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Compendium of Antidumping and Countervailing Duty Laws in the Western Hemisphere
IV. Steps of the Investigation
A. Petition Filing
A domestic producer may submit a complaint to the Deputy Minister of National Revenue (DM) whenever it believes that dumped/subsidized goods are causing injury or material retardation or threaten to cause injury.
The Special Import Measures Act (SIMA) Subsection 32(1) provides that, within 21 days of receiving a complaint, the DM must either:
(1) notify the complainant and the government of the country of export that the complaint is properly documented; or
(2) advise the complainant that additional information and material are required for the complaint to be properly documented.
According to SIMA subsection 2.(1), a properly documented complaint means that
(a) the complaint:
(i) alleges that the goods have been or are being dumped or subsidized, specifies the goods and alleges that the dumping or subsidizing has caused injury or retardation or is threatening to cause injury;
(ii) states in reasonable detail the facts on which the allegations are based; and
(iii) makes such other representations as the complainant deems relevant to the complaint, and the complainant provides such information as is available to the complainant to prove the facts and such other information as the Deputy Minister may reasonably require.
Section 37 of the SIMA regulations specifies that for the satisfaction of reasonable detail on which the allegations are based, a properly documented complaint must include:
(a) the volume and value of the complainant's domestic production of like goods;
(b) a list of all known producers of like goods in Canada, and of associations of such producers in Canada whom the complainant knows of;
(c) such details as are reasonably available to the complainant regarding the estimated volume and value of the production of the goods by the producers identified in (b);
(d) the name of each known foreign producer or exporter of the allegedly dumped or subsidized goods whom the complainant knows of;
(e) the name of each importer in Canada of the allegedly dumped or subsidized goods whom the complainant knows of;
(f) such details as are reasonably available to the complainant regarding the evolution of the volume of imports of the allegedly dumped or subsidized goods;
(g) such details as are reasonably available to complainant regarding the effect of imports of the allegedly dumped or subsidize goods on the price of like goods in Canada.
B. Initiation of Investigation
The Special Import Measures Act (SIMA) Subsection 31(1) provides that the Deputy Minister of National Revenue may, on his own initiative or within 30 days after giving written notice of a properly documented complaint, initiate an investigation if there is evidence that goods have been dumped or subsidized and there is a reasonable indication of injury, retardation, or threat of injury.
C. Issuance of Questionnaire
The Special Import Measures Act (SIMA) subsection 34(1) requires that, on the day of initiation of an investigation, a notice of investigation is provided to all known interested parties, and is published in the official Canada Gazette.
This notice invites interested parties to file written submissions.
Also on the day of initiation, a request for information is sent to all known exporters and importers.
D. Response to Questionnaire
In its Statement of Administrative Practices, Revenue Canada requires that exporters and foreign governments respond to requests for information within 30 days.
The 30 days are to be counted from the receipt of the request for information which is deemed to be 7 days after it is sent.
Revenue Canada specifies the date by which submissions by other interested parties must be made in its preliminary determination.
E. Preliminary Determination
Pursuant to 38(1) of the Special Import Measures Act, when the Deputy Minister of National Revenue makes a preliminary determination of dumping or subsidizing, there must also be evidence that discloses a reasonable indication that the dumping or subsidizing has caused injury or retardation or is threatening to cause injury.
A preliminary injury determination is normally issued within 90 days of an investigation's initiation.
Pursuant to subsection 39(1), this 90-day period can be extended to 135 days in exceptional circumstances.
At the time of making a preliminary determination of dumping or subsidizing, the Deputy Minister of National Revenue: estimates the margin of dumping or the amount of subsidy for each exporter of the goods; specifies or describes the goods to which the determination applies; where the subsidy is in whole or in part a prohibited subsidy, estimates the amount which is prohibited subsidy; and causes to be filed with the Canadian International Trade Tribunal, notice of the preliminary determination in order that it may commence its injury inquiry.
At the time of making a preliminary determination, notice of the determination is also provided to the exporter, the importer, the government of the country of export, the complainant, if any, and such other persons as may be prescribed.
In addition, notice of the determination is published in the Canada Gazette.
At this point, Canada provides exporters with a complete explanation of how normal values and export prices were determined.
In addition, Revenue Canada 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.
See "Preliminary Determination -- Antidumping" section above, as it pertains to Canada.
F. Conduct Verification
For the preliminary decision, the estimated margin of dumping is based as much as possible on verified data.
However, the requirement for an on-site visit to verify information submitted is at the option of Revenue Canada and a decision not to conduct a verification exercise does not in any way preclude using the data submitted.
In investigations where it is impossible to visit all exporters, the larger exporters are normally visited to verify their submissions.
Before any on-site verification visit takes place, Revenue Canada contacts the respondent to confirm arrangements and to advise, in a general manner, the data that will be verified and should be made available at the time of the visit.
Following the preliminary determination, verification may consist of visiting additional firms not visited during the first 90 day period, verifying new information or re-visiting exporters for clarification of certain issues.
While the verification of submissions for countervail cases is similar to dumping cases, subsidy calculations are based primarily on information provided by the foreign government authorities, verification visits are usually arranged with those authorities.
Visits to the exporter's premises are normally also conducted to obtain additional information respecting the subsidy program and to verify the benefits received by individual firms.
Upon receipt of a notice of preliminary determination under the Special Import Measures Act subsection 38(3), the Canadian International Trade Tribunal initiates an injury inquiry.
As part of its initiation, the Tribunal publishes a notice in the Canada Gazette setting out (pursuant to Rule 54), inter alia, time frames for submissions from interested parties.
The Tribunal's rule 10(1) requires that where a notice is published in the Canada Gazette with respect to a proceeding specifying the time and place fixed for a hearing in the proceeding, any person who proposes to appear at the hearing shall file with the Tribunal a Notice of Appearance on or before the date specified in the notice published in the Canada Gazette.
The Tribunal, in carrying out its responsibilities respecting an injury inquiry, conducts hearings that are open to the public.
The Tribunal has rules and procedures similar to a court of law, but not quite as strict or formal. The Tribunal Act states that hearings are to be conducted by a panel of three members.
In practice, the Tribunal sits in panels of three members. The Tribunal has the power to subpoena witnesses and require parties to submit information.
During its public hearings, in-camera sessions may be necessary to protect the confidentiality of sensitive business information used during the hearing process.
In addition to Tribunal staff, only independent and otherwise qualified counsel to interested parties (who have signed an undertaking not to disclose confidential third party information) may be present at the in-camera sessions and have access to this confidential third-party information.
See section on "Hearings -- Antidumping" above, as it pertains to Canada.
After the commencement of the inquiry, the Canadian International Trade Tribunal's staff will issue questionnaires requesting information from interested parties including domestic producers and importers.
The interested parties will subsequently provide additional information through their submissions filed with the Tribunal.
With respect to an injury inquiry, the Tribunal may, at any time, direct any party to an inquiry to file with the Tribunal, on or before a date fixed by the Tribunal, the following material:
a) a written submission with respect to such matters as the Tribunal directs;
b) a statement of the evidence adduced or to be adduced by the party;
c) the documentary evidence that the party wishes to file; and
d) a description of any exhibit in other than documentary form the party intends to adduce at the inquiry (Tribunal Rules 60(1)).
I. Final Determinations
The Special Import Measures Act (SIMA) Subsection 43.(1) specifies that the Canadian International Trade Tribunal shall, forthwith after the date of receipt by the Secretary of notice of a final determination of dumping or subsidizing with respect to any of those goods, but, in any event, not later than 120 days after the date of receipt by the Secretary of notice of a preliminary determination with respect to the goods, make such order or finding with respect to the goods to which the final determination applies as the nature of the matter may require.
With respect to notification of final determinations, SIMA Subsection 43.(2) requires the Secretary of the Tribunal to forward to the Deputy Minister of National Revenue, the importer, the exporter and such other persons as may be specified by the rules of the Tribunal:
(a) a copy of each order or finding by the Tribunal, and
(b) not later than fifteen days after the making of an order or finding by the Tribunal, a copy of the reasons for making the order or finding.
SIMA Subsection 43.(3) requires the Secretary to publish each order or finding made by the Tribunal in the Canada Gazette.
J. Maximum Length of Investigation
Under normal circumstances, the investigation process (i.e., initiation to final order) will be completed within 210 days and, in exceptional cases, within 255 days.
K. Maximum Duration of Antidumping and Countervailing Duty Orders
The Special Import Measures Act (SIMA) Subsection 76(5) provides for the deemed rescission of orders/findings upon expiration of five years from the date of the original order/findings or the last review order continuing the order/finding, unless the Canadian International Trade Tribunal has initiated a review of the particular order/finding pursuant to Subsection 76(2) of the Act.
A retroactive assessment of duties may be imposed on goods released during the period of 90 days prior to the date of the preliminary determination, but not prior to initiation of the investigation.
Under section 5 of the Special Import Measures Act (SIMA), retroactive duties are imposed on dumped goods where a considerable importation of dumped goods caused injury or where the importer was or should have been aware that the goods were dumped and that they would cause injury and injury has been caused because the goods constitute a massive importation into Canada, and it appears necessary to the Canadian International Trade Tribunal to impose the retroactive duties to prevent the recurrence of injury.
Under section 6 of the SIMA, retroactive duties may be imposed on goods receiving a prohibited subsidy where injury has been caused because the goods constitute a massive importation into Canada, and a countervailing duty should be imposed on the goods to prevent the recurrence of injury.
M. Best Information Available (or "Facts Available")
Section 29 of the Special Import Measures Act (SIMA) states that: Where, in the opinion of the Deputy Minister of National Revenue, sufficient information has not been furnished or is not available to enable the determination on normal value or export price, as provided in sections 15 to 28, the normal value or export price, as the case may be, shall be determined in such manner as the Minister of National Revenue specifies.
In applying section 29 of the SIMA, Revenue Canada makes a distinction between information that is not available because it does not exist and information that is not available because of non-cooperation of a party.
In the former case, substitute information such as weighted average margin of dumping determined for other cooperative exporters or importers of the goods in question may be used.
In the latter case, the highest margin of dumping or the highest amount of subsidy found in the investigation may be used.
N. Consumers as Interested Parties
There is a comprehensive definition of "interested party" in section 2 of the Canadian International Trade Tribunal Rules, which includes complainants, domestic producers, foreign exporters, domestic importers, associations (of domestic producers, foreign exporters, domestic importers), foreign governments mentioned in a preliminary determination and any other person who, because that person's rights or pecuniary interests may be affected or for any other reason, is entitled to be heard by the Tribunal before it disposes of an injury inquiry or review of an existing order.
O. Public Interest
In the event of a finding of material injury under section 42 of the Special Import Measures Act (SIMA), "persons interested", who have indicated an intention to make public interest representations under section 45 of the SIMA, are notified of the procedure for making the representations.
Based on the submissions, the Tribunal forms an opinion on whether there is a public interest concern worthy of further investigation.
If the Tribunal decides there is not public interest concern, it will issue reasons explaining why it came to that conclusion.
If it decides that there is a public interest concern that should be further investigated, it will issue a notice, including summary reasons and a schedule of the procedures that it will follow in conducting the investigation.
In its investigation, the Tribunal may issue questionnaires, receive submissions from parties and hold a public hearing.
If, after the investigation, the Tribunal is of the opinion that the duties should not be reduced or eliminated, it will issue reasons for its decision.
If, however, it is of the opinion that there is a public interest in reducing or eliminating the duties, it will issue a report to the Minister of Finance containing its opinion, with specific recommendations.
A copy of the report is published in the Canada Gazette.
Upon receipt of such a report of the Tribunal, the Minister of Finance must decide whether there should be any reduction in the duties.
A consideration of the public interest pursuant to section 45 of SIMA is made in accordance with the Tribunal's Guidelines for the Public Interest Investigation.
A "Person Interested" may make representations on issues of public interest to the Tribunal with respect to a specific inquiry.
A "Person Interested" is defined in the SIMA regulations (41) to include: producers, purchasers, sellers, exporters and importers of the subject goods or like goods to the subject goods, and persons acting on behalf of these groups, officials of the federal Bureau of Competition Policy and consumers and consumer associations.
While Canada does not have a provision for "lesser duty" consideration per se, a report made pursuant to subsection 45(1) of the SIMA (the Public Interest provision) can result in the reduction or elimination of antidumping duties, where this is considered to be in the public interest.
See "Public Interest -- Antidumping" section above.
P. Undertakings or Commitments
Paragraph 49(2)(b) of the Special Import Measures Act (SIMA) requires a preliminary determination of dumping or subsidizing and resulting injury, retardation or threat of injury as a prerequisite to the acceptance of an undertaking.
Upon acceptance of an undertaking, the investigation and collection of provisional duties is suspended.
However, pursuant to subsection 49(3), subparagraph 50(a)(iii) and paragraph 50(b) of the Act, an investigation must be completed after an undertaking has been accepted, if the exporter (in the case of dumping) or the government of the country (in the case of subsidies), that offered the undertaking, so requests.
Where completion of the investigation results in a negative finding of dumping/subsidizing or injury, retardation or threat of injury, the undertaking will be immediately terminated.
An undertaking will also be terminated at any time after acceptance thereof, where the conditions which gave rise to acceptance of the undertaking no longer exist.
An undertaking will expire after five years unless, upon review by the Deputy Minister of National Revenue pursuant to subsection 53(1) of the SIMA, it has been renewed for a further period of not more than five years.
V. Review of Antidumping and Countervailing Duty Determinations
A. Annual Reviews
Under Canada's prospective normal value system, a specific normal value is usually provided to the exporter and no duties are levied if the exporter prices at or above normal value.
Re-investigations to update normal values or amounts of subsidy and to establish values for new exporters or new models are conducted periodically, generally on an annual basis.
Further, an exporter not included in the original investigation or a subsequent re-investigation may request an expedited review of its normal values or amounts of subsidy.
B. Duty Refund Review
Refund requests that are made to the first level of administrative appeal are normally processed within 60 days of the date of receipt of the request.
A further request for review by the Deputy Minister of National Revenue (DM) would be processed no later than one year from the date of the original request.
By allowing a maximum of 60 days for the processing of the initial request, the Department of National Revenue ensures that sufficient time is left for the receipt and processing of a potential request to the DM within the one year period.
When a decision is made concerning a refund request, a Detailed Adjustment Statement (DAS) is issued and the importer usually receives a check within two weeks if he is owed money.
C. Sunset Review
Special Import Measures Act (SIMA) subsection 76.(5) specifies that where the Tribunal has not initiated a review with respect to an order or finding before the expiration of five years,
(a) the day on which the order or finding was made if no order continuing the order or finding has been made, or
(b) the day on which the last such order was made if one or more orders continuing the order or finding have been made, the order or finding shall be deemed to have been rescinded as of the expiration of the five years.
In determining whether an order or finding should be continued, the Tribunal must be satisfied that:
1. there is a likelihood of a continuation/recurrence of dumping and/or subsidizing from the subject countries if the order/finding is rescinded; and
2. the continuation/recurrence of dumping and/or subsidizing is likely to cause or continue to cause injury to the domestic industry.
With respect to the issue of the likelihood of a continuation/recurrence of dumping and/or subsidizing, the Tribunal would consider such factors as, demonstrated propensity to dump, product pricing trends relative to other relevant economic indicators, and relevant data from Revenue Canada including the results of the most recent administrative review.
In examining the issue of injury, the Tribunal would consider the volume, price effect, and industry impact factors set out in the WTO Anti-Dumping Agreement and the Agreement on Subsidies and Countervailing Measures, as well as changes to domestic industry and the domestic market.
D. Changed Circumstances Review
At any time after the making of an order or finding, the Tribunal may, on its own initiative or at the request of the Deputy Minister of National Revenue or any other person or any government, review the order or finding and, in the making of the review, may re-hear any matter before deciding it.
Pursuant to section 76(2) of the Special Import Measures Act (SIMA), with respect to changed circumstances reviews, the Tribunal must be satisfied that information available to it discloses a reasonable indication of a change in circumstances relating to an essential element of the finding (e.g., the continued existence of the domestic industry).
On completion of a review, the Tribunal shall make an order rescinding the order or finding or continuing it with or without amendment, as the circumstances require, and give reasons for the decision.
E. New Shipper Review
Authority for expedited reviews is provided for in section 13.2 of the Special Import Measures Act (SIMA). This section provides for an expedited review of normal values, export prices and amounts of subsidy for a qualified exporter not previously investigated by Revenue Canada.
For any goods released during the period beginning on the day the expedited review is initiated and ending on the day the review is initiated and ending on the day the review is completed, the importer is required, on demand by the Deputy Minister of National Revenue (DM), to post security equal to the margin of dumping or amount of subsidy.
At the conclusion of the review, the specific normal values or amounts of subsidy determined during the review are applied retroactively to the subject goods released during the period of review.
Security posted to cover any SIMA duties during the review will be returned if it is found that the duties are not applicable or because the duties owed at the conclusion of the review have been paid by the importer.
The DM will refund any difference between amounts paid/posted and actual duties owing.
See "New Shipper Review -- Antidumping" section, above.
3. Judicial, Administrative or Other Review
Final determinations made by the Deputy Minister of National Revenue (DM) and the Canadian International Trade Tribunal orders and findings are subject to judicial and panel review.
In addition, subsection 76.1(1) provides that, following a WTO Dispute Settlement Body's recommendation or ruling, the Minister of Finance may request the DM and/or the Tribunal to review any decision, determination, finding or portion thereof.
Pursuant to subsection 76.(1), and section 96.1 of the Special Import Measures Act (SIMA), an application for judicial review of an order or finding by the Tribunal, or a final determination or decision by the DM, may be made to the Federal Court of Appeal.
With respect to an order or finding by the Tribunal, subsection 76.(1) provides that the grounds for review are set out in subsection 18.1(4) of the Federal Court Act and 96.1(2) of the SIMA.
Section 77.011 provides the Canadian Minister for International Trade, the government of NAFTA country and certain persons with access to binational panel review insofar as it applies to a definitive decision regarding goods of that NAFTA country.
F. Procedures for Due Process
1. Notification of Initiation of Investigation
Where the Deputy Minister receives a written complaint respecting the dumping or subsidizing of goods, he shall, within twenty-one days after the receipt thereof, where the complaint is properly documented, cause the complainant and the government of the country of export to be informed in writing that the complaint was received and that it is properly documented. Art. 32 (1).
Upon initiation of the investigation, the Deputy Minister shall cause notice of the investigation to be given to the exporter, the importer, the government of the country of export, the complainant, and such other persons as may be prescribed, and to be published in the Canada Gazette. SIMA, subsection 34(1).
2. Questionnaires (Distribution, Response Time, Extensions, Supplements)
The Special Import Measures Act (SIMA) subsection 34(1) requires that, on the day of initiation of an investigation, a notice of investigation is provided to all known interested parties, and is published in the official Canada Gazette. This notice invites interested parties to file written submissions.
Also on the day of initiation, a request for information is sent to all known exporters and importers.
3. Publication of Antidumping and Countervailing Duty Determinations
Where the Deputy minister makes a preliminary determination of dumping or subsidizing he shall cause notice of the determination to be given to the exporter, the importer, the government of the country of export, the complainant, and such other persons as may be prescribed, and to be published in the Canada Gazette.
The Deputy Minister also shall cause to be filed with the Secretary written notice of the determination, stating the reasons therefore, together with such other material as may be required by the rules of the Tribunal. Art. 38 (3).
Where the Deputy minister makes a final determination of dumping or subsidizing he shall cause notice of the determination to be given to the exporter, the importer, the government of the country of export, the complainant, and such other persons as may be prescribed, and to be published in the Canada Gazette.
The Deputy Minister also shall cause to be filed with the Secretary written notice of the determination, stating the reasons therefore, together with such other material as may be required by the rules of the Tribunal. Art. 41 (3).
4. Access to Public Information
Where information is provided to the Deputy Minister, every party to the proceedings has, unless the information is confidential, a right on request to examine the information during normal business hours and a right, on payment of the prescribed fee, to be provided with copies of any such information that is in documentary form or that is in any other form in which it may be readily and accurately copied. Art. 83.
Where a person submits to the Deputy Minster a statement designating evidence as confidential, together with the explanation referred to in that subsection, the person shall submit to the Deputy Minister, at the same time, a summary of the evidence designated as confidential in sufficient detail to convey a reasonable understanding of the evidence. Art. 79 (2).
5. Access to Confidential Information
Section 85 of the Special Import Measures Act (SIMA), section 45 of the Canadian International Trade Tribunal Act and section 14 of the Tribunal rules provides that where information is designated as confidential, the Deputy Minister of National Revenue and the Tribunal shall each treat such information as confidential.
Prior to commencement of a hearing in a proceeding, the Tribunal may make confidential information available to independent counsel who have provided an undertaking of non-disclosure.
6. Decision Making Process (Ministerial Approval, Commission Vote, etc.)
Revenue Canada Decision-Making Process: The Deputy Minister of National Revenue initiates a formal antidumping or countervailing duty investigation and makes preliminary and final determinations respecting dumping and subsidization.
The following outlines the key points in the process:
1. Receipt of a properly documented complaint and verification of standing
2. Decision on whether or not to initiate an investigation
3. Issuance of questionnaire
4. Termination of investigation prior to preliminary determination
5. Preliminary determination (90 days from initiation)
6. Final determination period
7. Acceptance of undertakings
8. Final determination (180 days from initiation)
Canadian International Trade Tribunal Decision-Making Process: The Tribunal is an independent quasi-judicial body which reports to Parliament through the Minister of Finance.
As a quasi-judicial body, the Tribunal has rules and procedures similar to those of a court of law, but not quite as formal.
The Tribunal is currently composed of seven full time members, including a Chairman and two Vice- Chairmen.
Hearings are generally conducted by a panel of three members.
An injury inquiry undertaken by the Tribunal would normally follow the following procedural steps:
1. Notice of commencement of inquiry Distribution of questionnaires
2. Notices of appearance, declarations and undertakings filed with the Tribunal Requests to make representations on public interest Replies to all questionnaires
3. Notification by the Secretary, if necessary, on timing and procedure for public interest representations
4. Distribution of questionnaire replies
5. Distribution of Tribunal exhibits, and Research Staff Report and the Economic Reports
6. Receipt of the complainant's case Receipt of the importer's/exporter's case
7. Pre-hearing conference
8. Public hearing
9. Injury finding issued (210 days from initiation)
10. Statement of reasons issued.
G. Application and Collection of Duties
1. Suspension of Liquidation
During the time that provisional measures are in place, the importer may pay the provisional duty or post security in an amount equal to the antidumping duty provisionally estimated, being not greater than the provisionally estimated margin of dumping.
Therefore, as a matter of practice, the withholding of appraisement of provisional duties is not relevant to the Canadian system.
2. Use of Bonds or Cash Deposits
After a preliminary determination of dumping or subsidizing is made, any provisional duty owing may be recovered by payment in cash or by posting of security.
If security is being used, it should be posted prior to or at the time of accounting of the importation during the provisional period.
Security must be in the form of bonds issued by a financial institution or acceptable bonding company approved by the Government of Canada.
The bond is filed with the Customs Region having jurisdiction over the point of release of the goods.
Security is returned to the Surety if the Deputy Minister of National Revenue terminates the investigation or the Canadian International Trade Tribunal finds that injury has not occurred as a result of the dumping or subsidizing.
A significant feature of the SIMA's new expedited review provisions for new exporters is the requirement to accept security in lieu of SIMA duty from the importers while this type of review is underway.
3. Methods of Liquidation
Under the Canadian system of duty assessment, prospective normal values are established for goods subject to antidumping action.
This allows exporters to raise their prices to the normal value and thereby avoid payment of antidumping duties.
In cases where it is not practical to establish normal values or where the exporter does not price up to established normal values, they are required to pay antidumping duties equal to the margin of dumping.
As part of the importation process, all goods must be accounted for with the Customs Office by presenting the required information.
Within 30 days of accounting, Revenue Canada makes a determination as to whether the goods are subject to the Canadian International Trade Tribunal finding and determines the normal value, the amount of the subsidy and the export price for the goods.
Either the importer declared the correct amount of antidumping duty at the accounting, or a refund or demand for payment will be issued by Revenue Canada.
Once the importer has paid any dumping duty assessed, the importation is considered settled unless the importer appeals the assessment within 90 days.
Revenue Canada may also re-determine the SIMA duties within 2 years of the first demand for payment.
The Special Import Measures Act (SIMA) and SIMA regulations do not contain explicit anti-circumvention provisions.
Revenue Canada may, however, initiate a new investigation in respect of the goods exported from a third country or exported in a different form to Canada.
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