On November 18 the European Man-made Fibres Association petitioned the EC to investigate the fibre imports, which currently attract a 4 per cent tax in the EU.
The Vietnamese Government has assisted the EC in the investigation since the announcement was made on December 19.
According to the EC, it would investigate all programmes and policies considered by the petitioner as subsidies for exporters based on Vietnamese legal documents.
The documents are about investment incentives, preferential interest rates, and waiver or reduction of land lease besides import tax breaks for raw materials.
The EC has sought information about the exporters to identify compulsory defendants, and concerned parties have 15 days to provide the information.
After identifying or choosing the defendants, the EC will send them questionnaires to be answered within 30 days.
The investigation will take 13 months, according to the Viet Nam Competition Authority.
The EC has also conducted anti-subsidy investigations into the same product imported from China and India.
Since 2009 Viet Nam has faced four anti-subsidy cases in the US relating to PE bags, steel pipes, and steel hangers exported to that country.
This is the first anti-subsidy case in the EU.
The Viet Nam Competition Authority has warned businesses to be prepared to face an increasing number of anti-dumping and anti-subsidy cases in major markets, especially the US and EU, which have so far filed the largest number of lawsuits against Vietnamese exports.
It recommended that they should use the early warning system it established last year.
The system is expected to help exporters predict the possibility of such lawsuits.