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OTTAWA, June 1, 2004
4249-33
AD 1306
STATEMENT OF REASONS
concerning the final determination of dumping pursuant to
paragraph 41(1)(a) of the Special Import Measures Act regarding
WOOD VENETIAN BLINDS AND SLATS
ORIGINATING IN OR EXPORTED FROM
MEXICO AND THE PEOPLE'S REPUBLIC OF CHINA
DECISION
On May 17, 2004, in accordance with paragraph 41(1)(a) of the Special Import Measures Act, the President of the Canada Border Services Agency made a final determination of dumping respecting wood venetian blinds and slats originating in or exported from Mexico and the People's Republic of China.
Cet énoncé des motifs est également disponible en français. Veuillez vous reporter à la section "Renseignements".
This Statement of Reasons is also available in French. Please refer to the "Information" section.
TABLE OF CONTENTS
[1] On November 21, 2003, the Commissioner of Customs and Revenue initiated an investigation into the alleged injurious dumping of wood venetian blinds and slats originating in or exported from Mexico and the People's Republic of China (China). The investigation was initiated in response to a complaint filed by Stores de bois Montréal Inc. (SBM). The information and material with respect to the matter were provided to the Canadian International Trade Tribunal (Tribunal).
[2] On December 12, 2003, responsibility for the customs program of the Canada Customs and Revenue Agency, including the administration of the Special Import Measures Act (SIMA), was transferred to the Canada Border Services Agency (CBSA), which was created on the same day. The President of the CBSA (President) is now responsible for dumping investigations.
[3] On January 20, 2004, the Tribunal made a preliminary determination that the evidence disclosed a reasonable indication that the dumping of the subject goods had caused injury to the Canadian industry.
[4] On February 19, 2004, the President made a preliminary determination of dumping respecting wood venetian blinds and slats originating in or exported from Mexico and China, pursuant to subsection 38(1) of SIMA.
[5] The CBSA continued its investigation and, on the basis of the results, the President is satisfied that the subject goods have been dumped and that the margins of dumping are not insignificant. Consequently, on May 17, 2004, the President made a final determination of dumping pursuant to paragraph 41(1)(a) of SIMA.
[6] The Tribunal's inquiry into the question of injury to the Canadian industry is continuing. Provisional duty will continue to be imposed on the subject goods originating in or exported from Mexico and China until the Tribunal renders its decision. The Tribunal will issue its finding by June 18, 2004.
[7] The period of investigation (POI) that was used to determine whether there is dumping and to establish the margins of dumping is from October 1, 2002 to September 30, 2003.
[8] The name and address of the complainant is:
- Stores de bois Montréal Inc.
8320 Place Lorraine
Montréal (Anjou district), Quebec H1J 1E6
[9] The CBSA's investigation confirmed that 30 exporters were involved in exporting subject goods to Canada during the POI. Of the four exporters located in Mexico, only one, Royal Window Coverings México S.A. de C.V. (RWM), provided a complete response to the CBSA's Request for Information (RFI). RWM had significant subject shipments to Canada and was part of the group of exporters who were required to respond. None of the 26 exporters located in China provided a complete response to the RFI.
[10] The CBSA's investigation confirmed that there were 31 importers of the subject goods into Canada during the POI. In the preliminary investigation, 10 importers had provided a response to the CBSA's RFI. No additional response was received after the preliminary determination.
[11] For the purpose of this investigation, the subject goods were defined as:
- Wood venetian blinds and slats originating in or exported from Mexico and the People's Republic of China.
[12] Wood venetian blinds1 (blinds) are composed of stained, varnished and/or film-coated slats.2 Most often, the slats are one inch (25 mm) or two inches (50 mm) wide and an eighth of an inch (3 mm) thick. The blinds are used to cover windows of varied dimensions.
[13] Imported blinds are either made to measure or of standard sizes. The most-often used standard dimensions are 48 inches and 72 inches in height by 23, 30, 37, 44, 51, 58, 65, and 72 inches in width. Before delivery, the blinds are adjusted to fit the dimensions required by the consumer. As needed, slats are removed to shorten the blind and they can be shortened by up to 3.5 inches at each end. Hence, a standard blind measuring 23 inches in width can be used to cover a window measuring anywhere from 16 to 23 inches in width.
[14] The slats are connected by strings used to tilt, raise and lower the slats. There is also a locking mechanism. The slats can be enhanced using decorative cords instead of strings. The blind is equipped with either a tilt cord or wand mechanism for opening and closing. The various mechanisms are housed in a head rail made of metal, PVC or other material. The slats rest on a bottom rail, usually made of wood, when the blinds are raised.
[15] The slats are also imported separately and are the main component of the blinds. These slats have no other purpose or commercial use. They may be stained, painted, film-coated or bare. The types of wood most commonly used to manufacture slats are basswood, cherry, white ash, beech, poplar, ramin, samba, red oak and red cedar. Note that the CBSA considers that bare slats from Mexico or China that are stained, painted or film-coated in another country, before being imported into Canada, have acquired their essential characteristics in Mexico or China and are, therefore, subject to the investigation.
[16] Further note that ramin products imported into Canada must be accompanied by a Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) export permit issued by the exporting country if the wood is from a nation that has included ramin on the list of protected species or a CITES export permit, a CITES certificate of origin, or a CITES re-export certificate if the specimen is from another nation.
[17] Wood venetian blinds are properly classified under the following Harmonized System classification numbers:
4421.90.30.00 4421.90.40.40
[18] Wood slats are properly classified under the following Harmonized System classification numbers:
4421.90.40.40 4421.90.90.50 4421.90.90.99
Note that these classification numbers do not cover only wood slats but also other wood articles.
[19] At the time of initiation, for purposes of "standing", the CBSA considered that the producers of like goods in this case were those who produced both wood slats and blinds or assembled blinds with slats bought from Canadian distributors and who were not related with an exporter or importer of the subject goods, and who themselves were not importers of such goods. The list of the six Canadian producers identified can be found in Appendix 1. In the Tribunal's public staff report3, the Tribunal identified 26 producers of venetian blinds and subdivided them into three categories: (1) integrated producers, (2) producers/assemblers who import their slats from the non-subject countries or buy them from Canadian distributors, and (3) producers/assemblers who import either the blinds or the slats from the subject countries.
[20] For several reasons, the CBSA is not in a position to calculate the volume of wood venetian blinds and slats imported into Canada. It is necessary to know the dimensions of the blinds to calculate either the number of square feet or the number of linear feet. The Facility for Information Retrieval Management of the CBSA contains no information regarding the dimension of blinds and slats imported into Canada. Moreover, the volumes cannot be compiled from information on the customs' declarations, as the information is not provided. While the number of units is given, the dimensions of the blinds are frequently missing. For the purposes of the preliminary and final determination, the CBSA received a properly documented response from only one exporter and very few responses from the importers, therefore, making the compilation of volume data impossible.
[21] As there is no specific tariff classification for slats and as these tariff classifications include other wood products, it is difficult to determine the volume of slat imports accurately. Also, it is not possible for Statistics Canada to produce electronic data on imports of this product. There is, therefore, no public information available for slat imports.
[22] The volume of Chinese and Mexican slats finished in the United States of America (US) and imported into Canada during the POI, from October 1, 2002 to September 30, 2003, is unknown to the CBSA since the goods may have qualified as NAFTA goods for preferential tariff treatment when they entered into Canada. As such, the US would be used as the country of origin on customs' declaration documents.
[23] As a result, imports into Canada from all sources were estimated on a value basis and based on data published by Statistics Canada.
Value of Wood Blinds Imports
from October 1, 2002 to September 30, 2003
| Country | Value of Imports | Representation |
|---|---|---|
People's Republic of China |
$8,126,308 |
59.2% |
United States of America |
$4,719,164 |
34.4% |
Mexico |
$ 437,718 |
3.2% |
Chinese Taipei |
$ 280,652 |
2.0% |
Other countries |
$ 156,739 |
1.1% |
Total |
$13,720,581 |
Source: Statistics Canada
[24] At the initiation of the investigation, in view of the large number of exporters, the CBSA limited its examination of dumping to six exporters from China and three exporters from Mexico, pursuant to subsection 30.3(1) of SIMA. The combined declared value for duty of these six exporters from China and three exporters from Mexico represented more than 75% and 95%, respectively, of the total value of the subject goods imported directly into Canada from these two countries during the POI. The information supplied by these exporters would be used to determine appropriate normal values, corresponding export prices and the resulting margins of dumping, if any. A weighted average of these margins of dumping would then be allocated to the exporters that were not required to respond to the CBSA's RFI. All exporters not required to respond were advised that they could supply information to the CBSA in order to obtain their own margin of dumping.
[25] Prior to the preliminary determination, none of the exporters provided a complete response to the RFI. At the time of the preliminary determination, all exporters were again notified and given the opportunity to supply the required information.
[26] A response to the CBSA's RFI was received on March 8, 2004 from RWM of Mexico. On March 12, 2004, the CBSA informed RWM that its response was not complete and provided the company with a list of deficiencies. At the same time, the CBSA requested additional information from the company in order to clarify its original response. Additional information was provided on March 17, 2004. Arrangements were then made with RWM for verification meetings which were conducted at the premises of RWM, from March 30, 2004 to April 6, 2004, in order to verify and validate the information that the company submitted concerning sales to Canada, domestic sales of like goods and the full cost of the subject goods.
[27] Yeo Long Wooden Ware Company Ltd. (Yeo Long) of China provided a partial response to the CBSA's RFI in submissions received on March 23 and March 25, 2004. On April 13, 2004, the CBSA advised Yeo Long that its response was not complete and provided the company with a list of information that would complete the submission as well as assist the CBSA in its verification of the information. On April 21, 2004, Yeo Long provided some additional data. On April 23, 2004, the CBSA advised Yeo Long that while additional details and explanations were still required, no additional information could be accepted due to time constraints. Accordingly, the submission could not be considered for purposes of the final determination and the company was advised of this decision.
[28] No other companies that were identified as possible exporters of the subject goods responded to the CBSA's RFI.
[29] Responses to the CBSA's RFI were also received from 10 importers of subject goods: Canadian Tire Corp. of Brampton, Ontario; Finecraft Custom Shutters Ltd. of Toronto, Ontario; Global Shades Inc. of Calgary, Alberta; Havana Window Fashions of Aldergrove, British Columbia; Ikea Wholesale Limited Partner of Longueuil, Quebec; Royal Recouvrement de Fenêtre of Montréal, Quebec; Sears Canada Merchandising of Toronto, Ontario; Shade-O-Matic Ltd. of Toronto, Ontario; Urban Outfitters Inc. of Philadelphia, USA; and ZMC Metal Coating Inc. of Woodbridge, Ontario.
[30] Under Article 15 of the WTO Anti-dumping Agreement, developed countries are to give regard to the special situation of developing country members when considering the application of anti-dumping measures under the Agreement. Possibilities of constructive remedies provided for under the Agreement are to be explored before applying anti-dumping duty where they would affect the essential interests of developing country members.
[31] As Mexico and China are listed under Part 1 of the DAC List of Aid Recipients4 maintained by the Organization for Economic Co-operation and Development, the President recognizes them as developing countries for purposes of actions taken pursuant to SIMA. In this particular investigation, this obligation was met by providing the opportunity for exporters to submit price undertakings. The CBSA did not receive any proposals for undertakings from any of the identified exporters prior to the final determination.
[32] Normal values are generally based on the domestic selling price of the goods in the country of export or on the full cost of the goods plus a reasonable amount for profits. The export price is generally the lesser of the importer's purchase price and the exporter's selling price to Canada less all charges and expenses resulting from the exportation of the goods. When the export price is less than the normal value, the difference is the margin of dumping. Further details regarding the normal values, export prices and margins of dumping are discussed below.
[33] RWM was established in December 2002 and started shipping to Canada in February 2003. Therefore, the information, which was provided and verified, concerned only the period from February 2003 to September 2003.
[34] Normal Value - Based on an analysis of RWM's domestic sales, it was determined that, for a number of products in its domestic market, the exporter had a sufficient number of profitable sales to determine normal values pursuant to section 15 of SIMA with appropriate adjustments made for delivery costs pursuant to regulation 8 of the Special Import Measures Regulations (SIMR). The delivery cost adjustment is an amount that reflects the average cost incurred by RWM in delivering the like goods to a domestic customer in three zones: Guadalajara, Mexico City and Monterrey. Normal values were based on the weighted average domestic selling price of the like goods during the 60-day period corresponding with each sale to Canada during the POI. The normal values for the blinds were determined in peso per square foot and the normal values for the slats were determined in peso per linear foot.
[35] For those products for which there was not a sufficient number of acceptable sales of like goods in the domestic market, normal values were determined in accordance with paragraph 19(b) of SIMA, using the cost of production of the goods, a reasonable amount for administrative, selling, and all other costs, plus a reasonable amount for profits. An amount for profit was calculated in accordance with subparagraph 11(1)(b)(ii) of the SIMR, based on sales of goods in the domestic market that were of the same general category as the goods sold to the importer in Canada.
[36] Export price - For purposes of the final determination, the export prices for the subject goods produced by RWM were determined pursuant to section 24 of SIMA on the basis of the lesser of the exporter's selling price and the importer's purchase price and adjusted by deducting the actual delivery costs. In all cases, the exporter's selling price was the lower of the two prices.
[37] Margins of dumping - During the period of investigation, 76% of RWM's exports to Canada were dumped by a weighted average margin of dumping of 28%. The margins of dumping ranged from 1% to 41% when expressed as a percentage of export price.
[38] For purposes of the final determination, the normal values of subject goods from the Mexican exporters who were part of the group of exporters to whom an RFI was sent but who did not respond, were determined pursuant to a ministerial specification under section 29 of SIMA. The ministerial specification determines normal values on the basis of the weighted average of the highest estimated margin of dumping established for each importer who had provided a properly documented response during the first phase of the investigation. As a result, 100% of the subject goods exported to Canada by the uncooperative Mexican companies were determined to be dumped by a margin of dumping of 120% when expressed as a percentage of export price.
[39] For subject goods from Mexican exporters who were not part of the group to whom an RFI was sent pursuant to subsection 30.3(1) of SIMA, the margin of dumping was based on the weighted average margin of dumping for RWM. As a result, 100% of the subject goods exported to Canada by these exporters were determined to be dumped by a margin of 28% when expressed as a percentage of export price.
The People's Republic of China
[40] No complete submissions were received from any party involved in the export of subject goods from China during the POI.
[41] The normal values of subject goods from the Chinese exporters who were part of the group of exporters to whom an RFI was sent but who did not respond, were determined pursuant to a ministerial specification under section 29 of SIMA based on the weighted average of the highest estimated margin of dumping established for each importer who had provided a properly documented response during the first phase of the investigation. As a result, 100% of the subject goods exported to Canada by these companies were dumped by a margin of dumping of 120%.
[42] For subject goods from Chinese exporters who were not part of the group to whom an RFI was sent pursuant to subsection 30.3(1) of SIMA, the margin of dumping was based on the weighted average margin of dumping for RWM. As a result, 100% of the subject goods exported to Canada by these exporters were dumped by a margin of dumping of 28% when expressed as a percentage of export price.
[43] The results of the investigation indicate that 99% of the subject goods imported into Canada during the period of investigation were dumped by an overall weighted average margin of dumping of 95% when expressed as a percentage of export price.
[44] In making a final determination of dumping, the President must be satisfied that the subject goods have been dumped and that the margin of dumping is not insignificant. Subsection 2(1) of SIMA stipulates that the margin of dumping is insignificant if it is less than 2% of the export price of the goods. The margins of dumping found are as follows:
Margins of Dumping
from October 1, 2002 to September 30, 2003
| Country | % of Goods Dumped | Range of Margins of Dumping (% of Export Price) |
Weighted Average Margin of Dumping (% of Export Price) |
|---|---|---|---|
Mexico - Royal Window Coverings México S.A. de C.V. |
76% |
1% - 41% |
28% |
Mexico - Levolor and its suppliers |
100% |
120% | |
Mexico - All other exporters |
100% |
28% | |
Mexico - Total |
78 % |
34% | |
People's Republic of China
|
100% |
120% | |
People's Republic of China - All other exporters |
100% |
28% | |
China - Total |
100% |
98% | |
Grand Total |
99% |
95% |
[45] Based on the results of the investigation, the President is satisfied that the wood venetian blinds and slats originating in or exported from Mexico and the People's Republic of China have been dumped and that the margins of dumping are not insignificant. Accordingly, on May 17, 2004, the President made a final determination of dumping pursuant to paragraph 41(1)(a) of SIMA.
[46] The Tribunal's inquiry concerning the question of injury to the domestic industry is continuing. The Tribunal will issue its decision by June 18, 2004.
[47] The provisional period began on February 19, 2004, and will end on the date the Tribunal issues its finding. Subject goods imported during the provisional period will continue to be assessed provisional duty as determined at the time of the preliminary determination of dumping. For further details on the application of provisional duty, refer to the Statement of Reasons issued for the preliminary determination of dumping, which is available on the CBSA Web site at www.cbsa-asfc.gc.ca/sima-lmsi/menu-eng.html.
[48] If the Tribunal finds that the dumped goods have not caused injury and do not threaten to cause injury, all proceedings relating to this investigation will be terminated. In this situation, all provisional duty paid or security posted by importers will be returned.
[49] If the Tribunal finds that the dumped goods have caused injury, the anti-dumping duty payable on subject goods released from customs possession during the provisional period will be finalized, pursuant to section 55 of SIMA. Imports released from customs possession after the date of the Tribunal's finding will be subject to anti-dumping duty equal to the margin of dumping. In that event, the importer in Canada shall pay all such duty. If the importers of such goods do not indicate the required SIMA code or do not correctly describe the goods in the customs documents, an administrative monetary penalty could be imposed. The provisions of the Customs Act apply with respect to the payment, collection or refund of any duty collected under SIMA. As a result, failure to pay duties within the prescribed time will result in the application of interest.
[50] A notice of this final determination of dumping is being published in the Canada Gazette pursuant to paragraph 41(3)(a) of SIMA.
[51] This Statement of Reasons has been posted on the Directorate's Web site at the address below. For further information, please contact Michel Desmarais or Hugh Marcil, as follows:
Canada Border Services Agency | |
Telephone |
Michel Desmarais (613) 954-7188 |
Fax |
(613) 948-4844 |
MichelD.Desmarais@cbsa-asfc.gc.ca | |
| Web Site | http://www.cbsa-asfc.gc.ca/sima-lmsi/ |
Suzanne Parent
Director General
Anti-Dumping and Countervailing Directorate
List of domestic producers who make up the Canadian industry of like goods:
Les Industries La Belle
Division de la Belle Vénitienne Inc.
46 de la Seigneurie Blvd.
Blainville, QC J7C 3V5
Les Industries l'Avant-Garde
318B Saint-Paul St.
Le Gardeur, QC J5Z 3T3
Stores de bois Montréal
8320 Place Lorraine
Montréal (Anjou district), QC H1J 1E6
Tapis Saucier
98 Route 132 West
Trois-Pistoles, QC G0L 4K0
Trans UV
5235 Henri-Bourassa West
Saint-Laurent, QC H4R 1B8
V.P. Fabricants de Stores
2315 des Entreprises, Suite 102
Terrebonne, QC J6X 4J9
1 This product is known by several names: wood venetian blinds, wood blinds, basswood or other wood blinds, or simply blinds.
2 Both "strips" and "laths" are synonymous with slats.
3 Canadian International Trade Tribunal, Public Staff Report (Inquiry No.: NQ-2003-003), Wood Venetian Blinds and Slats Originating in or Exported from Mexico and the People's Republic of China, April 7, 2004.
4 OECD, DAC List of Aid Recipients - As at 1 January 2003, online: http://www.oecd.org/dataoecd/35/9/2488552.pdf
