UDS 2022 UP1: Upholstered domestic furniture
Conclusion of normal value review
Ottawa,
The Canada Border Services Agency (CBSA) has today concluded a normal value review (review) to update all normal values and export prices applicable to certain upholstered domestic seating (UDS) from China by Man Wah Furniture Manufacturing (Huizhou) Co., Ltd. (Man Wah Huizhou).
The review follows a request for re-determination filed by an importer and is part of the CBSA’s enforcement of the Canadian International Trade Tribunal’s (CITT) order issued on , respecting the dumping and subsidizing of UDS from China and Vietnam 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’s order are contained in Appendix 1 (subject goods).
Period of investigation
For this review, the Period of Investigation (POI) and the Profitability Analysis Period were from to .
Normal value review process
At the initiation of this review, on , the CBSA sent Requests for Information (RFIs) to Man Wah Huizhou and the importer in order to solicit information for purposes of re-determining normal values and export prices applicable to the goods subject to requests for re-determination filed by the importer. The responses to the CBSA’s RFIs and Supplemental RFIs (SRFIs) were received accordingly from Man Wah Huizhou.
Man Wah Huizhou was also asked to forward sections of the RFI to any related suppliers of significant inputs. Responses were received from Chongqing Ruimak Brand Management Co., Ltd.; Chongqing Chenyulong Brand Management Co., Ltd.; Chongqing Upspring Intelligent Technology Co., Ltd.; Jiangsu Yulong Intelligent Technology Co., Ltd.; Timberland Company Limited; Huizhou Upspring Intelligent Technology Co., Ltd.; and Remacro Technology Co., Ltd.
As part of the review, counsel on behalf of Palliser Furniture Ltd. (Palliser), a Canadian producer, submitted comments during the course of the investigation, and as case arguments after the close of record. No reply submissions were received by any party.
Representations
Throughout the investigation, Palliser made several arguments in regards to Man Wah Huizhou’s submission, which are summarized as follows:
Man Wah Huizhou’s costs of production cannot be relied upon as there are discrepancies and errors in the costs of production; their selling, general, and administrative expenses are underreported; and they have made impermissible adjustments.
Previous importations of Man Wah Huizhou’s shipments should be retroactively reassessed as they did not inform the CBSA of changes to prices or price up.
Man Wah Huizhou should provide information on sales of UDS by affiliates in China.
Man Wah Huizhou cannot properly determine the subjectivity of certain goods, so these goods should be considered subject. In particular, all components of sectionals should be considered subject.
CBSA response
The CBSA reviewed all costs provided by Man Wah Huizhou. In general, Man Wah Huizhou’s costs were accurate and discrepancies were explained. However, the CBSA did not use certain adjustments put forward by Man Wah Huizhou.
The CBSA took the complainant’s comments about the sectional components into consideration and determined normal values for all goods subject to the CITT’s finding.
The CBSA conducted an analysis of subject imports from Man Wah Huizhou during the POI, to determine whether a retroactive assessment was warranted. The analysis relied on information provided in the RFI and SRFI responses received. The analysis was focused on determining if export selling prices rose adequately in response to the rising costs of UDS. The CBSA looked at the period from to , which was the period from the CITT’s finding to the end of the POI.
The CBSA compared costs and export prices from the beginning to the end of this period and found that they increased by roughly the same amount, with a few minor exceptions. As a result, retroactive assessments do not appear to be warranted at this time.
Normal values for future shipments
Man Wah Huizhou is a producer and exporter of subject goods, located in Huizhou, China. Man Wah Huizhou is associated with a trading company involved in the sales of subject goods, located in Macao.
During the course of the review, Man Wah Huizhou provided responses to the CBSA’s Dumping RFI, three SRFIs, and five verification questionnaires.
Man Wah Huizhou stated that it did not have sufficient sales of domestic sales of UDS during the POI to determine normal values in accordance with section 15 of SIMA. The CBSA verified this claim, and this was consistent with that was found in the original investigation.
Man Wah Huizhou provided sufficient cost of production and administrative, selling and all other costs to determine normal values pursuant to paragraph 19(b) of SIMA. However, the CBSA was unable to determine an amount for profits under paragraph 11(1)(b) of the Special Import Measures Regulations (SIMR).
As such, normal values were determined pursuant to section 29 of SIMA using a method similar to that of paragraph 19(b), based on the aggregate of adjusted production cost of the goods, a reasonable amount for administrative, selling and all other costs, and a reasonable amount for profits determined by ministerial specification. As Man Wah Huizhou acquired inputs from an associated supplier, the CBSA considered if an adjustment to the cost of those inputs pursuant to paragraph 11.2(1) of SIMR was warranted. It was found that no such adjustment was warranted.
These specific normal values for future shipments are effective today, .
For the subject goods exported by Man Wah Huizhou to Canada, export prices are determined in accordance with section 24 of SIMA.
The normal values and export prices 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 this review, regardless of the date that the requests were received. The normal values and export prices determined as a result of this review may be applied retroactively where the conditions described below are met.
Exporter responsibility
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 of sale associated with the production and sales of the goods. If there are changes to the exporter’s domestic prices, costs, market conditions or terms of sale associated with the production and sales of the goods, and where the CBSA considers such changes to be significant, the normal values and export prices will be updated to reflect current conditions. All parties are cautioned that where there are increases in domestic prices, and/or costs as noted above, the export price 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 do not properly notify the CBSA of any such changes, do not adjust export prices accordingly, or do not provide the information required to make any necessary adjustments to normal values and export prices, retroactive assessments will be applied where such action is warranted.
Importer responsibility
Importers are reminded that it is their responsibility to calculate and declare their anti-dumping duty liability. If importers are using the services of a customs broker to clear importations, the brokerage firm should be advised that the goods are subject to SIMA measures and be provided with sufficient information necessary to clear the shipments. To determine their anti-dumping liability, importers should contact the exporter(s) to obtain the applicable normal values. For further information on this matter, please refer to Memorandum D14-1-2, Disclosure of Normal Values, Export Prices, and Amounts of Subsidy Established under the Special Import Measures Act.
The Customs Act (Act) applies, with any modifications that the circumstances require, with respect to the accounting and payment of anti-dumping duties. As such, failure to pay the duties within the prescribed time will result in the application of the interest provisions of the Act.
Should the importer disagree with the determination made on any importation of goods, a request for re-determination may be filed. For more information on how to file a request for re-determination, please refer to the Guide for appealing a duty assessment.
Contact us
SIMA Registry and Disclosure Unit
Trade and Anti-dumping Programs Directorate
Canada Border Services Agency
11-100 Metcalfe St
Ottawa ON K1A 0L8
- Telephone:
- Ted Chester: 343-553-1888
Appendix 1: product definition
Subject goods definition
“Upholstered seating for domestic purposes originating in or exported from the People’s Republic of China and the Socialist Republic of Vietnam, whether motion (including reclining, swivel and other motion features) or stationary, whether upholstered with a covering of leather (either full or partial), fabric (including leather-substitutes) or both, including, but not limited to seating such as sofas, chairs, loveseats, sofa-beds, day-beds, futons, ottomans, stools and home-theatre seating.
Excluding:
- Stationary (i.e. non-motion) seating upholstered only with fabric (rather than leather), even if the fabric is a leather-substitute (such as leather-like or leather-look polyurethane or vinyl)
- dining table chairs or benches (with or without arms) that are manufactured for dining room end-use, which are commonly paired with dining table sets
- upholstered stools with a seating height greater than 24 inches (commonly referred to as “bar stools” or “counter stools”), with or without backs, and/or foldable
- seating manufactured for outdoor use (e.g. patio or swing chairs)
- bean bag seating and
- foldable or stackable seating
For greater certainty, the product definition includes:
- Upholstered motion seating with reclining, swivel, rocking, zero-gravity, gliding, adjustable headrest, massage functions or similar functions
- seating with frames constructed from metal, wood or both
- seating produced as sectional items or parts of sectional items
- seating with or without arms, whether part of sectional items or not and
- foot rests and foot stools (with or without storage)”
On , the Canadian International Trade Tribunal excluded the following products from its finding:
- Specialized reclining massage chairs, not intended to be used for general seating purposes, with padded seat, headrest, back, and footrest, and containing built-in motorized mechanical components that operate by way of computerized controls to provide a full body massage for a single person, including to the head and/or neck, shoulders, back, buttocks, arms, and legs and/or feet
- Medical lift chairs containing electric motion mechanisms and motorized positioning controls, designed to carefully lift, lower and tilt (by raising or lowering the base and back of the seating) the occupant, and otherwise adjust the occupant’s seating position by adjusting one or more of the headrest, footrest, and seat; designed, manufactured, and tested to meet or exceed the requirements of Health Canada’s Medical Devices Regulations (SOR/98-282) applicable thereto and conforming with the following, or equivalent, standards and testing methodologies: EN12182, ANSI/AAMI/ISO10993, ANSI/AAMI/ES60601-1, CAL117, BSEN1021, ISO8191, ANSI/AAMI/ES60601-1-2, ISO14971
- Height-adjustable ergonomic gaming chairs for use with a desk and intended to be used primarily while playing video games, upholstered in leather or a leather-substitute, with armrests, headrests, lumbar support pillows, five-star swivel bases, and wheels or castors
Tariff classification numbers
The importation of the subject goods are usually classified under the following tariff classification numbers:
- 9401.41.00.00
- 9401.49.00.00
- 9401.61.10.10
- 9401.61.10.90
- 9401.71.10.10
- 9401.71.10.90
This listing of tariff classification numbers is for convenience of reference only. Refer to the product definition for authoritative details regarding the subject goods.
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