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Refined Sugar Normal Value Review Closed

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On February 21, 2023, the Canada Border Services Agency (“CBSA”) concluded its normal value review of refined sugar exported from the US by United Food Group Inc. (“United”).

Unlike re-investigations, where the CBSA reviews and redetermines normal values for all exporters in the industry, in a normal value review the CBSA only reviews the normal values of the named party – in this case United.

This particular normal value review was triggered by an importer appeal. However, while United responded to the CBSA’s RFI, the producer of the goods did not, and accordingly the CBSA concluded the review.

For reference, the Subject Goods whose normal values were under review are defined as follows (subject to a long list of exclusions):

“Refined sugar, refined from sugar cane or sugar beets, in granulated, liquid, and powdered form. Refined sugar is sold as white granulated, liquid and specialty sugars. Granulated sugar comes in a range of grain fractions (e.g., medium, fine, and extra fine). Liquid sugar includes invert sugar. Specialty sugars include soft yellow sugar, brown sugar, icing sugar, demerara sugar and others and may be sold in granulated, liquid, or powdered form.”

Background

The refined sugar anti-dumping measures have been in place since October 5, 1995, when the CBSA made its final determination that Subject Goods originating from or exported from the US, Denmark, Germany, the Netherlands, the UK, and South Korea had been dumped, and that Subject Goods originating in or exported from the European Union (“EU”) had been subsidized. In the course of its investigation, the CBSA determined normal values for four (4) co-operating US exporters, one (1) UK exporter, and four (4) South Korean exporters.

There have been numerous CBSA re-Investigations and Canadian International Trade Tribunal (“CITT”) expiry reviews since then, most recently a CBSA Re-investigation that concluded on March 30, 2022.

2022 CBSA Re-Investigation

On October 6, 2021, following a CITT expiry review, the CBSA initiated a re-investigation of normal values among exporters of the Subject Goods. While CBSA sent Requests for Information (“RFIs”) to all known importers, exporters, producers and vendors, the only exporter that provided a complete response to CBSA (and received updated normal values as a result) was the Cosun Beet Company. Normal values for all other exporters expired on March 30, 2022 – leaving them subject to 180% anti-dumping duties (“ADDs”)!

Conclusion of United’s Normal Value Review

United’s normal value review was triggered by an importer appeal. Essentially, an importer was assessed the 180% ADDs, and they were hoping that through their appeal the CBSA would assign United a normal value that would greatly reduce their assessment! The appellant likely coordinated this appeal with United to ensure they would be willing to cooperate with CBSA on a normal value review.

The CBSA initiated the review on December 12, 2022, and as indicated above, while United responded to the CBSA’s RFI, the producer of the goods failed to do so before the January 17, 2023, deadline.

If the producer had participated in the review, the CBSA could have determined that United was not dumping and not subject to ADDs, or, if determined to be dumping, assigned a specific normal value in respect of its products which would have displaced the 180% ADDs.

However, without a response from the producer, the CBSA had no choice but to conclude the review, and the normal values of the subject goods exported by United will be determined pursuant to a Ministerial Specification under subsection 29(1) of SIMA, by advancing the export price by 180%.

Unfortunately for United, its (likely lengthy and time-consuming) submissions to the CBSA were for naught. This demonstrates that, for those looking to appeal an assessment of anti-dumping duties, it is important to make sure both the exporter and the producer are willing to cooperate and respond to CBSA’s questionnaires. Without those answers, CBSA cannot determine a normal value and the goods will remain subject to the Ministerial Specification, wasting the extensive time and resources spent on the appeal – especially given that SIMA appeals are pay-to-play!

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