Guidelines on Implementing Article 9 of the Law on Protection of Producers Affected by Imported Goods (No. 27/National Assembly, October 30, 2017)

Article 1

I. Determination of Material Injury

For the determination of material injury caused by an increase in imports of goods, the eight factors specified in Article 9 shall be reviewed based on data reflecting abrupt changes relative to historical data for a period not exceeding five (5) years. If any of the above eight factors is found to have undergone an abrupt change and has caused a serious impact on domestic producers of the goods, it may be considered a factor for determining material injury, as follows:

1. The rate and volume of increase in imports of the goods, whether in absolute or relative terms, shall be reviewed based on evidence and data of changes in such imports, i.e., a significant increase in the volume of imports or an increase in the proportion of imports compared to the output of like or directly competitive goods produced domestically.

2. A decline in the market share of domestic producers of the goods shall be reviewed based on the increase in the market share of imported goods relative to the entire market for like domestic goods, compared to the market share of the previous year. The calculation formula is as follows: Market Share = Market Share Rate in the Investigation Implementation Year − Market Share Rate in the Previous Year. The market share rate is calculated as follows: Market Share Rate = (Sales Value of Imported Goods ÷ Total Sales Value of All Like Domestic Goods) × 100.

3. Changes in the level of sales shall be reviewed based on a decline in the sales volume or sales value of like or directly competitive goods produced domestically. The calculation formula is as follows: Sales Level = [(Sales Volume or Sales Value in the Investigation Implementation Year − Sales Volume or Sales Value in the Previous Year) ÷ (Sales Volume or Sales Value in the Previous Year)] × 100. The sales volume or sales value of goods is calculated as follows: Sales Volume = Quantity of Goods Produced − Quantity of Remaining Goods; Sales Value = Quantity of Goods Sold × Unit Price of Goods.

4. Changes in the level of output shall be reviewed based on a decline in the production volume of like or directly competitive goods by domestic producers. The calculation formula is as follows: Output Level = [(Output of Goods in the Investigation Implementation Year − Output of Goods in the Previous Year) ÷ (Output of Goods in the Previous Year)] × 100.

5. Changes in the level of productivity shall be reviewed based on a decline in the production efficiency of like or directly competitive goods by domestic producers. The calculation formula is as follows: Productivity Level = [(Productivity in the Investigation Implementation Year − Productivity in the Previous Year) ÷ (Productivity in the Previous Year)] × 100. Productivity is calculated as follows: Productivity = Total Output ÷ Production Factors. Production factors include: raw materials, labor, and other costs invested in the production process of the goods.

6. Changes in the level of capacity shall be reviewed based on a decline in the capacity utilization rate of like or directly competitive goods by domestic producers compared to the capacity utilization rate of the previous year. The calculation formula is as follows: Capacity Level = Capacity Utilization Rate in the Investigation Implementation Year − Capacity Utilization Rate in the Previous Year. The capacity utilization rate is calculated as follows: Capacity Utilization Rate = (Actual Output ÷ Maximum Capacity) × 100. Maximum capacity is calculated as follows: Maximum Capacity = Machine Working Hours ÷ Actual Time Used to Produce One Unit of Goods. Example: A refrigerator factory has 50 machines, and workers use the machines for 16 hours per day. Therefore, working hours or machine capacity = 50 machines × 16 hours = 800 hours/day. The actual time used to produce one refrigerator is: 0.5 hours (half an hour). Therefore, maximum capacity = 800 hours/day ÷ 0.5 hours/unit = 1,600 units/day.

7. Changes in the level of profits or losses shall be reviewed based on a decline in profits or an increase in losses incurred by domestic producers from the production and sale of like or directly competitive goods. The calculation formula for comparing the rate of increase or decrease in profits or losses is as follows: Profit or Loss Level = [(Profit or Loss in the Investigation Implementation Year − Profit or Loss in the Previous Year) ÷ (Profit or Loss in the Previous Year)] × 100. Profits or losses are calculated as follows: Profit or Loss = [(Sales Value of Goods) − (Production Costs + Administrative Expenses)].

8. Changes in the level of employment shall be reviewed based on a decline in the number of laborers employed in the production of like or directly competitive goods by domestic producers and the number of laborers engaged in management work. The calculation formula is as follows: Employment Level = [(Employment in the Investigation Implementation Year − Employment in the Previous Year) ÷ (Employment in the Previous Year)] × 100. Employment is calculated as follows: Employment = Production Labor + Management Labor.

II. Implementation

The Foreign Trade Policy Department of the Ministry of Industry and Trade is assigned as the lead authority, in coordination and cooperation with relevant departments, to implement this Guideline to achieve efficient results. This Guideline shall take effect from the date of its signing and shall become effective fifteen (15) days after publication in the Official Gazette.