Normal values can change when the CBSA reviews updated pricing, cost, and market information, and revised values can affect the anti-dumping duty payable on future imports.
SIMA normal values play a central role in determining whether anti-dumping duty is payable on goods imported into Canada.
When goods are subject to an anti-dumping measure under the Special Import Measures Act (SIMA), the Canada Border Services Agency (CBSA) compares the normal value of the goods with their export price. If the normal value is higher, the difference generally represents the amount of anti-dumping duty payable.
But normal values do not necessarily remain unchanged for the life of a SIMA measure. They can be reviewed and updated as prices, production costs, and market conditions change.
In this article, we explain how SIMA normal values are determined, how they affect SIMA duties, and what happens when the CBSA updates them.
A normal value is generally determined based on the price at which like goods are sold in the exporter’s home market or, in certain circumstances, on the cost of producing the goods.
The method used depends on the circumstances and the information available to the CBSA.
If sufficient information is not provided or is unavailable, the CBSA may instead determine the normal value under a ministerial specification.
SIMA measures can remain in force for years, but the values used to calculate duties can change during that period.
Before importing subject goods, check whether they are covered by one of CBSA’s current measures in force under SIMA, and review the applicable product definition, country, and exporter information.
You should also obtain the current normal value from your exporter and make sure the information used to account for each shipment reflects the values that apply at the time.
Normal value does not represent the anti-dumping duty itself. Instead, it is compared with the export price of the goods.
Anti-dumping duty is generally equal to the amount by which the normal value exceeds the export price.
For example, if the normal value of a product is $120 per unit and its export price is $100, the amount of anti-dumping duty would generally be $20 per unit.
If the export price is equal to or greater than the applicable normal value, there is generally no anti-dumping duty payable on that basis.
Specific normal values are generally considered confidential and are not publicly available. Under the CBSA’s rules for disclosing normal values, importers should contact their exporters to obtain the values that apply to their goods.
The CBSA may also provide certain information to importers on a need-to-know basis, including to account for goods already released or determine potential SIMA liability for goods that have been purchased and are in transit.
Normal values are based on economic information that can change over time. Production costs may increase, domestic selling prices may move, or other market conditions may change.
Under its Administrative Review Policy, the CBSA reviews SIMA values annually and monitors market conditions to determine whether existing normal values, export prices, and amounts of subsidy need to be updated.
Where an update is necessary, the CBSA may conduct an administrative review and request updated information from exporters to establish revised values.
Exporters are also advised to adjust their selling prices to Canada when changes in market conditions, prices, costs, or terms of sale could reasonably be expected to affect their SIMA values.
New SIMA normal values generally apply to goods released from customs on or after the administrative review’s conclusion date or the date of the exporter’s decision letter, whichever comes first.
This means importers should not assume that a price that previously resulted in no anti-dumping duty will continue to do so after normal values are updated. Importers should obtain the current normal values from their exporter before accounting for subject goods.
Updated normal values and export prices may also be applied to outstanding requests for re-determination that have not been processed when a review concludes.
In addition, the CBSA may make retroactive anti-dumping duty assessments where needed, including where exporters have not adjusted their selling prices to Canada to reflect relevant changes in domestic prices, costs, market conditions, or terms of sale.
Cole International provides trade consulting and customs brokerage services to help Canadian businesses understand and manage their SIMA obligations.
Reach out to one of our trade professionals for help understanding how SIMA measures and changes to normal values may affect your imports.