Tax & Trade Blog
Retroactive Anti-Dumping Assessments! Corrosion-Resistant Steel Sheet 2
On January 22, 2024, the CBSA issued a Notice of Retroactive Assessments in respect of certain Corrosion-Resistant Steel Sheet (“COR-2”) goods imported into Canada from Türkiye (formerly Turkey) and Vietnam.
Canadian importers of these COR-2 goods may soon find themselves on the receiving end of these retroactive assessments in respect of imports into Canda between December 2021 and November 2022!
On January 16, 2023, the Canada Border Services Agency (“CBSA”) started a Re-investigation of the normal values and export prices of COR-2 goods from Türkiye and Vietnam, and for amounts of subsidy of COR-2 exported from Türkiye, pursuant to the Special Import Measures Act (“SIMA”).
This was part of CBSA’s ongoing enforcement of the Canada International Trade Tribunal’s (“CITT”) finding in NQ-2019-002.
The Re-investigation Process
Once a Re-investigation is initiated by the CBSA, it sends a request for information (“RFI”) to all known importers, exporters, producers and vendors of the subject goods to get information on the costs and selling prices of those goods. This is done to update the normal values and export prices for such goods imported into Canada.
If sufficient information has not been provided to the CBSA, or the information is not available, then the normal values, export prices and subsidies for those particular exporters are determined pursuant to a Ministerial Specification.
Outcome of the COR-2 Re-Investigation
The CBSA concluded its Re-investigation for COR-2 on July 17, 2023, with only 2 companies in Türkiye and 4 companies from Vietnam participating in the process and obtaining normal values from the CBSA. On the subsidies issue, only one company from Türkiye participated, and CBSA determined that it had benefited from certain “actionable” subsidy programs, and thus was subject to Countervailing measures.
The CBSA has the power to issue retroactive assessments as part of its Re-investigative powers. The Notice of Conclusion of Re-Investigation sets out the essential basis of this power in a section called “Exporter Responsibility”, which states that exporters with normal values are required to notify the CBSA in writing about any changes to the prices, costs, market conditions, etc. of the subject goods. Exporters are also required to ensure their export prices are increased to reflect increases to the selling prices, and full costs and profits in the exporter’s domestic market.
Where the exporter either fails to notify the CBSA or sufficiently increase exporter prices to Canada as described above, the CBSA may retroactively assess the importer based on the retroactive normal values – leaving importers with a significant financial risk they have little control over.
Why Do I Care?
This Notice of Retroactive Assessmentsshould act as a warning for importers and exporters who deal with goods that are subject to Anti-Dumping/Countervailing duties. Exporters with normal values should keep their “Exporter Responsibility” in mind, otherwise their importers could be unpleasantly surprised to face retroactive assessments, as is happening with COR-2.