ANTI-DUMPING – WHO IS THE EXPORTER?
CITT DECISION PROVIDES CLARIFICATION IN TRANSACTIONS WITH INTERMEDIARIES
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Anti-dumping duties (“ADD”) under the Special Import Measures Act (“SIMA”) generally apply where the normal value of targeted imported goods exceeds their export price. However, determining what ADDs are payable on particular goods may first require identifying who the “exporter” of the goods actually is in the circumstances since that will affect the normal value/export price.
The recent Canadian International Trade Tribunal’s (“CITT”) decision in International Furniture Distribution Centre Ltd. v. CBSA, EA-2025-002 , clarifies that the question of “who is the exporter” must be determined from a commercial substance perspective based on the particular facts of each case.
Facts
International Furniture Distribution Centre Ltd. (“IFDC”) imported sofa beds from China (the “Subject Goods”), which fell within the scope of the CITT’s previous findings in the SIMA inquiry Certain Upholstered Domestic Seating . As a result, the Subject Goods were potentially subject to ADDs and countervailing duties (“ADCVDs”).
The supply chain of the transactions involved IFDC as the importer, a Chinese intermediary assisting IFDC in acquiring the Subject Goods (the “Intermediary”), and the Chinese manufacturer (the “Manufacturer”). The Canada Border Services Agency (“CBSA”) issued a re-determination under s. 59 of SIMA imposing ADCVDs on the basis that the Intermediary was the exporter for SIMA purposes. IFDC appealed to the CITT under s. 61(1) of SIMA, arguing the Intermediary was merely its buying agent and the Manufacturer was the exporter in the circumstances.
CITT Decision
The CITT allowed the appeal, holding that the CBSA had erroneously identified the Intermediary as the exporter of the Subject Goods. The CITT found that the CBSA had made “unjustified factual assumptions” based primarily on an invoice from the Intermediary to IFDC, which did not provide the complete commercial picture of the transactions. In contrast, the CITT found that IFDC provided credible documentary and oral evidence, including witness testimony and an agreement between IFDC and the Intermediary (the “Agreement”).
The Agreement demonstrated that the Intermediary provided sourcing, negotiation, order management, quality control, shipping coordination, and effectively acted as IFDC’s “eyes and ears” in China. The CITT concluded that the Agreement established a principal-agent relationship, as the Intermediary acted as the “conduit” for IFDC’s instructions and interactions with the Manufacturer.
The CITT also found that the evidence demonstrated that the goods were shipped directly from the Manufacturer to IFDC, with ownership passing directly to IFDC, and that the Intermediary retained only its commission before remitting the balance of the payment to the Manufacturer for the Subject Goods. Accordingly, the CITT found the Manufacturer was the exporter for SIMA purposes but remitted the matter back to the CBSA to determine the export price of the Subject Goods as it was unclear on the evidence.
is critical to ensure the correct ADCVDs are applicable.
Experienced Customs Counsel can assist interested
parties in making representations to the CBSA.
Takeaways
Where ADCVDs are at issue, the identity of the exporter can affect the normal value, the export price, and ultimately the ADCVDs that the CBSA determines are payable. Experienced Customs Counsel can assist interested parties in presenting their evidence and making representations to the CBSA at the outset to maximize the chances of success in an anti-dumping investigation.
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