The Canada Border Services Agency (CBSA) has today initiated a re-investigation to update the normal values and export prices, in accordance with the Special Import Measures Act (SIMA), respecting certain oil country tubular goods (OCTG) and certain seamless casing originating in or exported from China.
The re-investigation was initiated, in part, as a response to a dramatic increase in imports of the subject goods from China totaling approximately 135,000 MT since the beginning of 2022. The need for this re-investigation was further compelled by serious price volatility in the OCTG market, with world market price indicators rising by 50% or more during this same period. Given these factors, the re-investigation will be conducted on an expedited basis. The re-investigation will serve to address the rapidly changing market conditions and is part of the CBSA’s enforcement of the following Canadian International Trade Tribunal (CITT) orders issued on:
- November 28, 2018, in Expiry Review No. RR-2017-006 (SC) and
- December 10, 2020, in Expiry Review No. RR-2019-005 (OCTG I)
The product definition and the applicable tariff classification numbers of the goods subject to the CITT’s orders can be found on the CBSA’s Measures in force.
Since 2007, the CBSA has conducted three investigations and two re-investigations (i.e. Certain Seamless Casing, OCTG I and Certain Pup Joints) involving section 20 inquiries on the Chinese steel industry including the OCTG sector. In all instances, information available to the CBSA indicated that the domestic prices are substantially determined by the Government of China (GOC) 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. Accordingly, the CBSA was and remains of the opinion that the conditions of section 20 are present in the Chinese steel industry, including the OCTG sector.
Based on the results of those past inquiries, which include the CBSA’s recent opinion on May 25, 2020 reaffirming that the conditions of section 20 of SIMA exist in China with respect to the OCTG sector, the CBSA has decided not to conduct an inquiry pursuant to section 20 of SIMA in this re-investigation. Consequently, the CBSA will conduct this re-investigation on the basis that section 20 conditions continue to persist in the Chinese steel industry, including the OCTG sector, and will not be directly requesting information regarding the application of section 20 from GOC or other parties. However, interested parties are invited to provide comments and representations to the CBSA regarding the application of section 20 of SIMA. Any relevant information regarding the application of section 20 of SIMA provided will be considered by the CBSA as part of this re-investigation.
Normal values established during this re-investigation will be effective for the subject goods released from the CBSA on or after the date of the conclusion of the re-investigation. Normal values currently in place will expire on that date. Normal values determined on the basis of the re-investigation will be applied to any entries of subject goods under appeal that have yet to be re-determined at the time of the conclusion of this re-investigation.
Given the significant rise in prices globally in 2022 respecting OCTG and seamless casing, interested parties are cautioned that normal values currently in effect and based on periods prior to 2022 are likely no longer reflective of current market conditions. As such, the CBSA expects exporters to adjust their selling prices to Canada accordingly to take into account current market conditions until such a time that the CBSA has updated normal values as a result of this re-investigation. Exporters are also advised that failure to adjust selling prices to Canada will significantly increase the likelihood of the application of retroactive assessments of anti-dumping duties.
Exporters that wish to participate in this re-investigation are required to provide a complete and accurate response to the CBSA’s request for information (RFI) by no later than November 21, 2022. Information submitted after this date may not be taken into consideration for this re-investigation. Respondents should also note that as this re-investigation is being conducted on an expedited basis, extension requests will only be considered for exceptional circumstances.
Where an exporter of subject goods does not provide sufficient information to determine specific normal values or does not permit verification of information submitted, anti-dumping duties, in accordance with ministerial specifications pursuant to section 29 of SIMA, will be assessed at the following rates, expressed as a percentage of the export price of the subject goods imported into Canada:
- OCTG I: 166.9%
- Seamless Casing: 91%
Exporters that are not the manufacturer of the subject goods (e.g. trading companies, vendors, etc.) will receive their own normal values only to the extent that their suppliers/manufacturers provide sufficient information to permit the determination of normal values and export prices.
Please note, that for the current re-investigation, the CBSA is contacting all known and potential exporters. Any importers or exporters who wish to provide a response to the RFI are advised to contact one of the officers identified below to obtain a copy of the RFI. It is suggested that importers contact their exporter(s) to determine if the exporter(s) intend to co-operate with the CBSA in this re-investigation.
Where applicable, the normal values and export prices determined as a result of this re-investigation may be applied retroactively. 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. 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 duty may be warranted. Please refer to the CBSA’s re-investigation and normal value review policy (Memorandum D14-1-8) for details.
- Andrew Manera: 343-553-1868
- Matthew Lerette: 343-553-1867
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