cases involving
Vietnam up to November 2011
EARLY WARNING SYSTEM The supporting tool for
enterprises to prevent
antidumping cases
Dominant and Monopoly
Position in Danang and
Hanoi with JICA
BULLETIN
No. 30 - 2011
Publishing licence No. 10/GP-XBBT
dated 20 January 2011
Issuance date: the 20th day, monthly
RESPONSIBLE FOR PUBLICATION
BACH VAN MUNG
EDITORS
NGUYEN PHƯƠNG NAM, LE PHU CUONG,
NGUYEN THANH HAI, DO VAN HUNG,
NGUYEN THI THUY
ADVISORY COMMITTEE
TRUONG DINH TUYEN
Former Minister of Trade; Associate Professor
Dr. LE DANH VINH
Former Vice Minister of Industry and Trade; Professor
TRAN QUOC KHANH
Vice Minister of Industry and Trade
Dr. HOANG DUC THAN
National Economic University; Associate Professor
Dr. NGUYEN NHU PHAT
Institute of State and Law
Dr. BUI NGUYEN KHANH
Institute of State and Law
In the context of the increasing competitive pressure due to trade liberalisation among nations, together with reciprocity behaviors and competitive strategies of big corporations in the time of crisis, exporting
countries like Vietnam will have to face with an increasing risk of trade
remedies cases.
Recent trend shows that the European Union (EU) and the United
States (US) will increase their anti-subsidy activities due to the views that
foreign enterprises are enjoying unfair competitive advantages accrued
from their home government’s preferential programs in the absence of
strict rules controlling subsidy activities as in the above mentioned markets.
Remarkably, the EU may boost the using of “double” cases (antidumping and anti-subsidy), causing double difficulties for Vietnam exporters. The EU’s previous rules and practices on trade remedies used to
be considered as less stringent compared with other countries. At present, it can be changed less favorable for Vietnamese exporters.
The real situation shows that many Vietnam export merchandises are
being challenged along with cases against export merchandises of other
countries with similar economic situation within the region. Most recently, on 26 October 2011, the US’s domestic producers of circular
welded carbon quality pipe (CWP) filed a petition on antidumping and
anti-subsidy against CWP of 4 countries including Vietnam. This is the
second anti-subsidy case that the US initiated against Vietnam but it continues to become a debatable practice due to the concurrent antidumping and anti-subsidy case using the methodologies applied to a
nonmarket economy.
Under those circumstances, it is a common interest amongst many
stakeholders to see what competition authority and enterprises should
do to pro-actively maintain and promote the advantages of Vietnam exports.
The “Competition and Consumers” Bulletin No 30 (Dec 2011) would
like to provide readers with information related to trade remedies.
EDITORIAL BOARD
Overseas Collaborators
LE THANH VINH
PhD candidate in Law,
Monash University, Australia
Production and Release
THE CENTER FOR COMPETITION INFORMATION
AND DATA (CCID)
25 Ngo Quyen- Hanoi
Tel: (04) 2220 5305, Fax: (04) 2220 5303
Representative Office in Hochiminh City
159 Ki Con, District 1, Hochiminh City
Tel: (08)3914 6297, Fax: (08) 3914 6298
Email: [email protected]
Released by the
Central Press Issuance Company
The Editor Board of the Competition and Consumers Bulletin respectfully thank you and welcome any comments from our respected readers to improve
the quality of the Bulletin. Any comments, letters, articles, etc kindly send to:
The Editor Board of the Competition and Consumers Bulletin
25 Ngo Quyen- Hoan Kiem - Hanoi
Tel: (04) 22205305; Fax: (04) 22205303; Email: [email protected]
In this issue
5
TRADE REMEDIES
22
24
14
21
4
LAW ON COMPETITION
RESEARCH - EXCHANGE
HIGHLIGHTED ACTIVITIES
29
18
BULLETIN ON COMPETITION AND CONSUMER
BY VIETNAM COMPETITION AUTHORITY
LITERATURE CORNER
CONSUMER CORNER
QUESTIONS - ANSWERS
No. 30 - 2011
V C A
TRADE REMEDIES
Changing of U.S. trade policies and
law on trade remedies and its signficant effects on Vietnam exports
long with the world economic
crisis, the US has witnessed a
big depression and crisis
which lead to the decline of US domestic manufacturers and cause the
highest ever, unprecedented unemployment rate of 9,5%. Faced with
such threats as well as under pressure from domestic industries, the
Obama Administration has proposed to strengthen the enforcement of US trade laws and policies in
trade remedies to protect its domestic industries as well as the whole US
economy.
In the period of 2010 and 2011,
the US Department of Commerce
(DOC) has announced some new
changes which are being proposed
to strengthen the enforcement of US
trade law in support of the President’s National Export Initiative.
These proposals are mostly focused
on importing activities from non
market economies, which are alleged to have violated US trade laws.
Based on this review, the DOC has
developed a list of 14 proposals that
will help strengthen the administra-
A
V C A
tion of the nation’s antidumping
(AD) and countervailing duty (CVD)
laws, which called “US trade law enforcement package”. The purposes of
this package are:
(1) To make it more difficult to
obtain revocation of antidumping
and countervailing duty orders;
(2) To impose increased burdens
on respondents and tighter deadlines in the hope of increasing the
ability of the DOC to apply "adverse
facts available";
(3) To adopt practices which are
likely to increase the margins of
dumping and/or subsidization;
(4) To increase the level of uncertainty for exporters and importers
and thereby the impact of antidumping and countervailing duties.
Under the Obama Administration, the DOC’s International Trade
Administration (ITA) continues to
step up its enforcement of US trade
laws. In 2009, ITA’s Import Administration initiated 34 antidumping and
countervailing duty (AD/CVD) investigations compared to 19 the previ-
ous year, an increase of 79 percent.
Cases
against
non-market
economies comprise roughly onethird of the Import Administration’s
caseload.
Among the proposed changes:
Currently, individual companies
from a foreign country were excused
from AD/CVD duties by demonstrating that they were not dumping or
receiving subsidies for a certain period of time. The new proposal
would allow companies to be removed from the process only upon
the normal country-wide expiration
of those duties.
Starting as early as when the
DOC makes a preliminary determination on an AD/CVD investigation,
a new proposed measure will require importers to post cash deposits rather than bonds to facilitate
entry of their goods and services into
the United States. Currently, once an
initial affirmative determination is
made in an AD/CVD case, importers
are able to post a bond in the
amount of the estimated duties
owed. However, experience has
shown that in certain circumstances,
the amount of the bond proved inadequate to cover the ultimate
AD/CVD liability. Under this proposal, the DOC will ensure that importers will bear full responsibility
for any future duties.
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TRADE REMEDIES
Additionally, to address a range
of methodological issues unique to
antidumping (AD) proceedings involving non-market economy countries, the DOC is proposing updates
to its practice that will more closely
capture the realities of how entities
function in a non-market economy.
In this context, the DOC is proposing
to adjust its antidumping calculation
to account for export taxes or value
added taxes included in the US price
that are not rebated upon export,
just as in cases involving market
economy countries. Where such
taxes are present, this proposed
change would result in an increase in
antidumping margins.
Up to date, in order to elaborate
and implement its proposals, the
DOC has announced 5 official proposals to ask for public comments as
follows:
- Changing of calculation
methodology for dumping margin
and assessment rate in certain antidumping duty proceedings;
- Factors in assessment of separate rate for respondents in antidumping
duty
proceedings
involving non market economy;
- Changing of mandatory respondents selection methodology in
antidumping duty proceedings;
- Collecting of deposits in cash
instead of accepting bonds or securities during the provisional measures period in antidumping and
countervailing duty investigations;
- Eliminating the practices which
allow revocation of an antidumping
or countervailing duty order with respect to individual exporters or producers based on those individual
exporters or producers having received antidumping margins of zero
for three consecutive years, or countervailing duty rates of zero for five
consecutive years;
- Valuing the Labor factor of Production in antidumping proceedings
involving
Non-market
economies; and
- Assessing antidumping duty involving non-market economies antidumping proceedings.
To Thai Ninh
(Trade Remedies Board)
(to be continued)
6
No. 30 - 2011
Circular Welded Carbon-Quality
Steel Pipe from India, Oman, UAE
and Vietnam: Initiation of Countervailing duty and antidumping
by the US
n 26 October 2011, the US Department of Commerce (DOC)
received antidumping and
countervailing duty petitions against
India, Oman, UAE and Vietnam filed
by Allied Tube & Conduit, JMC Steel
Group, Wheatland Tube and United
States Steel Corporation, who are the
US’s domestic producers of circular
welded carbon-quality steel pipe
(CWP).
On 15 November 2011, the DOC
initiated an antidumping and countervailing duty investigation on the
above-mentioned product.
The subject products are classified under the following HS (Harmonised System) code: 7306.19.1010,
7306.19.1050,
7306.19.5110,
7306.19.5150, 7306.30.1000,
7306.30.5025,
7306.30.5032,
7306.30.5040, 7306.30.5055,
7306.30.5085,
7306.30.5090,
7306.50.1000, 7306.50.5050, and
7306.50.5070.
The Vietnamese producers of the
subject products mentioned in the
petition are:
• Asia Huu Lien Joint Stock Co.,
Ltd.
• Daiwa Lance International Company, Ltd.
• Hoa Phat Steel Pipe Co.
• Hoa Sen Group
• Hyundai-Huy Hoang Pipe
• SeAH Steel Vina Corporation
• Tianjin Lida Steel Pipe Group
• Vietnam Germany Steel Pipe JSC
(“VG-Pipe”)
• Vinapipe
• Vingal Industries Co., Ltd.
The period of antidumping investigation for Oman, India, and UAE is
01/10/2010 – 30/09/2011. For Vietnam, the period of investigation is
01/04/2011 – 30/09/2011. Apart from
O
the antidumping investigation, the
period of countervailing duty investigation for all the 4 countries is
01/01/2010 – 31/12/2010.
For respondent selection, there
will be difference between antidumping and countervailing duty
investigation. For antidumping investigation, the DOC will send a Quantity
& Value (Q&V) questionnaire to the 10
companies mentioned in the petition. The data and facts on quantity
and value will be used as a basis for
the identification of mandatory respondents. The Q&V questionnaire
together with the instructions will be
posted on the website of the DOC on
the same day when the initiation notice is published in the US Federal
Register at the following address:
http://ia.ita.doc.gov/ia-highlightsand-news.html. The responses are
due no later than 06/12/2011.
Besides, companies wishing to receive a separate rate for voluntary respondents must submit a separate
rate application. The detailed requirements for this application can be
found on the DOC’s website at:
http://ia.ita.doc.govlia-highlightsand-news.htrnl.
For the countervailing duty investigation, the DOC expects to select respondents on the basis of the US
Customs and Border Protection data
for US imports. The separate rate application should be filed within 60
days after the initiation notice is published in the Federal Register.
This is the US’s second countervailing duty case against Vietnam but
it continues to be a debatable practice because the US initiated both antidumping and countervailing duty
using the methodologies being currently applied for non market
economies ( NME)
V C A
The programs alleged to have
provided countervailable subsidies
in the petitions include:
A. Policy Lending:
- Preferential lending for exporters;
- Preferential lending to the steel
industry.
B. Government Provision of
Goods and Services for Less than
adequate remuneration (LTAR):
- Land Rent reduction or exemption for exporters;
- Land Rent reduction or exemption for foreign- invested enterprises
(FIE);
- Land preferences for enterprises
in promoted industries or industrial
zones;
- Provision of water LTAR in industrial zones.
C. Grant Programs:
- Export promotion program
- New product development program
D. Tax programs
Attached herewith is the list of some
law firms interested in the case
which companies can contact for
consultation:
• Mayer Brown Law firm (US)
Matthew McConkey
Mobile: +1 202 480 5019 (USA)
Mobile: +84 (0) 128 611 6073 (Viet-
V C A
- Import duty exemptions for imported raw materials for exported
goods;
- Income tax preferences for promoted industries;
- Income tax preferences for FIEs;
- Exemption of import duties on
imports of fixed assets, spare parts
and accessories for industrial zones;
- Income tax preferences for enterprises in industrial zones;
- Tax refund for reinvestment by
FIEs;
- Import duty preferences for FIEs;
- Duty exemption on goods for
the creation of fixed assets for promoted projects;
- Income tax preferences for exporters.
According to the law of the
United States, the estimated time
schedule for the antidumping/countervailing duty investigations will be
as follows:
nam)
Mobile: +86 135 1103 0873 (China)
[email protected]
Le Anh Hai
Tel : +84 8 3822 8860
Mobile: +84 (0) 916 961 727
[email protected]
• Winston & Strawn LLP Law firm
(US)
1700 K Street, N.W.
Washington, DC 20006-3817
Dinh Anh Tuyet (Lawyer)
Mobile: 0903282896
0903456092
• Grunfeld, Desiderio, Lebowitz,
Silverman & Klestadt LLP Law firm
(US)
399 Park Avenue
25th Floor
New York, NY 10022–4877
Tel: (212) 557-4000
Fax: (212) 557-4415
Mai Thi Minh Hang (Lawyer)
Mobile: (84 8) 3824 3026
(84 4) 3825 1700
Fax: (84 8) 3824 3113
(84 4) 3825 1742
Email:
[email protected]
• Kutak Rock LLP Law firm (US)
Suite 1000
1101 Connecticut Avenue, N.W.
Washington, DC 20036-4374
Tel: (202) 828-2400
Fax: (202) 828-2488
Lizbeth R. Levinson (Lawyer)
Tel: (202) 828-2400
Neo Tran (Lawyer)
Bui Ngoc Anh (Lawyer)
Mobile: 0906023873
• Hughes Hubbard & Reed LLP Law
firm (US)
1775 I Street, N.W.
Washington, D.C. 20006-2401
United States of America
Tel: (202) 721-4600
Fax: (202) 721-4646
Thai Bao Anh (Lawyer)
Mobile: (84 8) 38 237 396
Fax: (84 8) 38 234 056
• Trade Pacific PLLC
719 A Street, NE
Washington. DC 20002
Tel: (202) 223 3760
Fax: (202) 223 3763
Ngo Quang Thuy (Lawyer)
ĐTDĐ: 0913 833 777
(Trade Remedies Board)
No. 29 - 2011
7
Statistics on antidumping cases involving Vietnam up to November 2011
TRADE REMEDIES
8
No. 30 - 2011
V C A
V C A
No. 29 - 2011
9
Consolidated from various sources – VCA, Trade Remedies Board
TRADE REMEDIES
Early warning system - The supporting tool for enterprises
to prevent antidumping cases
ince 2005 to now, Vietnam faces continuous antidumping cases against major export products, remarkably the number of cases continuously increase
and keep at a high rate (on average 4 cases/year). When
faced with a case, domestic industries will suffer greatest
loss, at the same time, the country’s economy will be affected when export value decrease significantly and unemployment rate increase. One of the measures to prevent
such injuries is to provide warning about potential cases to
enterprises. This is also the original goal that the Vietnam
Competition Authority pursued when starting to set up
the early warning system of antidumping cases at the beginning of 2010.
After one year of establishment and development, the
early warning system has been consolidated and put into
use to serve more subjects, including the business community, associations, State agencies, research and policymaking organizations, etc. More specifically, when logging
into the system’s website, users will be able to get access
to the import export database of major export products
of Vietnam at major markets and can use the useful supporting tools available there.
The system’s scope of analysis: 10 products and 5 markets
Products and markets are chosen to be put into the
system on the basis of the following criteria:
• The chosen products and markets must have high export value;
• The product is the subject of a high number of antidumping cases according to WTO statistics;
• The market has undergone many investigations or
has been of the subject of most trade remedies cases (not
only against Vietnam);
• Labor intensive product
• Available information
Besides, VCA also takes into consideration the characteristics of most antidumping cases against Vietnam to
date, when most of the challenged products use manual
labor with low value added.
With the above mentioned criteria, VCA chose 10
major export products for analysis in the early warning system: interior furniture, rubber, paper, electric appliances,
S
sea food, footwear, textile, plastic, machinery, and spare
parts at 5 major markets, including: the United States, the
European Union, Australia, Canada and Brazil.
In the coming time, VCA will undertake further research to widen the scope of analysis and enhance the
support provided to the business community during the
process of defending the case as well as the process of
planning production and business strategy in the future.
Helpful supporting tools
To boost the efficiency of the early warning system, VCA has undertaken research and updated features
to support users when searching for information in the
system’s website.
Searching warning results
One of the most important outputs of the early warning system is the results of warning analysis. Enterprises,
when accessing the Warning Result part will know
whether their products will face potential cases. At present, the early warning system gives the following main
warning levels:
High potentiality
Average potentiality
Low potentiality
With certain warning level, the system also gives specific suggestions for enterprises’ reference, through which
they can build appropriate action plan.
10 ngành hàng
xuất khẩu chủ lực
1512 mặt hàng
(mã 6 số)
25150 mặt hàng
(mã chi tiết).
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10 COMPETITION
No. 30 - 2011
V C A
Import export data search
In addition to searching analysis result, users can use
import export database for 10 products at 5 major markets. The data system is updated monthly and has the lag
time of 3 months at the latest.
Example: The statistical table of seafood import value
of Australia market from some countries
Therefore, with this statistical table, users would
know the seafood export value of Vietnam into the Australia market and know about other competitors in the
same market. For enterprises in the consideration
process of investing in the Australia market, if Vietnam’s
market share is too big compared with other countries,
which means that it meets the requirement of minimum
market share threshold of 3% of total import value, enterprises need to consider their business plan by changing market to avoid the risk of facing a case in this market
in the future.
Besides, the system also has the function of mapping
database to help users have a broader overview about
the information updated to the system. For the following comparison table of export price of textile to the
Brazilian market, enterprises can make reference, calculate and establish an appropriate, not too low, price for
their export product, to avoid facing an antidumping
case and not too high a price to be able to compete in
the market.
Example: The comparison table of export price for textile
to the Brazilian market
Example: The consolidated map of import trend of
some target markets for seafood from Vietnam
Historical search of Trade remedies cases
The early warning system also provides users with a
very useful function of searching trade remedies cases.
This database is updated by VCA on a quarterly basis, including information related to the application history of
trade remedies cases of the United States, EU and some
other countries against a certain product to evaluate the
potentiality that the product will face a case in the future.
In the process of searching for market and establishing business and production plan, enterprises can
make reference of information in the early warning system. Basing on available data, the mapping function of
the system has provided relevant information on the import trend of the target markets for product categories
within the analysis scope. Therefore, enterprises will
know the move of domestic industry as well as import
policies of those countries in the future.
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No. 29 - 2011
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TRADE REMEDIES
Early warning bulletin
An early warning bulletin on antidumping cases is issued quarterly to provide the most important information of the early warning system, including:
- The analysis result of product categories in the high
potentiality zone;
- The changes in export value in the most recent 3
months;
- Consolidated antidumping cases in the world quarterly; and
- Updated information on trade remedies.
Users can register for the Bulletin or download the
bulletin directly from the system website.
Instruction to register for the early warning system
To know more information and use the above mentioned helpful tools, when accessing the website of the
early warning system at www.canhbaosom.vn/ www.earlywarning.vn, users should register to open an account.
At the moment, the information in the early warning
system will be updated in both Vietnamese and English.
With its efforts, VCA hopes that the early warning system will be the companion and supporting tools for Vietnamese exporters in their production and business
process as well as will provide helpful reference information for relevant State agencies during their research and
policy making process and trade promotion for business
community.
By Thanh Mai
(International Cooperation Board- VCA)
U.S. to impose antidumping duties on multilayered
wood flooring from China
The U.S. International Trade
Commission (USITC) Wednesday
cleared the way for the U.S. government to levy antidumping duties on imports of multi-layered
wood flooring from China.
The USITC also said in its website that the U.S. Commerce Department has already made a
ruling last month supporting the
antidumping duties.
According to the Commerce
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12 COMPETITION
No. 30 - 2011
Department ruling, the U.S. would
impose 58.84 percent-antidumping duties and countervailing duties of up to 26.73 percent on
imports of this product from
China.
Imports of multi-layered wood
flooring from China were valued at
an estimated 310 million U.S. dollars in 2010, accounting for more
than 40 percent of such products
consumed in the U.S., according to
the USITC.
The U.S. move came at a time
when protectionism is making a
comeback in America amid sluggish economic recovery. It was
widely believed that such actions
would only hurt U.S.- China trade
relations that are increasingly critical to global recovery.
Bao Anh
(Source: Antidumpingpublishing)
V C A
USITC makes determination in five-year (sunset) review
concerning gray portland cement clinker from Japan
The U.S. International Trade
Commission (USITC) today determined that revoking the existing antidumping duty order
on gray portland cement and
cement clinker from Japan
would be likely to lead to continuation or recurrence of material
injury
within
a
reasonably foreseeable time.
As a result of the Commission's
affirmative determination, the existing order on imports of this product
from Japan will remain in place.
Chairman Deanna Tanner Okun,
Vice Chairman Irving A. Williamson,
and Commissioners Charlotte R. Lane,
Daniel R. Pearson, and Shara L. Aranoff voted in the affirmative. Commissioner Dean A. Pinkert did not
participate in this investigation.
Today's action comes under the
five-year (sunset) review process required by the Uruguay Round Agreements Act. See the attached page for
background on this five-year (sunset)
review.
Background
The Uruguay Round Agreements
Act requires the Department of Commerce to revoke an antidumping or
countervailing duty order, or terminate a suspension agreement, after
five years unless the Department of
Commerce and the USITC determine
that revoking the order or terminating
the suspension agreement would be
likely to lead to continuation or recurrence of dumping or subsidies (Commerce) and of material injury (USITC)
within a reasonably foreseeable time.
The Commission's institution notice in five-year reviews requests that
interested parties file responses with
the Commission concerning the likely
effects of revoking the order under review as well as other information.
Generally within 95 days from institution, the Commission will determine
whether the responses it has received
reflect an adequate or inadequate
level of interest in a full review. If responses to the USITC's notice of institution are adequate, or if other
circumstances warrant a full review,
the Commission conducts a full review, which includes a public hearing
and issuance of questionnaires.
The Commission generally does
not hold a hearing or conduct further
investigative activities in expedited reviews. Commissioners base their injury determination in expedited
reviews on the facts available, including the Commission's prior injury and
review determinations, responses received to its notice of institution, data
collected by staff in connection with
the review, and information provided
by the Department of Commerce.
The five-year (sunset) review concerning Gray Portland Cement and
Cement Clinker from Japan was instituted on May 2, 2011.
On August 5, 2011, the Commission voted to conduct an expedited
review. Chairman Deanna Tanner
Okun, Vice Chairman Irving A.
Williamson, and Commissioners Charlotte R. Lane, Daniel R. Pearson, and
Shara L. Aranoff found that the domestic group responses for this review were adequate and the
respondent group responses were inadequate and voted for an expedited
review. Commissioner Dean A. Pinkert
did not participate in this review.
Minh Dat (Source USITC)
Russia launches AD probe against Chinese CD SS
seamless pipes
ussian Industry and Trade Ministry launched anti
dumping probe against cold drawing stainless steel
and seamless pipe imported from China, which mainly
be applied into fields of mechanical manufacturing, petrochemical, food processing, nuclear energy etc.
In Q1 2011, stainless steel and seamless pipe sales volume of Customs Union Countries gained 40% YoY, however,
output mere saw an increase of 14,3%.
Thanks to cheap price, stainless steel and seamless pipe
from China seized more market share from those from other
Customs Union countries, of which market share of those
from Russia dropped by 9,9% and profit tumbled massively.
Since Sep.28, 2009, Russian government has carried out
a special protective measure on stainless steel pipe imports,
invigorating Russian mills' enthusiasm in investing pipe producing, nevertheless, hit by flooded imports from China,
many investment projects were suspended, causing devastating losses on them.
Quyet Thang
(Source: Chinadaily)
R
V C A
No. 29 - 2011
13
Dominant and Monopoly Position in Danang and Hanoi with
JICA
n collaboration with Japan International Cooperation Agency
(JICA), on 18 November 2011,
Vietnam Competition Authority
(VCA) held a Competition Advocacy Seminar entitled “State management for Industries with
Dominant and Monopoly Position”
in Da Nang, and on 6 December
2011, VCA held a Competition Advocacy Seminar entitled “Regulation to Abuse Dominant and
Monopoly Position” in Hanoi.
Representatives of government
agencies,
enterprises,
lawyers and academicians in Hanoi
and Danang participated in these
seminars.
These two seminars were moderated by Mr. Nguyen Phuong
Nam, Deputy Director General of
VCA.
Mr. Osamu Igarashi, Resident
Advisor to VCA from the Japan Fair
Trade Commission (JFTC), JICA Expert, Mr. Cao Xuan Hien, Head of
Antitrust Investigation Board,, Ms.
Tran Phuong Lan, Head of Competition Policy Board and Mr. Bui
Nguyen Anh Tuan, Official of Competition Policy Board of VCA participated in these seminars as
I
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14 COMPETITION
No. 30 - 2011
speakers.
In his opening remarks of two
seminars in Danang and Hanoi, Mr.
Nguyen Phuong Nam, Deputy Director General of VCA, extended
his appreciation to the participants, then, asked them to deepen
the understanding on Competition Law and policy regarding the
regulation to abuse of dominant
and monopoly position through
these seminars.
Also, Mr. Nam pointed out that
it is one of the immediate tasks for
VCA to increase the efficiency and
effectiveness of the regulation to
abuse of dominant and monopoly
position, thus, he asked the participants to extend their opinions to
VCA in this occasion.
At the seminar held in Hanoi,
Ms. Tran Phuong Lan, Head of
Competition Policy Board of VCA,
made a presentation entitled
“Competition Law and Acts of
Abusing Dominant Position/Monopoly Position.”
In this presentation, Ms. Lan
explained theoretical background
of regulation to abuse dominant
and monopoly position, provisions
of Competition Law regarding
abuse of dominant and monopoly
position in detail accompanying
with the comparison with competition laws in other countries including Japan.
Also, Ms. Lan introduced the
database of highly concentrated
industries in Vietnam and market
studies as the efforts by VCA to supervise the industries with the enterprises with dominant and
monopoly position.
Mr. Bui Nguyen Anh Tuan, Official of Competition Policy Board of
VCA, made a presentation entitled
“The Role of Government in The
Supervision, Management of Dominant, Monopoly Enterprises” in
the seminar in Danang. In this
presentation, Mr. Tuan explained
theoretical background of necessity of intervention by government
to dominant, monopoly enterprises and introduced theories on
competition law and policy in developing countries.
At the two seminars in Danang
and Hanoi, Mr. Osamu Igarashi,
Resident Advisor to VCA from the
JFTC, JICA Expert, made a presentation entitled “Regulation of Private Monopolization in Japan.” In
this presentation, Mr. Igarashi explained theoretical background of
competition law violations and, requirements and evaluative points
of Private Monopolization in
Japanese Antimonopoly Act in detail. After then, he introduced JASRAC (Japanese Society for Rights
of Authors, Composers and Publishers) case, a JFTC’s case regarding Private Monopolization in
2009.
Mr. Igarashi pointed out that if
the enterprise with dominant, monopoly position continued the
same way of operation after the
deregulation to allow new entrant,
such a conduct could be a violation of Competition Law as abuse
of dominant position. Therefore,
for the enterprises with dominant,
monopoly positions, it is necessary
to comply with Competition Law
in an appropriate manner to prevent such severe treatment.
Also, Mr. Igarashi argued that
for competition law, flexible rule
of reason test by competition authority is appropriate based on
Japan’s experience. To realize it,
currently VCA is preparing for the
amendment of Competition Law,
thus, lastly he called to participants for further cooperation to
V C A
VCA.
Mr. Cao Xuan Hien, Head of Antitrust Investigation Board of VCA
made a presentation entitled
“Competition Law and Acts of
Abusing Dominant Position/ Monopoly Position.” in the seminar in
Danang and the presentation entitled “Enforcement of Competition
Law in Vietnam” in the seminar in
Hanoi. In these presentations, Mr.
Hien explained the organizations
of VCA and Vietnam Competition
Council (VCC), the acts fall into the
violations of Competition Law as
abuse of dominant/monopoly position, case handling procedure of
Competition Law and, a formal
case on abuse of dominant/monopoly position (Vinapco case) in
detail.
In the question and answer
session of the two seminars, Mr.
Igarashi received a question on
the independency of the JFTC. He
answered that in Vietnam, for
competition restriction acts, VCA
carries out investigation and Vietnam Competition Council make
decision on the case, however, in
Japan, the JFTC carries out both investigation and decision-making.
In addition, the independencies of
Chairman and Commissioners of
the JFTC have been secured by the
Antimonopoly Act. For the future,
it is important to increase the independency
of
competition
agency in Vietnam.
Also, Mr. Igarashi received a
question on the surcharge payment order system under the Antimonopoly Act from a Member of
VCC who participated in the seminar in Hanoi, then, he answered
the outline of surcharge payment
order system especially the point
that the calculation ratio is mandatory fixed for the JFTC.
At the end of the two seminars,
the organizers received high appreciation from participants, then,
the seminars finished very successfully.
Mr. Osamu Igarashi
Resident Advisor to VCA from the
JFTC
Seminar on “Manufacturing &
trading of bathroom products
and consumer protection”
n 4 November 2011, Vietnam
Competition Authority organised a seminar on “Manufacturing & trading of bathroom
products and consumer protection”
at the premise of the Hanoi Branch of
the Market Management Department, 80 Quang Trung, Ha Dong,
Hanoi.
Amongst those attending the
seminar were the leaders of VCA,
Hanoi Department of Industry and
Trade, Hanoi Branch of Market Management Department, representatives from relevant ministries and
industries, producers and traders of
bathroom products, distributors, and
representatives of consumers, and
media agencies. Mr Nguyen Phuong
Nam- Deputy Director General of
VCA chaired the seminar.
Mr Nguyen Van Thanh – Deputy
Head of Consumer Protection Board,
VCA - delivered a presentation with
the topic of “Subjects regulated by
the Law on Protection of Consumer
Interests”. The presentation gave an
overview of the current legal provisions related to consumer protec-
V C A
O
No. 29 - 2011
15
tion, and highlighted the rights and
obligations of consumers, the responsibilities of organisations and
individuals trading in goods and
services, as well as the responsibilities of social organisations and State
management agencies in consumer
protection.
Others such as representatives of
the Hanoi Branch of the Market Management Department, VATAP (Vietnam
Association
for
Anti-counterfeiting and Trademarks
Protection), VINASTAS (Vietnam
Standards and Consumers Association) and the Vietnam Inax Ltd. Co
also expressed their own viewpoints
through various speeches.
The representative of the Hanoi
Branch of the Market Management
Department provided a summary of
the fights against counterfeit products, infringement of intellectual
property rights, the real situation regarding counterfeit products, and
goods produced in infringement of
intellectual property rights, particularly with respects to bathroom
products. The real situation of counterfeit and fake construction materials and bathroom products in the
Vietnam market was also analysed by
the representative from VATAP under
many aspects. Mr. Vuong Ngoc Tuan,
Deputy Secretary General of VINASTAS, represented VINASTAS to deliver
a speech on “Enterprises, consumers,
VINASTAS and the market for bath-
room products”, in which he provided information about the number
of consumer claims received by
VINASTAS so far on construction materials and bathroom products. He
pointed out that even though there
were not many claims, it did not
mean that there were only a few
counterfeit and fake products. It is
because the consumers themselves
could not identify the counterfeit
products and because the low value
of the products made them hesitate
to file a claim. Mr. Tuan also introduced about the “Enterprises trusted
by consumers” program by VINASTAS, which was initiated with the objective of protecting consumers
against unfair and unethical business
conducts.
Mr. Morita Nguyen, Director of
Inax Ltd Co., delivered a short speech
at the seminar in which he shared his
concerns, “Our company is one of the
victims of counterfeit and fake products in the last 15 years. This problem
caused a great loss of revenue for the
State, while companies suffered from
are unfair competition, which also affect their revenue and the welfare of
workers. Consumers have to pay real
money to buy fake goods, affecting
their health. We think one of the important reasons for this problem is
the low penalty, which does not have
any deterrent effect at all”.
It is clear that currently in the
market, imported bathroom prod-
ucts from China accounted for a high
proportion with many designs,
brands and origins. These products,
when imported into Vietnam, have
been “localised” by many methods
such as adding accessories, or byproducts at processing villages, attaching new labels and re-packaging
and selling with very competitive
prices. Many products accepted by
the market were ordered exactly
from China to Vietnam, in which typically are INAX, Joden, and Clever
shower. The issue of counterfeit and
fake goods is a very serious issue, affecting the rights of consumers and
legitimate enterprises.
Many participants at the seminar
shared that, currently, the protection
of consumers as well as enterprises’
legitimate rights and benefits is not
effective, partly because many enterprises’ brands have been counterfeited but they are reluctant to file a
complaint because of their concerns
about cumbersome administrative
procedures and counter-effects
when publicly announcing that their
products are counterfeited or faked.
If State administration agencies and
relevant associations are more proactive, hopefully this situation will be
improved in the coming time.
By An Binh.
Dissemination Conference on Law on Protection of
Consumers' Rights in Hue
n order to raise the awareness of
consumers about the contents of
Law on Protection of Consumers’
Rights, with the support of the Star
Plus project, on 17 November 2011,
Vietnam Competition Authority, in
cooperation with Thua Thien Hue
Department of Industry and Trade,
organised a conference to disseminate information on the Law on Protection of Consumers’ Rights in Hue
City.
The conference was attended by
representatives from Vietnam Competition Authority (VCA), including
Mr. Nguyen Phuong Nam - Deputy
Director General, Mr. Nguyen Van
Thanh – Deputy Head of Consumer
I
& CONSUMER
16 COMPETITION
No. 30 - 2011
V C A
Protection Board, and Mr. Doan Tu
Tich Phuoc – Deputy Head of Unfair
Competition Investigation Board. In
addition, the conference was attended by Mr. Le Phuoc Hoa –
Deputy Director of and officials
from Thua Thien Hue Department
of Industry and Trade. The conference was also participated by Ms.
Phan Cam Tu – representative from
Star Plus project, delegates from
the Vietnam Standards and Consumers Association, relevant departments/
boards/branches,
enterprises in Thua Thien Hue
province as well as many press
agencies.
At the conference, Mr. Nguyen
Van Thanh delivered an overview
about the basic contents of the Law
on Protection of Consumers’ Rights
and consumer protection activities
in Vietnam, specially emphasizing
the rights of consumers as well as
the responsibilities of enterprises
and organizations. The presentation also provided many illustrative
examples of practical issues in consumer protection and many useful
advices to the consumers to protect
their rights in trading.
The presentation of Mr. Doan Tu
Tich Phuoc outlined fundamental
contents about unfair competition
practices, advertising for the purpose of unfair competition, the relationship between this kind of
advertising and consumer protection. This is an important clarification helping the consumers to
understand the close relationship
between the Law on Competition
and the Law on Protection of Consumers’ Rights.
The representative from the
Vietnam Standards and Consumers
Association presented some general remarks about the status of
consumer protection activities in
the province recently, the achievements and existing difficulties, as
well as provided some recommendations to Vietnam Competition
Authority – the direct State administration agency in consumer protection.
The conference was closed successfully with a Q&A session and active exchanges among business,
consumers, speakers and State
management agencies on some situations as well as infringements of
enterprises, etc.
In his closing remarks, Mr.
Nguyen Phuong Nam summarized
the basic contents presented during the conference, hence emphasized on the role of State
management by the Department of
Industry and Trade in consumer
protection, the role and necessity of
consumer protection associations
in provinces, as well as the supervision and support from Vietnam
Competition Authority. Mr. Le
Phuoc Hoa from Thua Thien Hue
Department of Industry and Trade
appreciated the cooperation of
Vietnam Competition Authority,
Ministry of Industry and Trade to organize this event which is necessary
for officials from departments/
boards/ agencies, enterprises, consumers in the province and looked
forward to participating in similar
conferences in Hue as well as nationwide.
Le Nguyen
ASEAN Competition Conference Promoting Competition Policy
he 1st ASEAN Competition
Conference convened from
15-16 November, one of
ASEAN events, was held in Bali, Indonesia – the chairman of ASEAN
in 2011. Through open discussions
among competition authorities
and relevant stakeholders within
and beyond ASEAN, this conference was expected to contribute to
raising public awareness as well as
support for competition policy in
ASEAN.
The Vice Minister of Trade of In-
T
V C A
donesia, H.E. Dr. Bayu Krisnamurthi
said in his opening remarks that
competition policy and trade policy were two sets of interlink policies, therefore, the operation and
stable development of the market
would be potentially affected if
market competition is not guaranteed.
Mr. Pushpanathan Sundram,
Deputy Secretary-General of
ASEAN for ASEAN Economic Community (AEC), also confirmed the
importance of competition policy
in encouraging healthy business rivalry, fostering a level playing field,
hence improving the overall efficiency of the economy.
During this Conference, Vietnam contributed two amongst
thirty presentations. The representative of Vietnam Competition Authority shared some experiences in
the development and enforcement
of the Law on Competition in Vietnam. As one of the earliest nations
(Continued on page 23)
No. 29 - 2011
17
CONSUMER CORNER
Chinese ceramics threatening Bat Trang
products – from the perspective of the
Law on Protection of Consumers’ Rights
ecently, information on ceramics from China flooding the market and taking Bat Trang
ceramics’ market share has been published on some e-newspapers. Some
shop owners even intentionally hide
the origin of products made in China
and sell them together with Bat Trang
products. This act violates the Law on
Protection of Consumers’ Rights.
Online Tien Phong Newspaper on
07/11/20011 reported that about 10
– 15% of products in the market came
from China, mainly consisting of cups,
bowls, plates and souvenirs made of
pottery. The local State management
agency and the representative board
of Bat Trang traditional trade village
said that they knew about this act but
the shop owners intentionally hid
about the product origins, and they
took no measures to prohibit and
handle this violation act. Therefore,
ceramic products having unclear origin have been and are being marketed with Bat Trang products in this
traditional trade village.
Violating the Law on Protection of
Consumers’ Rights
The shop owners’ acts, such as
selling ceramics products with different trade names together with Bat
Trang ceramics products, even deliberately hiding their origin by using
black pen to color the words “Made in
China” and then introducing them as
premium Bat Trang ceramic products
with beautiful colors and models,
constitute fraudulent or misleading
acts to the consumers.
R
& CONSUMER
18 COMPETITION
No. 30 - 2011
Such acts are prohibited by Article 10 of the Law on Protection of
Consumers’ Rights.
Point a, Clause 1, Article 10 defines that:
“Business individuals, organizations are prohibited from conducting
fraudulent or misleading acts to the
consumers by way of providing inaccurate and misleading information or
hiding information about one of the
followings:
a) Goods and services which are
provided by such business individuals, organizations”
In reality, most consumers only
pay attention to the models and
prices of goods but ignore their origin. Moreover, products, which are
not Bat Trang ceramics, have beautiful designs and are relatively cheaper,
thus they are easier to be sold. In this
case, the Law on Protection of Consumers’ Interest stipulates the responsibilities of business individuals
and organizations towards consumers for properly labeling their
goods as provided for by law and
publicly displaying the prices of
goods or services at their business
premises.
Threatening the prestige and
trade name of Bat Trang ceramics
The ceramics products with
unclear origin that are being sold in
Bat Trang are mainly illegally imported. Selling products with unclear
origin together with Bat Trang products will negatively affect the prestige
and trade name of Bat Trang ceramics. The local authority has not taken
any measure to prohibit and handle
this act.
For the purpose of making
their own profit, the shop owners
have not only violated the Law on
Business and the Law on Protection
of Consumers’ Rights but have also
buried the famous trade name of Bat
Trang traditional trade village by
themselves. Intervention by relevant
State agencies is the need of the hour.
Phan Khanh An
(Consumer Protection Board – Vietnam Competition Authority)
Cartels and
consumers [1]
People of the same trade
seldom meet together, even
for merriment and diversion,
but the conversation ends in a
conspiracy against the public,
or in some contrivance to raise
prices. It is impossible indeed
to prevent such meetings, by
any law, which either could be
executed, or would be consistent with liberty and justice.
But though the law cannot hinder people of the same trade
from sometimes assembling
together, it ought to do nothing to facilitate such assemblies, much less to render them
necessary.
The prophetic words of the great
economist Adam Smith—to the effect that when traders meet they do
not just talk about the weather, but
scheme to profiteer—are still true to
this day, more than a few centuries
later, given the increasing prevalence of cartels all over the world.
What are cartels?
Firms generally detest competition, as it drives away profits and
takes away important decisions over
market activities, such as pricing
and output from their control. In any
market therefore, competing firms
have an incentive to coordinate
their production and pricing activities so as to behave like a monopoly,
in order to increase their collective
and individual profits through restricting market output and raising
the market price. Coordination of
behaviour among competing firms
is known as collusion, and an organization of independent producers in
V C A
the same industry who collude to
co-ordinate pricing, production or
marketing practices to limit competition, maximize market power and
affect market prices is referred to as
a “cartel”[2]. A cartel can also be defined as a formal agreement among
firms in an oligopolistic industry[3] .
A cartel can be a result of either
explicit cartel agreements or implicit
collusion. Explicit agreements, occur
when the cartel members have a
formal agreement to control the
market. Because such collusion is illegal in jurisdictions with competition laws, such a formal agreement
is likely to be highly secret and unlikely to be documented and would
be a result of covert meetings,
which might involve nothing more
than a "casual" lunch among company presidents, a "chance" meeting at a conference of industry
executives, or company decisionmakers skulking around back alleys
in the dead of the night discussing
price charges[4] . Firms that engage
in explicit collusion are usually
shrewd enough to avoid the documents falling in the hands of antitrust authorities. Implicit collusion,
also termed tacit collusion, occurs
when the members informally agree
to control the market, sometimes to
the extent that this would be
through nothing more than interdependent actions, such as price
leadership where one firm takes the
lead of setting a price that will boost
profits for the entire industry and
other firms then go along with this
price, knowing that they stand to
benefit by doing so. With no formal
V C A
agreement, prosecuting firms that
admit to implicit collusion is difficult
and it has been used as a defence
mechanism even by explicit cartels.
There are typically four types of
cartel conducts:
• price fixing
• market sharing
• output restricting
• bid rigging
The three former types of conducts usually include all firms in a
market, or a majority of them, coordinating their business, whether visà-vis price, geographic market, or
output, to effectively act like a monopoly and share the monopoly
profits accrued from their collusion.
The fourth and last type of cartelised
behaviours usually involves competitors collaborating in some way
to restrict competition in response
to a tender and might be a combination of all the former practices.
The harms of cartels
But for some exceptions, most
cartels are unanimously condemned by economists and authorities as the worst of all antitrust
abuses, especially those engaged in
price fixing, because no expert has
satisfactorily established that consumers will benefit from price fixing.
On the contrary, economic analysis
has shown that cartels are inefficient
and lessen consumer welfare. It is,
therefore, not surprising that competition authorities around the
world have the closest meeting of
minds on the baleful influence of
cartels.
Many experts consider anti-cartel activity the most important function of a competition agency. They
feel that, because hard-core cartels
cause the greatest harm to consumers, finding and prosecuting
these agreements should be a top
priority of competition officials.
Prosecuting cartels may be the most
difficult of the tasks assigned to
competition authorities as cartels
are conceived and carried out in secret. Cartel operators, knowing that
their conduct is unlawful, do not
willingly cooperate with competition officials in the course of investigations. Thus obtaining evidence to
prove the existence of cartel agreements requires special investigative
tools and skills.
In the beginning of the 1990s,
there were about 30 countries with
a competition law. At present there
are over 100 countries in various
stages of enactment of competition
law. Competition laws across the
world differ in various aspects; however, as said, there is one feature
that unites them i.e. condemning
cartel agreements. 90 years of the
last century, in particular, saw a
global rise in the number of international cartels discovered, which was
evident thanks to the increase in
number of countries adopting competition policies and collaborative
efforts to uncover them by the competition authorities. Internationalcartel discovery rates have been
increasing since 1990, from four to
six per year in the early 1990s to
about 35 per year in 2003-2005[5] . It
is believed that, the US and EU authorities have prosecuted about 100
international cartels during this period[6]. This considered in conjunction with the fact that some believe
that as few as one in six or seven cartels are detected and prosecuted[7],
and also that other cartels may have
been discovered and prosecuted in
countries other than the US and EU,
gives a rough indication of their
high incidence. The record, however, has been much lower in the
developing world. This, arguably,
was not due to the fact that cartels
are less common in these developing economies, but because the law
enforcement agencies there were
less equipped to deal with them.
Sadly enough, this is no reason
for cartelists to cause less harm to
the vulnerable consumer in developing countries, as well as these
economies. Of the international
[1] Acknowledgements are thankfully
made for the use of materials and excerpts
from an article entitled “Trade associations
as cartels” by Pradeep S Mehta, CUTS Secretary General, published on the Financial Express, India in October 13, 2011 and the
author’s own writings in a report entitled
“Study of Cartel Case Laws in Select Jurisdictions – Lessons for the Competition
Commission of India”, 2007
[2] Canadian Economy online, found at
http://www.canadianeconomy.gc.ca/english/economy/cartel.html
[3] OECD Glossary of Industrial Organisation Economics and Competition Law
[4] AmosWeb Encyclonomic Web. Pedia
at
http://www.amosweb.com/cgibin/awb_nav.pl?s=wpd&c=dsp&k=collusion
No. 29 - 2011
19
CONSUMER CORNER
trade flows identified in 1997 that
best matched the products sold by
sixteen international cartels, which
operated during the 1990s, developing countries’ imports of these
goods that year amounted to
US$81.1bn, an amount that represents 6.7 percent of these countries’
imports and 1.2 percent of their national incomes. With an estimated
increase in prices of between 20 and
40 percent, one can then calculate a
range of estimates for the overcharges paid by developing countries in 1997; had all sixteen of these
cartels been in operation during
that year. These overcharges are in
the range of US$16-32bn, which are
equivalent to between one third
and two thirds of the total annual
multilateral and bilateral aid, received by developing countries in
the late 1990s. Thus, there is a
strong case for strengthening the
enforcement activity of competition
authorities in developing countries
vis-à-vis cartels. This, however, continues to be straddled by inadequate legal frameworks or tools, lack
of information or information asymmetries, or worst, human resource
handicap.
Cartels could be present in any
market, industry or sector of the industry, affecting consumers both directly and indirectly. When firms
producing/selling consumer goods
collude, consumers would suffer
from high prices (because prices are
fixed by firms and usually maintained at an
unreasonably high
level to extract
monopolistic
rents), lack of
choice
(because the
market
might be
divided
or output be
r
e
stricted).
When firms producing/selling
inputs for other
businesses collude, the consumers would
also
ultimately suf& CONSUMER
20 COMPETITION
No. 30 - 2011
fer, because the downstream businesses would certainly pass on the
extra costs to consumers. Even
when firms collude to rig government bids, tax money would be
wasted and that also comes from
the pockets of consumers as taxpayers.
Examples could be cited about
cartels being uncovered in markets
which range from being very close
to the consumers’ everyday life to
more abstract things like soda ash.
In August 2010, for example, the
Competition Commission of Pakistan (CCP) imposed a penalty of 50
million Pakistani rupees on the Pakistan Poultry Association for alleged
cartelisation in the chicken and egg
markets. In Europe, the Finnish
Competition Authority also found a
price fixing cartel by hairdressers,
and recommended to the Market
Court the imposition of a fine of
33,000 euros for the conduct, which
had taken place between 2000 and
2006. In March 2010, the Oslo District Court upheld the decision of
the Norwegian Competition Authority to impose a fine of
NKr400,000 on a Norwegian trade
association for bus charter operators, which had encouraged its
members to increase their prices together. In June this year, the National Competition Commission in
Spain issued a fine of 100,000 euros
to the National Association of
Canned Fish and Shellfish, after the
association had imposed a collective recommendation to transfer the
price increase of metal containers to
canned seafood.
Cartels and the law in Vietnam
The Competition Law of Vietnam
lists all types of cartel agreements in
its Article 8, which talks about “competition-restricting agreements”.
“Competition restricting agreements include:
1. Agreements on directly or indirectly fixing goods or service
prices;
2. Agreements on distributing
outlets, sources of supply of goods,
provision of services;
3. Agreements on restricting or
controlling produced, purchased or
sold quantities or volumes of goods
or services;
4. Agreements on restricting
technical and technological development, restricting investments;
5. Agreement on imposing on
other enterprises conditions on
signing of goods or services purchase or sale contracts or forcing
other enterprises to accept obligations which have no direct connection with the subject of such
contracts;
6. Agreements on preventing,
restraining, disallowing other enterprises to enter the market or develop business;
7. Agreements on abolishing
from the market enterprises other
than the parties of the agreements;
and
8. Conniving to enable one or all
of the parties of the agreement to
win bids for supply of goods or provision of services.”
However, competition restriction agreements prescribed in
Clauses 1, 2, 3, 4 and 5, Article 8 of
this Law are prohibited when the
parties have combined market
share of 30% or more on the relevant market (Article 9, Competition
Law).
From a legal perspective, these
agreements would be able to significantly restrain competition in the
market as well as cause harm to consumers only when jointly exercised
by a group of enterprises with considerable market power. And firms
found in violation of these articles
could be fined up to 10% of total
turnover earned by the firms in the
fiscal year preceding the year when
the violation is committed (Article
118, Competition Law).
Que Anh Pham
Director, CUTS Hanoi
(to be continued)
[5] Connor, John M. and C. Gustav
Helmers (2006), “Statistics on Modern Private
International Cartels”,: Working Paper #06-11.
West Lafayette, Indiana: Purdue University
(November 2006).
[6] Connor, John (2003), “Private International Cartels: Effectiveness, Welfare and
Anti-Cartel Enforcement”, Purdue Agricultural Economics Working Paper No. 03-12,
available
at
<http://agecon.lib.umn.edu/cgibin/pdf_vie
w.pl?paperid=11506&ftype=.pdf>
[7] OECD (2002), “Fighting Hard Core Cartels: Harm, Effective Sanctions and Leniency
Programmes”, OECD, Paris
V C A
QUESTIONS - ANSWERS
>>
Question 1: Dossiers requesting for application of
anti-dumping measures to
be sent to the investigation
agency?
✓ Answer:
A dossier requesting for application of anti-dumping measures,
which shall be addressed to the
investigation agency, comprises
of:
1. The written request for application of anti-dumping measures, including the following
contents:
a/ The name, address and
other necessary information of the
organization or individual filing
the request for application of antidumping measures;
b/ Description of the imports
which are requested to be subject
to the application of anti-dumping measures, stating the name of
the goods, their basic characteristics and main use purpose, their
codes according to the current import tariffs, the currently applied
import tax rates, and the imports'
origin;
c/ Description of the volume,
quantity and value of the imports
stated at Point b of this Clause
within twelve months before the
dossier requesting for application
of anti-dumping measures is filed;
d/ Description of the volume,
quantity and value of the like
goods domestically produced
within twelve months before the
dossier requesting for application
of anti-dumping measures is filed;
e/ Information on the normal
prices and export prices of the
goods described under the provisions of Point b of this Clause at
the time of their importation into
Vietnam within twelve months before the dossier requesting for application
of
anti-dumping
measures is filed;
f/ The dumping margin of the
imports requested to be subject
to the application of anti-dumping measures;
g/ Information, data and
proofs on the material injury
V C A
which the goods dumped into
Vietnam cause or threaten to
cause to the domestic industry in
question;
h/ The name, address and
other necessary information of the
organization and/or individual
producing and exporting into
Vietnam the goods requested to
be subject to the application of
anti-dumping measures;
i/ The specific request regarding the application of anti-dumping measures, the application time
limit and extent;
2. Other relevant documents
and information which are
deemed necessary by the organization or individual requesting the
application of anti-dumping measures.
>>
Question 2: Decision on
investigation for application
of anti-dumping measures?
✓ Answer:
1. Within fifteen days after receiving the dossiers requesting for
application of anti-dumping measures, if deeming that such dossiers
fail to fully contain the contents
prescribed in Article 9 of this Ordinance, the investigation agency
must inform the filing organization or individual thereof for supplementation.
2. The time limit for dossier
supplementation shall be set by
the investigation agency but must
not be shorter than thirty days as
from the date the organization or
individual receives the dossier
supplementation notice.
3. Before the Trade Minister issues investigation decisions, the
investigation agency must notify
Vietnamese anti-dumping regulations to the competent authorities
of the countries or territories that
export the goods requested to be
subject to the application of antidumping measures.
4. Within sixty days as from the
date of receiving the dossiers with
the full contents prescribed in Article 9 of this Ordinance, the Trade
Minister shall issue investigation
decisions; in special cases, the
time limit for issuance of investigation decisions may be extended
for no more than thirty days.
5. Within fifteen days as from
the date of issuance of the decisions on investigation for application of anti-dumping measures,
the investigation agency shall notify the investigation decisions to
the organizations or individuals requesting the application of antidumping
measures;
the
producers, exporters and competent authorities of the countries or
territories that export the goods
requested for application of antidumping measures and announce
them to the other involved parties.
6. The Trade Minister must not
issue investigation decisions if the
organizations or individuals requesting the application of antidumping measures withdraw their
dossiers, except for the case specified in Clause 2, Article 8 of this
Ordinance.
No. 29 - 2011
21
REVIEW LEGAL DOCUMENTS
✷ Strengthening administrative sanctions against
violations on medicines, cosmetics and
medical devices
On 18 October 2011, the Government has issued the decree No.
93/2011/ND-CP regulating administrative sanctions against violations on
medicines, cosmetics and medical
devices with maximum fine for administrative violations in this sector
✷ Introducing the Decree detailing and
guiding implementation of a number of articles of the Law on
Protection of Consumers’ Interests
On 27 October 2011, the Government
issued
the
Decree
No.99/2011/ND-CP detailing and
guiding implementation of a number
of articles of the Law on Protection of
Consumers’ Interests.
According to this Decree, individuals carrying out business activities independently and frequently without
business registration must be responsible for ensuring quality, quantity,
usage and safety of goods and services provided for customers under the
regulations of the Law on Protection
of Consumers’ Interests and relevant
laws.
& CONSUMER
22 COMPETITION
No. 30 - 2011
up to VND 40 million.
Specifically, the maximum fine
shall be imposed on the act of erasing or modifying information on expiry
date,
indications,
contraindication, dosage and usage
in the drugs’ label compared to those
in the licenses. Such fine amount shall
also be applied to wholesaling establishments selling habit-forming
drugs, psychotropic and pre-substance used as drugs to wrong users,
or to establishments not having functions of selling such drugs as stipulated.
Noticeably,
this fine
shall be
imposed
on the
advertisement
of cosmetics,
functional
foods
a n d
n o n pharmaceutical
produ c t s
with ambiguous contents causing
consumers’ misunderstanding of
such products as medicines.
Besides, a fine of 5 to 10 million
VND shall be imposed on establishments and enterprises taking one of
the following acts such as not listing
or incompletely listing price of drugs
which are being offered, or listing not
in accordance with regulations, selling drugs at higher price than listed,
or not providing customers with the
listed prices.
A fine of 10 to 20 million VND
shall be imposed on the change of
packing or label of drugs without
written consent by the Ministry of
Health; and the trading of drugs without packing or drugs with label contents and forms different from those
in the licenses.
This Decree comes into effect
from 15 December 2011 and supersedes several articles from articles 19
to 24 and articles 32 to 44 of the Decree No.45/2005/ND-CP dated 06
April 2005 on administrative sanctions against violations in the health
field.
For organizations and individuals
trading goods and services and violating customers’ interests, the Consumer Protection Agency, the
Departments of Industry and Trade
and the Ministry of Industry and Trade
are responsible for preparing and
publishing lists of such organizations
or individuals on the mass media, listing them at their headquarters and re-
leasing them on the website of the
Consumer Protection Agency.
Market management bureaus,
traders and business centers must release lists of organizations and individuals engaging in adverse business
practices within their scope of management.
This Decree comes into effect on
15 December 2011.
V C A
✷ Prime Minister appoints new members
of Vietnam Competition Council
On 29 November 2011, the
Prime Minister Nguyen Tan Dung
signed a number of decisions on
the appointment of several members of the Vietnam Competition
Council.
Mr. Nguyen Van Viet, Director
of the Legislation Department,
Ministry of Agriculture & Rural Development cum Member of the
Vietnam Competition Council was
appointed to replace Mr. Ngo Anh
Tuan, formerly Director of the Finance Department, Ministry of
Agriculture & Rural Development,
who retired.
Mr. Truong Quang Hoai Nam,
Director of the Domestic Market
Department, Ministry of Industry
and Trade cum Member of the
Vietnam Competition Council was
appointed to replace Mr. Hoang
Tho Xuan, formerly Director of the
Domestic Market Department.
Mr. Dinh Trung Tung, Deputy
Minister of Justice was re-appointed to hold the post of Vice
Chairman of the Vietnam Competition Council.
Mr. Trinh Minh Hien, Director of
the Legislation Department, Ministry of Communications and
Transport was re-appointed to be
a member of the Vietnam Competition Council.
Previously, the Prime Minister
appointed Mr. Tran Quoc Khanh,
Deputy Minister of Industry and
Trade cum Chairman of the Vietnam Competition Council to replace Mr. Le Danh Vinh, formerly
Deputy Minister of Industry and
Trade cum Chairman of the Vietnam Competition Council, who retired.
In order to implement the Law
on Competition, the Vietnam Competition Council was established
according to the Decision
No.05/2006/QD-CP. Thereby, the
Vietnam
Competition
Council
would serve as an independent
State
law enforcement body,
which has the function of handling
competition restriction acts such
as competition restriction agreements, abuse of dominant positions on the market and abuse of
monopoly position and economic
concentration.
On 12 June 2006, at the request of the Minister of Trade
(presently Ministry of Industry and
Trade), the Prime Minister signed
the Decision No.843/2006/QD-TTg
on the appointment of the Vietnam Competition Council’s members including 15 members. The
members have a five-year term of
office and may re-appointed.
Collected by Le Duy
ASEAN Competition Conference ...
(continued from page 17)
within ASEAN region which enacted a competition law, Vietnam
Competition Authority has received many supports from the
Government and relevant agencies
since the initial phase of establishing and implementing the competition law. However, Vietnam
Competition Authority has also encountered certain difficulties regarding limited resources as well
as capacity building for the investigators of the agency. Vietnam
Competition Authority has built
close relationship and cooperation
with many partners within the region as well as advanced competition authorities in the world, on
the basis of learning and sharing
experiences in the area of competition policy and law.
On the relationship between
competition policy and law and
small and medium enterprises
(SMEs), Mr. Doan Duy Khuong, Vice
President of the Vietnam Chamber
V C A
of Commerce and Industry (VCCI),
provided useful information on the
development of the small and
medium business sector in Vietnam. Joining regional development trend, SMEs in Vietnam has
now accounted for more than 90
percent of enterprises. In addition
to new business and investment
opportunities, they will also be
faced with the challenges of more
intense competition in the market.
This process can lead to one of two
tendencies, in which enterprises
will work together and compete
equally, or collude and enter into
competition restriction agreements.
Therefore, Vietnam welcomed
the initiative of organizing open
forums in which representatives
from the business sector in Vietnam and other ASEAN Member
States can contribute their opinions and have frank discussions on
relevant issues on competition.
The 1st ASEAN Competition
Conference Promotes Competition
Policy is one of the advocacy and
information dissemination activities on competition policy by the
ASEAN Secretariat and the ASEAN
Expert Group on Competition
(AEGC). This event is considered as
one of most effective initiatives to
raise the awareness of the business
community on competition policy
and law.
The Conference was attended
by about 200 participants, including government officials, members
of parliaments, business persons,
politicians, academics and the
media. Speakers from within and
outside ASEAN region delivered
their presentations and exchanged
open views with participants at the
Conference.
Source: International Cooperation Board
No. 29 - 2011
23
RESEARCH - EXCHANGE
ECONOMIC ANALYSIS ON COMPETITIVE
IMPACT OF M&As
(continued)
6. The ability for market
entry of new competitors
and production expansion
Even when a merger enhances
the extent of market concentration, it will not certainly cause competition issues if market entry is
easy or current firms in the market
can easily expand their production
scope. How is this issue assessed?
New firms can enter the market
if: (i) the change in price creates
motivation or encourages new
firms to enter; and (ii) there exist
low barriers of entry. In addition to
structural barriers (such as
economies of scale of current firms,
or ownership of key assets or technology), there are behavioral entry
barriers, for example, when current
firms cope with newly entrant firm
by offering very low price or by investing in expansion of production
up to a surplus level to deter the
entry.
When will the risk of market
entry of new competitors become
a real potential factor deterring
& CONSUMER
24 COMPETITION
No. 30 - 2011
abusing behaviors? The market
entry of new competitors should
be practical when post-merger related parties find ways to exercise
their abusive behaviors. The possibility for market entry of new competitors also should be sustainable
and sufficient to ensure effective
and long term competition in the
market after the merger is carried
out. At the same time, we should
take into account the switchability
of customers through the cost of
changing the currently used products.
New competitors can be considered from the perspectives of
import or supply substitutability.
Moreover, we should take into account the ability to expand production capacity or product
repositioning policy of big firms in
the market. In case new competitors can enter the market promptly
(within a short time, without much
cost), we should consider they are
current players in relevant markets,
but not potential competitors.
As discussed, even when a
merger leads to a significant increase in market concentration, it is
not likely to cause competitive constraints if new firms still can enter
the market (or expand production)
and limit the ability of current firms
to abuse market powers. In theory,
if market entry is easy, the monopoly profits of the post-merger market (derived from volume limitation
and price increase) will attract new
firms to enter the market and create pressures to reduce to the premerger price. In contrast, if market
entry is difficult, in other words, if
market barriers exist, the ability of
new competitors to enter the market will be limited and post-merger
firm can abuse its market power in
a sufficiently long time. In such
cases, there should be legal intervention to prevent competitive
constraints of the merger.
There is a broad conformity of
different legal systems in terms of
this basic concept. Most guideline
documents emphasize the assessment of how the ability of new
competitors to enter the market or
V C A
the likelihood of big firms to expand production would influence
the limitation of competitive constraints of a merger. These agencies concurred that, to have a real
effect in limiting the anti-competitive impact of a merger, the market
entry of new competitors must be
(i) feasible, (ii) timely and (iii) sufficient.
Even though the above mentioned approach is widely accepted in terms of theory, the
problem is, in fact, how to assess
most precisely the impact of 2 factors: the ability for market entry of
new firms, and the ability to expand production of current firms in
the market. In terms of the cost to
enter a certain market or the expected response of big firms in the
market, we should be able to assess whether there is a timely market entry with sufficient scope to
be able to limit the possibility of
abusing of post-merger firms or
not.
Different countries have established and continuously tried to
improve their analysis models to
be able to assess the impact of
these factors. In many countries, it
is differentiated about the ability to
enter market in short and medium
term. For example, in the views of
European and the United States
competition agencies, the ability to
enter market in short term is considered a kind of supply substitutability, therefore, potential firms
entering the market will be
counted in relevant markets and
the ability to enter market in
medium term is used to assess the
competitive impact of a merger.
Besides, the U.S and Brazil employ
the “minimum viable scale” analysis to assess the effective competitive impact of the market entry of
new competitors.
7. Powerful buyers
Normally, in case buyers are adequately powerful to be able to negotiate and can by themselves
limit the conducts the post-merger
firm, that merger will not raise concerns on competition.
However, the power of buyers
does not normally appear through
the existence of big customers. Big
V C A
customers themselves may not be
able to show their negotiation
power in such cases as having to
buy unique goods, supply shortage
or unable to find reliable supply
sources.
8. Bankrupt firms
When analyzing the market
structure, it is required that we
should compare the competitive
situation in the market with and
without the merger. If one company among merging companies
falls into bankruptcy, we should
compare the market structure in
the case of allowing the merger
with the case of letting that firm go
bankrupt or allowing other firms
which are not engaged in the
merger to buy that bankrupt firm.
In fact, mergers seldom meet the
criteria employed to analyse in
case one party of the merger goes
bankrupt. There are many viewpoints that, in some cases, if we let
the bankrupt firm withdraw from
the market, immediately, competition will increase because the remaining firms will have to try their
best to compete to seize customers
of the withdrawal firm.
9. Economic efficiency
As analysed above, a merger is
likely not a problem if we can prove
the economic efficiency effects of
that merger. Efficiency can be
shown through positive impacts on
competition in the market; competition cannot be alleviated even
though the number of competitors
reduces after the merger. For example, whether the case helps to
reduce the marginal cost of postmerger firms or enhance the firm’s
ability to improve technology. In
such cases, the assessment of benefits gained from increased economic efficiency is often used to
assess competition in the market
and we should compare between
gained benefits with anti-competitive impact of the case.
In fact, there can be cases
which economic efficiency is increased whilst competition reduces. In such case, economic
efficiency can be compared with
anticompetitive impact to assess
whether, in the end, consumers’
benefits (or total social benefits) increases or not. The point is to prove
that economic efficiency or combined impact on competition of
the merger will be transferred to
consumers.
Economic efficiency is not always bigger than anticompetitive
impacts. In some cases, there
should be certain competition
pressure to ensure a favorable result. Here, the assessment of economic efficiency is also related to
the assessment and provision of remedial measures. Accordingly, remedial measures should be
relevant to minimize the anticompetitive impact but also needs to
ensure the promotion of economic
benefits gained from the merger.
Some issues that need consideration when assessing the efficiency of a merger, including: how
to compare economic benefits
with the impact from increasing
the market power of the postmerger firms; whether we should
prove that economic benefits will
be relayed to consumers; whether
we can form a common criteria or
we need to examine on a case-bycase basis; whether it is necessary
to require that the expected economic benefits have immediate impact on the subject market; and
how to compare the advantages,
disadvantages between criteria
about consumers benefits (more
choice, better quality but higher
price) between different consumers group (some can enjoy the
benefits whilst others not) between different markets or between short term and long term
impacts.
Firms often cite economic benefits from the mergers but in fact,
are these economic benefits really
offered to consumers? How should
competition authorities address
the cited economic benefits gained
from the merger? To this end, we
should take note of the difference
between the information that the
firms participating in the merger
provide and the information that
competition authorities use to
analyse the impact of the merger.
10. Time frame
The choosing of time frame to
No. 29 - 2011
25
RESEARCH - EXCHANGE
evaluate a merger depends on
competitive characteristics of the
market in which that merger occurs. In markets with characteristic
competitiveness in technology or
franchising markets with fixed time
period, the time frame should be
identified in a short term.
The time frame also depends
on the relative importance between short term and long term
competitive constraints of that
case. For example, a merger has an
impact to boost competition (reduce price) in short term but constrain competition (increase price)
in long term (the impact to close
market or alleviate the motivation
to innovate production technology).
So how should we compare
short term and long term competition impacts? Will the disadvantages within the short term
decrease the role of long term impacts? If that happens, how should
we assess long term impacts of a
merger?
11. Public interests assessment
The assessment of public interests requires a different approach
to competition assessments. The
considerations relate to national
defense issues will be different
from the considerations of the
communications sector, for example. Therefore, it is difficult to have
a common framework for the assessment of public interests issues.
Firstly, if we consider issues not
related to competition, how the
analysis of these issues relates to
competition analysis? Is there any
difference between a merger policy giving priority to non-competition related issues compared with
a merger policy requiring the consideration of both issues.
Secondly, as mentioned above,
there are many discussions about
whether competition agencies will
have the authority to assess public
interests not relating to competition. Overall, competition authorities will be more relevant in
assessing competition-related issues instead of analysing all issues
relating to public interests, because this is the expertise and re& CONSUMER
26 COMPETITION
No. 30 - 2011
sponsibility of competition authorities. So should we reserve the right
to assess issues not relating to
competition to policymakers?
Thirdly, some merger policies
do not clarify which public interests will be given priority by the
monitoring agencies. Firms will not
be able to identify in advance requirements not relating to competition which they have to meet
during a merger. This enhances the
uncertainty of policies and cause
negative impacts on the efficiency
of the economy as a whole.
Fourthly, even though there is
no common assessment mechanism, the assessment of public interest issues should be transparent
and predictable. In order to do this,
we should be cautious in the decision making process. At the same
time we should avoid lobbying activities of special interest groups.
CONCLUSION
Many economics experts think
that in the coming years, M&A activities will increasingly grow in
Vietnam and this can be seen as a
new investment channel compared
with the traditional investment in
production and trading.
In addition to “mathematics
quiz” that firms participating in
merging activities should find the
answer and negotiate for the success of the deal (such as setting
price, M&A, finance sources, restructuring of the operations, enterprises culture, etc), the hidden
impacts causing competition constraints are also issues that firms
should take into account to avoid
violating the Competition Law intentionally. Due to the complexity,
specificity and relation to large volume of information, data, when
analysing, assessing a merger,
firms plan to merge should have
prior consultation with competition authorities to seek appropriate
solutions in accordance with the
provisions of the law.
Bùi Nguyễn Anh Tuấn (Master) (Competition Policy Board Vietnam Competition Authority)
The practical applica
cartels in cargo ship
world and the applic
PHUNG VAN THANH
Competition Investigation Board
In the world, ocean cargo
shipment is a business activity
with a long history bringing benefits to many countries and playing an important role in
international trade, even though
in the modern economy, various
types of cargo shipment have
also developed strongly. The
ocean cargo shipment has been
established and also had a long
development history. In principle, in a free competition market,
the fee for ocean cargo shipment
must be decided and controlled
by market factors, especially by
the relationship between supply
and demand in the market. However, due to specific characteristics, cartels in ocean cargo
shipment have been established
and had a history of nearly 140
years and have long controlled,
decided special shipment terms
especially the shipment fee.
The ocean cargo shipment in
practice includes many different
types of services but basically
can be divided into liners (which
follow a specific route) and bulk
cargo vessel. Liners services are
provided by ocean shippers to
ship cargo by means of transport
with big transportation capacity
which are ocean vessels under
V C A
tion of competition law against
ment by ocean vessel in the
ation in Vietnam
specific transport route and specific schedule. Liners mainly ship
goods in containers and/or machinery, and vehicles. Liners
services are organised in a very
complicated way, including
many types of shipping services
under specific route and schedule to be able to ship goods from
any places to any places in the
world. Sea routes for goods shipment create a network connecting many countries in the world.
Therefore, ocean cargo shipment
service itself is internationally
connecting countries.
Liner service is different from
bulk cargo shipment service
which is often provided by shippers to ship such cargo as fuel,
and raw material with big volume as oil (crude or refined),
coal, cereal, cement, and gas, etc
at the request of customers with
specific request about shipment
route and schedule.
If bulk cargo shipment service
in the world is currently assessed
by the World Trade Organisation
(WTO) as having free competition among shippers on the basis
of a fair competitive market [1] ,
on the contrary, cartel conducts
such as price fixing agreements
and shipping arrangements be-
V C A
tween shipping companies for
liners have been in place since
the 1870s [2] .
Not only that, the process for
market power concentration in
this sector is also increasingly
enhanced, especially in container shipping liner service. In
the world market currently, 10
biggest container shippers control more than 50% total volume
of cargo shipped all over the
world and the concentration
trend is increasing more and
more [3] through mergers or acquisitions among big shipping
companies.
In 1870s, the invention of
steam boat with quicker speed
and bigger shipping volume had
led to a fierce price reduce competition among shippers, especially among liners companies
with the same route. This directly
threatens the existence of not
only inefficient traditional boat
shipping but also newly entry
shipping companies when faced
with big fixed cost. To prevent
this fierce price-reducing competition, groups of shippers
doing business in the same sea
route had cooperated to build up
agreements in which the main
content is fixing a common fee
and arranging to allocate the
volume of cargo for shipment.
Besides, some other trade and
shipment terms and conditions
were also discussed and fixed by
those companies. This cooperation marked the birth of cartels
in ocean shipment, with the
strong development of ocean
shipment services including the
increase of number of shipping
companies, ships, capacity, etc
and the expansion of international trade. Finding new sea
routes connecting countries in
the world made cartel activities
in ocean shipment develop and
become a common trend in the
world. This is carried out through
a system of shipping conferences
all over the world. Shipping conferences are combination of
shipping companies to establish
association of shipping companies to cooperate in agreement
of shipping fees or other trade,
shipping terms and conditions
for each sea route. Each conference has agreements signed between ocean cargo shipping
companies in the same route to
fix fee and other shipping conditions to exclude competition
among shippers. The first shipping conference in the world is
convened in Calcutta since 1875
to negotiate shipping fee and
conditions for the route from UK
to India. This was also a time period when goods volume in trade
exchange between UK and India
increased significantly due to the
increase and surplus of capacity
in ocean cargo shipping and the
fierce competition in price reduction among ocean cargo
shippers in this route. Therefore,
7 shippers of the UK decided to
cooperate and signed an agreement to reduce the number of
liners and fix the minimum fee.
This agreed content was also
(Continued on page 28)
[1] WTO, Cargo shipping service, Report
of WTO Secretariat [(S/C/W/62),1998;
(S/CSS/W/106),2011].
[2] Deunden Nikomborirak, What to do
with cartels in ocean cargo shipping, 2004
[3] UNCTAD, Overview about ocean shipping, 2005.
No. 29 - 2011
27
UPCOMING ACTIVITIES
Activity: Dissemination Conference on Law on Protection of Consumers' Rights
Time: 15 December 2011
Content: To disseminate information on the Law on Protection of
Consumers’ Rights
Participants/ Project: Vietnam
Competition Authority, consumer
protection Associations
Location: Ha Tinh Province
Time: 21 December 2011
Content: To provide an overview
of Law on Protection of Consumers’
Rights; Exchange of questions and
answers on relevant issues in protecting consumers’ rights.
Competition Authority, reperesentatives from relevant agencies, participants from enterprises, associations
and consumers.
Location: Lam Dong Province
Time: 5 January 2012
Content: To disseminate information on the Law on Protection of
Consumers’ Rights
Competition Authority, consumers
and enteprises in Gia Lai Province.
Location: Gia Lai Province
Time: 11January 2012
Content: To provide an overview
of Law on Protection of Consumers’
Rights; Exchange of questions and
answers on relevant issues in protecting consumers’ rights.
Competition Authority, reperesentatives from related agencies, participants from enterprises, associations
and consumers.
Location: Binh Thuan Province
Ha Pham
& CONSUMER
28 COMPETITION
No. 30 - 2011
The practical application
of competition law...
(Continued from page 26)
signed in 1879 at a Chinese
Conference, former organisation of the Far East Freight Conference and later European
Conference among shippers of
the Asia- Europe route. The liner
conferences later were continued to develop and mainly for
ocean shipping routes from Europe or to Europe. At present,
there are many shipping conferences in the world such as
FEEA - Far East/ East Africa
Freight Conference, JWANS Japan/ West Africa Freight Conference,
Nigeria/Senegal
Range, and FESAMEC - Far
East/South Asia – Middle East
Conference, etc. These conferences, since their establishments, were mainly for the
following purposes [4] :
- Gradually managing and
supervising the competition
among shipping companies by
agreement in fixing shipping
fee - This agreement forced
shippers to apply the same fee
as well as to consult each other
in case of intention of changing
the fee. Fixing the same fee is
the most common content of
agreement in conferences.
However, other shipping conditions are also negotiated such
as the agreement in allocation
of cargo shipped, the requirement of vessel capacity, the application of limitation for each
party of the agreement such as
the number of trips, ports of
lading, volume of cargo
shipped, and services.
- Gradually excluding the
using of services from shippers
not belonging to the conferences - Because there was no
special limitation for market
entry, member of the same conferences must face and fight
against the competition from
shippers not belonging to the
conference and new entrants to
the market when their agreed
fees were made public. This
lead to the fact that conferences must plan appropriate,
effective and competitive fees
to gradually exclude the cargo
owners using services offered
by shippers outside the conference.
- Directly excluding gradually shippers outside the conference - During the initial
period, shipping conferences of
the UK implemented the policy
of either denying the accession
of non-member shippers or accepting for accession with certain
limitation
conditions
subject to the capacity of the
applicant and subject to each
route. Another policy applied
by the conference was that
members temporarily negotiate
to reduce the fee lower than
other shippers outside the conference for a certain period of
time to force shippers outside
the conference go out of business in certain routes.
Due to historical reasons,
cartel activities within liner
shipping conferences have
been exempted from the provisions of antitrust law or competition law in many countries in
the world for hundreds of years
but they are under strict supervision and control. In the US,
exemption status for cartels in
ocean cargo shipment is provided clearly in the Shipping
Act 1916 [5] . Canada also has
separate law governing exemption which is the Shipping Conference Act 1987 [6] . In some
other countries like Japan, Australia, Singapore, and European
countries, ocean shipping previously was also one of the industries enjoying exemption
status [7] .
(to be continued)
Phung Van Thanh
Competition Investigation
Board
[4] JFTC, Report on competition policy
and international ocean shipping market,
2006.
[5] Shipping Act 1916 (U.S).
[6] Shipping Conference Act 1987
(Canada).
[7] Please refer to the competition law
of these countries.
V C A
LITERATURE CORNER
omposing parallel sentences
is an elegant pleasure of the
intellectuals for many times
with highly cultural connotation,
reflecting Oriental morality in general and humanitarianism of Vietnam in particular. Once spring
arrives, besides decoration of the
house and preparation of fruits
and cakes, there are always parallel sentences.
C
V C A
In history, parallel sentences
were first eight trigram charm.
They were hung in middle of the
ridge purlin and glued on two
doors by the ancient Chinese people to bring peace and drive away
ghosts and devils. These charms
must be hung at the right place
and moment with ceremonial offerings to be effective. The ancient
Chinese people not only glued
amulets and incantations but also
drew pictures of gods and holies
subject to religious beliefs and
then glued on the door to expel
evil spirits.
Legend has it that there were
two gods – Than Thu and Uat Luat
who arrested fierce ghosts, bound
them with reed and then let tigers
eat them. Thus, on days close to
Tet, people often drew these two
gods and then used blade of reed
to hang on their houses’ two doors
with a view to expelling evil spirits. The ancient Chinese people
also believed that peach trees contained quintessence in five basic
elements (Ngu Hanh) and was
called “fairy peach trees” to expel
evil spirits. So, on Tet days, people
often drew 2 gods of Tran Thu and
Uat Luat on the peach wooden
board to defend against evil spirits.
Later on, peach wooden board
was replaced with papers and
other materials. Content of pictures and amulets was replaced
with literary sentences quoted
from classical or literary works or
greetings for New Year and happy
year. So, from the initial form of superstitious belief, parallel sentences hung up on Tet days
gradually become a fine custom of
Oriental people.
Nowadays, parallel sentences
are carved or written on valuable
and rare wood. On Tet days, parallel sentences are often written on
scarlet papers with Chinese ink in
Chinese scripts (or golden powder
scripts). Sometimes, these sentences are written on gold-inlaid
red papers. Parallel sentences
often mention greetings and show
aspiration of peace, security, good
health and potentiality:
Gia đình hòa dẫn xuân phong mãn
Diên kỷ quang đăng thọ diện cao
(Family welcomes soft spring winds
No. 29 - 2011
29
LITERATURE CORNER
With joyful party for congratulation
of longevity)
When Tet comes, each person
gets more mature. This is the pride
and happiness of each person. In
spring, hundreds of flowers and
cool air make it an ideal time for
people to relax and enjoy themselves after a busy working year. To
summarize the past year and draw
out orientation for a better year to
come on spring days, the following parallel sentences are preferred:
Thiên tăng tuế nguyệt, niên tăng
thọ
Xuân mãn càn khôn, phúc mãn
đường
(More months, more long-living
Spring everywhere, wealth every
house)
Wealth is a good thing that
people value above all others. In
Oriental philosophy, a blessed
family has a lot of children who
help increase production output
and maintain the continuity of a
family line. Therefore, in three
blessing signs (wealth, position
and longevity), wealth is ranked
first. Among the seasons, spring is
ranked first because this season
brings green trees and peaceful
wishes. For this reason, spring
greetings are as follows:
Tứ thời xuân tại thủ
Ngũ phúc thọ vi tiên
(Among four seasons, spring is
above all others
Among five blessings, longevity is
the first)
Tet is an occasion for people to
remember their origins and show
gratitude to our ancestors for our
birth and upbringing. Thus, on the
family ancestor altar, in addition to
incense, flowers and fruits, etc
there are horizontal lacquered
boards and parallel sentences reflecting gratitude towards our ancestors:
Cúc dục ân thâm Đông Hải đại
Sinh thành nghĩa trọng Thái Sơn
cao
(Gratitude for upbringing is as deep
as the East Sea
Favor for giving birth is as high as
the Thai Son Mountain)
Besides, other horizontal lacquered boards and scrolls hung in
the house also aim at wishing
& CONSUMER
30 COMPETITION
No. 30 - 2011
peace, prosperity and good fortune. In front of the door, people
often stick sentences such as: Xuất
nhập bình an (wishes for convenient and safe travel all year long) or
Ngũ phúc lâm môn (five blessings
coming home: wealth, position,
longevity, good health and security). The wardrobe or fruits placed
on the altar has big luck while the
rice jar is glued with ‘Mãn’ sign, reflecting the wish that it remains
full of rice all year around. For the
trading households only, parallel
sentences are hung up bearing
wishes of their products selling
like hot cakes:
Xuân đáo khách phòng xung hỷ khí
Hoa khai thương điếm phức hương
phong
(In spring, the living room is full of
beauty
Flower shop is full of fragrant smell)
Besides parallel sentences with
greetings in happy occasions and
Tet holidays, in some Southern
provinces, parallel sentences are
glued in front of the doors to show
the purpose and ambition in the
householder’s life.
Phục kế tổ huấn lập đại chí
Thành công đạo lộ chấn gia thanh
(Restoring and succeeding the ancestors’ teachings to achieve great
ambition
Success makes the family reputed)
In addition, families reputed
for literary traditions (families with
pen-names) also use graphology
to compose parallel sentences. The
pen-name of each family often
represents the will and aspiration
of the householder about good
things, wealth and honors. Therefore, using graphology to compose parallel sentences is aimed at
developing the family line. For example, a family in Vinh Chau district, Soc Trang province named
Moc Loi used the following parallel sentences:
Mộc gia tiên đức sáng cơ nghiệp
Lợi phát tài nguyên chấn gia thanh
(Virtue of the previous generation in
Moc family was maintained
Benefits and wealth of the present
generation create more prestigious
fame for the family)
Another family called Kim Loi is
suited to the following parallel
sentences:
Kim ngọc mãn đường tích thiên tứ
Lợi lộ hanh thông vạn đại xương
(Gold and pearl full of the house is
due to inheriting from the God
Fine and smooth life is due to his
family doing good things)
In Southern provinces of Vietnam, parallel sentences are written
not only on red papers (red parallel sentences) but also on green
papers (blue parallel sentences) in
Chinese scripts or Vietnamese
scripts or Khmer scripts. Hanging
blue parallel sentences is inadvisable because only red is a color of
good fortune and luck.
Blue parallel sentences are only
used in case such family is sad in
the happy days, for example, unfortunately, one of their relatives
passed away. The blue parallel sentences aim at neutralizing sadness
in such happy days. Hanging blue
parallel sentences make visitors
less embarrassed and compassionate.
Blue parallel sentences often
mention affection and gratitude of
the living or praiseworthy merits
of the deceased.
Parallel sentences in Khmer are
cultural exchange of Vietnamese,
Chinese and Khmer ethnic groups
written with black pink and on red
papers and hung as parallel sentences in Vietnamese scripts.
These parallel sentences are hung
in front of the door, room door or
on the house column for New
Year’s
greetings,
welcoming
guests, riches and honors, etc.
In the old days, in Tet market
days, people often bought several
parallel sentences composed and
written by a scholar and hung in
the house. It was a mistake to have
no parallel sentences in Tet holidays. As to the parallel sentences,
we can not forget two famous parallel sentences:
Fatty pork, pickled onions, red
parallel sentences
New Year’s tree, firecracker
strings, green square sticky-rice
cakes
An Binh
V C A
CENTRE FOR COMPETITION INFORMATION AND DATA
Always exceeds your expectation
Address: 25 Ngo Quyen Street, Hoan Kiem, Ha Noi, Vietnam
Tel: (84.4) 2220 5305; Fax: (84.4) 2220 5303; Email: [email protected]
Centre for Competition Information and Data (CCID) is an organization under the control of the Vietnam
Competition Authority (VCA). It was established in conformity with the Decree No. 06/2006/NĐ – CP dated
January 09.2006 of the Government.
FUNCTIONS AND DUTIES
■ Setting up and managing a database and information on competition, trade remedies and consumer protection, file documents and dossiers related to the closed cases handled by VCA and relevant authorities to serve the
tasks of the VCA.
■ Providing local and international information and data for the VCA to serve the VCA’s state management.
■ Developing and providing information and data, services for the needs of state management agencies, local
and international organizations/entities and individuals.
■ Co-ordinating with relevant agencies on publishing periodical publications for propagandizing, educating,
disseminating competition policy, trade remedies and consumer protection.
■ Setting up and maintaining a knowledge management system of the VCA.
■ Assisting and co-ordinating, under the direction of the Director General, with the VCA’s divisions and
branches on researching and analyzing information related to the cases handled by the VCA.
■ Implementing international cooperation activities within its assigned competence.
ORGANIZATION CHART
MINISTRY OF INDUSTRY
AND TRADE
Vietnam Competition Authority
Centre for competition
Information & Data
CCID’s Leaders
Administration
Division
Service Development
Division
Information Technology
Division

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Transcription

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