When a product is subject to high anti-dumping duties, the incentive to dodge those duties through origin fraud appears almost immediately: misdeclaring the country of origin, routing goods through third countries, or carrying out superficial processing or assembly in a country not subject to the duties in order to stamp a new “made in” label. Vietnamese law treats this as circumvention of trade remedy measures and addresses it on three levels: trade remedies, administrative sanctions, and criminal liability.
1. What is origin fraud to evade anti-dumping duties?
At its core, this is the act of falsely declaring a product’s country of origin in order to avoid anti-dumping duties, countervailing duties, or safeguard measures applied to goods originating from a specific country. Common forms include:
- Misdeclaring the country of origin on customs declarations and shipping documents, naming a country not subject to anti-dumping duties while the goods actually originate from a country that is;
- Illegal transshipment: moving goods from the targeted country through one or more intermediaries before exporting them to Vietnam, creating a false new origin;
- Superficial processing or assembly in a third country: performing simple, low-value-added operations in a country not subject to the duties to “launder” the origin, then labeling the goods “made in” that country.
The common thread is the motive to circumvent anti-dumping duties — which distinguishes this conduct from document forgery in general.
2. Level 1: Anti-circumvention under trade remedy law
Vietnam’s trade remedy framework sits in the Law on Foreign Trade Management No. 05/2017/QH14 (effective 1 January 2018, still in force) — Chapter IV covers trade remedy measures: anti-dumping, countervailing, and safeguard measures. Note: there is no standalone “Trade Remedies Law”; citations should use the correct number 05/2017/QH14.
The current detailed guidance is Decree No. 86/2025/ND-CP (issued 11 April 2025, effective 1 July 2025), which replaced Decree No. 10/2018/ND-CP, together with Circular No. 26/2025/TT-BCT (replacing Circular No. 37/2019/TT-BCT). Businesses should update to these new instruments and no longer rely on the expired ones.
Under Decree 86/2025/ND-CP, Article 81 sets out the forms of circumvention of trade remedy measures. Circumvention through production or assembly in a third country is established when four conditions are simultaneously met:
- The export price of the goods from the third country into Vietnam is lower than the normal value during the original investigation period;
- The volume or quantity of imports has increased significantly after the Minister of Industry and Trade decided to investigate or apply the original measures;
- Raw materials or components originating from the country subject to the duties account for at least 60% of the total value of the goods’ raw materials;
- The goods are determined not to originate from the third country under the non-preferential rules of origin.
Article 84 additionally covers circumvention through insignificant modification of the goods. Procedurally, the Ministry of Industry and Trade may decide to investigate suspected circumvention (reviewing the dossier within 45 days under Clause 2, Article 88) and apply anti-circumvention measures, including extending anti-dumping duties to the circumventing goods.
3. Level 2: Origin proof obligations, tax recovery, and administrative penalties
Importers also bear an obligation to prove origin. Under Clause 1, Article 26 of Decree No. 31/2018/ND-CP (effective 8 March 2018, still in force), point (c) provides that for goods that Vietnam has announced are subject to anti-dumping duties, countervailing duties, safeguard measures, tariff-rate quotas, or quantitative restrictions, the importer must submit origin certification documents to the customs authority. Failure to prove lawful origin may result in the highest applicable trade remedy duty rate.
Where fraud is detected, the competent authority will recover and assess the evaded anti-dumping duties and impose administrative penalties for customs violations under Decree No. 169/2026/ND-CP (effective 1 July 2026, replacing Decree No. 128/2020/ND-CP). Businesses should consult the full text of Decree 169/2026 to determine the applicable violations and penalties for each specific case.
4. Level 3: Criminal liability
In serious cases, origin fraud to evade anti-dumping duties may trigger criminal liability under the Penal Code 2015 (amended and supplemented in 2017):
- Article 188 (smuggling): illegal cross-border trading — including false declarations and forged origin documents — involving goods valued at VND 100 million or more may be punished by a fine of VND 50 million to VND 5 billion or imprisonment of 6 months to 20 years depending on the sentencing frame. A commercial legal entity committing the offence may be fined VND 300 million to VND 7 billion or permanently suspended from operation;
- Article 200 (tax evasion): applies where the fraud results in tax evasion meeting the statutory thresholds. Businesses should check the current text of the Penal Code for the applicable thresholds and frames.
Note: Law No. 86/2025/QH15 amending the Penal Code (which abolished the death penalty for certain offences) does not affect Articles 188 and 200 above.
5. The role of customs in detecting origin fraud
Customs authorities inspect and verify the origin of goods under Circular No. 33/2023/TT-BTC (Articles 20 and 21). Upon detecting signs of origin fraud or illegal transshipment, customs may reject the origin certification documents, apply the trade remedy duties as prescribed, and coordinate with the Ministry of Industry and Trade (the Trade Remedies Authority) and investigative bodies. Customs procedures are governed by the Customs Law No. 54/2014/QH13, which remains in force.
6. A live case: AC03.AD20 under investigation
A practical illustration of the anti-circumvention mechanism in motion: the Trade Remedies Authority (Ministry of Industry and Trade) is conducting an anti-circumvention investigation concerning certain hot-rolled steel products originating from China (case AC03.AD20, under Notice No. 266/TB-PVTM of the Trade Remedies Authority). The case is still under investigation; any assessment of its outcome at this stage would be speculation. This article does not name any specific enterprise involved in the ongoing investigation.
7. Prevention tips for compliant businesses
- Maintain complete, systematic origin documentation: Certificates of Origin, production process records, raw material sourcing, and contracts across each stage;
- Control your supply chain: avoid intermediaries that are not transparent about origin; require suppliers to commit to and provide clear origin documentation;
- Declare the country of origin truthfully on declarations and documents; cooperate proactively with customs when questions arise;
- Monitor investigation and measure decisions by the Ministry of Industry and Trade for your product groups to stay compliant.
FAQs
Is assembly in a third country always treated as circumvention?
No. Assembly in a third country is only treated as circumvention when all four conditions in Article 81 of Decree 86/2025/ND-CP are simultaneously met (lower export price than normal value, significant import surge, at least 60% of raw material value from the targeted country, and no third-country origin under non-preferential rules).
What happens if an importer cannot prove origin?
Under Clause 1, Article 26 of Decree 31/2018/ND-CP, importers of goods subject to anti-dumping duties must submit origin certification documents. Failure to prove lawful origin may lead to the highest trade remedy duty rate, plus risks of tax recovery and penalties.
The information in this article is for reference only and does not constitute legal advice. Businesses with specific cases involving origin of goods and trade remedy measures should consult a lawyer before acting. Contact FLAT Law Firm: contact us here.
For reference only, not legal advice. Content quality-checked by the AI Legal Council; not yet reviewed by a human lawyer.
