OCTG 2022 RI: Oil country tubular goods
Notice of conclusion of re-investigation

Ottawa,

The Canada Border Services Agency (CBSA) has today concluded a re‑investigation of the normal values and export prices of 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, South Korea, Thailand, Turkey and Vietnam, in accordance with the Special Import Measures Act (SIMA).

The re-investigation was initiated on March 8, 2022, as part of the CBSA’s ongoing enforcement of the Canadian International Trade Tribunal’s (CITT) orders respecting:

The product definition of the goods subject to the CITT’s order are contained in Appendix 1.

Period of investigation

The Period of Investigation (POI) and the Profitability Analysis Period (PAP) for the re-investigation was from January 1, 2021 to December 31, 2021.

Re-investigation process

At the initiation of the re-investigation, the CBSA sent a Request for Information (RFI) to all known importers, exporters, producers and vendors to solicit information on the costs and selling prices of subject goods and like goods. The information was requested for purposes of updating the normal values and export prices for subject goods imported into Canada. On-site verifications were conducted at the premises of two exporters located in South Korea. Desk audits were conducted for the remaining responding exporters.

As part of the re-investigation, case briefs and reply submissions were provided by counsels representing the complainants and responding exporters. Details of the representations are provided in Appendix 2. Details pertaining to the information submitted by the exporters in response to the RFIs as well as the results of the CBSA’s re-investigation are provided below.

OCTG II

The following table lists all exporters/producers who provided a complete response to the CBSA’s dumping RFI and provided responses to supplementary RFIs. Specific normal values for future shipments of subject goods, effective on or after September 6, 2022, were issued to these producers/exporters.

Exporters that have been provided with specific normal values

Country Exporter
Chinese Taipei Chung Hung Steel Corporation
Shin Yang Steel Co., Ltd.
Tension Steel Industries Co., Ltd.
India GVN Fuels Inc. & Maharashtra Seamless Limited
Jindal Saw Limited
South Korea Nexteel Co., Ltd.
SeAH Steel Co., Ltd.

All other exporters

For all other exporters of subject goods, normal values for future shipments shall be assessed at the rate listed in the table below, expressed as a percentage of the export price, in accordance with the ministerial specification pursuant to section 29 of SIMA.

OCTG II countries Advance over export price rate
All other exporters 37.4%

Normal values previously in place expire on September 6, 2022.

Results of the re-investigation are summarized below:

Chinese Taipei

Chung Hung Steel Corporation (CHS)

CHS is a manufacturer of OCTG located in Chinese Taipei. CHS did not export any subject OCTG to Canada during the POI. CHS provided substantially complete responses to the CBSA’s RFI and two supplementary RFIs.

Normal values could not be determined pursuant to section 15 of SIMA as CHS did not have any domestic sales of OCTG during the POI/PAP. Normal values could also not be determined pursuant to paragraph 19(b) of SIMA because a reasonable amount for profits could not be determined under paragraph 11(1)(b) of the Special Import Measures Regulations (SIMR).

As a result, normal values for CHS were determined pursuant to section 29 of SIMA using a paragraph 19(b) methodology, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs plus a reasonable amount for profits. As inputs significant in the production of the goods were acquired from associated suppliers, the cost of the inputs was determined pursuant to subparagraph 11.2(1)(a) of SIMR. The amount for profits was determined based on the weighted average profit made on domestic sales of OCTG by exporters from other countries who provided a complete response in this re‑investigation, pursuant to ministerial specification.

Shin Yang Steel Co., Ltd. (Shin Yang)

Shin Yang is a manufacturer of electric resistance welded (ERW) pipes including OCTG located in Chinese Taipei. Shin Yang did not export any subject goods to Canada during the POI.

Shin Yang provided complete responses to the CBSA’s RFI and four supplemental RFIs.

Normal values could not be determined pursuant to section 15 of SIMA, as Shin Yang did not have any domestic sales of like goods during the POI/PAP. In addition, the CBSA could not determine normal values pursuant to paragraph 19(b) of SIMA because a reasonable amount for profits could not be determined in accordance with paragraph 11(1)(b) of SIMR.

As a result, normal values were determined pursuant to section 29 of SIMA using a paragraph 19(b) methodology, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs plus a reasonable amount for profits. As inputs significant in the production of the goods were acquired from an associated supplier, the cost of the inputs was determined pursuant to subparagraph 11.2(1)(a) of SIMR. The amount for profits was determined based on the weighted average profit made on domestic sales of OCTG by other exporters from other countries who provided a complete response in this re-investigation, pursuant to ministerial specification.

Tension Steel Industries Co., Ltd. (Tension Steel)

Tension Steel is a manufacturer of standard pipes and OCTG located in Chinese Taipei. Tension Steel did not export any subject goods to Canada during the POI.

Tension Steel provided complete responses to the CBSA’s RFI and two supplemental RFIs.

As Tension Steel did not have any domestic sales of like goods during the POI/PAP, normal values could not be determined pursuant to section 15 of SIMA. In addition, the CBSA could not determine normal values pursuant to paragraph 19(b) of SIMA because a reasonable amount for profits could not be determined in accordance with paragraph 11(1)(b) of SIMR.

As a result, normal values were determined pursuant to section 29 of SIMA using a paragraph 19(b) methodology, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs plus a reasonable amount for profits. The amount for profits was determined based on the weighted average profit made on domestic sales of OCTG by other exporters from other countries who provided a complete response in this re-investigation, pursuant to ministerial specification.

India

GVN Fuels Inc. & Maharashtra Seamless Limited (GVN & MSL)

GVN, located in India, is an exporter of subject goods sold to Canada during the POI. These goods were manufactured by MSL, an associated company also located in India, which also produced like goods sold domestically.

As in the original investigation and subsequent re-investigations, GVN and MSL have collectively been determined to be the exporter for SIMA purposes and provided a joint response to the CBSA’s RFI. Their response to the RFI and three supplemental RFIs were complete.

Although MSL had domestic sales of like goods during the POI/PAP, normal values could not be determined pursuant to section 15 of SIMA as there were not sufficient number of sales of like goods that complied with all the terms and conditions referred to in sections 15 and 16 of SIMA. As a result, the CBSA determined normal values in accordance with paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs plus a reasonable amount for profits. The amount for profits were determined under paragraph 11(1)(b) of SIMR.

For subject goods exported to Canada, export prices were determined pursuant to section 24 of SIMA, based on the lesser of the exporter’s selling price and the importer’s purchase price, adjusted by deducting the costs, charges and expenses incurred in preparing the goods for shipment to Canada and resulting from the exportation and shipment of the goods.

Jindal Saw Limited (JSL)

JSL is a producer and exporter of the subject goods during the POI. It currently produces and exports subject goods from its Nashik seamless facility in Maharashtra, India.

JSL provided substantially complete responses to the CBSA’s RFI and two supplemental RFIs.

As JSL had insufficient profitable sales of like goods during the POI/PAP made to multiple customers, the CBSA determined normal values in accordance with paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs plus a reasonable amount for profits.

As inputs significant in the production of the goods were acquired from an associated supplier, the cost of the inputs was determined pursuant to subparagraph 11.2(1)(a) of SIMR. The amount for profits was determined in accordance with the methodology of paragraph 11(1)(b) of SIMR.

For subject goods exported to Canada, export prices were determined pursuant to section 24 of SIMA, based on the lesser of the exporter’s selling price and the importer’s purchase price, adjusted by deducting the costs, charges and expenses incurred in preparing the goods for shipment to Canada and resulting from the exportation and shipment of the goods.

South Korea

Nexteel Co., Ltd. (Nexteel)

Nexteel is a producer and exporter of the subject goods during the POI. It currently operates three manufacturing plants in Pohang, South Korea.

Nexteel provided substantially complete responses to the CBSA’s RFI and two supplementary RFIs, and an on‑site verification of Nexteel was conducted in July 2022.

As Nexteel did not have sufficient domestic sales of like goods in the ordinary course of trade during the POI/PAP, normal values could not be determined pursuant to section 15 of SIMA. In addition, the CBSA could not determine normal values pursuant to paragraph 19(b) of SIMA because a reasonable amount for profits could not be determined in accordance with paragraph 11(1)(b) of SIMR.

As a result, normal values were determined pursuant to section 29 of SIMA using a paragraph 19(b) methodology, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs plus a reasonable amount for profits. The amount for profits was determined based on the weighted average profit made on domestic sales of OCTG by other exporters from other countries who provided a complete response in this re-investigation, pursuant to ministerial specification.

For subject goods exported to Canada, export prices were determined pursuant to section 24 of SIMA, based on the lesser of the exporter’s selling price and the importer’s purchase price, adjusted by deducting the costs, charges and expenses incurred in preparing the goods for shipment to Canada and resulting from the exportation and shipment of the goods.

SeAH Steel Co., Ltd. (SeAH)

SeAH is a producer and exporter of OCTG whom did not export subject goods to Canada during the POI. SeAH currently operates one manufacturing plant producing the subject goods located in Pohang, South Korea.

SeAH provided substantially complete responses to the CBSA’s RFI and two supplemental RFIs. An on site verification of SeAH was conducted in June 2022.

Normal values could not be determined pursuant to section 15 of SIMA as SeAH did not have domestic sales of like goods during the POI/PAP. As a result, normal values were determined pursuant to paragraph 19(b), based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs plus a reasonable amount for profits. The amount for profit was determined pursuant to paragraph 11(1)(b) of SIMR.

As inputs significant in the production of the goods was acquired from an associated supplier, the cost of the inputs was determined pursuant to subparagraph 11.2(1)(a) of SIMR.

SC and OCTG I

The CBSA has also updated normal values for certain seamless carbon or alloy steel oil and gas well casing and certain oil country tubular goods originating in or exported from China (SC and OCTG I).

On May 25, 2020, the CBSA reaffirmed its opinion that the conditions of section 20 of SIMA exist in China with respect to the oil country tubular goods industry sector. Section 20 of SIMA is applicable where, in the opinion of the CBSA, domestic prices are substantially determined by the government and there is sufficient reason to believe that they are not substantially the same as they would be if they were determined in a competitive market.

As a result, normal values for Chinese exporters are determined using pricing and costing data from producers in a number of surrogate countries, pursuant to a ministerial specification. Consequently, in this re‑investigation, Chinese exporters were not requested to respond to the CBSA’s dumping RFI. While Chinese exporters, as interested parties, were invited to provide comments and representations to the CBSA, none was received.

The CBSA determined normal values for future shipments of subject goods for the following producers/exporters, effective on or after September 6, 2022, in accordance with the ministerial specifications pursuant to section 29 of SIMA.

Producers/exporters that have been provided with specific normal values

Country Producers/exporters
China Hengyang Valin Steel Tube Co., Ltd.
Huludao Steel Pipe Industrial Co. Ltd.
Groupe Jiangsu Changbao et ses filiales
Jiangsu Chengde Steel Tube Share Company
Shandong Molong Petroleum Machinery Co., Ltd.
Shengli Oilfield Shengji Petroleum Equipment Co., Ltd.
Tianjin Pipe Corporation
Tianjin TianGang Special Petroleum Pipe Manufacture Co., Ltd.
Vallourec Tianda (Anhui) Co., Ltd.
Zibo Freet Thermal Tech Co., Ltd.

Importer responsibility

Importers are reminded that it is their responsibility to calculate and declare their anti-dumping and countervailing 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 anti-dumping and countervailing measures and be provided with sufficient information necessary to clear the shipments. To determine their liability for anti-dumping and countervailing duty, importers should contact the exporters to obtain the applicable normal values and amounts of subsidy. For further information on this matter, refer to Memorandum D14-1-2, Disclosure of Normal Values, Export Prices, and Amounts of Subsidy Established Under the Special Import Measures Act to Importers.

The Customs Act applies, with any modifications that the circumstances require, with respect to the accounting and payment of anti-dumping and countervailing 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 with the Director General, Trade and Anti-dumping Programs Directorate, 11th Floor, 100 Metcalfe St, Ottawa, Ontario, K1A 0L8. Such a request must be received within 90 days from the making of the determination in the form and manner outlined in Memorandum D14-1-3, Procedures for Making a Request for a Re-determination or an Appeal of Goods Under the Special Import Measures Act.

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. 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. Where 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 of anti-dumping or countervailing duties may be warranted.

Retroactive duty assessment

The CBSA conducted an analysis of subject imports from exporters of OCTG during the POI, to determine whether retroactive assessments were warranted. The analysis relied on information provided in RFI and SRFI responses received, and in the absence of RFI information, as was the case for Chinese exporters, the CBSA relied on import data from the CBSA’s customs database, including a review of good descriptions as reported in the Accelerated Commercial Release Operations Support System (ACROSS) database. The analysis was focused on determining if export selling prices rose adequately in response to the rising costs and domestic selling prices of OCTG that were generally observed during the POI.

Information available to the CBSA indicates that imported goods subject to the OCTG1, OCTG2 and SC measures in force were exported to Canada by eight exporters which totalled approximately 23,000 metric tonnes (MT) or $38.8 million during the POI. Five exporters from China made up the majority with approximately 21,000 MT of subject goods valued at approximately $35 million. The CBSA’s analysis indicates that prices of subject goods exported to Canada by these exporters increased during the POI, thereby closely tracking fluctuations in overall OCTG pricing and costing. By examining the month-over-month average selling prices for the POI, the CBSA could clearly discern that prices of imports into Canada were trending upwards, which aligned with prevailing market conditions. In addition, the CBSA isolated instances where a particular exporter sold the same or substantially the same model at various occasions during the POI. From this exercise, price increases of 51% to 72% on goods sold to Canada was observed from March to December 2021.

The CBSA further supported this analysis by comparing the prices of subject goods imported into Canada during the POI to OCTG pricing data from Pipe Logix, a publication which reports spot prices for OCTG sold by distributors in the United States on a monthly basis. The CBSA has found Pipe Logix to be a reliable source in previous investigations involving tubular products in the oil and gas sector. Further, OCTG prices in the United States and the rest of the world have a strong historical correlation. The analysis demonstrated that the price trend of subject goods imported into Canada were consistent with pricing data provided by Pipe Logix. Specifically, according to Pipe Logix data, the average price of all items increased by 69% from March to December, 2021, which aligns with the pricing increases on sales of subject goods to Canada.

As a result, retroactive assessments do not appear to be warranted at this time.

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

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

Appendix 1: Product definition

OCTG II

“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 Chinese Taipei, India, Indonesia, South Korea, Thailand, Turkey, Ukraine and Vietnam, except for goods exported from South Korea by Hyundai Steel Company, and goods exported from Turkey by Borusan Mannesmann Boru Sanayi ve Ticaret A.Ş”

Appendix 2: Representations

Case arguments were received on behalf of Algoma Tubes Inc., Prudential Steel ULC, Tenaris Global Services (Canada) Inc. and Hydril Canadian Company LP (collectively “Tenaris Canada”)Footnote 1, Evraz Inc. NA Canada and Welded Tube of Canada Corp.Footnote 2, SeAHFootnote 3, Jindal SawFootnote 4, Chung HungFootnote 5, and NexteelFootnote 6.

The CBSA received reply submissions from counsel on behalf of MSL & GVNFootnote 7, Evraz and WTCFootnote 8, Chung HungFootnote 9, SeAHFootnote 10, Jindal SawFootnote 11, Cantak Corporation (Cantak)Footnote 12, NexteelFootnote 13, and Tenaris CanadaFootnote 14.

The material issues raised by the parties through case briefs are summarized as follows:

Normal values for goods not produced and/or sold during the POI/PAP

Case briefs

Counsel for SeAH submitted that the CBSA grants normal values for goods ordered during the POI, but that are produced after the POI.

Counsel for Evraz and WTC submitted that the CBSA should only grant normal values for products produced and sold during the POI. In addition, counsel argued that the CBSA should only issue prospective normal values based on cost and sales information from the last 60-day period of the POI, as there was a constant significant increase in OCTG production costs and prices over the POI.

Reply submissions

Counsel for MSL & GVN submitted that the goods need not be both produced and sold during the POI in order for the CBSA to establish normal values for such goods. Counsel argued that the CBSA should consider the determination of normal values for all goods sold during the POI, irrespective of when they were produced.

Counsel for EVRAZ and WTC reiterated that the CBSA should not determine normal values for goods that were not produced and sold during the POI.

Counsel for SeAH reiterated its position that normal values should be established for goods ordered during the POI, but produced after the POI. Counsel referenced the SIMA Handbook which states that in a re-investigation, the CBSA will attempt to establish normal values for goods that will be imported into Canada in the foreseeable future.

Counsel for Nexteel submitted that the CBSA should not limit the calculation of normal values only to goods produced or sold in the last 60-day period. Counsel argued there is no basis in SIMA or SIMR for such a limitation and noted it was common practice for the CBSA to use a POI covering a 12-month period.

Counsel for Tenaris Canada submitted that normal values should not be provided respecting goods ordered during the POI but only produced and shipped after the POI. Counsel stated that a single POI is established in order to provide transparency and certainty for all interested parties as to the delineation in time of the re-investigation. It argued that allowing extensions to the POI on a case-by-case basis for particular exporters would amount to special treatment and result in an arbitrarily conducted investigation.

Counsel for Tenaris Canada also submitted that the purpose of SIMA is not to provide exporters with the largest number of normal values. Referencing the SIMA Handbook, counsel indicated that normal values under 19(b) are reserved for exporters that actively exported subject goods to Canada during the POI. As a result, counsel argued that the CBSA should not issue prospective normal values to exporters that have not shown interest in the Canadian market through recent shipments.

CBSA response

Normal values are based on data relating to goods produced and sold during the profitability analysis period (PAP), which in the current re-investigation, is the same time period as the period of investigation (POI), January 1, 2021 to December 31, 2021. As noted in section 4.4.3.3. of the SIMA Handbook, the PAP established by the CBSA should be the same for all exporters in respect of a particular investigation or re-investigation.

While the CBSA may grant normal values for goods in a situation described by counsel for SeAH based on an exporters costing and sales information, such goods would normally have to have been either produced and/or sold during the POI/PAP. The CBSA does not typically determine normal values for goods that were not either produced and/or sold by an exporter during the POI/PAP.

It is common practice for the CBSA to calculate prospective normal values using the most recent cost and sales information available during the POI/PAP. While this often results on using information related specifically to the last 60-day period of the POI/PAP, the CBSA is not limited to only using information from that period for purposes of prospective normal values. Where sufficient information for particular models may not be available in the last 60-day period, the CBSA typically uses the most recent information available during the POI/PAP to calculate prospective normal values.

Reasonable Amount for Profits - Same General Category and Next Largest Category

Case briefs

Counsel for Nexteel submitted that standard pipe for consumption in Korea should be considered goods of the same general category for purposes of determining an amount for profits used to calculate normal values under paragraph 19(b) of SIMA.

Counsel for Tenaris Canada submitted that sales of standard pipe or “low pressure” welded pipe do not permit a proper comparison to the subject goods and should not be used in determining an amount for profits. Counsel also noted this approach would be consistent with the CBSA’s practice in the 2019 OCTG re-investigation.

Counsel for Evraz and WTC submitted that the CBSA should only consider profits on the sale of OCTG (in the case of like goods or goods of the same general category) and profits on the sale of line pipe (in the case of goods that are of the group or range of goods that is next largest to goods that are of the same general category). Counsel noted that the profit earned on other steel tubular products such as structural pipe or carbon steel welded pipe for general application should not be used as they do not command the same cost and price premiums associated with API-certified OCTG and line pipe.

Reply submissions

Counsel for Evraz and WTC reiterated its position that using profit earned on domestic sales of standard pipe would not permit a proper comparison with the subject goods and should not be relied upon by the CBSA.

Counsel for Nexteel reiterated its position that sales of standard pipe should be used by the CBSA in determining an amount for profits for normal values calculated under 19(b) of SIMA.

Counsel for Tenaris Canada reiterated its position that amounts for profit should not be based on sales of standard pipe.

CBSA response

The CBSA agrees with Tenaris Canada, Evraz, and WTC. Consistent with the approach taken in the previous re-investigation, the CBSA considered profits on the sale of goods of the same general category as relating to sales of OCTG and profits on the sale of goods that are of the group or range of goods that is next largest to goods that are of the same general category as relating to sales of line pipe. Profits earned on standard pipe and other tubular products were not used in calculating normal values under paragraph 19(b) of SIMA.

Paragraph 19(b) Normal Values for Products Not Exported to Canada in the POI

Case briefs

Counsel for Evraz and WTC noted that a number of exporters had requested the CBSA calculate normal values based on the cost of production of goods sold to a third country, such as the United States. Counsel argued that should exporters wish to obtain normal values for products sold to a third country, such normal values must be calculated based on prices and not costs as provided for under paragraph 19(a) of SIMA. As such, counsel submitted that the CBSA should not calculate paragraph 19(b) normal values for any models not exported to Canada during the POI.

Counsel for Chung Hung submitted that SIMA does not preclude it from obtaining normal values for a broad range of models, including those which it may export to Canada in the future. Counsel argued that normal values should be established for all models for which Chung Hung provided costing information. Counsel also submitted that the CBSA does not have to restrict the issuance of normal values to those models produced and exported to Canada during the POI.

Counsel for Nexteel submitted that normal values for all subject OCTG it exported to Canada and all additional models which it wishes to export to Canada should be determined based on the information it has submitted.

Reply submissions

Counsel for Chung Hung reiterated its position that normally the issuance of normal values should not be restricted only to goods exported to Canada during the POI, given that normal values should also be established for goods it intends to export in the future. Counsel also reiterated that the CBSA can use the costs of goods sold to a third country to establish normal values, as it has done in the past, given such products may be sold to Canada in the foreseeable future. Counsel also argued that a hard limit should not be set on using only information from the last 60-day period and that information available from the most recent period should be used by the CBSA.

Counsel for SeAH submitted that Evraz misinterpreted section 19 of SIMA and that sales made to an importer in Canada are not required as a pre-condition in application of that section. Counsel argued that section 19 of SIMA authorizes the CBSA to apply subsections 19(a) and 19(b) where there are no sales of subject goods to Canada during the POI, but there were sales of subject goods made to a third country during the POI.

CBSA response

A re-investigation or normal value review conducted by the CBSA is, in part, meant to provide an opportunity for exporters to obtain normal values for subject goods that are being imported or will be imported into Canada in the foreseeable future. Therefore, as part of a re-investigation, an exporter may request normal values for products or models not exported to Canada during the POI. Provided that the exporter has furnished sufficient information relating to the costs and/or selling prices of those particular products or models and that those goods were produced and/or sold during the POI, it is common practice for the CBSA to establish normal values for those goods regardless of whether or not they were exported to Canada during the POI.

Surrogate Normal Values for Chinese Exporters and Amounts for Profit under Section 29

Case briefs

Counsel for Tenaris Canada submitted that normal values for Chinese exporters determined in accordance with section 20 of SIMA should rely on Mexico as a surrogate country and use the information submitted by a Mexican exporter during the re-investigation. Alternatively, counsel submitted that the data provided by the Mexican exporter should be blended with other cooperative exporters’ data in determining normal values for Chinese exporters.

Counsel for Tenaris Canada also submitted that the CBSA should not treat Chinese exporters more favourably than other OCTG II exporters by providing normal values for goods not exported to Canada during the POI. Counsel argued that if Chinese exporters needed normal values for such products, those Chinese exporters could have provided information during the re-investigation, in accordance with the CBSA’s instructions in the initiation notice, yet chose not to.

Counsel for Evraz and WTC submitted that the CBSA should use sales and cost data submitted by Tubos de Acero de Mexico S.A. (TAMSA) in determining surrogate normal values or reasonable amounts for profit under section 29 of SIMA. Counsel also submitted that the CBSA should not blend seamless and welded OCTG normal values in calculating surrogate normal values.

Reply submissions

Counsel for Chung Hung submitted that Tenaris Canada’s suggestion that the CBSA should rely on data supplied by the Mexican exporter is driven by self-interest and that the CBSA should not use the information. Counsel argued that a reasonable amount for profits does not mean the highest amount available and that the CBSA’s standard is not that resulting normal values should be uncompetitive or unusable.

Counsel for SeAH submitted that the CBSA should only use its verified information in determining normal values for SeAH and none of the information submitted by TAMSA. Counsel noted that TAMSA’s information was not verified and that TAMSA and other Tenaris related entities had not filed complete responses to the RFI based on deficiency notices issued by the CBSA.

Counsel for Cantak submitted that using Mexico as a surrogate for establishing normal values in China would be improper and unwarranted. Counsel noted that the CBSA did not select surrogate countries outside of those covered by the re-investigation and did not issue surrogate exporter questionnaires. It further noted that the information from Mexico had not been verified and as a result should not be used by the CBSA. Counsel submitted that the RFI response submitted from Mexico was an attempt by Tenaris Canada to inject its own corporate data to adversely influence an investigation involving its competitors.

CBSA response

While the CBSA appreciated TAMSA’s voluntarily response to the RFI, the CBSA did not prioritize its review and analysis of TAMSA’s response over submissions received from exporters located in subject countries that were eligible to receive updated normal values. As a result, the CBSA relied upon the information submitted by subject exporters, which the CBSA reviewed, analyzed and verified, for purposes of determining surrogate normal values for Chinese exporters. TAMSA’s data was not used as it was not reviewed and analyzed to a degree in which the CBSA could use it in its calculations.

Given the information from TAMSA was not used, the CBSA did not fully assess the completeness of its submission. The deficiency notices issued by the CBSA to TAMSA and other Tenaris related entities were strictly limited to issues concerning disclosure and the designation of confidential and non-confidential information.

For the same reason above, the CBSA also did not use TAMSA’s information in calculating a reasonable amount for profits under section 29 of SIMA. However, the CBSA agrees with counsel for Evraz and WTC and did not blend seamless and welded OCTG normal values in calculating surrogate normal values.

As indicated in the CBSA’s initiation notice, the CBSA did not re-examine its opinion that the conditions of section 20 of SIMA exist in China with respect to OCTG as this was recently reaffirmed in May 2020. Without the need to re-examine section 20 conditions, Chinese exporters were not requested to respond to the CBSA’s dumping RFI. Nevertheless, the CBSA updated normal values for cooperative Chinese exporters listed on the SC and OCTG I measures in force webpages using the pricing and costing data submitted by producers/exporters in a number of surrogate countries, pursuant to ministerial specification.

Particular Market Situation (PMS) in South Korea

Case briefs

During the re-investigation, Tenaris Canada submitted commentsFootnote 15 alleging that a PMS exists in South Korea. The allegation focused on three areas, namely, the impact of imports of low-priced hot-rolled coil from China into South Korea, government intervention in the South Korean steel market, and government control over electricity prices in South Korea. Counsel for Tenaris Canada repeated the PMS allegation in its case brief.

Counsel for SeAH submitted that Tenaris Canada did not present any meaningful evidence to support its allegation that a PMS exists in respect of SeAH. Counsel also stated that evidence presented by SeAH during verification contradicted Tenaris Canada’s claims and argued there is no basis for the CBSA to conclude a PMS exists in respect of OCTG produced and/or exported by SeAH.

Reply submissions

Counsel for SeAH submitted that the CBSA had been unable to form an opinion that a PMS existed in South Korea in its previous OCTG re-investigation. Counsel also submitted that the brief filed by Tenaris Canada did not make any specific submissions regarding SeAH and did not point to any evidence on the record demonstrating that SeAH’s prices are distorted. Counsel referenced the Canada-Korea Free Trade Agreement and its requirement to comply with WTO rules set out in the WTO Antidumping Agreement. Counsel argued that this means the CBSA must not make arbitrary determinations respecting PMS in order to provide an unfair advantage for Canadian domestic industry.

Addressing each of the three main areas related to Tenaris Canada’s PMS allegation, counsel for Nexteel submitted the evidence did not support the assertions made regarding PMS. Counsel also submitted that the CBSA cannot form an opinion that a PMS exists if there are no domestic sales of like goods. Counsel concluded that there is no basis for the CBSA to determine that Nexteel or the Korean OCTG industry operates in a PMS.

CBSA response

The CBSA reviewed the information submitted by Tenaris Canada and found the evidence did not sufficiently support the allegation that a PMS existed in South Korea with respect to OCTG. Furthermore, the CBSA also found that none of the exporters from South Korea that participated in the re-investigation had domestic sales of like goods that were made in the ordinary course of trade under competitive conditions. As a result, the CBSA could not form an opinion under paragraph 16(2)(c) of SIMA that a PMS exists in the South Korean OCTG market.

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