Guidelines for preparing a dumping or subsidizing complaint

The Trade and Anti-dumping Programs Directorate of the Canada Border Services Agency (CBSA) conducts investigations to determine whether goods imported into Canada are dumped or subsidized. Most investigations result from a written complaint provided by Canadian producers.

If you are thinking about preparing a dumping or subsidy complaint, you should start by reading this guide and consult the: What You Should Know About Dumping and Subsidy Investigations Web page.

After you have read these materials, if you have any questions, contact us. The CBSA can offer advice on preparing your complaint or answer your questions about the dumping and subsidizing process.

As a first item in preparing your written complaint, you must complete a Statement of Complaint which identifies the dumped and/or subsidized imports causing injury to Canadian industry. This statement is also your pledge that the information in the complaint is true and complete.

Things to remember:

• When describing the goods, you should identify and explain their characteristics and uses. For example, you could describe their appearance, physical characteristics, major raw materials or chemical composition, performance standards or requirements, finish, size, manufacturing process, distribution channels, selling patterns, customers etc. Include what you believe to be important in describing the goods
• Use the ordinary meaning of a word to describe goods. Be careful when using general commercial terms and language. Sometimes, this has different meanings for different industry players and this can lead to misunderstandings regarding the goods involved
• If scientific terms, internationally recognized standards or specifications exist for the goods, they should be included in your description. This makes it easier to identify which goods are the subject of your complaint
• Make sure you identify all the products that are being dumped or subsidized and causing you injury
• Be clear and specific
• Try to describe the goods in enough detail that any anti-dumping or countervailing duties applied to future imports will not be avoided because of how they are described. For example, if you make a complaint against red balls, and it is determined that red balls are being dumped and causing injury, future duties will apply to red balls only. Yellow balls would not be included
• If you are an individual firm, association, or trade union representing an entire industry in Canada, please note explicitly which Canadian producer(s) you represent

When completing the questionnaire, you must answer a series of questions, and attach supporting evidence, to explain and document the allegations in your complaint.

Your written complaint may lead to an investigation into the matter. If you have important information to support your allegations that the CBSA has not specifically asked for, you should include this information in your complaint. The more information available, the better equipped the CBSA will be to assess your complaint.

You should start by going over your completed response to the questionnaire to determine if you have included any confidential information. If you decide that your complaint does not contain confidential information, every page of the complaint should be marked "Non-Confidential", including any attachments. You must also make a statement, in a covering letter, that you do not consider any information in your complaint to be confidential.

If the complaint contains confidential information, you must clearly mark "Confidential" on every page of the confidential version of the complaint, including any attachments. You must also clearly indicate, by either enclosing all confidential information within square brackets or by shading, all confidential information contained in the confidential version. As a general rule, confidential information usually includes any commercial or financial details not normally made public. You must also prepare a non-confidential version of the complaint, together with an explanation of why the evidence is designated as confidential and a summary of the evidence designated as confidential in sufficient detail to convey a reasonable understanding of the evidence. For further guidance on preparing a non-confidential version of your complaint, please consult the Confidentiality and Disclosure Guidelines for SIMA Proceedings.

Subject to strict conditions, the CBSA may disclose confidential information in your complaint to counsel for other parties involved in the proceedings.

For more information, please refer to the Guidelines on the Disclosure of Confidential Information.

Hard copies are not required.

Please submit your statement of complaint, your answers to the questions along with supporting evidence, and a separate non-confidential version of this information electronically to the CBSA via email, addressed to the director general at: simaregistry-depotlmsi@cbsa-asfc.gc.ca

E-mail is not secure, and has a 10MB file transfer size limitation.

For protected information and files larger than 10MB, please contact us via email to make arrangements on how to submit your information.

After the CBSA receives your complaint, it will be evaluated and then the CBSA will decide whether it is properly documented and complete. You will be notified of the decision within three weeks. If the complaint is not properly documented, you will be advised of the additional information required.

Give the complete name, address, email address and telephone number of the Canadian producer or association that is making the complaint. If you are an individual firm, association, or trade union representing an entire industry in Canada, please provide this information for both yourself and the Canadian producer(s) you represent. Identify the person the CBSA should contact for more information.

2.1 Precisely describe the imported goods that you are alleging are being dumped and/or subsidized.

If available, provide product literature for the imported goods.

2.2 If available to you, provide the tariff classification numbers used when the goods are imported into Canada.

2.3 Indicate the country where the imported goods are produced and where they are exported from.

2.4 Identify any known exporters that are shipping the goods to Canada. If the exporters are not the producers of the goods, identify the producers if known.

2.5 Identify any known Canadian importers of the goods.

2.6 Explain how the imported goods are marketed, priced, and distributed, in Canada.

Action against dumped or subsidized imports can only be taken if the industry is producing goods in Canada that are identical or similar (i.e., like goods) to the imported goods.

Precisely describe the goods you produce. If not identical to the imported goods, explain how they differ in terms of uses and other characteristics.

Provide product literature for the goods you produce.

Both the imported goods and the like goods produced in Canada, taken as a whole, may sometimes be divided into smaller classes or sub-groupings of goods.

It is necessary for the CBSA to determine whether there is more than one class of goods involved in this complaint.

As an example, plant seeds produced in Canada could be considered as like goods to imported plant seeds because they have similar characteristics and uses. That is, they have the same general uses, to grow plants, and they may have similar physical characteristics and methods of production. However, it is likely that these goods, as a whole, could be sub-divided into separate classes of goods such as flower seeds, vegetable seeds and grain seeds. These classes of goods do not directly compete with one another for the same customer, they do not fulfill the same needs and they are not substitutable.

Can the imported goods and the like goods produced in Canada be sub-divided into separate classes of goods? If yes, explain in detail.

Your complaint must have the support of Canadian industry before an investigation can be started. In brief, producer support for the complaint should be greater than opposition and represent not less than 25% of all Canadian production of like goods.

5.1 Identify all known Canadian producers of like goods.

5.2 Identify all the known associations of producers of like goods in Canada.

5.3 Provide the total volume and value of your production of like goods for the last three fiscal years and the current year to date.

5.4 Estimate the total volume and value of the like goods produced in Canada by each of the other known producers for the last three fiscal years and the current year to date. Explain how you estimated these figures.

5.5 Do you have any information on the views of the other Canadian producers regarding the imported goods? If you have discussed the matter with them, provide the name and telephone number of the person or persons contacted.

5.6 Are you, or any other known Canadian producer, related to an exporter or an importer of the goods? If yes, identify the company and the relationship.

5.7 Do you, or any other known Canadian producer, import the goods in question? If yes, provide details.

5.8 Provide a list of the trade unions that represent persons who are employed in the production of like goods in Canada, and the names of any associations that include such trade unions.

5.9 If you are submitting a complaint on behalf of Canadian industry, you will need to confirm in writing the percentage of production that supports the complaint (to establish that the minimum 25% is met) and to confirm that there is more support than opposition among those expressing an opinion. Please also explain the procedures or methodology used in addressing the producers’ standing.

In general terms, dumping is occurring if goods are being sold to Canada:

1. at prices that are less than the price for comparable products in the exporter's home market.
2. at prices which are unprofitable.

The profitable selling price in the country of export is the basis for determining normal value. Alternatively, normal value may be constructed based on the total cost of the goods and an amount for profit. The selling price to Canada is called an export price.

To support your allegations that the imported goods are dumped into Canada, you must estimate and compare:

(6.1) normal values; and

(6.2) export prices.

and determine

(6.3) a margin of dumping (i.e. the amount by which the normal values exceed the export prices).

Comparing normal value and export price

The identification of comparable goods in the exporter's home market (i.e., identical or similar goods to the goods sold to Canada) is an important first step in ensuring a fair comparison between normal value and export price.

Similarly, normal value and export price should both be expressed on a net basis (i.e., net of any common discounts, rebates or allowances) using the same unit of measure (i.e., per kg, per metric ton, etc.) and be compared at the ex-factory (or FOB) point of sale/delivery.

Product types, models, classes

If your complaint involves several different product types, models or classes of goods imported into Canada, you will need to estimate normal values, export prices, and margins of dumping, for a representative sample of the different types of goods.

If the imported goods all consist of the same type of product, one dumping calculation based on a comparison of normal value and export price may be sufficient for the whole product concerned.

Where the complaint involves goods from more than one country, you need to provide an estimate of normal values, export prices, and margins of dumping for each country.

Special provisions may apply if your complaint involves products from countries which, historically, have been operating on a non-market basis. You should contact the CBSA in this situation.

Similarly, you should contact the CBSA if you believe that the sales of comparable goods in the exporter’s home market cannot be compared with the sales to Canada because of the existence of a particular market situation. For example, there might be government imposed price floors or price ceilings in the exporter’s home market.

6.1 Normal Value

Generally, two different methods can be used to estimate normal values.

(a) First method

The preferred method of estimating normal values is using the selling price to unrelated purchasers in the exporter's home market where those goods are sold at a profit.

Start by identifying the comparable good. Next, provide selling price information available to you in the exporter's home market on these goods. This should reflect recent price information, preferably not more than one year old (If available, use selling price information to purchasers most comparable to the importers in Canada).

Provide any evidence of the selling price you have used such as price lists, market surveys, sales invoices, bids, sales correspondence, quotes, etc.

If necessary, estimate and support any of the items that should be deducted from the selling price to bring it to a net ex-factory (or FOB) level.

The following is an example of a normal value calculated using a retail selling price in the exporter's home market as the starting point.

(b) Second method

The second method of estimating normal value is based on all costs relating to the production and sale of the goods, and an amount for profit.

Typically, this second method is used where:

• You have difficulty getting price information on sales of the comparable goods in the exporter's home market;
• There are no sales of comparable goods in the exporter's home market;
• You have information that indicates the exporter's sales in the home market are generally unprofitable;
• The sales in the exporter's home market are made to related customers; or
• The sales in the exporter’s home market are not comparable due to the existence of a particular market situation.

In constructing the total unit cost of the goods, you should use information based on the producer's costs in the country of export.

If you do not have this information, your own company's costs may be used for estimating the total cost of the goods. However, you should explain and adjust your costs to account for any known differences between your costs and those of the producer in the country of export, including differences in: labour rates; production processes (including technological differences); raw material costs; economies of scale; capacity utilization rates; etc.

In estimating the total unit cost for the goods, list separately the:

• raw material costs, including the major raw material items;
• direct labour costs;
• factory overhead costs, including the major overhead items;
• general, selling and administrative costs; and
• any other costs (specify).

Explain how you estimated the costs of producing and selling the goods and provide all the evidence you have to support these costs. Explain how you calculated an amount for profit.

The following is an example of a normal value calculated using the total unit cost of the goods and an amount for profit.

6.2 Export price

Generally, the export price is the price of the exported goods paid by the importer in Canada.

It is usually estimated using one of two methods and should also be calculated at the net ex-factory (or FOB) level based on recent price information not more than one year old.

(a) First method

The first method of estimating the export price is based on the selling price offered by the exporter to the importer in Canada.

If available to you, provide all the evidence you have regarding the selling price to the importer in Canada, such as price lists; sales invoices; bids, written offers or price quotations; sales correspondence; salesman's reports; or even Statistics Canada reports (which may provide import prices for the country concerned).

Deduct any costs, included in the selling price, relating to the movement of the goods to Canada, such as freight and insurance, regular duties, etc. to bring the price back to an ex-factory level. Provide evidence to support the cost figures deducted.

(b) Second method

If you cannot estimate export prices this way, you can use the second method which starts with the selling price at which the imported goods are resold in Canada. From this resale price, subtract all costs and profits to bring the price back to an ex-factory level including:

1. the importer's mark-up on the goods (normally covering all the importer's GS&A and related costs concerning the purchase and re-sale of the goods, and an amount for profit); and
2. all costs relating to the movement of the goods such as freight and insurance (both within Canada and from the country of export to Canada), regular duties, etc. (Be careful to ensure that any cost items deducted are not already included in the importer's costs listed in point (1)).

Provide all the evidence that you have regarding the resale price of the imported goods in Canada, such as price lists, sales invoices, bids, sales correspondence, etc. Also provide the basis for the costs and profits subtracted from this selling price to bring it back to an ex-factory level such as published industry mark-ups, publicly available freight rates, etc.

There are additional considerations if the exportselling price is between an associated importer and exporter (as an example,through a parent/subsidiary relationship). Contact the CBSA for moreinformation if this type of relationship exists.

The following is an example of an export price calculatedusing the resale price of the goods in Canada, by the importer, as the starting point.

6.3 Margin of dumping

The margin of dumping is calculated by subtracting the export price from the normal value.

The following is an example of a margin of dumping calculation using information from the previous examples of normal value and export price:

Other considerations when comparing normal value and export price

The preceding calculations may be sufficient for making a fair comparison between normal value and export price and form a satisfactory basis for determining the margin of dumping.

However, if you know of any important differences between the goods sold to Canada and the goods sold in the exporter's home market which might affect the fair comparison of prices between the two markets (i.e., price comparability), these should be explained.

Some typical differences which have an effect on price comparability include trade level differences or quantities purchased.

Regarding trade level, there may be a pattern of price differences between sales by the exporter to various levels of trade. These price differences commonly reflect the costs and expenses of the distribution systems and selling activities for each type of sale (as an example, there may be different selling costs and expenses when comparing the exporter's sales to retailers vs. the exporter's sales to distributors).

Accordingly, if the selling price of the exporter used for determining normal value is not at the same trade level as the exporter's selling price to the importer in Canada, explain the difference in trade levels (including any differences in selling and distribution activities) and whether it might affect pricing.

Differences in quantities purchased between the two markets is another consideration. If the selling price of the exporter used for determining normal value is based on sales to purchasers who buy in significantly larger (or smaller) quantities than the importer in Canada, and these differences affect the selling price of the goods, then this should be explained.

If you know of any other important differences which affect the price comparability of the goods, please explain and give details of these differences.

7.1 To your knowledge, are the imported goods eligible for any foreign government subsidy? If you answer no, go to section 8 - Demonstrating injury.

7.2 Provide any details and evidence of the known subsidies including:

• the name of the foreign authority granting the subsidy (i.e. Government of state, province, municipality or other).
• the nature of the subsidy
• an explanation of how the subsidy operates;
• the subsidy benefit to the industry/exporters shipping goods to Canada.
• the amount of the benefit if possible to the industry/exporters shipping goods to Canada.
• whether the subsidy is specific or not
• whether the complaint involves a State-Owned Enterprise (SOE)

Type of evidence to be provided:

• The complaint must contain the sufficient information to support allegations and substantiate facts. It must also that the alleged dumping or subsidization causes injury.
• Evidence provided to sustain the allegation can be:
  • previous CBSA, U.S. Department of Commerce or other countries cases, including their analysis of the subsidy (a simple listing of the program is deemed insufficient)
  • industry reports,
  • government documents,
  • World Trade Organization Trade Policy Review
  • news articles
  • publications
  • any other relevant sources

The nature of the subsidy can be:

• Direct or potential direct transfer of funds or liabilities, such as:
  • grants
  • loans
  • equity infusions
  • acquisition of shares
  • debt-to-equity swaps
  • loan guarantees
• Government revenue that is otherwise due is foregone or not collected, such as:
  • tax exemptions
  • tax deferrals
  • tax forgiveness / tax not collected
  • preferential tax rates
  • tax credits
  • excess relief of import charges and indirect taxes in respect of exported goods
• Provision of goods or services other than general infrastructure or the purchase of goods

Benefit:

• The benefit is to be determined by reference to the recipient of the subsidy and not as a cost to government. In other words, a benefit exists if the recipient receives something that makes them better off than without receiving the subsidy. Costs to government should not be considered when determining whether or not a benefit has been granted to a company.

Specificity

• A subsidy is specific where a subsidy has limited availability to only certain enterprises
• A subsidy is specific when:
  • There is exclusive use by a limited number of enterprises
  • There is predominant use of the subsidy by a particular enterprise
  • There are disproportionately large amounts of the subsidy granted to a limited number of enterprises
  • The manner in which discretion is exercised by the granting authority indicates that the subsidy is not generally available
  • It is an export subsidy
  • It is a subsidy or a portion of a subsidy that is contingent, in whole or in part, on the use of goods that are produced or that originate in the country of export.

State-Owned Enterprise (SOE)

When it is alleged that an enterprise is a SOE and that it should be considered as government, the complainant should submit information that is reasonably available showing whether it possesses, exercises or is vested with governmental authority.

The evidence provided must be more than just the majority ownership by the government. It can refer to the way the organization is acting, for example: if the company is effectively exercising government functions and the government is able to exercise meaningful control of the company through its direct appointment of the executives of the company and through control of the industry.

You must explain and provide evidence to show how the dumped or subsidized goods have injured the Canadian industry.

First, you should provide information on general import trends relating to the volume and prices of the dumped or subsidized goods.

Second, you should provide information and evidence that shows the effects of the volume and/or the low price levels of the dumped or subsidized goods on the Canadian industry. Typically, this includes information and evidence which shows that:

• the imports are displacing Canadian production of the goods; and/or
• the low prices of the imports are forcing you (and the rest of the Canadian industry) to reduce or restrain prices to meet the dumped/subsidized import prices.

Last, you should show the effect of the dumped or subsidized imports on other related injury factors. That is, how have the imports impacted specific sales accounts, profits, etc.

It is not necessary that all the injury factors show a negative trend or effect. For example, while you might have maintained volume and market share in response to the dumped or subsidized imports, it might be that this was accomplished only because you reduced prices to match those of the imported goods.

Similarly, it may not be necessary to provide information on all the listed injury indicators. Rather, you should provide as full and comprehensive a picture as possible, along with supporting evidence, to show that the injury is significant and can be linked to the dumped or subsidized imports.

8.1 Trends in the volume and market share of the dumped or subsidized imports (i.e., the subject imports) are an important injury consideration and may help demonstrate that the subject imports are causing injury by displacing Canadian production.

1. As a first step, you should provide available details on the volume (Instead of import volumes, it might be acceptable to provide data on the value of imports - the key is to provide data which shows actual import trends and changes over the period concerned.)of the subject imports for each of the last three fiscal years and the current year to date (As a general guideline, the examination of import trends generally includes the last three years. However, you may choose a different period of time as long as it is representative and sufficient to support your allegations of injury.).
2. You should then compare and explain the impact of changes in the volume of subject imports on the volume of Canadian production and sales. This comparison is often done by providing data on changes in market share.

As market share is based on a percentage of the total size of the market, you normally have to collect information on:

• imports of the allegedly dumped or subsidized goods;
• all other imports;
• your company's production and sale of the goods; and
• the production and sales of other Canadian producers.
  (removing and listing separately any export activity for your company and other Canadian producers).

This type of information is best presented in the form of a table and you may have to consult with various sources (Industry associations, market sources, Internet Web sites and libraries, Statistics and Industry Canada data are some of the sources that may be useful for collecting this type of information.) to collect the information needed to estimate the total size of the market.

8.2 The price trend of the dumped or subsidized imports and their effect on the selling price of the goods produced in Canada is another important injury consideration.

1. It's best if you can provide price trend information for the subject imports at the first point of sale to Canada; that is, from the exporter to the importer in Canada.

   Where the subject imports are made up of the same types of product, a comparison of changes in average unit price figures (over the given period) may be useful for demonstrating price trends.

   If the subject imports consist of many different product types, models or classes of goods, your examination of price trends should be based on a representative sample of the different types of goods.

   In the absence of detailed pricing information for the subject imports, you might consider trying to collect more general price information (If information is not reasonably available, it may be necessary to provide an estimate for these items using the best information and sources available to you - including your own commercial knowledge and expertise.), such as price index information, which can be helpful in demonstrating price trends (as shown in the following table).

   Example - Price index for the subject imports

   Base year index price = 100

   Year 2 index price = 95

   Year 3 index price = 94

2. As a second step, you should compare and explain the trend in prices for the subject imports to the price trends for the goods you produce and sell.
   
   
3. The trend of resale prices of the subject imports in Canada might be another way of examining import price trends. However, make sure you consider whether the resale prices are being significantly affected by changes in the pricing practices of the intermediary company selling the imported goods rather than the pricing practices of the exporter.

8.3 In addition to providing information on general import price trends, you should provide details on specific instances where the selling price to Canada (or the resale price of the imported goods in the Canadian market place):

1. was lower than your selling price of like goods;
   
   
2. forced you to reduce your selling price to compete with the price of the imported goods;
   
   
3. prevented you from raising your selling price, to pass on cost increases.

Provide documentation to support these allegations such as correspondence with customers; notes of conversations; price lists; sales invoices; price quotations; contracts; bids; etc.

As an example, you might have received a telephone call from an established customer asking you to reduce selling prices by 10% to match a competing selling price from an exporter of the dumped goods.

As part of your evidence, you should provide documentation on the customer's request (i.e., such as your telephone notes of the conversation) and your company's response to the customer request. For instance, you might provide in your complaint the following statement and supporting evidence:

Other injury factors

There may be other injury factors relating to the increased volume and/or the low price levels of the dumped or subsidized imports. Some typical injury considerations follow and you should provide any available evidence you have on these items.

8.4 Lost sales

1. Have you lost sales to established customers to the dumped or subsidized imports?
   
   
2. Have you lost sales opportunities to potential new customers to the dumped or subsidized imports?

If yes, provide details and evidence about the value and volume of lost sales for each of these categories of customers for a sufficient period of time to explain and support your statements.

8.5 Reduced profits

Has the loss of sales and/or reduced selling prices caused by the dumped or subsidized imports affected your profit margin? Provide details and evidence for a sufficient period of time to explain and support your statement. This normally includes a comparison of your company's financial results over a representative period and may include copies of your company's income statements; product income statements; sales or gross margin analysis reports, etc.

8.6 Other ways of demonstrating injury

Provide any other details and evidence to demonstrate that your company has been injured by these imports. Provide details and evidence for a sufficient period of time to explain and support your statement.

Other injury indicators may include actual and potential effects on the following:

• employment;
• wages;
• capacity utilization rate;
• productivity;
• inventories;
• decline in return on investments;
• cash flow;
• ability to raise capital.

8.7 Provide an explanation regarding any factors, other than the imported goods, which might have affected the Canadian industry such as:

• strikes;
• changes in consumer demand;
• technological advances;
• changes in export markets;
• environmental regulations.