If you import goods that are subject to antidumping ("AD") and/or countervailing duties ("CVD"), but fail to ask questions before importing the goods, you may have a large assessment to pay. We have been contacted by importers or fasteners and aluminum products that are surprised to learn after importing that the goods were subject to an AD/CVD order. The Canada Border Services Agency ("CBSA") has contacted them about a shipment and determined that the goods are covered by the Canadian International Trade Tribunal ("CITT") AD/CVD order. The AD/CVD "all others" rates can be very significant (e.g., 170% for fasteners with a CVD rate on top of that).
You can prevent such a surprise by asking questions prior to importing goods. If this is the first time you are importing an item, ask a lawyer or customs broker if the goods are subject to Canadian duties. Don't ask the exporter who wants to make the sale.
As a first step, you should determine the tariff classification of the goods you plan to import. If you select the incorrect tariff classification (H.S. Code), you might not get the correct answer on whether the goods are subject to AD/CVD duties. You may wish to consult an expert who might ask that you get information from the seller.
After you know the H.S. Code, you should consult the Measures in Force section of the CBSA website to determine if goods are subject to a SIMA finding. If there is a similarity to the goods you are importing (e.g., the good is made from aluminum and may be extruded and might be an aluminum extrusion), you should read the subject goods definition. If you cannot determine if the goods you wish to import fit within the subject goods definition, you may call the CBSA. Each measure lists the Compliance Officer who may be contacted for further clarity. However, if you have already imported the goods, you may wish to contact a lawyer as a go between. You may also seek a legal opinion from a Canadian lawyer about whether the goods you wish to import are covered by a CITT AD/CVD Order.
If you read a definition for in a CITT AD/CVD Order and have
spoken with a CBSA Compliance Officer or have spoken to a lawyer
who cannot give you certainty, you can ask the CBSA to conduct a
scope proceeding. If the answer to a scope proceeding is that goods
are not subject to AD/CVD duties, then you can safely import the
Scope proceedings are conducted by the CBSA under the Special Import Measures Act. A scope proceeding is a formal process under SIMA, normally requiring 150 days and up to 255 days from the receipt of application to be completed. The CBSA has developed a chart depicting the scope proceeding process.
Scope proceedings are a new type of proceeding and there have only been four requests to date. In two cases, the goods were determined to be subject fabricated industrial steel components and in one case the goods were determined to be subject fasteners. In the fourth case, the goods were determined to not be subject to the CITT order in the seamless casing and OCTG cases.
Under the new scope proceeding rules, the scope proceeding is a public process. The applicant must submit a scope proceeding request and identify which CITT Order that should be reviewed. There is a formal announcement of the initiation of the scope proceeding and the domestic producers will be invited to participate in the proceeding. The CBSA will notify the domestic producers, the government of the country of export, known exporters/importer of the category of goods.
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.