Certain oil country tubular goods and certain hot‑rolled steel plate - 4214‑43 AD/1404 & 4214‑41 AD/1402
Statement of Reasons - Final determinations

Concerning the continuation of final determinations of dumping with amendments with respect to certain oil country tubular goods originating in or exported from South Korea.

Decision

Ottawa, August 21, 2020

On August 7, 2020, pursuant to paragraph 76.1(2)(b) of the Special Import Measures Act, the Canada Border Services Agency continued the final determination of dumping with respect to certain oil country tubular goods originating in or exported from South Korea and Turkey with the following amendments: the Canada Border Services Agency terminated the dumping investigation regarding certain oil country tubular goods exported from South Korea by Hyundai Steel Company (formerly Hyundai Hysco Co. Ltd.) and certain oil country tubular goods exported from Turkey by Borusan Mannesmann Boru Sanayi ve Ticaret A.Ş.

On the same date, pursuant to paragraph 76.1(2)(b) of the Special Import Measures Act, the Canada Border Services Agency continued the final determination of dumping with respect to certain hot‑rolled steel plate originating in or exported from South Korea with the following amendment: the Canada Border Services Agency terminated the dumping investigation regarding certain hot‑rolled steel plate exported from South Korea by Hyundai Steel Company.

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Summary

[1] On April 17, 2014, the CBSA made a final determination of dumping respecting certain hot‑rolled steel plate (HRSP) originating in or exported from Brazil, Denmark, Indonesia, Italy, Japan and South Korea. On May 20, 2014, the CITT found that the dumping of HRSP from those countries was threatening to cause injury to the domestic industry in Canada.

[2] On March 3, 2015, the Canada Border Services Agency (CBSA) made a final determination of dumping respecting certain oil country tubular goods (OCTG) originating in or exported from the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei), India, Indonesia, the Philippines, South Korea, Thailand, Turkey, Ukraine and Vietnam. On April 2, 2015, the Canadian International Trade Tribunal (CITT) found that the dumping of OCTG from those countries was threatening to cause injury to the domestic industry in Canada.

[3] On January 22, 2015, Chinese Taipei appealed the CBSA’s 2012 final determination in carbon steel welded pipe (CSWP) to the World Trade Organization (WTO). Among other things, Chinese Taipei challenged Canada’s practice of terminating an investigation where margins of dumping were insignificant only on a country basis, rather than terminating for individual exporters whose margins of dumping were insignificant.

[4] On January 25, 2017, the Dispute Settlement Body (DSB) of the WTO adopted the panel report in Canada – Anti‑Dumping Measures on Imports of Certain Carbon Steel Welded Pipe from the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (DS482). The panel report found certain aspects of Canada’s anti‑dumping law and practice to be inconsistent with the WTO Anti‑Dumping Agreement.

[5] In response to the DSB’s recommendations and rulings in DS482, amendments were made to the Special Import Measures Act (SIMA) through the Budget Implementation Act, 2017 No. 1, which was received Royal Assent on June 22, 2017. As part of the amendments, Canada’s previous practice of terminating an investigation where margins of dumping were insignificant on a country basis, was changed to terminating on an individual exporter basis whose margins of dumping were insignificant.

[6] On July 21, 2017, pursuant to section 76.1 of SIMA, the Minister of Finance requested that the President of the CBSA (President) review its final determination of dumping respecting CSWP from Chinese Taipei, having regard to the recommendations and rulings in DS482. As a result, the CBSA terminated the dumping investigation against two exporters from Chinese Taipei with insignificant margins of dumping.

[7] Recently, the governments of South Korea and Turkey made representations to the Department of Finance requesting the termination of anti‑dumping measures on certain exporters for which the CBSA had found an insignificant margin of dumping in its original dumping investigations.

[8] On April 30, 2020, pursuant to subsection 76.1(1) of SIMA, the Minister of Finance requested the President to review the final determinations of dumping in respect of OCTG from South Korea and Turkey, and in respect of HRSP from South Korea, having regard to the recommendations and rulings in DS482 concerning termination of investigations in respect of individual exporters with insignificant margins of dumpingFootnote 1.

[9] On May 29, 2020, following the request from the Minister of Finance, the CBSA initiated a review of the final determinations of dumping in respect of OCTG from South Korea and Turkey, and in respect of HRSP from South Korea.

[10] On August 7, 2020, pursuant to paragraph 76.1(2)(b) of SIMA, the CBSA continued the final determination of dumping with respect to OCTG originating in or exported from South Korea and Turkey with the following amendments: the CBSA terminated the dumping investigation regarding OCTG exported from South Korea by Hyundai Steel Company (formerly Hyundai Hysco Co. Ltd.) and OCTG exported from Turkey by Borusan Mannesmann Boru Sanayi ve Ticaret A.Ş.

[11] On the same date, pursuant to paragraph 76.1(2)(b) of SIMA, the CBSA also continued the final determination of dumping with respect to HRSP originating in or exported from South Korea with the following amendment: the CBSA terminated the dumping investigation regarding HRSP exported from South Korea by Hyundai Steel Company.

Scope of the review

[12] The Minister of Finance requested that the review examine the results of the OCTG and HRSP investigations having regard to the DSB recommendations and rulings in DS482 concerning termination of investigations in respect of individual exporters with insignificant margins of dumping.

[13] The CBSA has undertaken a review of the final determinations of dumping in respect of OCTG originating in or exported from South Korea and Turkey, and in respect of HRSP originating in or exported from South Korea. The review was limited to the three exporters with insignificant margins of dumping:

[14] For purposes of the review, the CBSA relied on information on the administrative record at the time of the final determinations. In addition, the CBSA invited the Canadian producers of OCTG, importers and exporters of the subject goods as well as the governments of South Korea and Turkey to file written representations pertinent to the final determination of dumping in respect of OCTG originating in or exported from South Korea and Turkey and HRSP originating and exported from South Korea.

Interested parties

Canadian producers

[15] The names of the complainants for the original OCTG investigation were as follows:

Algoma Tubes Inc.
Prudential Steel ULC
Tenaris Global Services (Canada) Inc.
Hydril Canadian Company LP (collectively “Tenaris Canada”)
530 ‑ 8th Avenue SW, Suite 400
Calgary, Alberta  T2P 3S8

Evraz Inc. NA Canada
P.O. Box 1670, 100 Armour Road
Regina, Saskatchewan  S4P 3C7

[16] In addition to these producers, at this time, the Canadian industry for OCTG also includes:

Welded Tube of Canada Corporation
111 Rayette Road
Concord, Ontario  L4K 2E9

[17] The name of the complainant for the original HRSP investigation was as follows:

Algoma Steel Inc.
105 West Street
Sault Ste. Marie, Ontario  P6A 7B4

Importers

[18] During the original OCTG investigation, the CBSA received seven responses to the importer Request for Information (RFI). Similarly, during the original HRSP investigation, the CBSA received 11 responses to the importer RFI.

Exporters

[19] During the original OCTG investigation, the CBSA received 16 responses to the exporter RFI. Of those responses, three responses were provided by exporters in South Korea including Hyundai Hysco Co. Ltd. and two responses provided by exporters in Turkey including Borusan.

[20] Similarly, during the original HRSP investigation, the CBSA received nine responses to the exporter RFI. Of those responses, four responses were provided by exporters in South Korea including Hyundai Steel.

Product definitions

[21] The subject goods for OCTG are defined as:

oil country tubular goods, which are casing, tubing and green tubes made of carbon or alloy steel, welded or seamless, heat‑treated or not heat‑treated, regardless of end finish, having an outside diameter from 2 ⅜ inches to 13 ⅜ inches (60.3 mm to 339.7 mm), meeting or supplied to meet American Petroleum Institute (API) specification 5CT or equivalent and/or enhanced proprietary standards, in all grades, excluding drill pipe, pup joints, couplings, coupling stock and stainless steel casing, tubing or green tubes containing 10.5 percent or more by weight of chromium, originating in or exported from the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei), India, Indonesia, the Philippines, the Republic of Korea, Thailand, Turkey, Ukraine and Vietnam

[22] The subject goods for HRSP are defined as:

hot‑rolled carbon steel plate and high‑strength low‑alloy steel plate not further manufactured than hot‑rolled, heat‑treated or not, in cut lengths, in widths from 24 inches (+/- 610 mm) to 152 inches (+/- 3,860 mm) inclusive, and thicknesses from 0.187 inches (+/- 4.75 mm) up to and including 3.0 inches (76.2 mm) (with all dimensions being plus or minus allowable tolerances contained in the applicable standards), but excluding plate for use in the manufacture of pipe and tube (also known as skelp); plate in coil form, plate having a rolled, raised figure at regular intervals on the surface (also known as floor plate), originating in or exported from Brazil, Denmark, Indonesia, Italy, Japan and the Republic of Korea

A list of all goods that were excluded by the CITT’s finding respecting HRSP can be found on the CBSA’s websiteFootnote 2.

[23] Additional product information as well as OCTG and HRSP production processes are outlined in the Statement of Reasons (SOR) for the final determinations of OCTG and HRSP, respectively, and can be found on the CBSA’s websiteFootnote 3.

Canadian Industry

[24] At the time of the original OCTG investigation, the domestic industry was comprised of four producers, Tenaris Canada, Evraz Inc. NA Canada, Energex Tube of Welland, Ontario and Welded Tube of Canada Corporation (Welded Tube) of Concord, Ontario.

[25] At the time of the original HRSP investigation, the domestic industry was comprised of two producers, Algoma Steel Inc. and Evraz Inc. NA Canada.

Results of the review

[26] The review examined all information on the CBSA’s administrative records as of March 3, 2015 and April 17, 2014, the dates of the final determination of dumping for OCTG and HRSP respectively.

[27] In conducting the review, the CBSA did not recalculate margins of dumping or reassess any of the results of its original determinations. The CBSA applied the recommendations and rulings of DS482 with respect to individual exporters whose margins of dumping were insignificant, to the results of the original investigations.

[28] The review confirmed that the margins of dumping for the named exporters were insignificant. Specifically, the CBSA found that OCTG exported by Hyundai Hysco were not dumped, OCTG exported by Borusan were dumped by a weighted average margin of 0.001%, and HRSP exported by Hyundai Steel were dumped by a weighted average margin of 1.9%, expressed as a percentage of the export price. Details regarding how the margins of dumping were determined were provided in the final determination SORs for OCTG and HRSP, respectively, and can be found on the CBSA’s website.

[29] Under SIMA, the CBSA is required to terminate an investigation in respect of the goods of an exporter if it is satisfied that the goods have not been dumped or the margin of dumping of the goods of that exporter is insignificant, meaning a margin of dumping that is less than 2% of the export price of the goods.

Representations

[30] During the course of the review, case arguments and representations were received from counsel representing Evraz Inc. NA Canada & Welded TubeFootnote 4, Tenaris CanadaFootnote 5, Algoma Steel Inc.Footnote 6, BorusanFootnote 7 and Hyundai SteelFootnote 8. Representations were also received from the government of South KoreaFootnote 9.

[31] Reply submissions were received from counsel representing Evraz Inc. NA Canada & Welded TubeFootnote 10, Tenaris CanadaFootnote 11, Algoma Steel Inc.Footnote 12, BorusanFootnote 13 and Hyundai SteelFootnote 14.

[32] The issues raised by these parties through their case arguments and reply submissions, as well as the CBSA’s response to these issues, are provided in Appendix 1.

Decision

[33] On August 7, 2020, pursuant to paragraph 76.1(2)(b) of SIMA, the CBSA continued the final determination of dumping with respect to OCTG originating in or exported from South Korea and Turkey with the following amendments: the CBSA terminated the dumping investigation regarding OCTG exported from South Korea by Hyundai Steel Company (formerly Hyundai Hysco Co. Ltd.) and OCTG exported from Turkey by Borusan Mannesmann Boru Sanayi ve Ticaret A.Ş.

[34] On the same date, pursuant to paragraph 76.1(2)(b) of SIMA, the CBSA also continued the final determination of dumping with respect to HRSP originating in or exported from South Korea with the following amendment: the CBSA terminated the dumping investigation regarding HRSP exported from South Korea by Hyundai Steel Company.

Future action

[35] As a result of the CBSA’s decisions to terminate the dumping investigations concerning OCTG exported by Hyundai Steel and Borusan and HRSP exported by Hyundai Steel, anti‑dumping duty will no longer be imposed on imports of subject goods from these companies.

[36] On June 1, 2020, the CITT initiated a review of its finding of April 2, 2015, in Review No. NQ‑2014‑002R, that the dumping of OCTG from Chinese Taipei, India, Indonesia, the Philippines, South Korea, Thailand, Turkey, Ukraine and Vietnam was threatening to cause injury to the domestic industry in Canada. On September 28, 2020, the CITT will make a decision, including reaffirming its threat of injury finding or replacing it with a negative finding.

[37] On June 1, 2020, the CITT also initiated a review of its finding of May 20, 2014, in Review No. NQ‑2013‑005R, that the dumping of HRSP from Brazil, Denmark, Indonesia, Italy, Japan and South Korea was threatening to cause injury to the domestic industry in Canada. On October 14, 2020, the CITT will make a decision, including reaffirming its threat of injury finding or replacing it with a negative finding.

[38] If the CITT reaffirms its threat of injury findings, OCTG (excluding those goods exported by Hyundai Steel and Borusan) and HRSP (excluding those goods exported by Hyundai Steel) will continue to be subject to anti dumping duties. If the CITT rescinds its threat of injury findings in whole or in part, such imports will no longer be subject to anti dumping duties.

Publication

[39] A notice of the continuation of the final determinations of dumping in respect of OCTG originating in or exported from South Korea and Turkey and in respect of HRSP originating in or exported from South Korea will be published in the Canada Gazette pursuant to paragraph 41(3)(a) of SIMA.

[40] A notice of the terminations of the dumping investigations in respect of OCTG exported to Canada by Hyundai Steel and Borusan and in respect of HRSP exported to Canada by Hyundai Steel will be published in the Canada Gazette pursuant to paragraph 41(4)(a) of SIMA.

Information

[41] This Statement of Reasons is posted on the CBSA’s website at the address below. For further information, please contact the officers identified as follows:

SIMA Registry and Disclosure Unit
Trade and Anti-dumping Programs Directorate
Canada Border Services Agency
11-100 Metcalfe St
Ottawa ON  K1A 0L8

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

Doug Band
Director General
Trade and Anti‑dumping Programs Directorate

Appendix 1

Representations

During the course of the review, case arguments and representations were received from counsel on behalf of Evraz Inc. NA Canada & Welded Tube, Tenaris Canada and Algoma Steel Inc. (hereinafter referred to as ‘Canadian industry’), as well as from counsel representing Borusan and Hyundai Steel. Representations were also received from the government of South Korea (GOK). Reply submissions were received from counsel on behalf of the Canadian industry, Borusan and Hyundai Steel.

It is noted that additional information was submitted by counsel representing Evraz Inc. NA Canada & Welded Tube on July 29, 2020, six days after the due date for submitting reply submissions. After considering the nature, relevance and materiality of the information, the CBSA decided not to accept the late submission for the purposes of this review.

Certain details provided in case briefs and reply submissions were designated as confidential information by the submitting counsel. This has restricted the ability of the CBSA to discuss all issues raised in these submissions. The material issues raised by the parties are summarized as follows and the CBSA has provided responses to representations below.

Scope of the review

Case briefs

Counsel for the Canadian industry made representations and requested the CBSA to re‑open the administrative records, to gather additional evidence, to apply the new relevant provisions of SIMA and the Special Import Measures Regulations (SIMR) as it is written today, and to re‑calculate margins of dumping for the three exporters, hence to treat this review as a de novo determination.

Counsel for the Canadian industry submitted that the scope of this review is not limited by the mandate of the Minister of Finance’s letter dated April 30, 2020 (hereinafter referred to as “the Minister’s letter”), and argued that the Minister’s letter does not contain any specific guidelines for the CBSA to follow. Counsel for the Canadian industry also argued that there is no direct implication from the Minister’s letter or section 76.1 of SIMA dictating that the final determinations need to be terminated.

Counsel for Algoma Steel Inc. argued that it is impossible for the CBSA to comply with the request of the Minister’s letter without retrospectively applying section 41 of SIMA as it exists today, and submitted that the premise of this review is to apply section 41 as it exists today, not as it existed at the original final determinations. Counsel for Evraz Inc. NA Canada argued that the amendments to SIMA enacted in 2017 do not have retroactive effect and the CBSA cannot retrospectively apply the 2017 amendments to the final determinations, unless the CBSA makes a fresh determination by taking into account SIMA as it exists today.

Counsel for the Canadian industry argued that the margins of dumping determined for the three exporters at the final determinations should be re‑calculated for the purposes of this review to ensure a correct application of law and procedural fairness. Counsel for Algoma Steel Inc. further argued that the margin of dumping calculated for Hyundai Steel at the HRSP final determination may include goods that were subsequently excluded by the CITT in its threat of injury finding.

The GOK made a representation and submitted that the purpose of this review is to exclude the Korean exporters with zero or de minimis margins of dumping from the CITT findings.

Counsel for Borusan submitted that the recommendations and rulings in DS482 are fairly straightforward and are not in dispute, and further submitted that the issues in this review are specific, narrow and well‑defined. Counsel for Hyundai Steel submitted that the Minister’s letter establishes the terms of reference for this review as limited to the issue of termination of investigations in respect of the exporters identified by the Minister of Finance with de minimis margins of dumping, in light of D482.

Counsel for Hyundai Steel argued that neither the Minister’s letter nor the findings in DS482 require the CBSA to re‑calculate Hyundai Steel’s margins of dumping for this review, and further argued that a re‑determination of export prices and normal values for Hyundai Steel is beyond the scope of this review.

Counsel for Hyundai Steel submitted that limiting this review to the consequences of de minimis margins of dumping is also consistent with the approach of the CBSA’s previous review of the final determination regarding CSWP from Chinese Taipei. Counsel for Hyundai Steel further submitted that domestic producers and the Canadian Steel Producers Association (CSPA) who participated in that review all supported the CBSA’s termination of the dumping investigation against two de minimis exporters from Chinese Taipei, without any re‑calculation of their dumping margins.

Reply submissions

Counsel for the Canadian industry reiterated that the Minister’s letter does not limit the scope of the review and further submitted that the scope of this review is not a mere act of termination.

Counsel for Tenaris Canada argued that the CBSA is not bound to terminate the investigations, and counsel for Algoma Steel Inc. argued that the decision and process of the 2017 CSWP review do not bind the CBSA’s review in this proceeding. Counsel for Evraz Inc. NA Canada submitted that the CBSA is bound by Canadian law and argued that WTO jurisprudence has force of law only to the extent that Parliament implements the WTO’s recommendations in DS482, and further argued that the recommendations in DS482 have been implemented following the 2017 CSWP review.

Counsel for Borusan rebutted the claims made by the Canadian industry regarding the retrospective application of the 2017 and other amendments to SIMA and argued that the matter that arises from the Minister’s letter relates to subsection 76.1(1) of SIMA, a provision that existed at the time of the original investigations.

Counsel for Hyundai Steel submitted that the decision of this review will be made under subsection 76.1(2) of SIMA that existed at the time of the final determinations, not section 41 of SIMA. Further, counsel for Hyundai Steel argued that the 2017 amendments to section 41 of SIMA and other amendments afterwards such as provisions related to particular market situations do not apply to this review. Counsel for Hyundai Steel submitted that the language of “considers necessary” under subsection 76.1(2) gives the CBSA broad authority to terminate investigations against de minimis exporters, regardless of the terms of section 41 of SIMA.

Counsel for Hyundai Steel refuted the Canadian industry’s claim that the terms of reference set out in the Minister’s letter are mere guidelines, and argued that the terms of reference have special legal significance under SIMA. Counsel for Hyundai Steel submitted that the terms of reference were issued by the Minister of Finance under subsection 76.1(1) of SIMA and argued that the CBSA is not authorized to look beyond the terms of reference.

Counsel for Hyundai Steel submitted that nothing in the terms of reference or the findings in DS482 requires or authorizes the CBSA to revisit the dumping margin calculations or other issues. Counsel for Hyundai Steel also argued that the CITT’s product exclusions cannot have an impact on the CBSA’s final determinations because the CBSA’s investigations are based on the scope of the goods established in the complaint.

CBSA’s response

Under subsection 76.1(1) of SIMA, the Minister of Finance has the authority to request the President of the CBSA (President) to initiate a review of any decision or any portion of a decision, at any time after the issuance of a recommendation or ruling by the DSB, if the Minister considers it necessary to do so, having regard to the DSB’s recommendation or ruling.

In conducting a review, the President has discretion to limit or otherwise govern in any way the conduct or direction of the review process.

Given the specific request set out in the Minister of Finance’s letter of April 30, 2020, the President made the decision to apply SIMA as it was written on the day of the original final determinations and to limit the review to the DSB’s recommendations and rulings in DS482 concerning termination of investigations in respect of the three named exporters with de minimis margins of dumping.

Merger of Hyundai Steel and Hyundai Hysco

Case briefs

Counsel for Hyundai Steel submitted that a merger of Hyundai Hysco and Hyundai Steel was effective as of July 1, 2015, four months after the OCTG final determination. Counsel further submitted that the merged company is Hyundai Steel and Hyundai Hysco no longer exists as a separate corporate entity.

Counsel for Hyundai Steel submitted that Hyundai Steel is the successor‑in‑interest to Hyundai Hysco and argued that the termination of the OCTG investigation against Hyundai Hysco should apply to Hyundai Steel. Counsel for Hyundai Steel provided supporting documentation with respect to the merger and explained that the organization and management structures of the former Hyundai Hysco remained largely unchanged, and the OCTG production facilities remained the same post‑merger.

Reply submissions

Counsel for Tenaris Canada and Evraz Inc. NA Canada submitted that Hyundai Steel submitted new evidence to the CBSA as information concerning the merger did not exist on the original OCTG record. Counsel for Evraz Inc. NA Canada argued that the CBSA must reopen its record in order for the CBSA to determine whether Hyundai Steel is indeed the successor‑in‑interest to Hyundai Hysco.

Counsel for Tenaris Canada submitted that Hyundai Steel and Hyundai Hysco should be considered separated legal entities for the purposes of this review. Counsel for Tenaris Canada argued that Hyundai Steel was not a named exporter in the original OCTG investigation, and therefore, Hyundai Steel by default was covered by the margin of dumping determined for all other Korean exporters (i.e. 37.4%). Counsel for Tenaris Canada submitted that, if the CBSA decides to exclude Hyundai Hysco from the final determination as a result of this review, Hyundai Steel should not automatically benefit from this exclusion.

CBSA’s response

As mentioned earlier, Hyundai Steel and Hyundai Hysco merged effective July 1, 2015, four months after the final determination of the original OCTG investigation which was concluded on March 3, 2015.

The information with respect to the merger was not available prior to the OCTG final determination. Considering the nature, relevance and materiality of this information for purposes of making its decision, the CBSA accepted and considered the information as part of the administrative record for this review.

The CBSA notes the Hyundai Steel and Hyundai Hysco’s merger were previously investigated as part of the OCTG re‑investigation concluded in December 2015, in which the CBSA recognized Hyundai Steel was the successor‑in‑interest to Hyundai Hysco for SIMA purposes.

Therefore, the CBSA confirms that the decision to terminate the dumping investigation regarding OCTG exported by Hyundai Hysco as a result of this review applies to OCTG exported by Hyundai Steel.

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