A Detailed Adjustment Statement (“DAS") is an assessment of antidumping duties and/or countervailing duties, additional GST, and interest. It is like a tax assessment – only it relates to antidumping and countervailing duties. Customs duties and excise taxes can also be imposed on a DAS (with or without antidumping duties). You would have received an antidumping duty and/or countervailing duty DAS if the Canada Border Services Agency (“CBSA”) determined that you imported goods subject to an Order of the Canadian International Trade Tribunal (“CITT”).
The DAS may have been issued because you did not pay any antidumping and/or countervailing duties at the time of importation of the goods. Some importers do not know about the antidumping and/or countervailing duties and their customs broker failed to tell them. Sometimes a DAS is issued by the CBSA when the proper SIMA Code was used at the time of importation, but the valuation was incorrect (understated). The CBSA will issue a DAS when the export price is lower than the normal value they determined for the good (in cases where the exporter cooperated fully with the CBSA in the most recent investigation or reinvestigation). This type of error occurs when there is a new sales manager or when the foreign exchange rate is fluctuating (normal values are usually determined in the currency of the factory and the importer usually pays in US dollars).
The first thing to do when you receive an antidumping duty and/or countervailing duty DAS from the CBSA is to calm down because normally the amount you have to pay is 4, 5, or 6 figures. You were not expecting this type of expense. Antidumping duties at the “All Others” Ministerial Specification rate are prohibitively high because they are intended to protect the Canadian domestic industry of the product and stop imports from the subject country (often China).
The next thing to do is to diarize in your calendar (paper and computer) the 30 day deadline for paying the amount of the DAS at no additional interest. If you pay the amount after the deadline stated in the DAS, there will be added interest. The amount of the DAS must be paid in full to perfect your appeal (called a request for redetermination). Diarize the 90 day deadline for filing the appeal because there are no extensions of time allowed under the Special Import Measures Act. It is also helpful to diarize the 60 day point and the 75 day point to make sure you have a lawyer hired to help you and that you will be ready to file the appeal on time or early. Remember – if the appeal is filed late, it will be rejected. If the appeal is filed and the amount of the DAS has not been paid in full, the appeal will be rejected. You cannot post security and cover the amount of the DAS with a lien on property or other security (such as a bond).
The next thing to do is to determine what form your appeal must take. The Special Import Measures Act requires that the request for redetermination be in prescribed form and set out prescribed information. To file an appeal, you must file a B2 – Adjustment Request. The instructions on where to send the B2 Adjustment Request are on the DAS. Make sure your customs broker sends the appeal paperwork to the Antidumping and Countervailing Directorate of the CBSA. Also, it is important to remember that a separate B2 Adjustment Form must be filed for each DASsed transaction. Look at the top of the DASs for the DAS numbers and for the Transaction Numbers in the DAS. Also, remind your customs broker to file the supporting information for each B2 Adjustment Request rather than one copy as a blanket for each separate appeal.
The appeal must set out the facts, the grounds for the appeal and the evidence that you will be relying on. The appeal requests the following:
(a) the CBSA
determine the correct normal value;
(b) the CBSA determine the correct export price;
(c) the CBSA determine the correct amount of subsidy;
(d) the CBSA determine the correct amount of the export subsidy; or
(e) the CBSA determine whether the goods are of the same description as those described in the order or finding of the Tribunal or in the order of the Governor in Council.
This inforamtion should be in a separate document as there isn’t enough space on the form to cover this inforamtion adequately.
For (a) – (d), the CBSA will send a questionnaire to the exporter and the export must provide information to enable the CBSA to make the calculations. If the exporter does not cooperate with the CBSA, the appeal will fail. So, it is important to get the exporter onside before you file the appeal.
For (e), you must present facts and arguments to demonstrate the the goods you imported are not caught by the definition of “subject goods” in the relevant CITT Order. We often carefully review the words in the subject goods definition and any additional product information in the CITT Findings to find arguments that the imported goods are not subject to the CITT’s Order. It also may be that the goods are covered by an exclusion within the subject goods definition or granted by the CITT. There are a number of subjectivity appeals on the CITT web-site and it may be that arguments can be made based on a previous decision of the CITT.
If you must prepare subjectivity arguments, do not delay in seeking the assistance of an antidumping lawyer. They need time to help you organize the evidence and possibly obtain an expert’s report. Sometimes your lawyer can take a sample to the CBSA and they might even reverse the DAS if it is a case of misunderstanding what was imported.
For example, we once had a client who imported Hex Head Cap Screws and the original B3 referred only to “screws”. We were able to present documents to the CBSA to demonstrate that the imported goods were Hex Head Cap Screws. The CBSA agreed that the imported goods were not subject to the CITT’s Fasteners Order.
In another case, our client imported parts of an aluminum railing and the CBSA issued a DAS because the parts were described individually on the import documentation. In reality, the railing was assembled prior to importation and was not subject to the CITT’s Aluminum Extrusions Order.
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.