SC 2022 UP1: Seamless casing
Conclusion of normal value review
The Canada Border Services Agency (CBSA) has today concluded a normal value review to update the normal values, export prices and amounts of subsidy applicable to certain seamless casing exported to Canada from China by JingJiang Special Steel Co., Ltd. (JJSS).
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 November 28, 2018, respecting the dumping of certain seamless casing from China, 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) for the normal value review was from January 1, 2021 to December 31, 2021.
Normal value review process
At the initiation of the normal value review, the CBSA sent Requests for Information (RFIs) to JJSS and an importer in order to solicit information for purposes of re-determining normal values, export prices and amounts of subsidy applicable to the goods subject to a request for re determination filed by the importer.
JingJiang Special Steel Co., Ltd. (JJSS) submitted a response to the dumping and subsidy RFIs on March 4, 2022Footnote 1. Related input suppliers Daye Special Steel Co., Ltd. (Daye)Footnote 2 and Jiangyin Xingcheng Special Steel Works Co., Ltd. (Xingcheng)Footnote 3 also provided responses to the subsidy RFI on the same date. Upon review, the responses to the subsidy RFI provided by JJSS, Daye and Xingcheng were determined to be deficient. As a result, deficiency letters were issued to the aforementioned parties on March 29, 2022Footnote 4. Responses to the deficiency letters were received from JJSS, Daye and Xingcheng on April 15, 2022Footnote 5. Responses to the deficiency letters were determined to be substantially complete. JJSS also responded to one dumping and one subsidy supplemental RFI (SRFI)Footnote 6, while Daye and Xingcheng each responded to one subsidy SRFI.
Case briefsFootnote 7 were submitted by counsel on behalf of Evraz Inc. NA Canada and Welded Tube and Algoma Tubes Inc. (Evraz), Prudential Steel ULC, Tenaris Global Services (Canada) Inc. and Hyrdil Canadian Company LP (Tenaris), and the United Steelworkers.
The case briefs concerned a proposed amendment to the oil country tubular goods (OCTG) ministerial specification by Tenaris Canada, which was supported in briefs filed on behalf of Evraz and the United Steelworkers.
Tenaris submitted that the CBSA must address the high volumes of imports of OCTG from China. Tenaris stated that Chinese OCTG have been entering Canada at dumped prices, which have had an undercutting effect, thereby preventing them from selling into the Canadian market.
Tenaris further submitted that surrogate normal values determined for Chinese exporters in the OCTG 2022 RI are already considered to be out of date and that the CBSA should amend the seamless casing and OCTG1 finding ministerial specifications via the SC 2022 UP1 normal value review.
The CBSA appreciates the concerns of Tenaris and the supporting parties. However, the SC 2022 UP1 normal value review was conducted to update normal values, export prices and an amount for subsidy specific to one Chinese exporter of seamless casing. A normal value review for a single exporter is not the appropriate procedure to update normal values for all Chinese exporters subject to both the seamless casing and OCTG1 findingsFootnote 8. Furthermore, doing so would have been procedurally unfair to other parties that were neither notified of the normal value review, nor provided an opportunity to provide comments on the manner in which normal values are determined for the seamless casing and OCTG1 findings.
In order to ensure that the CBSA can take them in consideration, representations concerning the effectiveness of normal values, and methodologies employed in determining those normal values should be directed to the SIMA Registry and Disclosure Unit and be published on Normal values: Representations.
Normal values and amount of subsidy
Specific normal values and amounts of subsidy for future shipments of seamless casing have been determined for JJSS. The normal values and amounts of subsidy are effective today, October 11, 2022.
Normal values are generally based on the domestic selling price of like goods in the country of export in accordance with section 15 of SIMA or on the full cost of the goods including administrative, selling and all other costs and a reasonable amount for profits in accordance with paragraph 19(b) of SIMA.
Where section 20 conditions exist, the CBSA normally determines normal values using the selling price, or the total cost and profit, of like goods sold by producers in a surrogate country pursuant to paragraph 20(1)(c) of SIMA. Alternatively, normal values may be determined under paragraph 20(1)(d) of SIMA, on a deductive basis starting with an examination of the prices of imported goods sold in Canada, from a surrogate country. However, sufficient information was not available in this normal value review to determine normal values under these provisions. As a result, normal values were determined based on the selling prices, or the total cost and profit, of like goods sold by producers in surrogate countries, under ministerial specifications, pursuant to section 29 of SIMA.
The GOC did not respond to the CBSA’s Government Subsidy RFI, which limited the CBSA’s ability to determine the amount of subsidy in the prescribed manner as the required information relating to financial contribution, benefit and specificity was not provided. It also limited the CBSA’s ability to determine whether producers or other suppliers of goods and services are public bodies. Therefore, subsidy amounts for the exporter were determined pursuant to subsection 30.4(2) of SIMA, based on a ministerial specification.
In consideration of the fact that the exporter provided sufficient information in response to their Subsidy RFI, an amount of subsidy was determined based on the information provided in response to the Subsidy RFI and obtained through additional SRFIs. The amount of subsidy determined for JJSS for future shipments is 136.68 RMB per metric tonne (MT), which includes upstream subsidies received by the producer Daye and Xingcheng.
The normal values and amount of subsidy 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 and amount of subsidy 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.
- Benjamin Crossan: 343-553-1634
Appendix 1—Product definition
Subject goods definition
“Seamless carbon or alloy steel oil and gas well casing, whether plain end, beveled, threaded or threaded and coupled, heat-treated or non-heat-treated, meeting American Petroleum Institute (API) specification 5CT, with an outside diameter not exceeding 11.75 inches (298.5 mm), in all grades, including proprietary grades, originating in or exported from the People’s Republic of China.”
Additional product information
Seamless casing falls within a category of products commonly referred to as oil country tubular goods (OCTG), which includes drill pipe, casing and tubing. OCTG are used in the drilling of oil and gas wells and in the conveyance of these products to the surface. Casing is used to prevent the walls of the bored hole from collapsing, both during drilling and after the well has been completed.
Casing must be able to withstand outside pressure and internal yield pressures within the well. It must also have sufficient joint strength to hold its own weight and must be equipped with threads sufficiently tight to contain the well pressure where lengths are jointed. Various factors limit the total amount of open hole that can be drilled at any one time, and it may be necessary to set more than one string of casing concentrically for certain portions of well depth.
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