In June 2018, Canada implemented a company-specific anti-dumping normal value review process. A number of companies/exproters have already taken advantage of the new process. Normal value reviews are administrative proceedings conducted by the Canada Border Services Agency (CBSA") upon request by an exporter - here is the link to normal value reviews that have been conducted or that are underway.
This new normal value review process is similar in purpose to re-investigations of normal values and export prices process except that each normal value review is conducted in respect of a single exporter only and not the country or market as a whole. An exporter may decide to ask the CBSA (at a convenient time for the epxorter) to conduct a normal value review if their costing structure has changed since a previous calculation of normal values, if the exporter has added new products or changed model numbers, if the exporter has acquired or built another production facility that does not have normal values, if the foreign producers has changed intermediaries, or if the exporter did not participate in the previous investigation or re-investigation of normal values and export prices. This new normal value review process enables the CBSA to update normal values for a particular company in a more efficient and timely manner. There are other valid reasons that an exporter may request a normal value review - the ones mentioned above are the most common reasons.
The CBSA has indicated that it will consider the following factors when deciding whether to grant a request for a normal value review:
- whether a significant period of time has elapsed since the last time the CBSA calculated normal values for the goods at issue;
- the volume of imports of the subject goods and fluctuations in import volume;
- the elapsed time since values were last issued; the nature of the subject goods;
- the presence of new models or products imported;
- the presence of new exporters of the subject goods;
- changes in the selling prices in the exporter's home market;
- changes in the selling prices in the exporter's third country export markets;
- changes in the exporter's costs;
- fluctuations in the currency exchange rate;
- changes in the nature or amount of subsidies;
- changes in the channels of distribution for the goods sold to Canada;
- changes in any other manner in which the goods were sold to Canada;
- the need to review the export prices, such as where exporters are associated with the importers;
- the number of requests for re-determination;
- the timing of the next potential expiry review;
- CBSA resources available; and
- any other relevant consideration.
The same factors are considered when the CBSA ponders a re-investigation of normal values and export prices. The re-investigation of normal value process is initiated by the CBSA for a all exporters in a country or market or in a number of countries that are subject to an existing anti-dumping order. Historically, the CBSA decided when to conduct a re-investigation (and still does initiate re-investigations from time to time).
Both the normal value review process and the re-investigation of normal value process are public and permit representatives of the domestic industry and unions and other interested parties to participate. In other words, Canadian domestic producers will be in a position to submit letters to the CBSA seeking higher normal values and raising concerns with the data submitted. Exporters will still be permitted to file confidential information that only counsel with signed confidentiality undertakings can review (the Canadian domestic producers are not permitted to review costing, customer lists and other sensitive business information).
The only process that remains semi-private is an appeal of a detailed adjustment statement (called a "request for redetermination). If an importer imports goods subject to an anti-dumping order and over-pays anti-dumping duties, the importer may file an appeal and ask the CBSA to calculate the correct normal value for the imported goods and pay a refund as required. These appeals are confidential and not open to interference by the Canadian domestic producers, unions and interested parties.
The new anti-dumping normal value review process is important because Canada's practice is to determine normal values and export prices rather than assign a dumping margin to an exporter. The CBSA often calculates moment-in-time normal values on a product by product basis. As a result, when world-prices increase, there is a benefit to the Canadian domestic industry if the CBSA takes steps to adjust the normal values upwards. It goes without saying that when world-prices decrease, there is an incentive not to adjust the normal values downward.
When the CBSA calculates normal values, the CBSA informs the exporter that the onus is on the exporter to seek new normal values when there is a change in market conditions.
On July 19, 2019, the CBSA released an updated version of D-Memorandum D-14-1-8 "Re-Investigation and Normal Value Review Policy - Special Import Measures Act (SIMA)" and included updated information about the new normal value review process. According to the D-Memorandum, the CBSA will conduct a normal value review in the following circumstances:
- where a significant volume of the imports of the subject goods are from a particular exporter or a limited number of exporters (i.e. generally less than four);
- where there are new models, they are limited to a particular exporter or limited number of exporters;
- where there are a limited number of new exporters in the market who have requested to be part of the next re-investigation (rather than obtaining values through an expedited review);
- where there are factors impacting export prices, they are limited to a particular exporter or a limited number of exporters;
- where representations are made in respect of a particular exporter or the issue raised impacts a limited number of exporters; and
- where a request for a re-determination has been filed by an importer, which includes a request that normal values be issued for its exporter.
The CBSA has said that in a normal value review or re-investigation of normal values and export prices process, it is not bound by a methodology used in a previous investigation or re-investigation. This means that the CBSA try to apply section 20 of SIMA in a normal value review or re-investigation of normal values and export prices when it determined in the original investigation that the government does not control prices in a country. The normal value review process is not without risk of prohibitive normal values being determined.
The CBSA will, where possible, conclude a normal value review within 180 days of the initiation date (however it may take more or less time depending on the circumstances of the review). Each schedule will vary depending on the circumstances of the case and the CBSA may adjust the schedule as necessary.
The CBSA may conduct a normal value review by way of a desk audit or may request on on-site verification.
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.