The Canada Border Services Agency (CBSA) has today concluded an expedited review of certain carbon steel welded pipe (CSWP) exported to Canada from the United Arab Emirates by KD Industries Inc. (KDI), in accordance with the Special Import Measures Act (SIMA).
The expedited review was initiated on May 4, 2023 and is part of the CBSA’s enforcement of the Canadian International Trade Tribunal’s (CITT) finding of injury issued on December 11, 2012, respecting the dumping of certain CSWP from the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei), India, Oman, South Korea, Thailand, and the United Arab Emirates and the subsidizing of CSWP originating in or exported from India.
The product definition and the applicable tariff classification numbers of the goods subject to the CITT’s order can be found on the CBSA’s Measures in force.
Period of investigation
The period of investigation (POI) and the profitability analysis period (PAP) for the expedited review were from April 1, 2022 to March 31, 2023.
Expedited review process
At the initiation of the expedited review, the CBSA sent an exporter dumping request for information (RFI) to the exporter KDI, and an importer RFI to a potential importer, to solicit information on the costs and selling prices of subject and like goods.
A response to the exporter dumping RFI was received from KDI. KDI’s actively participated in the expedited review and its response was considered complete. On site verification was conducted for the responding exporter.
Counsel on behalf of KDI and counsel on behalf of the complainant, Nova Steel Inc. and Nova Tube Inc. (collectively Nova), each submitted case arguments after the close of record. Both counsels also submitted reply submissions.
Counsel for Nova submitted case argumentsFootnote 1, which are summarized as follows:
The CBSA must follow SIMA when selecting domestic sales and must consider relationship to customers, trade levels, profitable sales, and match product characteristics appropriately.
KDI did not adequately respond to certain questions, provided inconsistent responses, and unreliable costs of production.
Profits should be based on a different company, Emirates Steel Arkan, as KDI does not have a reasonable amount for profits.
KDI should not be given normal values because no importer responded to the CBSA’s importer request for information.
Counsel for KDI submitted case argumentsFootnote 2, which are summarized as follows:
KDI participated in the expedited and there is sufficient information on the record to determine normal values for KDI under paragraph 19(b) of SIMA.
The CBSA must calculate a margin of dumping for KDI and then terminate the measure as it relates to KDI based on a di minimis margin of dumping.
In the event that an amount for profit cannot be determined under 11(1)(b) of the Special Import Measures Regulations (SIMR) due to insufficient profitable sales, the CBSA should use the profit of different pipe companies provided by KDI.
KDI provided additional recommendations for what are the appropriate product characteristics to consider.
In its reply submissionFootnote 3, counsel for Nova stated that: the CBSA does not determine margins of dumping during an expedited review or outside an original investigation; KDI’s response should be considered deficient; and if it is not considered deficient, the financial statements of other producers submitted by KDI to determine an amount for profit should be rejected.
In its reply submissionFootnote 4, counsel for KDI stated that: KDI’s information is not deficient and is reliable; importer submissions are not required; and that the financial statements of other producers submitted by KDI should not be rejected.
The information submitted in these case arguments were given due consideration by the CBSA.
The CBSA found KDI’s submissions to be complete and reliable, and there was sufficient information on the record to determine normal values using the information submitted by KDI, notwithstanding the absence of a response from an importer. The CBSA followed SIMA when calculating normal values, including the amount for profits, including taking into account the relationship to customers, trade levels, and profitable sales as mentioned by Nova. The CBSA was also able to calculate an amount of profit for KDI pursuant to paragraph 11(1)(b) of the SIMR.
In determining normal values, the CBSA considered arguments from both Nova and KDI concerning product characteristics.
The CBSA does not determine a margin of dumping during an expedited review, under 13.2(1) of SIMA, the expedited review is a review of the normal value and export price of the subject goods.
Normal values and export prices for future shipments
KDI is a producer and exporter of subject goods, located in Dubai, United Arab Emirates. During the course of the expedited review, KDI provided responses to the CBSA’s dumping RFI, as well as supplemental RFIs (SRFIs). An on-site verification of KDI was conducted in August 2023.
KDI provided a database of domestic sales of CSWP during the PAP. Where KDI had sufficient domestic sales that met the requirements of section 15 and 16 of SIMA, normal values were determined pursuant to section 15 of SIMA, based on the company’s weighted average domestic selling prices of CSWP. Where there were insufficient domestic sales of like goods that met the requirements of section 15 and 16 of SIMA, normal values were determined pursuant to section 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, and a reasonable amount for profits. The amount for profits was determined pursuant to paragraph 11(1)(b)(ii) of the SIMR.
These specific normal values for future shipments are effective today, October 6, 2023. The normal values determined as a result of this expedited 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.
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. 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. Where 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 of anti dumping or countervailing duties may be 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.
- Ted Chester: 343-553-1888
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