UDS 2022 UP8: Upholstered domestic furniture
Conclusion of normal value review
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 Dongguan Tianhang Furniture Co., Ltd. (Dongguan Tianhang).
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 were from to .
Normal value review process
At the initiation of this review, on , the CBSA sent Requests for Information (RFIs) to Dongguan Tianhang 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.
Dongguan Tianhang was also asked to forward sections of the RFI to any related suppliers of significant inputs, its associated trading company and vendors involved in the sales transactions.
The responses to the CBSA’s RFIs and Supplemental RFIs (SRFIs) were received accordingly from Dongguan Tianhang and its related trading company.
As part of the review, counsel on behalf of Palliser Furniture Ltd. (Palliser), a Canadian producer, submitted case arguments after the close of record. No reply submissions were received by any party.
Palliser made several arguments in regards to Dongguan Tianhang’s submissions,Footnote 1 which are summarized as follows:
Dongguan Tianhang’s submission should be considered unreliable since it provided incorrect and misrepresented information throughout the normal value review and only changed its responses when “caught or challenged” by the CBSA.
Previous importations of Dongguan Tianhang’s shipments should be retroactively reassessed as it did not inform the CBSA of changes in costs and did not price up accordingly.
Dongguan Tianhang cannot properly determine the subjectivity of certain goods, so these goods should be considered subject. As such, the CBSA should issue normal values for complete sectionals.
The CBSA reviewed the information, including selling prices and costs, provided by Dongguan Tianhang. In general, inaccuracies or errors discovered by the CBSA were corrected and/or explained by Dongguan Tianhang as requested.
The CBSA conducted an analysis of subject imports from Dongguan Tianhang during the POI, to determine whether a retroactive assessment was warranted. The analysis was focused on determining if export selling prices rose adequately in response to the rising costs of UDS. The CBSA compared costs and export prices from the beginning to the end of the period of investigation and found that they increased by the same amount. The CBSA also compared costs and export prices from the original investigation to the end of the period of investigation and found that they increased by the same amount. As a result, retroactive assessments do not appear to be warranted at this time.
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
Dongguan Tianhang is a producer and exporter of subject goods, located in Dongguan, China. Dongguan Tianhang is associated with a trading company involved in the sales of subject goods, located in Hong Kong. The CBSA found Dongguan Tianhang to be the exporter of the subject goods as it acted as the principal in the transaction, and is located in the country of export, China.
During the course of the review, Dongguan Tianhang and its associated trading company provided responses to the CBSA’s Dumping RFI and five SRFIs.
Dongguan Tianhang did not have domestic sales of UDS during the profitability analysis period, and as a result, normal values could not be determined in accordance with section 15 of SIMA.
Dongguan Tianhang 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 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.
For the subject goods exported by Dongguan Tianhang to Canada, export prices are determined in accordance with section 24 of SIMA.
These specific normal values and export prices for future shipments are effective today, . 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.
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 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.
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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.
- 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)
- 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
- 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
- seating manufactured for outdoor use (e.g. patio or swing chairs)
- bean bag seating and
- foldable or stackable seating
For greater certainty, the product definition includes:
- Upholstered motion seating with reclining, swivel, rocking, zero‑gravity, gliding, adjustable headrest, massage functions or similar functions
- seating with frames constructed from metal, wood or both
- seating produced as sectional items or parts of sectional items
- seating with or without arms, whether part of sectional items or not and
- foot rests and foot stools (with or without storage)”
On , the Canadian International Trade Tribunal excluded the following products from its finding:
- 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
- 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
- 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:
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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