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IGNORING THE CITT CAN COME AT A COST 

CONTEMPT FINDING SERVES AS A REMINDER TO IMPORTERS

In the rush of everyday business, both Canadian and foreign businesses can occasionally overlook the importance of responding to requests from the Canadian International Trade Tribunal (the “CITT” or “Tribunal”).  

A recent Expiry Review that escalated into a contempt hearing against a U.S.-based steel importer serves as a reminder of the Tribunal’s power to issue orders reaching those across the border!

The Production Order

As part of its expiry review of a finding of dumping of certain Corrosion-resistant Steel Sheet (“COR”) from several countries, including the People’s Republic of China and the Republic of India (“Subject Goods” and the “Subject Countries” – see RR-2023-008) the CITT issued standard requests for the completion of questionnaires to importers of COR into Canada.  One such request was sent to T.Co Metals LLC (“T.Co”), a U.S. supplier whose imports of COR accounted for a significant part of Canada’s imports from non-Subject Countries during the relevant period of review.

The request was sent to T.Co on June 14, 2024.  After several unanswered follow-up communications from the Tribunal, a production order (“Production Order”) was sent on August 8, 2024, requiring the completion of the questionnaire by August 14, 2024.

T.Co Metals failed to comply with the Production Order, and while it did eventually provide answers to the questionnaire, it was called to a show cause hearing to answer for possible contempt of the CITT.

Contempt Hearing

At the show cause hearing, T.Co admitted it had received the CITT’s request, but explained that the delay was a result of prioritizing conflicting deadlines for submitting U.S. tax returns (due in September), and other business activities.  T.Co appeared to argue against a finding of contempt on the basis that:

       1. It only imported COR from non-Subject Countries during the period of review, which made its imports less relevant to the expiry review analysis.

       2. The public nature of the show cause hearing was a sufficient deterrent to respect the authority of the Tribunal.

Contempt Order

The CITT disagreed. Among other factors, the Tribunal emphasized that: (1) its analysis must consider the effects of likely dumping in the overall context of the entire Canadian market; (2) the strict time constraints preclude it from considering the refusal to respond to a questionnaire lightly; and (3) T.Co did not take “basic reasonable steps” including contacting the Tribunal to discuss its compliance.

Ultimately, the CITT made a finding of civil contempt against T.Co based on the facts that:

       1. The production order was clear and unequivocal;

       2. T.Co had actual knowledge of the Production Order; and

       3. T.Co intentionally failed to comply with the Production Order.

The CITT stated it was considering whether it would be appropriate to impose a fine on T.Co but a decision on this has yet to be released.

Takeaways

While the CITT acknowledged that this situation leading to this proceeding was “novel”, importers should note that the CITT has enforcement powers – and is willing to use them! Those who receive requests from the CITT should consider seeking professional advice.

For help with an Expiry Review or Injury Inquiry, click here.

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