Tax & Trade Blog
CBSA Investigating Dumping of OCTG from Mexico
On June 30, 2021 the Canada Border Services Agency (the "CBSA") issued a Notice of Initiation of Investigation under the Special Import Measures Act ("SIMA") of alleged dumping of Oil Country Tubular Goods ("OCTG") imported from Mexico. This investigation was prompted by a complaint filed by Canadian manufacturers of the products in Saskatchewan and Ontario.
The goods under investigation are currently defined as
"Oil country tubular goods, which are casing, tubing and green tubes made of carbon or alloy steel, welded or seamless, heat treated or not heat treated, regardless of end finish, having an outside diameter from 2 3/8 inches to 13 3/8 inches (60.3 mm to 339.7 mm), meeting or supplied to meet American Petroleum Institute specification 5CT or equivalent and/or enhanced proprietary standards, in all grades, excluding drill pipe, pup joints, couplings, coupling stock and stainless steel casing, tubing or green tubes containing 10.5 percent or more by weight of chromium, originating in or exported from the United Mexican States" (the "Subject Goods").
This is the third investigation involving OCTG, with previous investigations imposing anti-dumping duties on similar goods imported from China (see OCTG1), Chinese Taipei, India, Indonesia, the Philippines, South Korea, Thailand, Turkey, Ukraine and Vietnam (see OCTG2).
Additional information on the current investigation will be available by July 15, 2021 when CBSA publishes its Statement of Reasons.
If anti-dumping/countervailing duties are imposed, it will effectively increase costs for petroleum producers and pipeline builders operating in Canada (many of which are headquartered in Calgary) – and could impact projects in oil-producing regions like Alberta and Newfoundland.
What are the next steps?
Under SIMA, the matter will proceed along two parallel tracks: (1) the Canadian International Trade Tribunal (the "CITT") has 60 days to make a preliminary determination as to whether the domestic industry has been injured by the alleged dumping; and (2) the CBSA has 90 days to make a preliminary determination as to whether the goods are being dumped/subsidized (and to determine provisional anti-dumping duties).
While this timeline may be extended by 45 days for complex cases, at this point the CITT'a preliminary determination is expected by August 29, 2021, and CBSA's preliminary determination by September 28, 2021, followed by a Statement of Reasons 15 days later.
In order to ensure that CBSA has sufficient time to consider the data it receives from the industry, all importers and exporters who have received a questionnaire (or want to obtain specific normal values for their goods) should respond to CBSA's "Request for Information" ("RFI") by no later than July 26, 2021 and August 6, 2021 respectively.
Following the preliminary determination of dumping by the CBSA on September 28, 2021, the matter proceeds on two parallel tracks again: (1) the CBSA has 90 days to make a final determination as to whether the goods are being dumped/subsidized and to determine any specific normal values for individual exporters; and (2) the CITT has 120 days to make a final determination as to whether the domestic industry has been injured by the alleged dumping.
The CBSA's final determination of dumping is expected by December 24, 2021 (at which point exporters who fully cooperated with the CBSA will also be notified of their specific normal values), with a final Statement of Reasons 15 days later. The CITT's final determination is expected by January 26, 2022.
What can I do?
Given the strict timelines, and the significant amount of work involved in responding to RFIs issued by the CBSA and the CITT, any importers or exporters potentially impacted by this Investigation and the eventual anti-dumping/countervailing duties on Subject Goods should contact their lawyer immediately to discuss recommended next steps given the potential anti-dumping duties – regardless whether or not you have received an RFI/Questionnaire!
It may also be possible to request the CITT consider whether your goods should be excluded from the Subject Goods definition – typically on the basis the goods are unique and the domestic industry is not capable of producing a substitutable product. Again contact your lawyer immediately if you think your product should qualify for an exclusion.