Anti-dumping and countervailing: understanding the CBSA complaint process
Last month, the Special import Measures Act (SIMA) handbook was updated and in light of this we are sharing a refresher on what SIMA is, along with a deep dive into the process of filing a complaint.
Your SIMA refresher
The Special Import Measures Act (SIMA), helps protect Canadian industry from harms caused by the dumping and subsidizing of imported goods.
We’ve explained the basics of SIMA in past posts – dumping, subsidizing, injury - as well as shared news of active investigations and normal value reviews. But what are "measures in force" and what happens when a complaint is filed?
Measures in force
Measures in force refers to the list of goods subject to anti-dumping duty (ADD) or countervailing duty (CVD). The list is updated as necessary to reflect the current status of duty liability.
Here is a list of the most recent goods covered by measures in force: https://www.cbsa-asfc.gc.ca/sima-lmsi/mif-mev/menu-eng.html.
How does the complaint process work?
Whenever there is suspicion that imported goods are being dumped or subsidized, causing injury to Canadian industry, a Canadian business producing goods that are identical can file a written complaint with the CBSA. Similarly, associations of Canadian producers, individual firms or trade unions with members engaged in the production of similar goods may also file complaints on behalf of their members.
A written complaint requires information on the goods produced in Canada, the competing imports, and the domestic industry and conditions in the Canadian market. Evidence related to dumping or subsidizing of imported goods must be provided along with an indication of the injury or harm it is doing to Canadian industry. If it is an association or trade union submitting the complaint, the Canadian producers being represented must be clearly indicated in writing. (For more information on the preparation of a complaint, please consult the Guidelines for Preparing a Dumping or Subsidizing Complaint.)
Once the complaint is filed, the CBSA will evaluate it. In some cases, the CBSA may launch a formal investigation to determine whether the imported goods were dumped or subsidized.
When the CBSA launches their investigation, at the same time the Canadian International Trade Tribunal (CITT) will commence their own preliminary investigation to establish if / when the dumping or subsidizing of imported goods is harming Canadian industry. If the CITT makes a preliminary decision that injury is being caused, the CBSA has the authority to impose anti-dumping or countervailing duty on those imports. These are meant to limit any price advantage caused by dumping or subsidizing, thereby giving Canadian industry the chance to compete fairly with the imported goods.
What if there is an investigation?
In the event of an investigation, producers representing at least 25% of Canadian production must support the complaint. There also must be more support than opposition to the complaint within the Canadian industry.
If an investigation begins, the CBSA will send questionnaires to exporters, importers and, in subsidy investigations, to the foreign government involved. These are designed to collect detailed information on any alleged dumping or subsidizing of imported goods. The CBSA will then meet, as needed, directly with the necessary parties to verify all information provided.
Generally, the process takes about seven months from when the CBSA starts an investigation until the CITT makes a final decision. At the same time the CBSA is conducting their investigation, the CITT is also determining their inquiry.
Both the CBSA investigation and the CITT inquiry include preliminary and final decisions. For any investigation to continue, the CITT must make a preliminary decision that injury occurred, and the CBSA must make a preliminary decision of whether dumping or subsidizing occurred.
What about undertakings?
In some cases, an undertaking is used as an alternative to a full investigation. An undertaking involves exporters or foreign governments committing to changing their pricing or subsidizing practices so as to eliminate any harm done to Canadian industry.
Generally, undertakings with the CBSA lead to suspension of the CBSA investigation and the CITT inquiry. In some ways, undertakings offer a faster, less costly solution than the investigation process.
The CBSA does not collect duties when an undertaking is in effect.
When are duties applied?
It only takes a preliminary decision of injury by the CITT and a preliminary decision of dumping or subsidizing by the CBSA for provisional duty to be imposed on imports of dumped or subsidized goods. These decisions are normally made within three months of the start of the investigation. Any preliminary duties applied are intended to protect Canadian producers until the CITT makes its final decision.
If the investigation determines there is dumping and injury, preliminary duties will remain. While the preliminary amount assessed may be reduced if the final determination of the SIMA rates are lower than the preliminary rate, these duties may be refunded only if the CBSA and the CITT determine that no dumping or injury took place.
At the final stage of its inquiry, the CITT holds public hearings following its finding. If the CITT issues a final decision that injury is present, the CBSA will impose anti-dumping or countervailing duty on all dumped or subsidized imports. This is imposed for a period of at least five years. Every five years, cases are reviewed to determine whether the measures should continue or expire.
Detailed information on how to properly declare and pay duties imposed under SIMA is provided in the Guide for Self-Assessing SIMA Duties.
How can my customs broker help?
While there is not necessarily a lot your customs broker can do to help during the investigation stage, at Cole International, we don't just help you move your goods; we seek to inform, educate and empower.
Beyond providing informational support, here are two other ways our customs brokers can help:
- Preparation of a robust report for you as the importer listing your imports of subject goods. This helps with the importer's questionnaire during the period of investigation;
- Providing information on our blogs and website, alerting you to when new investigations are initiated.
Finally, we also recommend you request a copy of the newly revised SIMA Handbook to review changes within. Note: all changes in this handbook are effective immediately. Contact the SIMA Registry to request a copy in either official language.
In a world of ever-changing regulations and requirements, you need an experienced partner by your side. Access over a half-century of customs consulting experience. Connect with us today.
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