OCTG2 2021 UP2: Oil country tubular goods 2
Conclusion of normal value review
The Canada Border Services Agency (CBSA) has today concluded a normal value review to update the normal values and export prices applicable to certain oil country tubular goods (OCTG) exported to Canada from South Korea by Nexteel Co., Ltd.
This review follows a request for re‑determinations filed by an importer and is part of the CBSA’s enforcement of the Canadian International Trade Tribunal’s (CITT) order issued on December 30, 2020, in Expiry Review No. RR‑2019‑006 respecting the dumping of certain OCTG from the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei), India, Indonesia, South Korea, Thailand, Turkey, Ukraine 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.
Period of investigation
The Period of Investigation (POI) and the Profitability Analysis Period (PAP) for the normal value review were from June 1, 2020 to May 31, 2021.
Normal value review process
At the initiation of the normal value review, the CBSA sent Requests for Information (RFIs) to Nexteel and an importer in order to solicit information for purposes of re‑determining normal values and export prices applicable to the goods subject to a request for re‑determination filed by the importer.
Nexteel submitted a response on July 21, 2021 that was substantially completeFootnote 1. The company also responded adequately to all supplemental requests for information (SFRIs)Footnote 2.
As part of the normal value review, comments on the submissions filed by Nexteel prior to the close of the record were submitted by counsel on behalf of EVRAZ Inc. NA Canada and Welded Tube of Canada Corporation (the Canadian producers)Footnote 3. Responses to the comments were submitted by counsel on behalf of NexteelFootnote 4.
Case argumentsFootnote 5 and reply submissions were submitted by counsel on behalf of the Canadian producersFootnote 6. Case argumentsFootnote 7 and reply submissionsFootnote 8 were also submitted by counsel on behalf of Nexteel.
The issues raised in the comments, case briefs and reply submissions mainly concerned the deficiencies and completeness of Nexteel’s responses, normal values for future shipments, and the application of paragraph 19(a) of SIMA.
Respecting normal values for future shipments, counsel for the Canadian producers argued that normal values should only be issued to models produced and/or sold in the last 60 days of the POI. In practice, the CBSA endeavors to issue normal values for future shipments based on models produced and/or sold in the last 60‑day period of the POI in order to reflect the latest market conditions. However, should there be insufficient information regarding a model in the last 60 days, the CBSA may issue normal values for future shipments based on a prior 60‑day period if deemed reasonable. With respect to Nexteel, some of the models requested for re‑determination were only produced and/or sold in prior 60‑day periods and the normal values for those models were issued based on information from those 60‑day periods.
In relation to the application of paragraph 19(a) of SIMA, counsel for the Canadian producers argued that the CBSA should have requested Nexteel’s sales data to third countries to determine normal values pursuant to paragraph 19(a) of SIMA during this normal value review, and submitted that the CBSA should do so in future normal value reviews or re‑investigations. CBSA’s position is that the use of paragraph 19(a) or 19(b) is at the discretion of the President, and there is no legislative hierarchy in selecting between the two methodologies. In the present case, as Nexteel only had sales of OCTG to one country other than Canada during the POI and the sales to the other country were substantially larger in volume than Nexteel’s export sales to Canada, the CBSA determined that these sales do not provide for a proper comparability of the market conditions between the goods sold to the importer in Canada and the like goods sold by Nexteel to importers in the other country.
The representations submitted by all parties were given due consideration by the CBSA prior to the conclusion of this review.
Normal values for future shipments
Specific normal values for future shipments of OCTG have been determined for Nexteel. These normal values are effective today, February 18, 2022.
Nexteel’s RFI response included a database of domestic sales of like goods. Consequently, some normal values were determined in accordance with section 15 of SIMA based on domestic selling prices of like goods, where Nexteel had a sufficient number of domestic sales of like goods that met the conditions of sections 15 and 16 of SIMA.
For the majority of the models, normal values for Nexteel were determined pursuant to 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 subparagraph 11(1)(b)(ii) of the Special Import Measures Regulations, based on Nexteel’s profitable domestic sales of goods that were of the same general category as the subject goods exported to Canada.
For the subject goods exported by Nexteel to Canada, export prices are determined in accordance with section 24 of SIMA.
The normal values 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 normal value review, regardless of the date that the requests were received. The normal values determined as a result of this review may be applied retroactively where the conditions described below are met.
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.
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 exporters to obtain the applicable normal values. 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.
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.
Any questions concerning the above should be directed to:
- Jason Huang: 343‑553‑1891
Appendix 1—product definition
Subject goods definition
Classification of imports
Prior to 2022, the subject goods were usually classified under the following tariff classification numbers:
Beginning January 1, 2022, under the revised customs tariff schedule, subject goods are normally classified under the following tariff classification numbers:
This listing of tariff classification numbers is for convenience of reference only. Refer to the product definition for authoritative details regarding the subject goods.
- Date modified: