Conclusion of normal value review: Upholstered domestic furniture
The Canada Border Services Agency (CBSA) has concluded a normal value review (review) to update all normal values and export prices applicable to certain upholstered domestic seating (UDS) from China by Gu Jia Intelligent Household Jiaxing Co., Ltd. (Gu Jia Jiaxing).
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 September 2, 2021, 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 April 1, 2021 to March 31, 2022.
Normal value review process
At the initiation of this review, on April 5, 2022, the CBSA sent requests for information (RFIs) to Gu Jia Jiaxing and the importer in order to solicit information for purposes of re-determining normal values and export prices applicable to the goods subject to the request for re-determination filed by the importer.
Responses to the CBSA’s RFIs and supplemental RFIs were received from Gu Jia Jiaxing.
As part of the review, counsel on behalf of Palliser Furniture Ltd. (Palliser), a Canadian producer, submitted comments on the submissions filed by Gu Jia Jiaxing. The issues raised in the comments submitted on behalf of Palliser concerned issues with costing, the retroactive application of normal values, and sectional subjectivity of goods exported by Gu Jia Jiaxing.
Counsel on behalf of Gu Jia Jiaxing submitted reply comments in response to the comments filed by counsel on behalf of Palliser.
Palliser argued that the CBSA should review all of Gu Jia Jiaxing’s costs and decline to provide the exporter with normal values for which costs are unreliable. Palliser argued that should the CBSA decide to use Gu Jia Jiaxing’s costs in the determination of normal values, the CBSA should use Gu Jia Jiaxing’s highest costs for each product.
Palliser argued that the CBSA should determine normal values on the basis of full sectionals, and not for sectional components. Palliser argued that Gu Jia Jiaxing failed to provide sufficient information for CBSA to assess whether goods are subject.
Palliser argued that the CBSA should apply normal values retroactively.
Gu Jia Jiaxing provided arguments in reply to the arguments submitted by Palliser.
The CBSA reviewed all costs provided by Gu Jia Jiaxing 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.
The CBSA conducted an analysis of subject imports from Gu Jia Jiaxing during the POI, to determine whether a retroactive assessment was warranted. The analysis relied on information provided in the RFI and SRFI responses received. The analysis was focused on determining if export selling prices rose adequately in response to the rising costs of UDS. The CBSA looked at the period from September 3, 2021 to March 31, 2022, which was the period from the CITT’s finding to the end of the POI.
The CBSA compared costs and export prices from the beginning to the end of this period and found that they increased by roughly the same amount, with a few minor exceptions. As a result, retroactive assessments do not appear to be warranted at this time.
Normal values for future shipments
Gu Jia Jiaxing is a producer and exporter of subject goods, located in Zhejiang, China. Gu Jia Jiaxing is associated with a trading company involved in the sales of subject goods, located in Hong Kong.
During the course of the review, Gu Jia Jiaxing provided responses to the CBSA’s Dumping RFI as well as four Supplemental RFIs (SRFIs).
Gu Jia Jiaxing 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.
Gu Jia Jiaxing 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. These specific normal values for future shipments are effective today, December 5, 2022.
For the subject goods exported by Gu Jia Jiaxing 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.
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.
SIMA Registry and Disclosure Unit
Trade and Anti-dumping Programs Directorate
Canada Border Services Agency
11-100 Metcalfe St
Ottawa ON K1A 0L8
- Telephone: Stephen Chung: 416-200-9640
- Email: email@example.com
Source: Canada Border Services Agency (CBSA)
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