UDS 2020 IN: Certain upholstered domestic seating
Notice of initiation of investigations
Ottawa, December 21, 2020
The Canada Border Services Agency (CBSA) initiated investigations on December 21, 2020, under the Special Import Measures Act respecting the alleged injurious dumping and subsidizing of certain upholstered domestic seating from China and Vietnam. The investigations follows a complaint filed by Palliser Furniture Ltd. (Winnipeg, MB).
The subject goods are usually classified under the following tariff classification numbers:
The product definition as well as additional product information are contained in Appendix 1.
Additional information about the investigations will be available in a Statement of Reasons that will be available within 15 days on the CBSA’s website.
Officers’ names and contact information:
- Kevin Lambertsen: 613-954-7341
- Ansa Mohammad: 613-960-6096
The subject goods are defined as:
Upholstered seating for domestic purposes originating in or exported from China and 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 (“HTS”).
- 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)
Additional product information
The term “upholstered” refers to leather, leather-like and/or fabric cover material, which may be used in combination with padding and springs, to make a soft covering for the frame. This covering may be permanently (e.g. sewn) or semi-permanently (e.g. with Velcro or ties) attached to the frame of the seating. Similarly, some or all the soft covering may also be removable from the frame of the seating in the form of loose cushions designed as an integral part of the seating, whether those cushions are on the seat, back or both parts of the chair.
The Subject Goods may be commercially described in a variety of ways based on various factors such as shape, style or purpose, including as “wedge chairs”, “lounge chairs”, “saucer chairs”, “bergere chairs”, “side chairs” and other non-standard descriptions. The Subject Goods may be described as “occasional chairs”, which typically (though not always) means that they are living room chairs that are styled differently from a matching furniture set.
Other than “occasional chairs”, these descriptions do not have any industry standard meaning. These descriptive marketing terms may be used by manufacturers and retailers in different ways, such as one retailer calling a chair by one description, whereas another retailer calls a very similar chair by a different description. Conversely, two retailers may apply the same descriptive word to two relatively different chairs.
These descriptive words generally do not indicate any material differences in the nature of the goods or detract from the goods being Subject Goods. Notwithstanding the various descriptions, if the goods have the essential elements of the above definition (e.g. upholstered, seating, for domestic purposes, not expressly excluded), they are within the scope of Subject Goods.
For domestic purposes
Subject Goods are intended for domestic (i.e. residential) purposes and use. “For domestic purposes” in the product description is defined in the same way as “for domestic purposes” under Chapter 94 of the Customs Tariff Schedule and in accordance with Tribunal jurisprudence.
While the Subject Goods are primarily intended by producers and retailers for residential use as opposed to commercial applications, some Subject Goods may be occasionally used in commercial establishments by customers. The occasional end-use of the Subject Goods within commercial settings does not detract from the primary intended use in domestic or residential settings, and such goods remain Subject Goods.
To determine whether the Subject Goods are primarily intended for domestic purposes, factors including the design, characteristics, marketing and pricing of the goods must be considered, which accords with Tribunal practice in interpreting the “for domestic use” qualification.
A key distinction between residential and commercial seating goods is that goods intended for commercial use are generally built to a higher specification in the types of materials used, such as the urethane quality and fabric durability, to withstand heavier use in busier settings like airports and concert halls. Additionally, producers and retailers market the Subject Goods online and on showroom floors as intended for home rather than business use and are priced lower relative to goods intended for business use.
Goods clearly designed and marketed for non-domestic (i.e. commercial use purposes), such as in offices, business reception areas, restaurants, studios and other non-residential applications, are not covered.
Upholstered seating product use and characteristics
The Subject Goods are designed for sitting or sleeping in residential settings. While the Subject Goods have common functions, there are some variations in their uses. For example, sofas that convert into sofa-beds are designed for sleeping in their fold out or extended configuration, whereas sofas, arm-chairs and HTS are not specifically designed for sleeping purposes.
The Subject Goods are made of wood and/or steel tubular frames, with urethane foam inner material or padding that is covered in either fabric; genuine leather; a manufactured leather-substitute; a combination of genuine leather and leather-substitute (known as leather-match).
The Subject Goods generally consist of the following components:
- Wood or metal frame: The goods are of either metal or wood frames. Metal frames are steel and/or aluminum. Material for wood frames includes solid wood, plywood or engineered materials such as oriented strand board (“OSB”) and particleboard
- Urethane foam: Foam is used for internal upholstery padding and can have various characteristics or be composed of several materials to create comfort inside the outer upholstery cover
- Cover material: The upholstery covering on the exterior of the seating is made up of leather or a leather-like good, fabric, or a combination of leather and fabric
- Motion components: Complicated metal components and mechanisms are made from hot-rolled coil (“HRC”) and cold-rolled coil (“CRC”) steel used in motion furniture
- Miscellaneous parts and components: These items vary and may include webbing, fiber, springs, legs, zippers, etc. and are globally sourced
Particularly, leather or leather-like cover material may consist of the following materials:
- Leather: Genuine leather is commercially known as ‘top grain’. The outer surface of the hide is processed with varying degrees of finish but based on the original outer surface
- Split leather: Leather processed in a tannery is typically split into the outer layer and a second layer known as ‘split’. This is genuine leather but given a manufactured surface. Split leather is less strong structurally, is less expensive and may be used on the sides or back of furniture where strength is not a factor
- Bicast: Split leather that is covered with a film of some kind of plastic to provide a look and a more durable surface
- Bonded leather: This is a leather-substitute such as polyurethane that has leather shavings glued to the back. The leather shavings cannot be seen or felt, and add very little to the cost compared to a pure leather substitute product. The shavings are used as a marketing strategy to allow for the use of the word ‘leather’
- Leather match: An upholstered product that combines the use of real or top grain leather together with a leather substitute such as vinyl or polyurethane on the same item. Normally the leather is used on surfaces that can be touched by the consumer or are more visible. The leather substitute will be produced to look as identical as possible to genuine leather and is used on the side or back of the product. This combination is done to reduce cost and leather match products are typically less expensive than comparable pure leather products
- Leather substitutes: These are covering materials constructed from polyurethane, vinyl or other chemicals that may be constructed as a sheet of material or as a textile but in all case designed to create the feel or visual look of leather. They are typically less expensive than a comparable product containing any degree of leather
Leather cover material goods refer to goods falling into categories (a) – (e), and “leather-like” goods is synonymous with leather-substitutes in category (e). Most customers cannot readily distinguish between leather and leather-like goods.
Fabric cover material goods refer to goods that may consist of wool, cotton, nylon, polyester, acrylic, rayon or a combination thereof, which may be in any color.
The Subject Goods and domestically produced like goods (together “Upholstered Domestic Seating”) may be ordered to be custom built for a customer, which usually includes the choice of cover material and sometimes some technical features in motion furniture.
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