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Pup Joint Finding Continued!

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On December 29, 2022, the Canadian International Trade Tribunal (“CITT”) released an Order continuing the CITT’s original 2012 finding that the dumping and subsidizing of oil country tubular good pup joints (“pup joints) originating in or exported from China was threatening to cause injury to Canadian domestic injury.

The Order effectively means that the current anti-dumping duties (“ADDs”) of up to 173.4% and countervailing duties (“CVDs”) of 9,125.6 Renminbi per metric tonne will remain in place for Subject Goods originating in or exported from China.

Subject Goods are defined in the Order as follows:

"Oil country tubular goods pup joints, 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 4 1/2 inches (60.3 mm to 114.3 mm), in all grades, in lengths from 2 feet to 12 feet (61 cm to 366 cm)excluding casing pup joints, originating in or exported from the People’s Republic of China."

Background

Canada Border Services Agency (“CBSA”) originally initiated an investigation on September 12, 2011 in response to a complaint from Canadian producer Alberta Oil Tool, a division of Dover Corporation Canada, about imports of Subject Goods from China.

On March 12, 2012, the CBSA made a final determination that Subject Goods were being dumped and subsidized. One exporter that cooperated with CBSA in its investigation was assigned specific normal values in respect of their products.

On April 10, 2012, the CITT issued a finding that the dumping of the Subject Goods had not caused injury but was threatening to cause injury to the Canadian domestic industry. However, the CITT found that dumping and subsidization of casing pup joints was not threatening to cause injury to the Canadian domestic industry, and these were excluded as a result.

As a result of this finding, the ADDs and CVDs determined by the CBSA came into effect (replacing earlier provisional duties) in respect of Subject Goods from China.

2015 Re-Investigation

On December 14, 2015, the CBSA concluded a re-investigation of normal values, export prices, and amounts of subsidy for certain oil country tubular goods (“OCTG”) and pup joints originating in or exported from China. This re-investigation occurred in parallel with a similar re-investigation for related OCTG Orders that apply to other countries.

As a result of the re-investigation, thirteen (13) exporters from China were assigned normal values and amounts of subsidy (interestingly, one of the Chinese exporters was assigned a subsidy on a “per piece” basis while the rest were assigned a subsidy on a “metric tonne” basis).

Expiry Reviews

The CITT previously conducted an expiry review (which are required every 5 years, per section 76.03 of the Special Import Measures Act), and on April 7, 2017, continued its finding (and the ADDs/CVDs) in respect of Subject Goods.

What’s Next?

Given that most normal values and subsidy amounts for exporters have not been updated since the end of 2015, exporters (and importers) should expect that CBSA may undertake a re-investigation soon – especially in light of market volatility since the COVID-19 pandemic began in 2020! (Even without a re-investigation, exporters who have normal values are required to notify the CBSA in writing when there are changes to domestic prices, costs, market conditions, etc. and adjust export prices accordingly!)

As always, businesses importing goods that may fall within the definition of Subject Goods should seek legal advice before importing any goods, otherwise they could find themselves paying massive anti-dumping duties and/or countervailing duties!

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