anti-dumping and anti-subsidy remedies

frequently asked questions

What is the Special Import Measures Act ("SIMA")?
What organizations are responsible for the administration of SIMA?
What do the CBSA and the CITT do in relation to alleged dumped or subsidized goods?
What is dumping?
What is a normal value?
What is an export price?
How are margins of dumping determined?
What is a subsidy?
What constitutes "injury"?
What is retardation?
What is causation?
How is a dumping or subsidy case started?
How is confidential information protected?
What Canadian industry support is required?
How long does it take before the investigation proceeds?
What are the requirements for an investigation?
What happens when the CBSA begins an investigation?
What is the purpose of the CBSA investigation?
What is the purpose of the requests for information to exporters and importers?
How long do the importers, exporters and governments have to supply the requested information?
What happens if an exporter does not provide the information requested by the CBSA?
What role does the CITT play at the beginning of the CBSA investigation?
What is a preliminary determination of dumping or subsidy?
How long does the CBSA have to make its preliminary determination?
What happens if a preliminary determination is issued by the CBSA?
What is a provisional duty?
What is an undertaking?
What happens after the CBSA makes a preliminary determination?
What is a verification?
What happens at the final determination?
What action does the CITT take after a preliminary determination has been made?
What is the Staff Report?
What action does the CITT take after the CBSA's final determination phase?
What happens if the CITT concludes that injury has occurred?
What are public interest considerations?
What is an expiry review?
What is the purpose of an expiry review?
What is an interim review?
Can decisions be appealed?

What is the Special Import Measures Act ("SIMA")?

SIMA is the statute that is used to protect Canadian businesses from injury caused by imports of dumped or subsidized goods into Canada.

What organizations are responsible for the administration of SIMA ?

The Canadian International Trade Tribunal ("CITT") and the Canada Border Services Agency ("CBSA") are responsible for administration of SIMA .

What do the CBSA and the CITT do in relation to alleged dumped or subsidized goods?

The CBSA determines whether goods are dumped or subsidized. The CITT determines whether the dumped or subsidized goods have caused material injury or retardation, or are threatening to cause material injury to Canadian producers of like goods.

What is dumping?

Dumping occurs where the normal value of a good exceeds its export price.  The means of determining normal values and export prices is discussed below.

What is a normal value?

A normal value is what the CBSA determines to be the "fair" price in the exporter's home market.  This may be the average profitable selling price, or in the absence of such prices, the normal value may be the full cost of the goods, plus an amount for general selling and administrative expenses, plus a reasonable amount for profit.  In determining normal values, the CBSA will look at goods sold in the same quantities, and at the same level of trade (e.g. wholesalers).  The CBSA will make adjustments in price for differences in quality, quantity, warranties and other terms and conditions of sale.

What is an export price?

The export price is the selling price from the exporter to the importer in Canada measured at the factory gate (ex-factory).

Where the exporter and the importer are related, SIMA specifies that the export price of the goods is either (a) the ex-factory price to the importer, or (b) the price of the goods when resold by the importer to an independent buyer less (i) general selling and administrative expenses of the importer, (ii) an amount for profit by the importer and (iii) all other costs incurred in preparing the goods for export. The CBSA generally will use the "resale" methodology where it yields lower export prices in 20% or more of sales investigated.

How are margins of dumping determined?

The margin of dumping of a good is its normal value less the export price, expressed as a percentage of export price.  Negative margins of dumping may be used to offset a company's positive margins of dumping.

What is a subsidy?

A subsidy is a financial benefit given by a government in the country of export.  The subsidy may be given by a federal, provincial/state, or municipal government.  In order to be subject to countervailing duties, a subsidy must be found to be "specific".  This means that the subsidy must be limited to a company, a particular industry, or group of industries.

What constitutes "injury"?

"Injury" means material injury to domestic producers of like goods, material retardation of the establishment of a domestic industry or threat of material injury to domestic producers of like goods. The CITT examines whether there have been increases in dumped or subsidized imports, that significantly undercut, depress or suppress Canadian pricing.  Other important factors to be examined include the impact on output, sales, market share, profits, capacity utilization, inventories and employment.

What is retardation?

Retardation refers to impairment in the ability to establish production of goods in Canada due to the presence of dumped or subsidized goods.  It requires at least a firm intention to commencing production, such as a financial commitment or investment in plant.

What is causation?

Injury must be linked to the presence of dumped or subsidized imports and not caused by other factors.  SIMA requires the CITT to distinguish between the impact on the domestic industry of dumped or subsidized imports and other factors such as recession, efficiency, quality, cost control, marketing ability, etc. The impact of these other factors on the performance of the domestic industry must not be attributed to the effect of dumped or subsidized imports.

How is a dumping or subsidy case started?

A complaint is filed with the CBSA by, or on behalf of, the Canadian industry. An association of Canadian producers can also make a complaint.

The complaint must provide sufficient documentary evidence to support allegations of injury caused by the dumping or subsidization. The complaint must state the facts in reasonable detail.

How is confidential information protected?

Any information designated as confidential by the party submitting it will only be provided to designated officials at the CBSA and CITT and to counsel for parties who have provided written undertakings to protect the confidentiality of the information they receive.  A breach of confidentiality may lead to fines of up to $1 million, and imprisonment for up to five years.

What Canadian industry support is required?

The complaint must be supported by a producer or producers whose collective production of the goods in issue represents 25 percent or more of total Canadian production of the goods. Also, the total production of the Canadian producers who express support for the complaint must be greater than the total production of the producers who express opposition.

How long does it take before the investigation proceeds?

The CBSA advises the complainant whether or not the complaint is properly documented within 21 days of receipt.

Once the complaining industry is given notice that the complaint is properly documented, the CBSA has 30 days to evaluate the information to determine whether or not it should launch an investigation.

What are the requirements for an investigation?

To determine the need for an investigation, the CBSA will examine whether:

1. the complaint has been made by or on behalf of the domestic industry;
2. there is sufficient evidence that the imports were dumped or subsidized; and
3. there is a reasonable indication that the dumping or subsidizing has caused injury or is threatening to cause injury.

What happens when the CBSA begins an investigation?

When the CBSA initiates an investigation:

1. the complaint and other relevant information is provided to the CITT;
2. notice of the decision is published in an official Canadian Government publication called the Canada Gazette;
3. all known importers, exporters and the foreign government(s) concerned are given written notice that the investigation has begun.

In the case of a dumping investigation, a copy of the non-confidential version of the complaint is sent to the foreign government and, where practical, is provided to all known exporters or to their trade associations.

What is the purpose of the CBSA investigation?

The CBSA investigation is undertaken to obtain detailed information from exporters and importers, or the government(s) in a subsidy investigation, to determine if goods are indeed being sold to importers in Canada at dumped or subsidized prices.

What is the purpose of the requests for information to exporters and importers?

The exporter request for information (RFI) is to allow the exporter to fully explain and document its pricing practices on sales to Canada.  The importer RFI is relied upon to substantiate the information supplied by the exporter regarding sales to importers in Canada, including the export price.  If the importer is related to the exporter then the CBSA may examine the subsequent resale of the goods in Canada to independent Canadian purchasers in order to determine whether it yields a more reliable export prices.

In subsidy cases, an RFI is also sent to the foreign governments. This is done to get detailed information on each government program identified as potentially conferring a benefit to a producer or exporter of the goods to Canada. Producers and exporters are also requested to provide information on the receipt of benefits from the foreign government whose programs are under investigation.

How long do the importers, exporters and governments have to supply the requested information?

Exporters and foreign governments are allowed 37 days to respond, while importers are allowed 21 days. Extensions to the time limits for requests for information are not normally granted. However, where the CBSA is satisfied that exceptional circumstances exist, an extension of a few days may be granted.

What happens if an exporter does not provide the information requested by the CBSA?

If an exporter does not provide the requested information, the CBSA will usually apply the highest margin of dumping or subsidy found during the investigation for the goods in question.

What role does the CITT play at the beginning of the CBSA investigation?

The CITT conducts a preliminary injury inquiry to determine whether the evidence included in the complaint discloses a "reasonable indication" that the dumped or subsidized goods have caused material injury or retardation, or are threatening to cause material injury. The CITT must make its decision within 60 days after initiation of the investigation. If the CITT finds a reasonable indication of injury, the CBSA will continue its investigation.

What is a preliminary determination of dumping or subsidy?

If the CBSA finds that the margin of dumping, or the amount of subsidy is significant and the volume of dumped or subsidized goods is more than negligible, it will make a preliminary determination of dumping or subsidization.

If, however, the margin of dumping, or amount of subsidy, is insignificant, or the volume of dumped or subsidized goods is negligible, the CBSA will terminate the investigation.

How long does the CBSA have to make its preliminary determination?

A preliminary determination of dumping or subsidization must be made within 90 days after initiation of the investigation.  In exceptional circumstances, the CBSA may extend the deadline for an additional 45, but this is done only rarely.  In the case of agricultural goods the CBSA will make a preliminary decision as quickly as possible, which generally runs to within 65 days of initiation of the investigation.

What happens if a preliminary determination is issued by the CBSA?

The CBSA begins to collect provisional duties on the dumped or subsidized imports. All dumped or subsidized goods that are imported into Canada on or after the date of the preliminary determination are subject to a "provisional" duty paid by the importer at the time the goods enter Canada.

What is a provisional duty?

Provisional duty is a temporary anti-dumping or countervailing duty which takes effect as of the date of the preliminary determination of dumping and/or subsidization by the CBSA.  Duty collection continues until the date that the CITT issues a final decision as to whether or not there is injury caused or threatened by the dumped or subsidized goods.  The amount of the provisional duty is based upon the estimated margin of dumping or the estimated amount of subsidy determined for each cooperating exporter.  For all other exporters, the CBSA will impose an amount of duty based upon the highest margin of dumping and/or the highest margin of subsidy found in the investigation.

What is an undertaking?

An undertaking in a dumping investigation is an offer made voluntarily by an exporter to increase the selling price of goods so that the margin of dumping or the injury caused to the Canadian industry is eliminated. In a subsidy investigation, an undertaking is a voluntary offer by a foreign government or an exporter to eliminate the subsidy or its injurious effects. The effect of acceptance of an undertaking is to suspend the collection of provisional anti-dumping or countervailing duty and, except when otherwise requested by the exporter or foreign government, to suspend the dumping or subsidy investigation. The CBSA accepts undertakings only if given by exporters or foreign governments representing substantially all (at least 85 percent) of the volume of dumped or subsidized product sold into Canada.

What happens after the CBSA makes a preliminary determination?

Unless the investigation is suspended upon acceptance of an undertaking, the CBSA must make a final determination of dumping or subsidization within 90 days of its preliminary determination.  The CBSA will use this time to complete a more detailed analysis of the data used in determining margins of dumping and amounts of subsidy, and accept submissions from parties.

What is a verification?

The CBSA will often request additional information of exporters or importers, essentially auditing the response to the CBSA RFI.  This audit may be conducted with a verification visit on site, or it may be conducted as a desk audit.  Verification visits are usually conducted prior to or shortly after the preliminary determination of dumping or subsidy.

What happens at the final determination?

If the CBSA determines that there is no dumping or subsidy, or that the margin of dumping or the amount of subsidy is insignificant, the investigation is terminated. If, however, the available information establishes that the goods were dumped or subsidized and the margin of dumping or the amount of subsidy is not insignificant, a final determination is made.

When a final determination of dumping or subsidization is made, the precise margin of dumping or amount of subsidy is specified for each exporter and all parties involved are notified of the decision in writing. The CITT will proceed to complete its inquiry into whether injury was caused or is threatened by the dumped or subsidized goods.

What action does the CITT take after a preliminary determination has been made?

Within 120 days after receiving a notice of a preliminary determination by the CBSA, the CITT must conduct and complete its injury inquiry and issue a decision or "finding" as to whether the dumping or subsidizing of the goods has caused injury or retardation, or is threatening to cause injury to the Canadian industry.  This involves the collection of significant amounts of information through questionnaires, the production of the Staff Report distilling this information, the exchange of submissions by interested parties, as well as a formal hearing before the CITT.

During its full injury inquiry, the CITT will also accept submissions of parties for and against an injury finding.  The domestic industry will be expected to provide its case in writing.

The evidence presented may cover such factors as loss of sales to dumped or subsidized imports, price erosion or suppression, and declines in market share, profitability and employment.  Parties opposed to the domestic industry have a right to reply in writing.  In addition, parties may make requests to have products excluded from any finding that the CITT may make.  Product exclusion requests are made on the basis that the products are not available from production in Canada.

What is the Staff Report?

The Staff Report is a detailed summary of the information provided to the CITT in questionnaire responses. The Staff Report becomes part of the case record, and is made available to counsel, with a public version prepared for participants in the inquiry.

What action does the CITT take after the CBSA's final determination phase?

At about the time the CBSA issues its final determination, the CITT usually begins a public hearing at which it considers the domestic industry evidence that the dumping or subsidizing of goods has caused injury, or retardation or is threatening to cause injury.

Importers, exporters and sometimes users of the goods, are provided an opportunity to challenge the domestic industry's case. Each side has an opportunity to cross-examine witnesses opposed to it, and to make argument.

The CITT must make its decision within 30 days of the final determination.  The reasons for the finding must be released within 15 days of its decision.

What happens if the CITT concludes that injury has occurred?

A finding of injury results in the imposition of protection against dumping or countervailable subsidies for a period of up to five years.  If the CITT makes a finding of threat of injury only, the same protection is imposed for a period of up to five years; however, any provisional duty paid on importations prior to the CITT's finding would be returned to the importer together with interest.

What are public interest considerations?

The CITT may be asked by parties opposed to the domestic industry to recommend that anti-dumping or countervailing duties be reduced or eliminated, if this is considered to be in the public interest. The CITT will investigate the public interest issue only if it makes an injury finding and if there appears to be a public interest issue worthy of investigation. Should the CITT conclude duty reduction or elimination is warranted in the public interest, the Minister of Finance would then consider the recommendations of the CITT and decide whether the anti-dumping or countervailing duties should be reduced or eliminated.

What is an expiry review?

A finding imposing anti-dumping or countervailing duties is periodically reviewed to determine whether these measures continue to be required.  A finding lapses automatically five years after its date of issuance, unless the CITT initiates a review of the finding (an "expiry review"). The Tribunal notifies interested parties about 10 months before the expiry date of a finding. In the notice, interested parties are asked to make submissions as to why a review should be held or why the finding should expire. The CITT will initiate an expiry review if it determines that there may be grounds for the finding to remain in place.

What is the purpose of an expiry review?

The purpose of an expiry review is to determine whether anti-dumping or countervailing duties are still necessary. The first step is an investigation by the CBSA to determine whether dumping or subsidization is likely to resume in the event that the finding is allowed to expire. If the CBSA decides there is such a likelihood, then the CITT will inquire into whether the resumed dumping or subsidization is likely to cause material injury or retardation to the domestic industry. If a review results in a decision to continue an injury finding, anti-dumping or countervailing duties may be extended for up to an additional five years.

What is an interim review?

The CITT may review its findings at any time where there is a reasonable indication that there has been a change in the circumstances that led to the finding (an "interim review"). Where the CITT receives a request for an interim review, it will forward the request to interested parties for comment. After weighing these submissions, the CITT will determine whether an interim review is warranted. Termination of Canadian production of the goods in question is the most common justification for an interim review.

Can decisions be appealed?

Any party may request judicial review of a decision of the CBSA or CITT by the Federal Court of Appeal. The grounds for review include denial of natural justice or errors of jurisdiction, law or fact.

In cases involving goods from the United States or Mexico, parties from these countries or from Canada may choose a binational panel under the provisions of the North American Free Trade Agreement, rather than going to the Federal Court of Appeal.

Governments that are members of the World Trade Organization ("WTO") may appeal findings in dumping and countervailing cases to the WTO, but this is not a right that may be exercised by private parties.

anti-dumping investigation process chart