This publication is intended to provide an explanation of the anti-dumping and countervailing duty investigation process under Canada's Special Import Measures Act.
The procedures involved in an investigation are explained together with a description of the activities carried out by Canada Border Services Agency during this course of an investigation. The obligation and rights of complainants, importers, exporters and other parties involved in an investigation are explained.
The Special Import Measures Act, commonly referred to as SIMA, provides protection to Canadian producers who are being harmed by the dumping or subsidizing of goods imported into Canada. The President of the Canada Border Services Agency (CBSA) and the Canadian International Trade Tribunal (Tribunal) are responsible for its administration.
The Anti-dumping and Countervailing Directorate of the CBSA conducts investigations and determines whether goods imported into Canada are dumped or subsidized. The Tribunal is responsible for deciding whether the dumped or subsidized goods have caused injury or are threatening to cause injury to the Canadian industry, or have caused retardation of the establishment of an industry in Canada. Throughout this document and except where required for clarity, injury is used to refer to injury and threat of injury or retardation which is material in nature.
SIMA, which came into force on December 1, 1984, incorporates in law Canada's rights and obligations in respect of anti-dumping and countervailing actions. The Act, as amended, incorporates the requirements of the North America Free Trade Agreement (NAFTA) and implements the relevant Agreements which resulted from the Uruguay Round of Multilateral Trade Negotiations signed on April 15, 1994 and which became effective on January 1, 1995.
Under SIMA, there are two situations where the President is required to initiate an investigation into the dumping or subsidizing of goods. These situations are:
In addition, the President may initiate an investigation on receipt of a notice from the Tribunal that, in its opinion, there is evidence that imported goods which closely resemble goods for which a preliminary determination has already been made are being dumped or subsidized and are causing injury.
Although the President may initiate an investigation without having received a written complaint, such investigations are infrequent since there must be evidence of injury to Canadian industry and such evidence normally must be provided in a written complaint. In any event, responsibility for presenting the injury case to the Tribunal rests with Canadian producers.
Most investigations result from a written complaint provided by Canadian producers, along with supporting evidence and documentation, on the basis of which the President forms an opinion that an investigation is warranted. Consideration of whether there is sufficient evidence to warrant initiation of an investigation can be made only after a properly documented complaint is submitted to the CBSA.
A properly documented complaint must allege that the imported goods in question are being dumped or subsidized and that the dumping or subsidizing has caused injury to the production of like goods in Canada. The complaint must state in reasonable detail the facts upon which these allegations are based. The complainant must provide all information that is reasonably available in support of the complaint, including detailed information regarding production of the goods in Canada and the market for the goods. In addition, the complaint must include detailed evidence of dumping or subsidizing and detailed evidence of consequent injury.
Initially, a written complaint may range from a brief letter alleging that goods are dumped or subsidized to a fully detailed submission made on behalf of all Canadian producers. Regardless of the form and content of a written complaint, the CBSA advises the complainant whether or not the complaint is properly documented within 21 days of its receipt. Where the Canadian industry is composed of more than one producer, and submissions are made separately, each submission is responded to individually. If the complaint is not properly documented, the CBSA specifies in detail what additional information or evidence is required in order for the complaint to be properly documented.
When the complainant submits any additional information, the President is deemed to have received a new complaint consisting of the original written submission plus the new additional information. The 21-day time limit in which the CBSA must decide if the complaint is properly documented again applies. If the additional information is still not sufficient, the CBSA again specifies the information that is required.
Upon receipt of all required information, the CBSA reviews the complete complaint submission and determines whether the complaint is properly documented and, if so, the complainant is notified in writing within 21 days. At the same time, the foreign government of the exporting country is notified that a properly documented complaint has been received and, in the case of a subsidy complaint, is provided with a copy of the non-confidential version of the complaint.
In accordance with international Agreements and in order not to disrupt normal international trade, the CBSA does not publicize the receipt of a complaint. However, in situations where it is not clear whether the complaint has a sufficient level of support of the Canadian industry, it is necessary to contact other Canadian producers, in which case the filing of a complaint with the CBSA is made known to those producers. Unless the complainant has publicly announced that a complaint has been filed, no other acknowledgment of the receipt of a complaint is given prior to the initiation of an investigation, except for the required notification to the foreign government of the exporting country at the time the complaint is deemed to be properly documented.
Once the complainant has been given notice that the complaint is properly documented, SIMA stipulates that the President has 30 days to determine:
In order for an investigation to be commenced under the Act, the complaint must be made by or on behalf of the Canadian industry. In this respect, there are two conditions to be met. First, the complaint must be supported by a producer or producers whose collective production of the goods represents 25% or more of total Canadian production of the goods and second, the total production of those Canadian producers who express support for the complaint must be greater than the total production of those producers who express opposition. The CBSA must take the necessary steps to satisfy itself that the conditions noted above are met.
In addition to the above, an investigation may be initiated only if a complaint contains sufficient evidence of dumping or subsidizing and sufficient evidence that the alleged dumping or subsidizing has caused injury to domestic producers whose collective production of like goods constitutes a major proportion of total domestic production. It is the practice of the CBSA to decide, on a case by case basis, whether a significantly large proportion of Canadian production has been injured by the alleged dumping or subsidizing. It should be noted, however, that a major proportion may be less than 50%.
In establishing whether there is sufficient industry support for the complaint or whether there is evidence of injury to a major proportion of Canadian production, the output of Canadian producers who are also importers of the goods or who are related to exporters or importers of the goods need not be included as part of Canadian production.
If the complaint is not supported by producers whose combined production represents a sufficient percentage of domestic production, the complainant may choose to contact other Canadian producers to solicit their support along with information and evidence where necessary. Alternatively, the CBSA may request directly that other domestic producers provide an indication of their support for or opposition to the complaint. Producers are asked to indicate their production figures in order to determine whether the complaint has the necessary level of support as described earlier. SIMA permits the 30-day period after notification of a properly documented complaint to be extended to 45 days for the purpose of examining the level of support among Canadian producers.
An investigation is initiated by the CBSA where the complaint is made by or on behalf of Canadian industry and there is sufficient evidence of dumping or subsidizing and of injury caused by the alleged dumping or subsidizing. Notice of this decision is published in the Canada Gazette. Written notice is also sent to the Canadian International Trade Tribunal, the complainant, all known importers and exporters and to the foreign government concerned. The Tribunal will be provided with a copy of the confidential and non-confidential versions of the complaint and any other information that was taken into account by the President. In the case of a dumping investigation, a copy of the non-confidential version of the complaint is sent to the foreign government and, where practicable, is provided to all known exporters or to their trade associations.
A decision not to initiate an investigation is made by the President when one of the following occurs:
Where it is decided not to initiate an investigation following receipt of a properly documented complaint, the CBSA issues a written notice of the decision to the complainant as well as to the concerned foreign government.
If an investigation is not initiated, other producers may subsequently be willing to support the complaint or file satisfactory evidence of dumping or injury. If statements or submissions are received from other Canadian producers at a later date, the CBSA determines if the original complainant(s) still wish to pursue the complaint and reconsiders the entire matter as appropriate following the procedures described above.
The President may decide not to initiate an investigation because the complaint has not been filed by or on behalf of the Canadian industry or because the President is of the opinion that there is insufficient evidence of dumping or subsidizing. SIMA does not provide for an appeal from such a decision by the complainant.
However, if the President decides not to initiate an investigation only by reason that there is insufficient evidence of injury, the complainant may refer the matter to the Tribunal within 30 days of the date of the written notice given by the President. The Tribunal's opinion is given within 30 days of the date of the referral. In reviewing the President's decision, the Tribunal confines itself to an examination of all the evidence and information that was before the President when the decision was made. No additional information is sought by the Tribunal and the submission of new information by the complainant or other parties is not permitted. If the Tribunal advises that there is, in its opinion, evidence which discloses a reasonable indication of injury, the President must initiate an investigation.
When an investigation is initiated, the Tribunal must initiate a preliminary inquiry into whether the evidence discloses a reasonable indication that the dumping or subsidizing of the goods has caused injury or is threatening to cause injury to the Canadian industry. Notice of this decision is published in the Canada Gazette. Written notice is also sent to the President, the complainant, all known importers and exporters, the foreign government concerned, and any trade association known to have a particular interest in the inquiry.
The Tribunal will normally rely primarily on the information received from the CBSA and submissions of evidence and argument from parties. The Tribunal will not normally hold an oral hearing unless warranted by exceptional circumstances. The Tribunal will not normally issue questionnaires, however, depending on the circumstances of the case, the Tribunal may seek clarification from parties relating to issues pertinent to its preliminary injury inquiry.
The Tribunal must make its decision on this matter within 60 days after receiving notice from the CBSA that an investigation was initiated. The Tribunal may also form an opinion on what are the like goods and which domestic producers comprise the domestic industry. Where the evidence discloses a reasonable indication of injury, the CITT will make a preliminary determination of injury and the CBSA's investigation will continue until it is terminated or a preliminary determination of dumping or subsidizing is made. If the CITT determines that the evidence does not disclose a reasonable indication of injury, the preliminary injury inquiry will be terminated and the Tribunal will issue reasons for its decision 15 days later. The CBSA will terminate the dumping or subsidy investigation.
The purpose of the CBSA's investigation is to obtain detailed information from exporters and importers, or the governments in a subsidy investigation, to determine if the goods are indeed being sold to importers in Canada at dumped or subsidized prices. .
The conduct of the CBSA's investigation is governed by the legislative requirements of SIMA, the Regulations and the administrative policies and procedures put in place by the CBSA. The circumstances prevailing in individual cases impose particular operational requirements, thus no two investigations are exactly the same.
However, the first phase in all investigations by the CBSA follows the same general path:
An investigation places a responsibility on all parties involved to provide accurate and detailed information in a timely manner. As required by SIMA, the President must make the required decisions and determinations within specified time limits. In the absence of complete data, these decisions are made on the basis of the facts available at the time.
If the Tribunal determines that the evidence does not disclose a reasonable indication of injury, the CBSA will terminate its investigation. Where the Tribunal has made a preliminary determination of injury, the CBSA's investigation will continue and a preliminary decision as to whether the goods are in fact dumped or subsidized must be made within 90 days of initiation. The investigation will be terminated within this time frame if dumping or subsidizing is not found.
In the case of perishable agricultural or horticultural goods, the President will make the preliminary decision as expeditiously as possible after receipt of the Tribunal's preliminary injury decision, generally within 65 days of initiation.
In certain investigations where the circumstances are particularly complex, SIMA provides that the 90-day deadline may be extended to 135 days. However, the CBSA will complete its preliminary investigation within 90 days whenever possible.
The decision to terminate an investigation or to make a preliminary determination is based on the information available to the President in sufficient time to be analyzed before the decision is made. It is the responsibility of the parties involved in the investigation to respond promptly to requests for information.
The CBSA will send a request for information to all known exporters and importers on the day of initiation of the investigation. The request describes in detail the necessary information which must be prepared and submitted by the exporter or importer to allow the CBSA to determine normal values, export prices and margins of dumping. The request for information also provides an opportunity for the exporter to fully explain and document its pricing practices on sales to Canada.
The purpose of the importer's request for information is to obtain information to substantiate the information supplied by the exporter with respect to sales to importers in Canada, including the export price. The information requested from importers varies depending on whether the importer is related to the exporter. If the importer is not related to the exporter, the required information centres on the importer's purchase and importation of the goods under investigation. If the importer is related to the exporter, the required information centres on the subsequent resale in Canada of the goods to Canadian purchasers, including information describing the general, selling and administrative expenses associated with these sales.
In subsidy cases, a request for information is also forwarded to the foreign government(s) at the time of initiation of the investigation. The request for information is designed to elicit detailed information on the nature and operation of each government program identified as potentially conferring a benefit to the producer or exporter of the goods to Canada. Producers and exporters are requested to provide information on the receipt of benefits from the foreign administering authority and on their production and export of the goods to Canada.
A set of general instructions accompanies all requests for information to assist the parties in preparing the required information. The instructions identify the period covered by the investigation and include explanations of the information to be provided for specific situations as well as the rules regarding the treatment, use and disclosure of confidential information.
The notice of initiation of the investigation advises importers, exporters and the foreign governments of the legislated time limits and of the need for promptness in responding to the request for information due to the limited time available. Exporters and foreign governments are allowed 30 days and importers are allowed 21 days in which to respond. For exporters and foreign governments, the days allowed are counted from the date the party receives the request for information, which is deemed to occur seven days after it is sent by the CBSA.
Shortly after the initiation of the investigation, the exporters and, if necessary, the importers are contacted by the CBSA in order to provide any necessary clarification of the request for information and to confirm the respondent's intention to co-operate in the investigation and to respond completely in a timely manner.
Extensions to the time limits for receipt of responses to the requests for information are not normally granted. However, where the CBSA is satisfied that exceptional circumstances exist, an extension of a few days may be granted.
Information which is submitted past the time limit may not be considered in the preliminary phase of the investigation. If a preliminary decision of dumping or subsidizing is made, this information may be considered in the final phase of the investigation if sufficient time is available.
It is the respondent's responsibility to ensure that the submission is received in Ottawa by the date specified.
The preliminary decision required within 90 days of initiation, including the estimated margin of dumping or amount of subsidy, is based as much as possible on verified data. Where it is not possible to verify all information, the preliminary determination or the decision to terminate the investigation is made on the basis of the data available, which may include unverified information.
The requirement for an on-site visit to verify information submitted is at the option of the CBSA and a decision not to conduct a verification exercise does not in any way preclude using the data submitted. If only unverified information is available, and its reliability is questionable, it will not be used to justify, without supporting data from other sources, the critical decision of terminating the investigation. In investigations where it is impossible to visit all exporters, the larger exporters are normally visited to verify their submissions. The verified data can be used to check unverified data or as a substitute in the absence of information.
If a submission in response to a request for information is substantially complete and the CBSA intends to verify the information, the respondent is contacted as soon as possible to confirm arrangements for a verification meeting. In general terms, respondents are advised prior to the verification meeting of the material that is to be verified, and the data that must be made available at the time of the visit. If any supplementary information is required, the respondent is requested to furnish this additional information as soon as possible and before the start of the on-site verification exercise.
If the respondent's submission is incomplete, a verification meeting is not scheduled and the missing information is requested again or the respondent is advised of the steps required to make the submission acceptable. Information subsequently provided may be received too late for consideration in the making of the preliminary decision regarding the estimated margin of dumping or amount of subsidy but may be taken into account in the next phase of the investigation.
A verification exercise, if required, is only conducted with the consent of the exporter and only if the foreign government does not object. No verification will be conducted without prior assurance that the CBSA investigators will have complete and full access to any and all company records that they deem necessary to examine. If such assurances are not given, the CBSA may consider that the information cannot be fully verified and may proceed on the basis of the facts available, which may or may not include the unverified information.
All information collected during an investigation is subject to the legislative requirements for confidential and non-confidential information as discussed in Part XV of this document.
Non-confidential edited versions or non-confidential summaries of confidential information must be provided to the CBSA. Failure by any party to provide adequate non-confidential information results in the confidential information being disregarded and excluded from any consideration in the decision making process.
Copies of non-confidential information are released by the CBSA to any party upon request. Access to confidential information will be granted to independent counsel representing other parties to the proceeding as provided for in section 84 of SIMA. When such disclosure is given, it is in accordance with a strict undertaking of confidentiality and the CBSA's policy on disclosure of confidential information. See Part XV for more information.
Where there is a large number of exporters, producers, importers or products, the investigation may concentrate on the largest percentage of goods from each country which can reasonably be investigated or, if necessary, a statistical sample. Normally, the larger exporters in each country subject to the investigation are investigated. All exporters of goods not included in the percentage or sample are informed that they need not submit the detailed information described in the request for information. These exporters are informed, however, that they may voluntarily submit the information described in the request for information for the purpose of determining a margin of dumping. Where time permits, voluntary submissions are reviewed and used to determine a margin of dumping for the preliminary decision in respect of that respondent. Otherwise, where practicable, the submission is reviewed and used during the next phase of the investigation. For exporters who are not included in the percentage or sample and who have not submitted information, the margin of dumping normally is based on the weighted average of the margin of dumping found for exporters in the same country who were required to provide information and who fully complied with the CBSA's request for information.
If unusual circumstances make it difficult to reach a preliminary decision within the 90 days provided in SIMA, the President may extend the preliminary phase of the investigation by a further period of up to 45 days. The reasons set out in SIMA for which an investigation may be extended are:
The decision to extend an investigation under the Act is based on a consideration of the facts and circumstances in the individual case at hand. However, in no case does the President extend an investigation solely for reasons of administrative convenience. A decision to extend an investigation is made only where it is in the best overall interest of all parties involved in the investigation.
A final consideration in the decision whether to extend an investigation is the length of the additional time required. Although SIMA provides for an extension of 45 days, this full period may not always be required. Thus, granting an extension does not necessarily mean that the preliminary investigation will be prolonged to the full 135 days.
SIMA provides that a dumping or subsidy investigation is to be terminated where there is no dumping or subsidizing, the margin of dumping or amount of subsidy is insignificant, the actual and potential volume of dumped or subsidized goods is negligible, or the Tribunal concludes that the evidence does not disclose a reasonable indication of injury.
Where the Tribunal concludes, as a result of its preliminary inquiry, that the evidence does not disclose a reasonable indication that injury has been caused to Canadian production, the Tribunal will terminate its inquiry. The Tribunal will notify the CBSA of its decision and the CBSA will terminate its dumping or subsidy investigation.
If during the preliminary investigation it is determined, based on sufficient verified information and evidence from the parties involved, that the goods in question are not being dumped or subsidized, the President must terminate the investigation. Also, if the margin of dumping or the amount of subsidy is insignificant or if the volume of dumped or subsidized goods is negligible, the investigation is terminated. SIMA does not provide for an appeal of such a decision by the President.
A margin of dumping less than 2% of the export price and an amount of subsidy less than 1% of the export price are normally considered insignificant. In a dumping investigation, the volume of dumped goods from a country is considered negligible if the volume is less than 3% of the total volume of like goods exported to Canada from all countries. However, where the total volume of dumped goods from at least three countries, each of whose exports is considered negligible, is more than 7% of the total volume of exports to Canada from all countries, the volume of goods from each of those countries is not considered to be negligible.
The termination of an investigation ceases all action by the President and the Tribunal under the Act in respect of the importations of the subject goods. Written notice of the decision is sent to all parties involved in the investigation and is published in the Canada Gazette.
Where the evidence indicates the existence of dumping or subsidizing and where the Tribunal has concluded that there is a reasonable indication that the dumping or subsidizing has caused injury, a preliminary determination is made. The decision is made after the 60th day but on or before the 90th day following the date of initiation of the investigation, subject to the provisions previously noted regarding time limit extensions.
At the time of making a preliminary determination of dumping or subsidizing, the President:
The term "available" is interpreted to mean furnished and verified whenever necessary. Therefore, for the purpose of the preliminary determination, the President bases the estimate on information which has been furnished to the CBSA by various sources, for example, complainants, exporters, importers, and other government departments, which is believed to be reliable. If an approximation is necessary because sufficient information has not been received at the time the preliminary determination is made, an estimate may be made using the information which is on hand.
With respect to subsidies, the CBSA is required to identify which portion, if any, of the subsidy is a prohibited subsidy as defined in the Act. SIMA permits retroactive application of countervailing duties in some cases where certain prohibited subsidies are provided.
The President must specify the importer or importers of the goods at the time of making the preliminary determination. The requirement that the identity of the importer be established at the time of the preliminary determination is related to specific appeal procedures contained in SIMA under which any interested person may appeal to the Tribunal if it disagrees with the CBSA's designation of who is the importer. However, failure to identify any importer at this stage does not affect that importer's future liability under the legislation. For example, if an importer is only identified after the preliminary determination, the fact that the importer was not specified has no effect on the application of the legislation to the goods imported by that importer.
Where the President makes a preliminary determination and considers that the imposition of duty is necessary to prevent injury, all dumped or subsidized imports from the countries involved in the investigation are subject to provisional duty. The provisional period starts on the date that the preliminary determination is made and ends on the date that the Tribunal issues its final decision on the matter of injury to Canadian production.
The estimated normal values, or amounts of subsidy, are provided to all Customs offices where goods are accounted for, together with instructions on the determination of the export price. If the exporter continues shipping at dumped prices, provisional duty is assessed in an amount equal to the amount by which the normal value exceeds the export price. In the case of subsidized goods, the amount of the provisional duty is the estimated amount of subsidy. In some situations, provisional duty may be calculated and assessed based on a percentage of the export price of the goods.
Provisional duty is to be paid at the time of accounting for the goods for Customs purposes, or when assessed by a Customs officer. In the case of provisional duty, the importer may elect to post approved security with Customs to cover the amount of the duty. Depending on the decision issued by the Tribunal, the amount of duty is retained in whole or in part or is returned to the importer.
At the time of making a preliminary determination, the CBSA provides exporters with a complete explanation of how normal values and export prices were determined. Typically, at the same time, detailed spreadsheets showing these calculations are provided to the exporters.
In addition, the CBSA provides parties with an opportunity to participate in a disclosure meeting with the investigating officers to obtain further explanation of the decisions made in the investigation. The need for transparency, the constraints imposed by the confidential nature of much of the information, and the constraints imposed by the investigative procedures must be taken into account for disclosure meetings purposes as noted in the following paragraphs:
Undertakings are commitments made by exporters, or the foreign government in subsidy cases, to adhere to certain conditions which serve to eliminate the harm to Canadian producers caused by dumping or subsidizing. Undertakings may result in a suspension of the investigation and thus may provide a more expeditious and less costly solution than proceeding with the completion of the investigation and a final Tribunal inquiry. Undertakings may only be accepted after a preliminary determination has been made by the President and generally remain in force for a five year period. No anti-dumping duties or countervailing duties are applicable while valid undertakings are in effect.
Undertakings are voluntary and the CBSA does not initiate proposals or solicit undertakings. However, the undertaking provisions of SIMA are explained in discussions with complainants and exporters early in the investigation. Upon request, in cases where undertakings offer a viable alternative, disclosure meetings are held subsequent to the preliminary determination for the purpose of assisting the exporter or foreign government in finalizing an undertaking proposal and facilitating an offer for an undertaking. In such cases, the Canadian producers who filed the complaint are consulted to obtain their views on possible undertakings and the price levels they feel are necessary to eliminate injury to production in Canada.
Undertaking proposals must be received by the CBSA as soon as possible after the preliminary determination to permit proper analysis and consultations with the complainants. The President may refuse to consider any undertaking submitted later than 60 days after the preliminary determination. Interested parties, including the Commissioner of Competition, will have nine days from the day the CBSA receives a proposal to provide comments on it.
During undertaking discussions, the investigation continues and all parties are expected to respond to any CBSA requests for information to establish normal values, export prices and the amounts of subsidy. As there is no guarantee that an undertaking will be accepted, the final investigation must proceed in order that the President is in a position to make a final decision in the investigation and specify the final margins of dumping or amounts of subsidy within 90 days of the preliminary determination as required by the Act. This time limit cannot be extended. In addition, the CBSA must collect adequate data to assess whether circumstances justify termination of the investigation rather than issuance of a final determination or acceptance of an undertaking.
Confidential information contained in undertakings will only be disclosed where counsel for a party to the undertaking proceedings signs a strict undertaking of confidentiality, and where disclosure is in accordance with the CBSA's policy on the disclosure of information. See Part XV for more information.
The definition of "undertaking" in SIMA provides for two possible types of undertakings in dumping investigations and several possible types in subsidy investigations:
The President may accept an undertaking only when the undertaking eliminates the margin of dumping or the amount of subsidy or, alternatively, removes the injury caused to Canadian industry. An undertaking which causes the price of goods sold to importers in Canada to increase by more than what is required to offset the estimated dumping or subsidizing cannot be accepted.
Undertakings must be made individually by exporters or governments and cannot be made by an association or a group of exporters acting in concert. While discussions with associations, agents, counsel, or affected importers may take place, the formal written offer of the undertaking must be made directly by individual exporters or governments and is accepted by the President only on that basis.
Undertakings are accepted only if they are given by exporters or governments of foreign countries representing all or substantially all of the trade in the product under investigation. The CBSA interprets this to mean that exporters or foreign governments offering undertakings should normally account for at least 85% of the volume of dumped or subsidized imports into Canada. However, representation of 85% of the volume of dumped or subsidized goods does not necessarily mean that the undertaking will be accepted. For example, if an exporter not included in the 85% has a potential to ship large quantities of dumped goods to Canada, the President may conclude that a sufficient percentage of the trade is not covered by the undertaking. Undertakings cannot be accepted and the investigation suspended for some exporters while the investigation continues for others.
The terms of the undertaking must be sufficiently precise and well defined to permit effective monitoring. There must also be an agreement by the exporter or the foreign government to provide evidence considered necessary by the CBSA to substantiate, on an ongoing basis, compliance with the undertaking.
Finally, the legislation stipulates that the President shall not accept an undertaking which is impracticable to administer. Factors which are considered in assessing the practicability of undertakings include:
Where a proposed undertaking is not acceptable, the exporter or foreign government is advised that the proposal has been considered but has not been accepted, together with reasons for not accepting the proposal. If the reason for rejection is the impracticability of administration, and should time permit further discussions, suggestions may be made regarding the means of overcoming this problem.
An undertaking proposal which satisfies all of the requirements of the legislation may be formally accepted by the President. Written notice of this decision is sent to all parties involved in the investigation. Except for the situation described below, acceptance of an undertaking causes an investigation to be suspended in respect of all exporters, regardless of whether they are covered by an undertaking. In situations where the investigation was suspended due to the acceptance of undertakings, additional undertakings may be accepted after the suspension of the investigation from exporters or foreign governments who had not previously provided any.
An exporter or the foreign government may, at the same time as it submits the undertaking proposal, request that the President complete the investigation and the Tribunal complete its inquiry. In these circumstances, and following the acceptance of the undertaking and the resulting suspension of collection of provisional duties, the President continues the investigation to a final decision while the undertaking remains in place. If the President subsequently terminates the investigation or if the Tribunal concludes that there is no injury caused by the dumping or subsidizing, the President terminates all undertakings. Should an injury finding result, the undertakings that were accepted continue in effect. However, under these circumstances, no additional undertakings can be accepted after the investigation is concluded.
SIMA requires that the President terminate an undertaking upon receipt of a request to do so by a directly concerned person within 30 days of the date of acceptance of the undertaking and prior to the Tribunal's finding. Such persons include the exporter, importer and complainant, and the foreign government in a subsidy case.
SIMA also provides that at any time after an undertaking is accepted, the President may terminate the undertaking for the following reasons:
The termination of any undertaking necessitates the termination of all undertakings which may have been accepted with respect to that investigation. Where an undertaking is terminated, all involved parties are informed in writing and the CBSA's investigation and the Tribunal inquiry are resumed, if they have not already been completed as a result of a request described in section (E) above.
After the acceptance of an undertaking, the CBSA, as part of its ongoing enforcement activities and administration of undertakings, conducts periodic re-investigations to verify compliance with the terms of the undertaking.
In this respect, exporters may be requested to provide information on domestic and export sales to Canada, including production and pricing data. Importers may also be requested to provide information similar to that requested during the original investigation. As a result of these periodic re-investigations, price levels with respect to sales to Canada are adjusted according to the terms of the undertaking to reflect changes in market conditions, if any. It would be during this phase of the case that undertakings could be accepted from exporters who had not previously provided them if the investigation is still in suspension and the conditions for acceptance of undertakings exist.
Where a Tribunal decision of injury has been issued following the acceptance of an undertaking, the undertaking stays in place until the Tribunal decision is rescinded or is allowed to expire. Where no Tribunal decision has been made following the acceptance of the undertaking, that is, where the investigation was suspended, SIMA requires that undertakings be reviewed at least every five years in order to determine whether they continue to serve the purpose for which they were intended and should therefore be continued. Before the expiration of the initial five year period, the CBSA initiates a review for the purpose of obtaining information to determine if the undertaking is to be renewed. All parties involved in the original investigation are notified in writing of the review.
The complainant is requested to provide information similar to that required in support of the injury allegations in the original complaint. Exporters and importers are requested to provide information and documents necessary to determine whether the undertaking should be continued. Details on market shares, trends in the Canadian market and developments in production or product design, where applicable, are included in these requests. In addition, each of these parties, and the government of the country concerned in subsidy cases, has the opportunity to provide any other information or representations they deem appropriate to the question of whether the undertaking should be continued. Following analysis of all information available, the President decides whether to continue the undertaking. Written notice of this decision is sent to all parties involved in the investigation and notice is published in the Canada Gazette.
If a decision is made by the CBSA that the undertaking will not be renewed, it expires immediately and all action under SIMA ceases. An undertaking may also be allowed to lapse before the expiry of the five year period if the President or the Tribunal, as appropriate, considers that anti-dumping or countervailing measures are no longer required.
On the other hand, the undertaking may be renewed for a further period of not more than five years. The renewal may be for a period of less than five years if the circumstances of the case warrant it. At the end of this period, a new review would be conducted.
Following the making of a preliminary determination and except where the investigation is suspended due to the acceptance of an undertaking, the legislation requires that the CBSA, within a further 90 days, make a final decision regarding the dumping or subsidizing.
In most investigations, some verified information is available at the preliminary determination and the investigation for the final decision consists of meetings with additional firms not visited during the first 90-day period, verifying new information, re-visiting exporters for clarification of details and visiting importers, if necessary. The purpose of the final investigation is to obtain precise normal values or amounts of subsidy for use in the President's final determination or, alternatively, the termination of the investigation. Where sufficient data has been collected and verified as required, normal values and export prices or the amounts of subsidy are calculated on the basis of this data. Where sufficient information is not available, recourse is made to a Ministerial Specification as discussed in Part XIV.
If during the final investigation it is determined that the information and evidence shows that there is no dumping or subsidizing or that the margin of dumping or the amount of subsidy is insignificant, the President terminates the investigation. Where the investigation is terminated, all parties involved are notified in writing. The termination causes all action under SIMA in respect of those goods to cease.
At this stage if the investigation, however, the President cannot terminate the investigation on the grounds that the volume of dumped or subsidized goods is negligible. Once the preliminary determination is made, the Tribunal's final injury begins and the termination of an investigation because of negligible volumes of dumped or subsidized goods is no longer within the President's jurisdiction.
If the available information establishes that the goods are dumped or subsidized and that the margin of dumping or the amount of subsidy is not insignificant, a final determination is made. In the final determination of dumping or subsidizing, the precise margin of dumping or amount of subsidy is specified for each exporter and all parties involved are notified of the decision in writing. The final results are provided to the Tribunal for consideration in its final inquiry into the matter of injury caused by the dumped or subsidized goods.
As in the case of the preliminary determination, CBSA officials provide interested parties with an opportunity for a disclosure meeting, at their request, to fully explain how the normal values and export prices or amounts of subsidy were finally calculated and the result of the CBSA's consideration of their representations following the preliminary determination. The meetings take place immediately after the final determination is issued. If a disclosure meeting reveals that changes in the calculations are warranted, the margin of dumping or amount of subsidy would be adjusted and the Tribunal advised immediately. It is in the interest of all parties that the dumping or subsidizing specified at the final determination be as accurate as possible as this information could be a critical element in the Tribunal's assessment of the injury question. All interested parties are therefore notified in writing of any adjustment to the normal value or amount of subsidy.
The final determination of dumping or subsidizing, or the termination of the investigation as described above, represents the conclusion of the investigation by the CBSA under the Act. Under certain conditions, parties may appeal the decision of the President to make a final determination or to terminate an investigation to the Federal Court, or, in the case of goods from a NAFTA country, parties may request a Binational Panel review of the decision under the terms of NAFTA.
Within 120 days of receiving a notice of a preliminary determination, the Tribunal must complete its final inquiry and issue a decision or "finding" as to whether the dumping or subsidizing of the goods has caused injury or retardation or is threatening to cause injury to the Canadian industry. Alternatively, the Tribunal may find that the dumping or subsidization would have caused injury or retardation except for the fact that provisional duty was imposed in respect of the goods.
Tribunal findings remain in place for five years unless they are reviewed by the Tribunal and a new order or finding is made to continue the finding for a longer period of time or to rescind it sooner.
The Tribunal's finding on the question of injury may be one of three possibilities. The subsequent action in respect of duties imposed depends on the nature of the finding. The three possible findings are that the dumping or subsidizing:
A finding of no injury by the Tribunal ends all proceedings in the investigation. In such a case, the CBSA refunds to the importer all provisional duties collected and returns any security that was posted with the CBSA in lieu of duty payment.
Where the Tribunal concludes that injury has occurred, anti-dumping or countervailing duty is payable on all dumped or subsidized goods imported during the provisional period, i.e., from the date of the preliminary determination to the date of the Tribunal's finding, and on all shipments of the subject goods released after the date of the Tribunal's finding, until such time as the finding is rescinded. Duties are not payable, however, if the goods are covered by a valid undertaking.
The Tribunal may also find that massive importations of dumped or subsidized imports have caused injury in which case retroactive duty may be assessed on goods that were imported in the period starting on the day the investigation was initiated and ending on the day of the preliminary determination. In case of an extension of the first phase of the investigation, this period cannot exceed 90 days prior to the date of the preliminary determination.
Where duties are applicable to importations made prior to the date of the Tribunal's finding, SIMA requires that a Designated Officer of the CBSA make a decision or "determination", within six months of the date of a Tribunal's finding, in respect of those importations made during the provisional period, and the earlier period in the case of a "massive" finding by the Tribunal. The effect of this determination is to finalize the amount of duty payable for the goods already imported by determining:
The Designated Officer's determinations take the form of rulings issued by letter to individual importers of the subject goods. The rulings also include a schedule of the imports affected, showing the calculations made, and indicating the amount refundable, or the amount payable, as appropriate.
In determining the normal value and export price of the goods, or the amount of subsidy, the information collected during the investigation and the values established for the final determination may be used, if these properly represent the margin of dumping or amount of subsidy for the importations being assessed. If there is reason to believe that the information used to determine normal value and export price or the amount of subsidy for the final determination is outdated, it may be necessary to obtain more recent information before making the Designated Officer's determination. The requirement for updated information is considered during the period between the final determination and the Tribunal's finding. The updated information would be requested immediately after a Tribunal's injury finding and new values would be established in time to allow for the determination of the final duties within the six month time limit allowed. In addition to using the revised normal value, export price or amount of subsidy for the Designated Officer determinations, the new values are applied to importations released after the date the revised values are issued.
If duty is owed, payment of the duty is demanded when the Designated Officer decision is made. The anti-dumping or countervailing duties levied for goods imported during the provisional period may not exceed the amount of the provisional duty paid or payable on the goods. If a refund of provisional duty is due, as a result of the final calculations, such amount is returned to the importer. Where duty is returned to an importer, the importer is paid interest on that amount. The Designated Officer's determination and assessment of duty may be appealed to the President.
If the Tribunal makes a finding of threat of injury only, no anti-dumping duty or countervailing duty is payable on goods released before the date of the Tribunal's finding. Any provisional duty paid on importations prior to the Tribunal's finding is returned to the importer together with interest. Any securities posted by importers in lieu of provisional duty payment are returned. A Designated Officer's determination as described above is not required in cases where the Tribunal has made a finding of threat of injury only. However, duty is payable on all dumped or subsidized imports released after the date of the finding except where the goods are covered by a valid undertaking.
Re-investigations to update normal values, export prices or amounts of subsidy and to establish values for new exporters or new models are conducted periodically, generally on an annual basis. Procedures followed during a re-investigation are similar to those outlined earlier for the preliminary investigation except for the consideration of injury which is not part of a re-investigation. Further, an exporter not included in the investigation or a subsequent re-investigation may request an expedited review of its normal values, export prices or amounts of subsidy.
SIMA provides that an order or finding expires if the Tribunal has not initiated an expiry review of the order or finding before the expiration of five years after the date of the finding. Two fundamental issues are considered in an expiry review. Firstly, the CBSA will consider whether there is a likelihood of continued or resumed dumping or subsidizing of the goods. If the CBSA finds that there is a likelihood of continued or resumed dumping or subsidizing, the Tribunal must then determine whether the dumping or subsidizing is likely to cause material injury to the domestic industry.
The CBSA has 120 days complete its investigation and publish the President's decision on the likelihood of dumping or subsidizing continuing or resuming, if the Tribunal's order or finding were to expire. In making its determination on the likelihood of a continuation or resumption of dumping or subsidizing, the President will collect information through questionnaires to exporters, importers and domestic producers.
If the President determines that the expiry of the Tribunal's order or finding is likely in dumping/subsidizing continuing or resuming, the Tribunal must be provided with notice of this decision without delay.
If the President determines that the expiry of the Tribunal's order or finding is unlikely to result in dumping/subsidizing continuing or resuming, the President must provide the Tribunal with notice of the determination without delay. The Tribunal then shall make an order rescinding its order or finding in respect of the goods.
Where sufficient information to calculate normal values, export prices, or the amounts of subsidy under the specific provisions of SIMA has not been furnished or is not available, the values are determined in the manner that the Minister specifies in what is commonly referred to as a Ministerial specification.
This situation arises where an exporter, producer, importer or foreign government chooses not to supply sufficient information to determine normal value, export price or the amount of subsidy after being requested to do so by the CBSA or does not permit the verification of information provided. Also included are situations where a party has not provided the required information in sufficient time prior to an importation of goods to allow the normal provisions of SIMA to be applied and specific values to be determined prior to the date the goods are imported.
In such circumstances, the specified method of determining values normally ensures that the dumping or subsidizing is entirely offset by a sufficient level of duty. It is the position of the CBSA that the values established using the Ministerial specification in such cases must not result in a more beneficial result than would have resulted had the party provided full and timely information and permitted full verification. Similarly, the values which result in such cases must not be more favorable than for an exporter that has provided full information. For example, the specification may be based on the highest margin of dumping found during the investigation for the goods in question.
Where sufficient information is simply not available and the CBSA is unable to determine normal value, export price or the amount of subsidy under the regular provisions of SIMA, a Ministerial specification is also used. This is an infrequent situation where the CBSA is satisfied that the required information is not available because it does not exist or, for some other highly unusual reason beyond the control of the parties, is not available. There is a distinction made with the previous section, where the information was not available because of a decision by a party not to provide the information.
In such cases, where the CBSA is satisfied as to the unavailability of the information, normal value or export price determined through the use of a method set out in a Ministerial specification normally reflects the best information available and an attempt is made to arrive at normal values, export prices or amounts of subsidy using substitute information or average results as appropriate to the case. For example, the Specification may be based on the weighted average margin of dumping determined for other exporters or importers of the goods in question.
It is recognized that certain exporters, such as distributors or service centres, who are not the manufacturer or producer of the goods exported to Canada are often unable to supply the CBSA with cost of production information which is required in the determination of normal values. In such cases, the CBSA will attempt to use the best information in lieu of the cost of production information provided that the exporter has otherwise supplied the CBSA with a satisfactory response to all of the other information requested in the Request for Information. If necessary, a Ministerial specification may be used in these situations.
SIMA provides for the disclosure of confidential and non-confidential information. The purpose is to make information available in order that all parties can understand the reasons and bases of fact on which decisions are made, while guaranteeing the protection of confidential information.
The legislation obliges persons who provide information to identify those parts of their submissions which are considered to be confidential, and to provide a statement setting out the reasons why the information is confidential. The CBSA must be satisfied that the information is indeed confidential and that the reasons given in support of this designation are satisfactory. If it is not clear that the information merits a confidential designation, the person providing the information is so advised and given an explanation. The person must either change the designation of the information or supply additional reasons why the information is confidential. If the CBSA is not satisfied with the supplementary explanation and still considers that the designation of the information as confidential is unjustified, the information is disregarded and is not used for purposes of the proceedings unless it is obtained from another source.
In addition to providing justification for the designation, any person submitting confidential documents must also provide a non-confidential edited version or summary of the document or if this is not possible, a statement explaining why it is not possible. The non-confidential version is in effect the same as the confidential version of the documents with the specific confidential data edited out or otherwise obliterated. Where necessary for clarification, a brief statement as to the nature of the obliterated information is to be included. The edited version must be sufficiently detailed to allow a person reading it to have a reasonable understanding of the substance of the confidential information. If the CBSA considers the non-confidential information to be inadequate, or if non-confidential information is not provided and unsatisfactory reasons are given to support this omission, then the CBSA notifies the person and states what corrective action is required. If the person does not subsequently correct the situation, that is, provide adequate non-confidential information or properly explain its omission, the information is disregarded and is not used in the proceedings.
Upon request, the CBSA makes available to any party any non-confidential information which has been submitted to the President for the purposes of any proceedings under the Act. However, non-confidential versions of the complaint or submissions by other interested parties are not released until after the initiation of an investigation, except in subsidy cases where a non-confidential version of the complaint is included with the notice of receipt of a properly documented complaint to the government of the country concerned.
SIMA states that information designated as confidential shall not be disclosed by any public servant to any business competitor or rival of any person to whose business or affairs the information relates. However, SIMA requires the President to disclose confidential information submitted by a party to independent counsel for other parties in that proceeding or a subsequent related proceeding.
The President shall, on written request and payment of the prescribed fee, disclose confidential information to counsel for any party to a proceeding, subject to any conditions that the President considers reasonably necessary to ensure that the information will not be disclosed to any person by counsel in any manner that is calculated or likely to make it available to any party or business competitor. As well, there is a limitation on such disclosure when the President is satisfied that the disclosure might result in material harm to the business or affairs of the person who designated the information as confidential.
Independent counsel will have to provide a Disclosure Undertaking when requesting the disclosure of confidential information. By signing a disclosure undertaking, counsel agrees
The disclosure of information provisions in SIMA are only applicable to information and evidence submitted to the President for purposes of proceedings under SIMA. These provisions do not cover: information submitted to the President which has not been designated as confidential; information which has been internally generated by the CBSA such as case analyses or correspondence; information protected by section 107 of the Customs Act such as customs accounting documents; nor information designated as confidential and submitted to the President by the CITT at the initiation of an expiry review (access to such information received from the CITT will have to be obtained under the rules and procedures of the CITT).
SIMA only permits disclosure of confidential information to counsel for a party to a proceeding or to other proceedings arising directly therefrom. Under SIMA, "counsel" includes any person, other than a director, servant or employee of the party, who acts in the proceedings on behalf of the party and is not limited to legal counsel. A party to a proceeding conducted by the President under SIMA is a person who is directly interested in a proceeding and who actively participates in the proceeding.
Counsel for a party which is not involved in the proceeding is denied access to the confidential information. Access to confidential information is not given prior to the initiation of an investigation nor is any confidential information disclosed to counsel if an investigation is not begun.
Further information on the subject of disclosure can be found in the detailed Policy and Guidelines on Disclosure available on our web site at www.cbsa-asfc.gc.ca/sima-lmsi/menu-eng.html.