Tax & Trade Blog
Refined Sugar Normal Value Review
On December 12, 2022, the Canada Border Services Agency (“CBSA”) issued a notice that it will be conducting a 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 CBSA will only review the normal values of the named party – in this case United. (That said, CBSA will sometimes conduct normal value reviews in respect of 2-3 exporters at around the same time and may sync up their schedules so it issues decisions more or less at the same time.)
For reference, the Subject Goods whose normal values are 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.”
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, with the most recent being a CBSA Re-investigation that concluded on March 30, 2022.
2022 CBSA Re-Investigation
On October 6, 2021, and following a CITT expiry review which concluded in August 2021, 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 was the Cosun Beet Company, which received updated normal values from CBSA. (importers who purchase goods at or above the exporter’s normal values are generally not subject to ADDs or CVDs upon import!) Normal values for all other exporters expired on March 30, 2022 – leaving them subject to 180% anti-dumping duties (“ADDs”), and EU exporters subject to countervailing duties (“CVDs”) of 3.97 Euros per 100 kg!
Why is CBSA conducting a Normal Value Review?
Normal value reviews are generally triggered by an importer appeal of an ADD assessment, or as a result of changes in domestic prices, costs, market conditions, or terms of sale for a particular exporter (rather than the whole industry). In this case, United’s normal value review was triggered by an importer appeal. Essentially, an importer was assessed the 180% ADDs, and they are hoping that United will be assigned normal values which will greatly reduce their assessment!
Can I get a Normal Value Review Now?
Exporters with normal values are required to notify the CBSA in writing of changes which would increase their normal values, and should increase their export prices to Canada accordingly. Where the exporter does not increase prices in a timely manner, the CBSA may issue retroactive assessments to the exporter's Canadian importers!
While an exporter can technically request a normal value review (or re-investigation) at any time, CBSA policy is clear that proceedings required under the Special Import Measures Act (“SIMA”) take precedence over optional proceedings. Importing goods caught by ADDs and/or CVDs and hoping for a normal value to be assigned after the fact is risky at best, especially given that SIMA appeals are pay-to-play!
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