UDS 2021 UP1: Upholstered domestic furniture
Conclusion of normal value review

Ottawa,

The Canada Border Services Agency (CBSA) has today concluded a normal value review (review) to update all normal values and export prices applicable to certain upholstered domestic seating (UDS) from China by Violino Furniture (Shenzhen) Ltd (Violino SZ).

The review follows a request for re-determination filed by an importer and is part of the CBSA’s enforcement of the Canadian International Trade Tribunal’s (CITT) order issued on , respecting the dumping and subsidizing of UDS from China 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 (subject goods).

Period of investigation

For this review, the Period of Investigation (POI) and the Profitability Analysis Period (PAP) were from to .

Normal value review process

At the initiation of this review, on , the CBSA sent Requests for Information (RFIs) to Violino SZ and the importer in order to solicit information for purposes of re-determining normal values and export prices applicable to the goods subject to requests for re-determination filed by the importer.

The responses to the CBSA’s RFIs and Supplemental RFIs were received accordingly from Violino SZ.

As part of the review, counsel on behalf of Palliser Furniture Ltd. (Palliser), a Canadian producer, submitted comments on the submissions filed by Violino SZ. The issues raised in the commentsFootnote 1 submitted on behalf of Palliser concerned issues with costing and sectional subjectivity of goods exported by Violino SZ.

Representations

The issues raised by Palliser mainly concerned the variations in the costs of production provided by Violino SZ. Palliser stated that the SG&A reported by Violino SZ was under reported.

Palliser argued that the CBSA should review all of Violino SZ’s costs and decline to provide them with normal values for which costs are unreliable.

Palliser further submitted comments concerning the determination of subject fabric sectional components and that the exporter should confirm that its stationary fabric sectional components can only be attached to non-subject sectional components within the same product line to be determined non-subject to the CITT’s finding.

CBSA response

The CBSA reviewed all costs provided by Violino SZ and adjustments were made when necessary.

The CBSA took the complainant’s comments about the sectional components into consideration and determined normal values for all goods subject to the CITT’s finding.

Normal values for future shipments

Violino SZ is a producer and exporter of subject goods, located in Shenzhen, China. Violino SZ is associated with a trading company involved in the sales of subject goods, located in Hong Kong.

During the course of the review, Violino SZ provided responses to the CBSA’s Dumping RFI as well as three Supplemental RFIs (SRFIs).

Violino SZ provided a database of domestic sales of UDS during the POI. However, normal values could not be determined in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with all the terms and conditions referred to in sections 15 and 16 of SIMA as to permit a proper comparison with the sales of the goods to the importer in Canada.

Violino SZ provided sufficient cost of production and administrative, selling and all other costs to determine normal values pursuant to paragraph 19(b) of SIMA. However, the CBSA was unable to determine an amount for profits under paragraph 11(1)(b) of the Special Import Measures Regulations (SIMR).

As such, normal values were determined pursuant to section 29 of SIMA using a method similar to that of paragraph 19(b), based on the aggregate of adjusted production cost of the goods, a reasonable amount for administrative, selling and all other costs, and a reasonable amount for profits determined by ministerial specification. As Violino SZ acquired inputs from an associated supplier, the cost of those inputs were adjusted pursuant to paragraph 11.2(1) of SIMR. These specific normal values for future shipments are effective today, .

For the subject goods exported by Violino SZ to Canada, export prices are determined in accordance with section 24 of SIMA.

The normal values and export prices 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 review, regardless of the date that the requests were received. The normal values and export prices determined as a result of this review may be applied retroactively where the conditions described below are met.

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. 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.

Importer responsibility

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 exporter(s) to obtain the applicable normal values. For further information on this matter, please 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.

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

Subject goods definition

“Upholstered seating for domestic purposes originating in or exported from the People’s Republic of China and the Socialist Republic of 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.

Excluding:

  1. 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)
  2. 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
  3. 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
  4. seating manufactured for outdoor use (e.g. patio or swing chairs)
  5. bean bag seating and
  6. foldable or stackable seating

For greater certainty, the product definition includes:

  1. Upholstered motion seating with reclining, swivel, rocking, zero-gravity, gliding, adjustable headrest, massage functions or similar functions
  2. seating with frames constructed from metal, wood or both
  3. seating produced as sectional items or parts of sectional items
  4. seating with or without arms, whether part of sectional items or not and
  5. foot rests and foot stools (with or without storage)”

On September 2, 2021, the Canadian International Trade Tribunal excluded the following products from its finding:

  1. Specialized reclining massage chairs, not intended to be used for general seating purposes, with padded seat, headrest, back, and footrest, and containing built‑in motorized mechanical components that operate by way of computerized controls to provide a full body massage for a single person, including to the head and/or neck, shoulders, back, buttocks, arms, and legs and/or feet
  2. Medical lift chairs containing electric motion mechanisms and motorized positioning controls, designed to carefully lift, lower and tilt (by raising or lowering the base and back of the seating) the occupant, and otherwise adjust the occupant’s seating position by adjusting one or more of the headrest, footrest, and seat; designed, manufactured, and tested to meet or exceed the requirements of Health Canada’s Medical Devices Regulations (SOR/98‑282) applicable thereto and conforming with the following, or equivalent, standards and testing methodologies: EN12182, ANSI/AAMI/ISO10993, ANSI/AAMI/ES60601‑1, CAL117, BSEN1021, ISO8191, ANSI/AAMI/ES60601‑1‑2, ISO14971
  3. Height‑adjustable ergonomic gaming chairs for use with a desk and intended to be used primarily while playing video games, upholstered in leather or a leather‑substitute, with armrests, headrests, lumbar support pillows, five‑star swivel bases, and wheels or castors

Tariff classification numbers

The importation of the subject goods are usually classified under the following tariff classification numbers:

  1. 9401.40.00.00
  2. 9401.61.10.10
  3. 9401.61.10.90
  4. 9401.71.10.10
  5. 9401.71.10.90

This listing of tariff classification numbers is for convenience of reference only. Refer to the product definition for authoritative details regarding the subject goods.

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