SPT 2022 UP1: Small power transformers
Notice of export price review

Ottawa, February 9, 2022

The Canada Border Services Agency (CBSA) has today initiated a review of the export price of certain small power transformers exported from South Korea by Hyundai Electric & Energy Systems Co., Ltd. (Hyundai Energy) and imported into Canada by Hyundai Electric America Corporation (HE America).

The review is part of the CBSA’s enforcement of the Canadian International Trade Tribunal’s (CITT) finding of injury issued on December 24, 2021, respecting the dumping of small power transformers from the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei) and South Korea, in accordance with the Special Import Measures Act (SIMA).

The product definition and the applicable tariff classification numbers of the goods subject to the CITT finding are contained in Appendix 1 (subject goods).

Should the importer and exporter decide to participate in this export price review, it is required to provide a complete and accurate response to the CBSA’s request for information (RFI) by March 2 and March 11, 2022, respectively.

If the importer or exporter does not provide a complete response to the RFI by the deadline, the export price for the subject goods imported by HE America from Hyundai Energy shall be the normal value as determined under section 15 to 23 of SIMA, less an amount equal to 42.2% of that normal value, pursuant to a ministerial specification.

The CBSA will close the record for the review at any time during the proceeding, without advance notice, once it has been determined that sufficient information has been received to make a decision. Therefore, interested parties are encouraged to provide any and all information that they feel is relevant to the review to the CBSA as early as possible.The CBSA will update the schedule for the export price review to announce that the record has been closed. Interested parties will have seven days from the close of the record to file case arguments concerning the review.

The export price deductions established during this review will apply to subject goods released from the CBSA on or after the date of the conclusion of the export price review. The export price deductions determined as a result of this review may be applied to any requests for re-determination of importations of subject goods that have not been processed prior to the conclusion of the export price review, regardless of the date that the requests were received.

Please note that exporters with normal values are required to promptly inform the CBSA in writing of changes to domestic prices, costs, market conditions or terms and channel of sale associated with the production and sales of the goods. All parties are cautioned that where there are increases in domestic prices and/or costs as noted above, the export price for sales to Canada should be increased accordingly to ensure that any sale made to Canada is not only above the normal value but at or above selling prices and full costs and profit of the goods in the exporter’s domestic market. If exporters did not properly notify the CBSA of any such changes, did not adjust export prices accordingly, or did not provide the information required to make any necessary adjustments to normal values and export prices, retroactive assessments of anti-dumping duties may be warranted.

In situations where related parties are involved, companies are cautioned that they must increase resale pricing to their unrelated customers in Canada in order to avoid secondary dumping. If it is determined that the company has raised its selling prices in Canada to levels necessary to eliminate all secondary dumping, the export prices will be calculated under section 24 of SIMA. Price reviews would continue to be conducted to ensure that an appropriate selling price is maintained in the Canadian market. However, if as a result of a review, a company is still found to be in a secondary dumping situation, the CBSA will re-calculate the export prices and the margins of dumping by deducting the anti-dumping duties already paid or payable from the previously determined export prices. This will result in increased margins of dumping and additional retroactive assessments of anti-dumping duties.

Any questions concerning the above should be directed to:

• Telephone:
• Laurie Trempe: 343-553-1588

Email: simaregistry-depotlmsi@cbsa-asfc.gc.ca

Appendix 1—product definition

Subject goods definition

Additional product information

For greater clarity, the subject goods include but are not limited to transformers manufactured to meet CSA standard C88-16, “Power transformers and reactors,” and superseding or equivalent standards, and similar proprietary specifications and standards that may be established by a customer for power transformers whether or not expressly based on or incorporating CSA C88-16. Incomplete small power transformers are subassemblies consisting of the active part and any other parts attached to, imported with, or invoiced with the active parts of the small power transformer. The “active part” of the small power transformer consists of one or more of the following when attached to or otherwise assembled with one another: the steel core or shell, the windings, electrical insulation between the windings, and/or the mechanical frame for a small power transformer. The product definition encompasses all small power transformers regardless of name designation, including but not limited to: Generation Station/Generator Step-Up Transformers, Step-Down Transformers, Auto-Transformers, Interconnection Transformers, Voltage Regulator Transformers, High-voltage Direct Current (“HVDC”) Transformers, and Mobile Transformers. The subject goods do not include reactors, as reactors are not like small power transformers. Reactors are used at the terminal end of a transmission line to neutralize the reactive power generated by the line capacitance. Rather than transform voltage from one level to another, as small power transformers do, reactors reduce voltage drop by consuming reactive power. Reactors, therefore, have very different end uses than small power transformers. Reactors are also produced differently than small power transformers. Reactors contain, in general, only one winding and are based on a completely different core concept than small power transformers. Small power transformers, on the other hand, typically have more than one winding. For greater clarity, the subject goods also do not include fully assembled mobile substations but do include small power transformers that are designed to be incorporated into mobile substations.

Classification of imports

Imports into Canada of the subject goods are normally classified under the following tariff classification numbers:

1. 8504.22.00.20
2. 8504.23.00.10
3. 8504.23.00.20

Incomplete small power transformers and parts and components thereof may also be imported under the following tariff classification numbers:

1. 8504.90.90.10
2. 8504.90.90.82
3. 8504.90.90.90

The listing of tariff numbers is for convenience of reference only. The tariff numbers may also include non-subject goods. Also, subject goods may fall under additional tariff numbers not listed. Refer to the product definition for authoritative details regarding the subject goods.