The Canada Border Services Agency (CBSA) has today concluded a re-investigation of the normal values and export prices of certain carbon and alloy steel line pipe (line pipe) originating in or exported from South Korea, in accordance with the Special Import Measures Act (SIMA).
The re-investigation was initiated on July 6, 2022, as part of the CBSA’s ongoing enforcement of the Canadian International Trade Tribunal’s (CITT) order issued on January 4, 2018 in Inquiry No. NQ-2017-002.
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 re investigation was from July 1, 2021 to June 30, 2022.
Re-investigation process
At the initiation of the re-investigation, the CBSA sent a Request for Information (RFI) to all known importers, exporters, producers and vendors to solicit information on the costs and selling prices of subject goods and like goods. The information was requested for purposes of updating the normal values and export prices for subject goods imported into Canada. On-site verifications were conducted at the premises of four exporters located in South Korea.
As part of the re-investigation, case briefs and reply submissions were provided by counsel representing the complainants and responding exporters. Details of the representations are provided in Appendix 1. Details pertaining to the information submitted by the exporters in response to the RFIs as well as the results of the CBSA’s re-investigation are provided below.
Specific normal values, export prices and amounts of subsidy for future shipments of line pipe have been determined for exporters that submitted a complete response to the Dumping RFI, Supplemental RFIs, and for whom the verification was considered reliable.
Normal values and export prices
Normal value
Normal values are generally determined based on the domestic selling prices of like goods in the country of export, in accordance with section 15 of SIMA, or on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs, plus a reasonable amount for profits, in accordance with paragraph 19(b) of SIMA.
Where, in the opinion of the CBSA, sufficient information has not been furnished or is not available, normal values are-determined pursuant to a Ministerial specification in accordance with subsection 29(1) of SIMA.
Export prices
The export price of goods sold to importers in Canada is generally determined in accordance with section 24 of SIMA, based on the lesser of the adjusted exporter’s sale price for the goods or the adjusted importer’s purchase price. These prices are adjusted where necessary by deducting the costs, charges, expenses, duties and taxes resulting from the exportation of the goods as provided for in subparagraphs 24(a)(i) to 24(a)(iii) of SIMA.
Where, in the opinion of the CBSA, sufficient information has not been furnished or is not available, export prices are-determined pursuant to a Ministerial specification under subsection 29(1) of SIMA.
Where there are sales between associated persons or a compensatory arrangement exists, the export price may be determined based on the importer’s resale price of the imported goods in Canada to non associated purchasers, less deductions for all costs incurred in preparing, shipping and exporting the goods to Canada that are additional to those incurred on the sales of like goods for use in the country of export, all costs that are incurred in reselling the goods (including duties and taxes) or associated with the assembly of the goods in Canada and an amount representative of the average industry profit in Canada, pursuant to paragraphs 25(1)(c) and 25(1)(d) of SIMA. In any cases not provided for under paragraphs 25(1)(c) and 25(1)(d) of SIMA, the export price is determined in such a manner as the Minister specifies, pursuant to paragraph 25(1)(e).
SeAH Steel Co., Ltd. (SeAH)
SeAH is a producer and exporter of line pipe who exported subject goods to Canada during the POI. SeAH currently operates one manufacturing plant producing the subject goods located in Pohang, South Korea. The company headquarters is located in Seoul, South Korea.
SeAH provided substantially complete responses to the CBSA’s RFI and two supplemental RFIs. An on-site verification of SeAH was conducted in November 2022.
The exporter had domestic sales of like goods during the POI/PAP and as a result, normal values were determined pursuant to section 15 of SIMA where possible, based on the company’s weighted average domestic selling prices of line pipe in South Korea. Where sufficient domestic sales of like goods did not meet 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 plus a reasonable amount for profit. The amount for profit was determined pursuant to paragraph 11(1)(b) of the Special Imports Measures Regulations (SIMR).
As inputs significant in the production of the goods was acquired from one or more associated suppliers, the cost of the inputs were determined pursuant to subparagraph 11.2(1)(a) of SIMR.
Since all sales of subject goods exported to Canada by SeAH during the POI were sold to Canadian customers via related importer, SeAH Steel America (SSA), a reliability test was performed to determine whether the section 24 export prices were reliable as envisaged by SIMA. This test was conducted by comparing the section 24 export prices with the section 25 export prices. The test revealed that the export prices determined in accordance with section 24 were reliable, therefore, export prices were determined in accordance with section 24 of SIMA.
The related parties also responded to any RFIs, as well as Supplemental RFIs issued by the CBSA as part of the re-investigation.
Hyundai Steel Company
Hyundai Steel is a producer and exporter of line pipe who exported subject goods to Canada during the POI. It currently operates several manufacturing plants that produce a range of steel products in South Korea. The company headquarters is located in Seoul, South Korea.
Hyundai Steel provided substantially complete responses to the CBSA’s dumping RFI and two supplemental RFIs. An on-site verification of Hyundai Steel was conducted in November 2022.
The exporter had domestic sales of like goods during the POI/PAP and as a result, normal values were determined pursuant to section 15 of SIMA where possible, based on the company’s weighted average domestic selling prices of line pipe in South Korea. Where sufficient domestic sales of like goods did not meet 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 plus a reasonable amount for profit. The amount for profit was determined pursuant to paragraph 11(1)(b) of SIMR.
As inputs significant in the production of the goods was acquired from one or more associated suppliers, the cost of the inputs were determined pursuant to subparagraph 11.2(1)(a) of SIMR.
Nexteel Co., Ltd. (NEXTEEL)
NEXTEEL is a producer and exporter of line pipe who exported subject goods to Canada during the POI. NEXTEEL currently operates three manufacturing plants, two located in Pohang and one in Gyeongju, South Korea. The subject goods are produced at their Pohang locations.
NEXTEEL provided substantially complete responses to the CBSA’s RFI and two supplemental RFIs. An on-site verification of the company was conducted in November 2022.
The exporter had domestic sales of like goods during the POI/PAP, 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.
As such, normal values were determined using the methodology of paragraph 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 profit. The amount for profit was determined pursuant to paragraph 11(1)(b) of SIMR.
Husteel Co., Ltd. (Husteel)
Husteel is a manufacturer and exporter of line pipe who exported subject goods to Canada during the POI. All of the subject goods shipped to Canada during the POI were produced at the Dangjin and Daebul plants. The company headquarters is located in Seoul, South Korea.
During the course of the re-investigation, Husteel provided responses to the CBSA’s Dumping RFI as well as two Supplemental RFIs. Likewise, its related importer, Husteel Canada, provided responses to the CBSA’s Importer RFI and two Supplemental RFIs. An on-site verification of Husteel was conducted from October 31 to November 3, 2022.
The exporter had domestic sales of like goods during the POI/PAP and as a result, normal values were determined pursuant to section 15 of SIMA where possible, based on the company’s weighted average domestic selling prices of line pipe in South Korea. Where sufficient domestic sales of like goods did not meet 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 plus a reasonable amount for profits. The amount for profit was determined pursuant to paragraph 11(1)(b) of SIMR.
Since all sales of subject goods exported to Canada by Husteel during the POI were sold to Canadian customers via related importer, Husteel Canada, a reliability test was performed to determine whether the section 24 export prices were reliable as envisaged by SIMA. This test was conducted by comparing the section 24 export prices with the section 25 export prices. The test revealed that the export prices determined in accordance with section 24 were reliable, therefore, export prices were determined in accordance with section 24 of SIMA.
Importer responsibility
Importers are reminded that it is their responsibility to calculate and declare their anti-dumping and countervailing 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 anti-dumping and countervailing measures and be provided with sufficient information necessary to clear the shipments. To determine their liability for anti-dumping and countervailing duty, importers should contact the exporters to obtain the applicable normal values and amounts of subsidy. For further information on this matter, refer to Memorandum D14-1-2, Disclosure of normal values, export prices, and amounts of subsidy established under the Special Import Measures Act to importers.
The Customs Act applies, with any modifications that the circumstances require, with respect to the accounting and payment of anti-dumping and countervailing 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 with the Director General, Trade and Anti-dumping Programs Directorate, 11th Floor, 100 Metcalfe St., Ottawa, Ontario, K1A 0L8. Such a request must be received within 90 days from the making of the determination in the form and manner outlined in Memorandum D14-1-3, Procedures for making a request for a re-determination or an appeal of goods under the Special Import Measures Act.
Exporter responsibility
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.
Contact us
- Telephone:
- Sean Robertson: 343-553-1584
- Jordan Harris: 343-573-3003
- Email: [email protected]
https://www.cbsa-asfc.gc.ca/sima-lmsi/ri-re/lp22022/lp22022-nc-eng.html