Annual Report March 31, 2018- Chapter III

Process

Under SIMA, the CBSA may impose anti-dumping and countervailing duties if Canadian producers are injured by imports of goods into Canada:

• that have been sold at prices lower than prices in the home market or at prices lower than the cost of production (dumping), or
• that have benefited from certain types of government grants or other assistance (subsidizing).

The determination of the existence of dumping and subsidizing is the responsibility of the CBSA. The Tribunal determines whether such dumping or subsidizing has caused or is threatening to cause material injury to a domestic industry or has caused material retardation to the establishment of a domestic industry.

Preliminary Injury Inquiries

A Canadian producer or an association of Canadian producers begins the process of seeking relief from alleged injurious dumping or subsidizing by making a complaint to the CBSA. If the CBSA initiates a dumping or subsidizing investigation, the Tribunal initiates a preliminary injury inquiry under subsection 34(2) of SIMA. The Tribunal seeks to make all interested parties aware of the inquiry. It issues a notice of commencement of preliminary injury inquiry that is published in the Canada Gazette and notice of the commencement of the preliminary injury inquiry is provided to all known interested parties.

In a preliminary injury inquiry, the Tribunal determines whether the evidence discloses a reasonable indication that the dumping or subsidizing has caused injury or retardation, or is threatening to cause injury. The primary evidence is the information received from the CBSA and submissions from parties. The Tribunal seeks the views of parties on what are the like goods and which Canadian producers comprise the domestic industry. In most cases, it does not issue questionnaires or hold a public hearing at the preliminary injury inquiry stage. The Tribunal completes its inquiry and renders its determination within 60 days.

If the Tribunal finds that there is a reasonable indication that the dumping or subsidizing has caused injury or retardation, or is threatening to cause injury, it makes a determination to that effect, and the CBSA continues the dumping or subsidizing investigation. If there is no reasonable indication that the dumping or subsidizing has caused injury or retardation, or is threatening to cause injury, the Tribunal terminates the inquiry, and the CBSA terminates the dumping or subsidizing investigation. The Tribunal issues reasons for its decision not later than 15 days after its determination.

Preliminary Injury Inquiry Activities

Final Injury Inquiries

If the CBSA makes a preliminary determination of dumping or subsidizing, the Tribunal commences a final injury inquiry pursuant to section 42 of SIMA. The CBSA may levy provisional duties on imports from the date of the preliminary determination. The CBSA continues its investigation until it makes a final determination of dumping or subsidizing.

As in a preliminary injury inquiry, the Tribunal seeks to make all interested parties aware of its inquiry. It issues a notice of commencement of inquiry that is published in the Canada Gazette and notice of the commencement of the injury inquiry is forwarded to all known interested parties.

In conducting final injury inquiries, the Tribunal requests information from interested parties, receives representations and holds public hearings. Questionnaires are sent to Canadian producers, importers, purchasers, foreign producers and exporters. Primarily on the basis of questionnaire responses, an investigation report is prepared, which is put on the case record and is made available to counsel and parties.

Parties participating in the proceedings may present their own cases or may be represented by counsel. Confidential or business-sensitive information is protected in accordance with provisions of the CITT Act and is only available to counsel and experts who are approved by the Tribunal.

The Special Import Measures Regulations prescribe factors that the Tribunal must consider in its determination of whether the dumping or subsidizing of goods has caused injury or retardation or is threatening to cause injury to a domestic industry. These factors include, among others, the volume of dumped or subsidized goods, the effects of the dumped or subsidized goods on prices and the impact of the dumped or subsidized goods on domestic production, sales, market share, profits, employment and utilization of domestic production capacity.

The Tribunal holds a public hearing about 90 days after the commencement of the inquiry, i.e. at or around the time when the CBSA has made a final determination of dumping or subsidizing. At the public hearing, Canadian producers attempt to persuade the Tribunal that the dumping or subsidizing of goods has caused injury or retardation or is threatening to cause injury to a domestic industry. Importers, foreign producers and exporters may challenge the Canadian producers’ case. After cross-examination by parties and questioning by the Tribunal, each side has an opportunity to respond to the other’s case and to summarize its own. In some inquiries, the Tribunal calls witnesses who are knowledgeable of the industry and market in question. Parties may also seek the exclusion of certain goods from the scope of a Tribunal finding of injury or retardation or threat of injury.

The Tribunal must issue its finding within 120 days from the date of the preliminary determination of dumping or subsidizing issued by the CBSA. It has an additional 15 days to issue reasons supporting the finding. A Tribunal finding of injury or retardation or threat of injury to a domestic industry is required for the imposition of anti-dumping or countervailing duties by the CBSA.

Final Injury Inquiry Activities

Final Injury Inquiries in Progress at the End of the Fiscal Year

There were 2 final injury inquiries in progress at the end of the fiscal year concerning copper pipe fittings and dry wheat pasta.

Public Interest Inquiries

Following a finding of injury, the Tribunal notifies all interested parties that any submissions requesting a public interest inquiry must be filed within 45 days. The Tribunal may initiate, either after a request from an interested person or on its own initiative, a public interest inquiry following a finding of injury or threat of injury caused by dumped or subsidized imports, if it is of the opinion that there are reasonable grounds to consider that the imposition of all or part of the duties may not be in the public interest. If it is of this view, the Tribunal then conducts a public interest inquiry pursuant to section 45 of SIMA. The result of this inquiry may be a report to the Minister of Finance recommending that the duties be reduced and by how much.

The Tribunal did not have any public interest inquiries during the fiscal year.

Interim Reviews

The Tribunal may review its findings of injury or threat of injury or orders at any time, on its own initiative or at the request of the Minister of Finance, the CBSA or any other person or government (section 76.01 of SIMA). The Tribunal commences an interim review where one is warranted, and it then determines if the finding or order (or any aspect of it) should be rescinded or continued to its expiry date, with or without amendment.

An interim review may be warranted where there is a reasonable indication that new facts have arisen or that there has been a change in the circumstances that led to the finding or order. For example, since the finding or order, the domestic industry may have ceased production of like goods or foreign subsidies may have been terminated. An interim review may also be warranted where there are facts that, although in existence, were not emphasized during the related expiry review or inquiry and were not discoverable by the exercise of reasonable diligence at the time.

Interim Review Activities

The Tribunal completed 2 interim reviews during the fiscal year, concerning certain fasteners and oil country tubular goods.

Expiries

Subsection 76.03(1) of SIMA provides that a finding or order expires after five years, unless an expiry review has been initiated. Not later than two months before the expiry date of the finding or order, the Tribunal publishes a notice of expiry in the Canada Gazette. The notice invites persons and governments to submit their views on whether the order or finding should be reviewed and gives direction on the issues that should be addressed in the submissions. If the Tribunal determines that an expiry review is not warranted, it issues an order with reasons for its decision. Otherwise, it initiates an expiry review.

Expiry Activities

Expiry Reviews

When the Tribunal initiates an expiry review of a finding or an order, it issues a notice of expiry review and notifies the CBSA of its decision. The notice of expiry review is published in the Canada Gazette and notice is provided to all known interested parties.

The purpose of an expiry review is to determine whether anti-dumping or countervailing duties remain necessary. There are two phases in an expiry review. The first phase is the investigation by the CBSA to determine whether there is a likelihood of resumed or continued dumping or subsidizing if the finding or order expires. If the CBSA determines that such likelihood exists with respect to any of the goods, the second phase is the Tribunal’s inquiry into the likelihood of injury or retardation arising from the resumption or continuation of the dumping or subsidizing. If the CBSA determines that there is no likelihood of resumed dumping or subsidizing for any of the goods, the Tribunal does not consider those goods in its subsequent determination of the likelihood of injury and issues an order rescinding the order or finding with respect to those goods.

The Tribunal’s procedures in expiry reviews are similar to those in final injury inquiries.

Upon completion of an expiry review, the Tribunal issues an order with reasons, rescinding or continuing a finding or order, with or without amendment. If a finding or order is continued, it remains in force for a further five years, unless an interim review is initiated and the finding or order is rescinded. If the finding or order is rescinded, imports are no longer subject to anti-dumping or countervailing duties.

Expiry Review Activities

The Tribunal completed 2 expiry reviews in the fiscal year, and there were five expiry reviews in progress at the end of the fiscal year.

Expiry Reviews in Progress at the End of the Fiscal Year

There were 5 expiry reviews in progress at the end of the fiscal year.

Sample of Noteworthy Decisions

Of the SIMA cases carried out by the Tribunal during the past year, certain decisions stand out. Brief summaries of a representative sample of these cases are included below. These summaries have been prepared for general information purposes only.

• NQ-2012-003R Carbon Steel Welded Pipe
• LE-2017-003 Carbon Steel Welded Pipe
• RD-2017-001 Oil Country Tubular Goods and
• NQ-2016-003 Concrete Reinforcing Bar

All of the above decisions related in whole or in part to the 2015-2016 WTO dispute involving Canada, where Chinese Taipei successfully challenged aspects of SIMA measures on carbon steel welded pipe. In its report of December 21, 2016, the WTO panel determined that the CBSA final determination and the Tribunal’s finding, as they related to two Chinese Taipei exporters with de minimis margins of dumping, were inconsistent with the WTO Anti-Dumping Agreement.

In April 2017 in Inquiry No. NQ-2016-003, the Tribunal conducted an inquiry into a complaint alleging that domestic producers had been injured or were being threatened with injury by the dumping of concrete reinforcing bar (“rebar”) from Belarus, Chinese Taipei, Hong Kong, Japan, Portugal and Spain. In its reasons for the decision made on May 3, 2017, the Tribunal found that significant volumes of dumped rebar entering the Canadian market in 2015 and 2016, and the resulting downward pressure on the price of domestic rebar, prevented the domestic industry from increasing its prices in the face of rising production costs (i.e. price suppression). Due to such volumes and price effects, the dumped goods caused material injury to the domestic industry. Having regard to the WTO panel report in the carbon steel welded pipe case, the Tribunal exercised its discretionary authority under subsection 43(1) of SIMA to exclude goods exported by Feng Hsin, an exporter with a de minimis dumping margin.

In RD-2017-001, decided on October 25, 2017, however, the Tribunal denied a request for interim review made by Borusan Mannesmann Boru (BMB), a Turkish producer and exporter of oil country tubular goods (OCTG) with a dumping margin of zero. BMB requested an interim review of the Tribunal’s finding in Inquiry No. NQ-2014-002 in light of the WTO panel report and the Tribunal’s subsequent exclusion of an exporter with a de minimis dumping margin in the rebar case. BMB submitted that the WTO ruling and decisions of the Tribunal subsequent to the OCTG finding constitute changed circumstances that warrant an interim review. The Tribunal disagreed and pointed to the need for finality of its previous decisions. Additionally, the Tribunal cited a request by the Minister of Finance to the Tribunal pursuant to section 76.1 of SIMA as a possible avenue of relief for BMB.

On December 8, 2017, in Inquiry No. NQ-2012-003R, the Tribunal reviewed the threat of injury determination it had made in Inquiry No. NQ-2012-003 regarding the carbon steel welded pipe from Chinese Taipei as well as the United Arab Emirates (the UAE), which was the subject of the WTO panel report. This review followed a request by the Minister of Finance pursuant to section 76.1 to “review its threat of injury finding in respect of certain carbon steel welded pipe originating in or exported from Chinese Taipei having regard to the DSB recommendations and rulings in DS482.” The Minister made a similar request to the CBSA and, as a result of its review, the CBSA terminated its dumping investigation in respect of the Chinese Taipei exporters with de minimis margins of dumping. As a consequence of this determination of the CBSA and fresh amendments to SIMA to implement the WTO panel report, those exporters were no longer subject to the Tribunal’s finding. The Tribunal received submissions from various domestic producers who argued in support of the Tribunal continuing its threat of injury finding, and from Conares Metal Supply Ltd. (Conares) —a de minimis exporter from the UAE—in favour of its goods being excluded from the finding. However, the Tribunal determined that it did not have the authority to exclude Conares’ good from its finding as it was outside the scope of the Minister’s request.

At the same time, however, in Notice of Expiry Proceeding No. LE-2017-003, which was conducted in parallel with Inquiry No. NQ-2012-003R, the Tribunal determined that an expiry review of the finding in relation to Conares was not warranted. The Tribunal stated that the treatment that Conares’ exports have received under SIMA has been contrary to the Anti-Dumping Agreement; it should never have been subject to the finding in the first place because its exports were neither dumped nor subsidized. As a result, the Tribunal found that it cannot be a reasonable indication that the expiry of the finding will likely result in the continued or resumed dumping of Conares’ goods given that they were not dumped in the first place. Therefore, the finding in relation to goods exported by Conares was allowed to expire. The Tribunal added that in any upcoming notice of expiry proceedings, it would consider extending this treatment to other exporters who had de minimis margins of dumping (or amounts of subsidy). The Tribunal confirmed that, while it did not foresee partial expiry reviews in other circumstances (e.g. initiating an expiry review in respect of one country’s goods but not another’s), the extraordinary circumstances of the present case warranted a departure from the Tribunal’s usual approach.

Judicial or Panel Reviews of SIMA Decisions

The following table lists Tribunal decisions that were before the Federal Court of Appeal under section 76 of SIMA in the fiscal year.