After the CBSA initiates a countervailing duty investigation,
the CBSA issues an exporter request for information (RFI) that must
be completed by the exporter of the goods and all factories
involved in the manufacture of the goods (if the exporter is not
the manufacturer). The CBSA sets a filing deadline that is
between 30-35 days after the initiation of the subsidy
Top ten mistakes in responding to CBSA questionnaires
Waiting too long before
hiring a Canadian subsidy specialist. A Canadian
subsidy specialist knows why the CBSA is asking certain
questions. Care must be taken in completing the RFI
response. The goal in completing the RFI response is to
receive a 0% subsidy rate or the lowest possible subsidy rate based
on the information provided. Too many exporters do not
understand why they are completing the RFI (other than to be able
to sell into the Canadian market).
Waiting too long to get
started. In most cases, the subsidy specialist is
hired with only a week left before the filing deadline. I have been
asked many times to request an extension of time. However,
the CBSA refuses to grant extensions of time.
The exporter fails to
dedicate company personnel and other resources to the investigation
and the completion of the RFI. The completion of the
RFI is a lot of work. It is necessary to dedicate a team,
which includes senior people knowledgeable about domestic sales,
knowledgeable about sales to Canada, knowledgeable about the
financial accounting system, knowledgeable about taxes, and
knowledgeable about production costs.
The non-confidential version
of the RFI response and supporting documentation is prepared at the
very end (instead of identifying confidential parts and
documents as each RFI is prepared). As a result, highly
confidential information is made public.
The exporter does not contact
the factories: Often the exporter of the goods to Canada
is a trading company or an agent and not the actual factory that
produced the goods. The CBSA will want to receive a subsidy
response from the exporter and the factory if the exporter sells
goods manufactured by another person. If the factory
subcontracts some of the production activities to other related or
unrelated factories, each factory involved in the manufacture of
the finished good will be required to file a subsidy RFI. As
a result, it is very important to identify all the relevant parties
at the start of the process of completing RFIs in order to make
sure the right number of responses are submitted from the right
The exporter fails to provide
English translations of documents. The CBSA
instructions indicate that all RFIs must include a French or
English translation (Canada’s official languages).
There are often many attachments to a subsidy RFI, such as tax
returns, incorporation documents, loan documents, government grant
applications, leases, etc. It is common for these documents
to not be written in English or French. All attached
documents must be translated before being attached to the subsidy
RFI response. The translation process should be started early
because many of the documents are very long.
The exporter does not
carefully review the subsidy RFI instructions: The Subsidy
RFI often has a period of investigation. Amounts received
within the period of investigation must be reported. Many
exporters mistakenly include amounts outside that period and that
results in higher subsidy rates. Since the goal is to have an
accurate, but lower amount, it is important to understand what to
include and what not to include.
All subsidies received must
be identified. Many exporters do not want to provide
information about the amount of subsidies they received.
However, this is the purpose of the subsidy investigation. It
is very important to look at the accounting records to identify all
inbound payments that could be considered to be subsidies or
No reconciliation is
completed: It is important to perform a reconciliation
between what is reported in the Subsidy RFI response and what is
contained in the accounting records. The CBSA is going to
conduct a verification and will find the discrepancy. The CBSA will
be more likely to accept the information provided as valid and
correct if you have taken the step to make sure the reconciliation
shows a match or any deviance can be explained. Canadian
legal counsel who have been involved in other subsidy cases can
perform necessary reconciliations.
Just because the CBSA says it
is a subsidy does not make the amount or benefit
received a countervailable subsidy. A Canadian
advisor with knowledge about WTO rules and Canadian law is very
useful in reducing the subsidy rate by excluding what is not
includable. Only countervailable subsidies and prohibited
subsidies may result in countervailing duties.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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While that agreement mandated export measures on Canadian softwood lumber exports destined for the United States, it also protected those lumber exports from the potential imposition of onerous import measures by the U.S.
On September 29, 2016, the Supreme Court of Canada issued its first tariff classification decision since Canada signed the International Convention on the Harmonized Commodity Description and Coding System in 1998.
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