Tax & Trade Blog
CBSA Issues Preliminary Determinations re: Mattresses
On February 24, 2022, the Canada Border Services Agency (the “CBSA”) issued a Notice of Initiation of Investigation under the Special Import Measures Act (“SIMA”) with respect to the alleged dumping and subsidizing of mattresses originating in or exported from China (the “Subject Goods”).
See our previous blog for more information on the precise definition of the Subject Goods, including exclusions.
While the CBSA Investigation was ongoing, the Canadian International Trade Tribunal (the “CITT”) conducted a separate Preliminary Injury Inquiry, as required under subsection 34(2) of SIMA.
On April 25, 2022, the CITT made a Preliminary Determination of Injury (with reasons released on May 10, 2022) finding that “there is evidence that discloses a reasonable indication that the dumping and subsidizing of the subject goods have caused injury to the domestic industry.”
Had the CITT not found a reasonable indication of injury to the domestic industry, both the CBSA and CITT would have terminated their investigations.
CBSA Issues Preliminary Determinations of Dumping and Subsidizing
As the CITT determined there was a reasonable indication of injury to the domestic industry, the CBSA investigation continued, and on July 7, 2022 the CBSA issued a Notice of Preliminary Determinations(the “Notice”), establishing the Provisional Duties that will be imposed on Subject Goods released by the CBSA on or after July 7, 2022. A Statement of Reasons was issued on July 22, 2022.
The Notice sets out estimated margins of dumping and estimated amounts of subsidy in respect of eleven (11) named exporters. Estimated dumping margins range from 23.01% to 161.60%, while the estimated amounts of subsidy range between 0% and 4.16%.
Subject Goods purchased and imported from the named exporters will be subject to Provisional Duties as set out by CBSA (between 23.01% and 163.48%), while Subject Goods purchased and imported from all other exporters will be subject to Provisional Duties of 173.36%.
The CBSA will continue its investigation and is expected to release its Final Determination by October 5, 2022, with a Statement of Reasons to be issued 15 days later.
The CITT will also continue with its inquiry with respect to whether the dumping and subsidizing of the Subject Goods have caused injury to the domestic industry, and is expected to release their Finding on injury by November 4, 2022, with a Statement of Reasons to be issued 15 days later. It is at this stage that the CITT will also determine if there should be any exclusions from the Subject Goods, as defined.
The Provisional Duties determined by CBSA will remain in effect until CBSA either terminates their investigation, or the date the CITT issues its final Finding on injury (at which point the duties as determined by the CBSA in its Final Determination take effect).
In its final Finding on injury, the CITT may also consider if Subject Goods that were imported close to or after the initiation of the investigations on February 24, 2022 constitute “massive importations” over a relatively short period of time and have caused injury to the Canadian industry. Should the CITT issue such a finding, imports of Subject Goods released by the CBSA in the 90 days preceding July 7, 2022 could be subject to a retroactive anti‑dumping and/or countervailing duty.
Canadian importers of the Subject Goods – whether from one of the named exporters or not – should be carefully considering what the Preliminary Determination means for their imports and the duties they may have to pay. Importers who ignore the Preliminary Determination and continue importing as if nothing has changed are setting themselves up for a significant liability in the future.
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