In an effort to prevent sugar from Thailand being smuggled into the country illegally, Vietnam's Ministry of Industry and Trade announced on August 1 that a anti-circumvention tax would be levied on Thai sugar entering the country through five ASEAN countries: Indonesia, Malaysia, Cambodia, Laos, and Myanmar.

In a final draft conclusion on the results of its sugar duty evasion probe released on July 14, Vietnam's Ministry of Industry and Trade confirmed that sugar from Thailand was evading import tariffs and entering the domestic market via re-exports via these five ASEAN, or Association of Southeast Asian Nations, member countries.

Thai sugar is subject to anti-dumping and anti-subsidy charges, and the ministry has announced that sugar imported from Cambodia, Indonesia, Laos, Malaysia, and Myanmar would also be subject to these tariffs if it is produced using Thai sugar resources. Cane sugar imported from Thailand has been subject to a 47.64% tax starting June 16, 2021.

Consequently, a total tariff of 47.64% will be imposed on these five nations, consisting of an anti-dumping tax of 42.99% and an anti-subsidy tax of 4.65%. From August 9, 2022, to June 15, 2026, this levy will be in effect.

In contrast, anti-circumvention duties will not be levied on exports from these five nations provided exporters can demonstrate that their goods are manufactured from sugarcane grown and harvested domestically.

One sugar broker said, "Local producers in these five ASEAN countries who can produce a wholly obtained [WO] certificate, which is a note in the certificate of origin that states 100% of the product is from sugarcane harvested in their local origin, will be allowed to export to Vietnam at the 5% tax rate."

To date, the anti-circumvention tax exemption list includes six businesses: three from Laos, two from Myanmar, and one from Indonesia.

The Ministry of Industry and Trade reports that between October 2020 and June 2021, sugar imports into Vietnam increased fivefold, reaching 527,200 metric tons.

The opposite was true for imports from Thailand, which fell by 38% during that time. During this time, Vietnam was looking into whether or not Thailand was illegally dumping or subsidizing its sugar.

The sugar sector "has submitted proof revealing symptoms of Thai sugar's trade remedy evasion via the five nations stated above," according to a statement released by the trade ministry. On select Thai sugar goods, Vietnam slapped a five-year anti-dumping penalty of 47.64 percent on them in June of last year. According to the ministry of Industry and Trade, challenges in the local sugar business led to the loss of 3,300 agricultural employment and the disruption of 93,225 farming families in Vietnam.

If the customs declarers can provide the appropriate C/O, COA, etc. for six different manufacturers (PT.Kebun Tebu Mas, Mitr Lao Sugar Company Limited, Savannakhet Sugar Corporation, TTC Attapeu Sugar Cane Sole Co., Ltd., Than Daung OO Company Limited, and Ngwe Yi Pale Sugar Company Limited), then those companies are exempt from the aforementioned anti-circumvention measures.