Notice of conclusion of expedited review: Upholstered domestic seating
The Canada Border Services Agency (CBSA) has concluded an expedited review of certain upholstered domestic seating (UDS) exported to Canada by the exporters, Dongguan Advantech Polyurethane Foam Products Co., Ltd. (Dongguan Advantech) and Jiashan Foamtech Furniture Ltd. (Jiashan Foamtech) and their related trading company, Fine Home Limited (Fine Home), and by the exporter, Gold Lion Furniture (Shanghai) Co. Ltd. (Gold Lion), in accordance with the Special Import Measures Act (SIMA).
The expedited review initiated on November 29, 2021 and is part of the CBSA’s enforcement of the Canadian International Trade Tribunal’s (CITT) finding of injury issued on September 2, 2021, 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 October 1, 2020 to October 31, 2021.
Expedited review process
At the initiation of the expedited review, the CBSA sent dumping and subsidy requests for information (RFIs) to the exporters Dongguan Advantech and Jiashan Foamtech, and their related trading company, Fine Home, and to the exporter, Gold Lion as well as importers, to solicit information on the costs and selling prices of subject and like goods. 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 Dongguan Advantech, Jiashan Foamtech, Fine Home and Gold Lion.
Exporters were also asked to forward sections of the RFI to any related suppliers of significant inputs. Responses were received from King Furniture Australia Pty Ltd.
As part of the review, counsel on behalf of Palliser Furniture Ltd. (Palliser), a Canadian producer, Gold Lion, Dongguan Advantech, Jiashan Foamtech and Fine Home submitted comments during the course of the investigation.
Counsel on behalf of Dongguan Advantech, Jiashan Foamtech and Fine Home (“the Fine Home Parties”) submitted case arguments after the close of record.
No reply submissions were received by any party.
Representations
Counsel for Palliser made comments throughout the investigation in regards to the Fine Home Parties’ submissions, which are summarized as follows:
The Fine Home Parties’ costs of production cannot be relied upon as there are discrepancies and errors in the costs of production. Further the costs of production are misreported and their selling, general, and administrative expenses are underreported.
The Fine Home Parties must properly provide confirmation of the subjectivity of certain goods. If not, these goods should be considered subject. In particular, all components of sectionals should be considered subject.
Counsel for Gold Lion made comments throughout the investigation and proposed different methodologies to determine normal values for new models of UDS imported into Canada.
Counsel of the Fine Home Parties submitted comments throughout the investigation and as case arguments after the close of record, which are summarized as follows:
The information including cost of production data submitted by the Fine Home Parties were complete, corrected and verified.
While issuance of normal values based on key UDS characteristics is appropriate, the CBSA should calculate a weighted average margin of dumping for cooperative exporters in the expedited review for the purpose of determining normal values for new models of subject goods imported into Canada.
The CBSA should determine the subjectivity of sectional components based on the physical and technical characteristics of the goods at the time of importation into Canada.
The CBSA should determine normal values under either section 19(a) and/or 19(b) for goods produced and sold by the Fine Home Parties to Canada and other countries based on the domestic sales information, reasonable amounts for administrative, selling and all other costs, net interest expenses and amounts for profits of the Fine Home Parties.
The CBSA cannot use the sales between related parties in the determination of export prices and should rely on the vendor’s selling price to the importer as the basis of export price.
The subsidy programs received by the Fine Home Parties are non-actionable because they are not specific under subsection 2(1) of the SIMA.
The information submitted in these case arguments was given due consideration by the CBSA.
CBSA response
The CBSA reviewed all costs provided by the Fine Home Parties. In general, these costs were accurate and discrepancies were corrected and/or explained.
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 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.
In regards to calculating a weighted average margin of dumping for cooperative exporters in an expedited review for the purpose of determining normal values for new models of subject goods, the CBSA will continue to review the current policy and update the ministerial specification, if warranted.
Source: Canadian Society of Customs Brokers
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