UDS 2022 XR2 : Upholstered domestic seating
Notice of conclusion of expedited review
The Canada Border Services Agency (CBSA) has today concluded an expedited review of certain upholstered domestic seating (UDS) exported to Canada by the exporter Kaiser 2 Furniture Industry (Vietnam) Co. Ltd. (Kaiser 2), in accordance with the Special Import Measures Act (SIMA).
The expedited review was initiated on and is part of the CBSA’s enforcement of the Canadian International Trade Tribunal’s (CITT) finding of injury issued on , respecting the dumping and subsidizing of UDS from China and Vietnam.
The product definition and the applicable tariff classification numbers of the goods subject to the CITT finding are contained in Appendix 1 (subject goods).
Period of investigation
The period of investigation (POI) and the profitability analysis period (PAP) for the expedited review were from to .
Expedited review process
At the initiation of the expedited review, the CBSA sent Dumping and Subsidy requests for information (RFIs) to the exporter Kaiser 2, and Importer RFIs to importers, to solicit information on the costs and selling prices of subject and like goods. During the course of the expedited review, it was determined that there may be an additional exporter involved, and the CBSA sent a Dumping RFI to TradeMango Solutions Inc. dba Article (Article). The information was requested for the purposes of determining the normal values, export prices and amounts of subsidy for subject goods imported into Canada.
Responses to the dumping and subsidy RFIs were received from Kaiser 2 and Article. However, Article’s response to the Dumping RFI was determined to be incomplete and deficient.
Counsel on behalf of Kaiser 2 and Article submitted case arguments after the close of record.
No reply submissions were received by any party.
Counsel for Article submitted case arguments after the close of recordFootnote 1, proposing that Article is importer for SIMA purposes, and as such, could not also be the exporter for SIMA purposes.
Counsel for Kaiser 2 submitted case arguments after the close of recordFootnote 2, which are summarized as follows:
With regards to dumping, the appropriate methodology is a cost plus methodology pursuant to paragraph 19(b) of SIMA, and the cost of production information submitted by Kaiser 2 is verified and reliable. The month of production should be based on particular time periods as the costs are largely more stable throughout this period, or an average cost throughout the year.
With regards to subsidy, Kaiser 2 is not state-owned or controlled, and did not receive any subsidies from the Government of Vietnam (GOV).
The information submitted in these case arguments was given due consideration by the CBSA.
The CBSA examined the involvement of each separately incorporated entity to determine the identity of the exporter, including any relationships between entities.
The CBSA did not have complete information regarding the portion of subject goods originating in Vietnam and shipped through the United States to Canada. As such, normal values will be determined by advancing the export price of the goods by 171.2%, pursuant to the ministerial specification.
With regards to the portion of subject goods originating in and exported from Vietnam and shipped directly to Canada, the CBSA reviewed all costs provided by Kaiser 2. In general, these costs were accurate, and any discrepancies were corrected and/or explained. The CBSA determined normal values, export prices and amounts of subsidy based on relevant requirements of SIMA and the Special Import Measures Regulations (SIMR) as well as the relevant policies in the Handbook.
Normal values, export prices and amounts of subsidy for future shipments
Kaiser 2 Furniture Industry (Vietnam) Co., Ltd.
Kaiser 2 is a producer and exporter of subject goods, located in Ben Cat Town, Binh Duong Province, Vietnam. For the portion of subject goods originating in and exported from Vietnam and shipped directly to Canada, the CBSA found Kaiser 2 to be the exporter, as it acted as the principal in the transaction, and is located in the country of export, Vietnam.
During the course of the expedited review, Kaiser 2 provided responses to the CBSA’s dumping and subsidy RFIs, as well as supplemental RFIs (SRFIs). An on-site verification of Kaiser 2 was conducted in .
Kaiser 2 did not have any domestic sales of like goods during the PAP, and as a result, normal values could not be determined in accordance with section 15 of SIMA.
Kaiser 2 provided sufficient costs 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 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 the cost of production of the goods, a reasonable amount for administrative, selling and all other costs, and a reasonable amount for profits determined by ministerial specification.
Kaiser 2 provided a response to the subsidy RFI. Kaiser 2 was found to have received countervailable benefits from the following 3 subsidy programs:
- Program 1: Exemptions of Import Tax and Duty
- Program 7: VAT Preferences, Exemptions, and Reductions
- New Program: Land Use Tax Preferences, Exemptions and Reductions
The amount of subsidy found for Kaiser 2 was 9,342.24 VND per piece.
These specific normal values, export prices and amounts of subsidies for future shipments are effective today, . The normal values, export prices and amounts of subsidies 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. 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.
- Gladys Chau: 343-553-1638
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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