Tax & Trade Blog
CBSA Re-Investigation re: OCTG!
On October 14, 2022, the Canada Border Services Agency (“CBSA”) issued a notice that it will be conducting a re-investigation in respect of oil country tubular goods (“OCTG”) and certain seamless casing originating in or exported from China. Responses to the CBSA’s Request for Information (“RFI”) are due November 21, 2022!
Normal values established during the re-investigation will be effective as of the end date of the re-investigation, and all normal values currently in place will expire on that date. Exporters of Subject Goods from China should consider cooperating with CBSA, as the potential anti-dumping duties (“ADDs”) for goods without normal value are as high as 166.9% for OCTG and 91% for seamless casing!
Subject Goods are defined as follows:
“Oil country tubular goods including, in particular, casing and tubing, 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 API specification 5CT or equivalent standard, in all grades, excluding drill pipe, seamless casing up to 11 3/4 inches (298.5 mm) in outside diameter, pup joints, welded or seamless, heat-treated or not heat-treated, in lengths of up to 3.66 m (12 feet), and coupling stock originating in or exported from China.”
CBSA originally initiated an investigation in respect of the Subject Goods on August 24, 2009 in response to a complaint from Canadian producers: Tenaris Canada Inc., Evraz Inc. NA Canada, and Lakeside Steel Corporation, about imports from China. On March 9, 2010 the CBSA made a final determination that Subject Goods were being dumped and subsidized.
On March 23, 2010, the Canadian International Trade Tribunal (“CITT”) issued a finding that the dumping and subsidizing of the Subject Goods (as defined in the finding) from China had caused injury to the Canadian domestic industry.
As a result of this finding, the ADDs and countervailing duties (“CVDs”) determined by the CBSA came into effect (replacing earlier provisional duties) in respect of Subject Goods from China.
The CITT conducted an expiry review after 5 years, as required by section 76.03 of the Special Import Measures Act (“SIMA”), and on March 2, 2015, continued its finding (and the ADDs) in respect of Subject Goods from China. A subsequent expiry review concluded on July 17, 2020 further continued the original CITT finding.
CBSA has also conducted three previous re-investigations – one in 2011, one in 2015, and another in 2019-2020.
Why Does this Re-Investigation Matter?
The CBSA is undertaking another re-investigation for OCTGs and seamless casing despite having concluded its most recent re-investigation less than two (2) years ago. CBSA emphasized it is concerned by price volatility in the OCTG market and will conduct its re-investigation on an expedited basis.
This re-investigation is particularly important because – unusually – CBSA has already stated it no longer considers pre-2022 normal values to be reflective of current market prices, and that selling at those normal values may not be enough to prevent retroactive assessment of duties!
When goods are sold for export to Canada at or above the normal value assigned by CBSA, no ADDs apply. However, unless these exporters cooperate in the re-investigation and CBSA assigns them new normal values, their exports will be subject to the default ADDs.
Exporters who are not manufacturers should also consider applying to have CBSA determine a normal value – although they will need the manufacturers to cooperate with and provide information to the CBSA.
Exporters should request an RFI package from CBSA if they have not received one, and submit it ASAP given the due date of November 21, 2022 and the expedited nature of this re-investigation!
If you may be impacted by this re-investigation, legal advice from counsel with extensive experience in the area is highly recommended, in order to make sure that the worst impacts of anti-dumping and countervailing duties can be avoided!
Do you require assistance in this area? If so, please click here.