MAT 2022 IN: Mattresses
Statement of Reasons—final decisions

Complainant

[17] The contact information for the complainants is as follows:

Restwell Mattress Co. Ltd.
14922 54A Ave
Surrey, BC  V3S 5X7

United Steelworkers Canada
National Office
234 Eglinton Ave E, 8th floor
Toronto, ON  M4P 1K7

[18] Restwell is a Canadian manufacturer of mattresses and bed foundations that sells its product line through national retail and independent dealers in North America. It is headquartered in Surrey, British Columbia.^{Footnote 1}

[19] The USW’s full legal name is the “United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union”. It is an international trade union with approximately 220,000 members in Canada. The USW was founded in 1941, and its initial membership was based primarily in the basic steel industry. However, the USW has grown with membership in virtually every sector of the economy. Of note, in October 1985, the Upholsterers International Union (UIU) merged into the USW creating, at that time, the Upholsterers Division of the USW. Thanks to the UIU’s decision to join the USW, the USW became the predominant union in the mattress sector in both Canada and the United States. Today the USW remains the predominant union in the Canadian mattress sector, with the following bargaining units (in alphabetical order) at producers across Canada:

• King Koil (Satpanth Capital Inc.), USW Local 8300-10; Local President: Carolyn Egan; Unit Chair: Donald Hilton; Total employment: 10 to 20 workers
• Marshall Ventilated Mattress, Downsview ON, USW Local 3950-62; Plant currently closed
• Serta Simmons Bedding Canada, Vaughan ON, USW Local 8300-11: Local President: Carolyn Egan; Unit Chair: Aaron Philip; Production workers at full capacity: 150
• Simmons SSH Bedding Canada Co., Kirkland QC; USW Local 6565, Local President: Ryan Stevens. Production workers at full capacity: 220
• Springwall Sleep Products Inc., Mississauga ON, USW Local 8300-36; Local President: Carolyn Egan; Unit Chair: Desmond Clarke; Production workers at full capacity: 80
• Tempur Sealy Canada Ltd, Toronto ON, USW Local 8300-09; Local President: Carolyn Egan; Unit Chair: Dennis Williamson. Total production workers at full capacity: 170
• Tempur Sealy Canada Ltd, Edmonton AB; USW Local 1-207; Local Union President: Dave Baraniuk; Unit Chair: Devon Mytroen Production workers at full capacity: 100

Other producers

[20] The complainants identified the following other potential producers of mattresses in Canada^{Footnote 2}:

Trade unions

[21] One of the complainants, the USW, is a trade union representing numerous bargaining units at producers of mattresses across Canada. The complaint also identified three other trade unions which may represent workers at mattress production facilities in Canada. Specifically, the complaint identified UNIFOR Local 112 and 252, the United Food and Commercial Workers Local 501, and the Operating Engineers Local 955.^{Footnote 3}

Importers

[22] At the initiation of the investigations, the CBSA identified 146 potential importers of the subject goods based on both information provided by the complainant and CBSA import entry documentation. All of the potential importers identified were asked to respond to the CBSA’s Importer RFI.^{Footnote 4} The CBSA received 8 responses to the Importer RFI.

Exporters

[23] At the initiation of the investigations, the CBSA identified 131 potential exporters/producers of the subject goods originating in or exported from China from CBSA import documentation and from information submitted in the complaint. All of the potential exporters identified were sent the CBSA’s Dumping and Subsidy RFIs.^{Footnote 5}

[24] In total, 14 exporters responded to the Dumping and Subsidy RFIs. The submissions and results for the companies have been summarized in the Results of the dumping investigation and Results of the subsidy investigation sections, found below.

[25] The CBSA performed verifications by way of Verification Questionnaires for all companies.

[26] Respondents who have provided deficient submissions have been informed that their information could not be used for the purposes of the final determinations as it was not found to be complete and/or reliable.

Government

[27] For the purposes of these investigations, the GOC refers to all levels of government, i.e., federal, central, provincial/state, regional, municipal, city, township, village, local, legislative, administrative or judicial, singular, collective, elected or appointed. It also includes any person, agency, enterprise, or institution acting for, on behalf of, or under the authority of any law passed by, the government of that country or that provincial, state or municipal or other local or regional government.

[28] At the initiation of the investigations, the GOC was sent the CBSA’s Government Subsidy RFI.^{Footnote 6} The GOC did not provide a response to the Government Subsidy RFI.

Definition

[29] For the purpose of these investigations, subject goods are defined as:

[30] For additional product information, refer to the Statement of Reasons issued for the preliminary determinations.

Classification of imports

[31] The subject goods are normally classified under the following tariff classification numbers:

• 9404.21.00.00
• 9404.29.00.00
• 9404.90.90.40

[32] The listing of tariff classification numbers is for convenience of reference only. The tariff classification numbers include non-subject goods. Also, subject goods may fall under tariff classification numbers that are not listed. Refer to the product definition for authoritative details regarding the subject goods.

Normal value

[53] Normal values are generally determined based on the domestic selling prices of like goods in the country of export, in accordance with the methodology of section 15 of SIMA, or based on either the methodology of 19(a) or on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs, plus a reasonable amount for profits, in accordance with the methodology of paragraph 19(b) of SIMA.

[54] Where, in the opinion of the CBSA, sufficient information has not been furnished or is not available, normal values are determined pursuant to a ministerial specification in accordance with subsection 29(1) of SIMA.

Export price

[55] The export price of goods sold to importers in Canada is generally determined in accordance with the methodology of section 24 of SIMA based on the lesser of the adjusted exporter’s sale price for the goods or the adjusted importer’s purchase price. These prices are adjusted where necessary by deducting the costs, charges, expenses, duties and taxes resulting from the exportation of the goods as provided for in subparagraphs 24(a)(i) to 24(a)(iii) of SIMA.

[56] Where there are sales between associated persons and/or a compensatory arrangement exists, the export price is determined based on the importer’s resale price of the imported goods in Canada to unrelated purchasers, less deductions for all costs incurred in preparing, shipping and exporting the goods to Canada that are additional to those incurred on the sales of like goods for use in the country of export, all costs included in the resale price that are incurred in reselling the goods (including duties and taxes) or associated with the assembly of the goods in Canada and an amount representative of the average industry profit in Canada as provided for in paragraphs 25(1)(c) and 25(1)(d) of SIMA. In any cases not provided for under paragraphs 25(1)(c) and 25(1)(d) of SIMA, the export price is determined in such a manner as the Minister specifies, pursuant to paragraph 25(1)(e).

[57] Where, in the opinion of the CBSA, sufficient information has not been furnished or is not available, export prices are determined pursuant to a ministerial specification under subsection 29(1) of SIMA.

Margin of dumping

[58] The margin of dumping by exporter is equal to the amount by which the total normal value exceeds the total export price of the goods, expressed as a percentage of the total export price. All subject goods imported into Canada during the POI are included in the determination of the margins of dumping of the goods. Where the total normal value of the goods does not exceed the total export price of the goods, the margin of dumping is zero.

[59] Further information regarding each exporter is detailed below.

Normal values and export prices

Dongguan Sinohome Limited

[60] Dongguan Sinohome Limited (Dongguan Sinohome) is a producer and exporter of subject goods, located in Guangdong, China.

[61] Dongguan Sinohome provided a response to the Dumping RFI^{Footnote 11}, including a database of domestic sales of mattresses during the PAP. However, normal values could not be determined in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with all the terms and conditions referred to in sections 15 and 16 of SIMA as to permit a proper comparison with the sales of the goods to the importer in Canada.

[62] As such, normal values were determined using the methodology of paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs, and a reasonable amount for profits.

[63] The cost of production was determined in accordance with paragraph 11(1)(a) of the SIMR, based on Dongguan Sinohome’s cost data associated with the subject goods shipped to Canada. The amount for administrative, selling, and all other costs was determined in accordance with subparagraph 11(1)(c)(ii) of the SIMR, based on Dongguan Sinohome’s selling and administrative expenses incurred during the POI. The amount for profit was determined pursuant to subparagraph 11(1)(b)(iv), based on other producers’ sales of goods in China, during the PAP, that were of the same general category as the subject goods exported to Canada.

[64] For the subject goods exported by Dongguan Sinohome to Canada during the POI, export prices were determined in accordance with section 24 of SIMA, based on the lesser of the exporter’s selling price and the importer’s purchase price less all costs, charges and expenses resulting from the exportation of the goods.

[65] For the purposes of the final determination, the total normal value compared to the total export price results in a margin of dumping of 23.9% for Dongguan Sinohome, expressed as a percentage of the export price.

Foshan EON Technology Industry Co., Ltd.

[66] Foshan EON Technology Industry Co., Ltd. (Foshan EON) is a producer and exporter of subject goods located in Guangdong, China.

[67] Foshan EON provided a response to the Dumping RFI^{Footnote 12}, including a database of domestic sales of mattresses during the POI. However, normal values could not be determined in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with all the terms and conditions referred to in sections 15 and 16 of SIMA as to permit a proper comparison with the sales of the goods to the importer in Canada.

[68] As such, normal values were determined pursuant to paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs and a reasonable amount for profits.

[69] The cost of production was determined in accordance with paragraph 11(1)(a) of the SIMR, based on Foshan EON’s cost data associated with the subject goods shipped to Canada. The amount for administrative, selling, and all other costs was determined in accordance with subparagraph 11(1)(c)(ii) of the SIMR, based on Foshan EON’s selling and administrative expenses incurred during the POI. The amount for profits was determined in accordance with subparagraph 11(1)(b)(ii) of the SIMR, based on Foshan EON’s sales of goods in China, during the PAP, that were of the same general category as the subject goods exported to Canada.

[70] During the POI, Foshan EON also exported subject goods to its related importer. Due to the relationship between the companies, a reliability test was performed to determine whether the section 24 export prices were reliable as envisaged by SIMA. This test was conducted by comparing the section 24 export prices with the section 25 export prices. This test revealed that the export prices determined in accordance with section 24 of SIMA were unreliable and, therefore, export prices for sales of subject goods by Foshan EON to their related importer in Canada were determined in accordance with section 25 of SIMA.

[71] For those subject goods that were exported by Foshan EON during the POI to unrelated importers in Canada, export prices were determined in accordance with section 24 of SIMA, based on the lesser of the exporter’s selling price and the importer’s purchase price less all costs, charges and expenses resulting from the exportation of the goods.

[72] For the purposes of the final determination, the total normal value compared to the total export price results in a margin of dumping of 37.9% for Foshan EON, expressed as a percentage of the export price.

Foshan Suilong Furniture Co., Ltd.

[73] Foshan Suilong Furniture Co., Ltd. (Foshan Suilong) is a producer and exporter of subject goods located in Guangdong, China.

[74] Foshan Suilong provided a response to the Dumping RFI^{Footnote 13}, including a database of domestic sales of mattresses during the POI. However, normal values could not be determined in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with all the terms and conditions referred to in sections 15 and 16 of SIMA as to permit a proper comparison with the sales of the goods to the importer in Canada.

[75] As such, normal values were determined using the methodology of paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs, and a reasonable amount for profits.

[76] The cost of production was determined in accordance with paragraph 11(1)(a) of the SIMR, based on Foshan Suilong’s cost data associated with the subject goods shipped to Canada. The amount for administrative, selling, and all other costs was determined in accordance with subparagraph 11(1)(c)(ii) of the SIMR, based on Foshan Suilong’s selling and administrative expenses incurred during the POI. The amount for profits was determined pursuant to subparagraph 11(1)(b)(iv), based on other producers’ sales of goods in China, during the PAP, that were of the same general category as the subject goods exported to Canada.

[77] For the subject goods exported by Foshan Suilong to Canada during the POI, export prices were determined in accordance with section 24 of SIMA, based on the lesser of the exporter’s selling price and the importer’s purchase price less all costs, charges and expenses resulting from the exportation of the goods.

[78] For the purposes of the final determination, the total normal value compared to the total export price results in a margin of dumping of 13.2% for Foshan Suilong, expressed as a percentage of the export price.

Gold Lion Furniture (Shanghai) Co., Ltd.

[79] Gold Lion Furniture (Shanghai) Co., Ltd. (Gold Lion Furniture) is a producer and exporter of subject goods located in Shanghai, China.

[80] Gold Lion Furniture provided a response to the Dumping RFI^{Footnote 14}, including a database of domestic sales of mattresses during the POI. However, normal values could not be determined in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with all the terms and conditions referred to in sections 15 and 16 of SIMA as to permit a proper comparison with the sales of the goods to the importer in Canada.

[81] As such, normal values were determined using the methodology of paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs, and a reasonable amount for profits.

[82] The cost of production was determined in accordance with paragraph 11(1)(a) of the SIMR, based on Gold Lion Furniture’s cost data associated with the subject goods shipped to Canada. The amount for administrative, selling, and all other costs was determined in accordance with subparagraph 11(1)(c)(ii) of the SIMR, based on Gold Lion Furniture’s selling and administrative expenses incurred during the POI. The amount for profits was determined pursuant to subparagraph 11(1)(b)(iv), based on other producers’ sales of goods in China, during the PAP, that were of the same general category as the subject goods exported to Canada.

[83] During the POI, the subject goods exported to Canada by Gold Lion Furniture were sold to their related importer. Due to the relationship between the companies, a reliability test was performed to determine whether the section 24 export prices were reliable as envisaged by SIMA. This test was conducted by comparing the section 24 export prices with the section 25 export prices. The test revealed that the export prices in accordance with section 24 of SIMA were reliable and, therefore, export prices for Gold Lion Furniture were determined in accordance with section 24 of SIMA.

[84] For the purposes of the final determination, the total normal value compared to the total export price results in a margin of dumping of 22.9% for Gold Lion Furniture, expressed as a percentage of the export price.

Guangdong Eonjoy Technology Limited

[85] Guangdong Eonjoy Technology Limited (Guangdong Eonjoy) is a producer and exporter of subject goods located in Guangdong, China.

[86] Guangdong Eonjoy provided a response to the Dumping RFI^{Footnote 15}, including a database of domestic sales of mattresses during the PAP. For exports of subject goods by Guangdong Eonjoy where it had sufficient domestic sales of like goods that met the requirements of sections 15 and 16 of SIMA, the CBSA determined normal values in accordance with section 15 of SIMA based on prices of domestic sales of like goods.

[87] For all other exports of subject goods by Guangdong Eonjoy, the CBSA determined normal values in accordance with paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs and a reasonable amount for profits.

[88] The cost of production was determined in accordance with paragraph 11(1)(a) of the SIMR, based on Guangdong Eonjoy’s cost data associated with the subject goods shipped to Canada. The amount for administrative, selling, and all other costs was determined in accordance with subparagraph 11(1)(c)(ii) of the SIMR, based on selling and administrative expenses incurred during the POI. The amount for profits was determined pursuant to subparagraph 11(1)(b)(ii) of the SIMR, based on Guangdong Eonjoy’s sales of goods in China, during the PAP, that were of the same general category as the subject goods exported to Canada.

[89] For the subject goods exported by Guangdong Eonjoy to Canada during the POI, export prices were determined in accordance with section 24 of SIMA, based on the lesser of the exporter’s selling price and the importer’s purchase price less all costs, charges and expenses resulting from the exportation of the goods.

[90] For purposes of the final determination, the total normal value compared to the total export price results in a margin of dumping of 10.0% for Guangdong Eonjoy, expressed as a percentage of the export price.

Healthcare Co., Ltd.

[91] Healthcare Co., Ltd. (Healthcare) is a producer and exporter of subject goods located in Rugao City, China.

[92] Healthcare provided a response to the CBSA's Dumping RFI^{Footnote 16}, including a database of domestic sales of mattresses during the POI. However, normal values could not be determined in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with all the terms and conditions referred to in sections 15 and 16 of SIMA as to permit a proper comparison with the sales of the goods to the importer in Canada.

[93] As a result, normal values were determined using the methodology of paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs and a reasonable amount for profits.

[94] The cost of production was determined in accordance with paragraph 11(1)(a) of the SIMR, based on Healthcare’s cost data associated with the subject goods shipped to Canada. The amount for administrative, selling, and all other costs was determined in accordance with subparagraph 11(1)(c)(ii) of the SIMR, based on selling and administrative expenses incurred during the POI. The amount for profits was determined pursuant to subparagraph 11(1)(b)(ii) of the SIMR, based on Healthcare’s sales of goods in China, during the PAP, that were of the same general category as the subject goods exported to Canada.

[95] For subject goods exported to Canada by Healthcare during the POI, export prices were determined in accordance with section 24 of SIMA, based on the lesser of the exporter's selling price and the importer's purchase price less all costs, charges and expenses resulting from the exportation of the goods.

[96] For the purposes of the final determination, the total normal value compared to the total export price results in a margin of dumping of 71.3% for Healthcare, expressed as a percentage of the export price.

Jiaxing Taien Springs Co., Ltd.

[97] Jiaxing Taien Springs Co., Ltd. (Taien) is a producer and exporter of subject goods located in Zhejiang, China.

[98] Taien provided a response to the Dumping RFI^{Footnote 17}, including a database of domestic sales of mattresses during the POI. For exports of subject goods by Taien where it had sufficient domestic sales of like goods that met the requirements of sections 15 and 16 of SIMA, the CBSA determined normal values in accordance with section 15 of SIMA based on prices of domestic sales of like goods.

[99] For all other exports of subject goods by Taien, the CBSA determined normal values in accordance with paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs and a reasonable amount for profits.

[100] The cost of production was determined in accordance with paragraph 11(1)(a) of the SIMR, based on Taien’s cost data associated with the subject goods shipped to Canada. The amount for administrative, selling, and all other costs was determined in accordance with subparagraph 11(1)(c)(ii) of the SIMR, based on selling and administrative expenses incurred during the POI. The amount for profits was determined pursuant to subparagraph 11(1)(b)(ii) of the SIMR, based on Taien’s sales of goods in China, during the PAP, that were of the same general category as the subject goods exported to Canada.

[101] For subject goods exported to Canada by Taien during the POI, export prices were determined in accordance with section 24 of SIMA, based on the lesser of the exporter’s selling price and the importer’s purchase price less all costs, charges and expenses resulting from the exportation of the goods.

[102] For the purposes of the final determination, the total normal value compared to the total export price results in a zero margin of dumping. As such, the dumping investigation in respect of the goods of this exporter was terminated pursuant to paragraph 41(1)(a) of SIMA.

Jinlongheng Furniture Co., Ltd

[103] Jinlongheng Furniture Co., Ltd (Jinlongheng Furniture) is a producer and exporter of subject goods located in Guangdong, China.

[104] Jinlongheng Furniture provided a response to the Dumping RFI^{Footnote 18}, including a database of domestic sales of mattresses during the POI. For exports of subject goods by Jinlongheng where it had sufficient domestic sales of like goods that met the requirements of sections 15 and 16 of SIMA, the CBSA determined normal values in accordance with Section 15 of SIMA based on prices of domestic sales of like goods.

[105] For all other exports of subject goods by Jinlongheng Furniture, the CBSA determined normal values in accordance with paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs, and a reasonable amount for profits.

[106] The cost of production was determined in accordance with paragraph 11(1)(a) of the SIMR, based on Jinlongheng Furniture’s cost data associated with the subject goods shipped to Canada. The amount for administrative, selling and all other costs were determined in accordance with paragraph 11(1)(c)(ii) of the SIMR, based on Jinlongheng Furniture selling and administrative expenses incurred during the POI. The amount for profits was determined pursuant to subparagraph 11(1)(b)(iv) of the SIMR, based on other producers’ sales of goods in China, during the PAP, that were of the same general category as the subject goods exported to Canada.

[107] For the subject goods exported to Canada by Jinlongheng Furniture during the POI, export prices were determined in accordance with section 24 of SIMA, based on the lesser of the exporter’s selling price and the importer’s purchase price less all costs, charges and expenses resulting from the exportation of the goods.

[108] For the purposes of the final determination, the total normal value compared to the total export price results in a margin of dumping of 4.4% for Jinlongheng Furniture, expressed as a percentage of the export price.

Sinomax (Zhejiang) Polyurethane Technology Ltd.

[109] Sinomax (Zhejiang) Polyurethane Technology Ltd. (Zhejiang Sinomax) is a producer and exporter of subject goods, located in Zhejiang, China.

[110] Zhejiang Sinomax provided a response to the Dumping RFI^{Footnote 19}, including a database of domestic sales of mattresses during the PAP. For exports of subject goods by Zhejiang Sinomax where it had sufficient domestic sales of like goods that met the requirements of sections 15 and 16 of SIMA, the CBSA determined normal values in accordance with section 15 of SIMA based on prices of domestic sales of like goods.

[111] For all other exports of subject goods by Zhejiang Sinomax, the CBSA determined normal values in accordance with paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs and a reasonable amount for profits.

[112] The cost of production was determined in accordance with paragraph 11(1)(a) of the SIMR, based on Zhejiang Sinomax’s cost data associated with the subject goods shipped to Canada. The amount for administrative, selling, and all other costs was determined in accordance with subparagraph 11(1)(c)(ii) of the SIMR, based on Zhejiang Sinomax’s selling and administrative expenses incurred during the POI. The amount for profits was determined in accordance with subparagraph 11(1)(b)(iv), based on other producers’ sales of goods in China, during the PAP, that were of the same general category as the subject goods exported to Canada.

[113] During the POI, some of the subject goods exported by Zhejiang Sinomax were sold to their related importer in Canada. Due to the relationship between the companies, a reliability test was performed to determine whether the section 24 export prices were reliable as envisaged by SIMA and was conducted by comparing the section 24 export prices with the section 25 export prices. This test revealed that the export prices determined in accordance with section 24 of SIMA were unreliable and, therefore, export prices for sales of subject goods by Zhejiang Sinomax to their related importer in Canada were determined in accordance with section 25 of SIMA.

[114] For those subject goods that were exported by Zhejiang Sinomax during the POI to unrelated importers in Canada, export prices were determined in accordance with section 24 of SIMA, based on the lesser of the exporter’s selling price and the importer’s purchase price less all costs, charges and expenses resulting from the exportation of the goods.

[115] For purposes of the final determination, the total normal value compared to the total export price results in a margin of dumping of 14.1% for Zhejiang Sinomax, expressed as a percentage of the export price.

Xianghe Kaneman Furniture Ltd.

[116] Xianghe Kaneman Furniture Ltd. (Kaneman) is a producer and exporter of subject goods located in Hebei, China.

[117] Kaneman provided a response to the Dumping RFI^{Footnote 20}, including a database of domestic sales of mattresses during the POI. For exports of subject goods by Kaneman where it had sufficient domestic sales of like goods that met the requirements of sections 15 and 16 of SIMA, the CBSA determined normal values in accordance with section 15 of SIMA based on prices of domestic sales of like goods.

[118] For all other exports of subject goods by Kaneman, the CBSA determined normal values in accordance with paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs, and a reasonable amount for profits.

[119] The cost of production was determined in accordance with paragraph 11(1)(a) of the SIMR, based on Kaneman’s cost data associated with the subject goods shipped to Canada. The amount for administrative, selling, and all other costs was determined in accordance with subparagraph 11(1)(c)(ii) of the SIMR, based on selling and administrative expenses incurred during the POI. The amount for profits was determined pursuant to subparagraph 11(1)(b)(ii) of the SIMR, based on Kaneman’s sales of goods in China, during the PAP, that were of the same general category as the subject goods exported to Canada.

[120] For the subject goods exported by Kaneman to Canada during the POI, export prices were determined in accordance with section 24 of SIMA, based on the lesser of the exporter’s selling price and the importer’s purchase price less all costs, charges and expenses resulting from the exportation of the goods.

[121] For the purposes of the final determination, the total normal value compared to the total export price results in a zero margin of dumping. As such, the dumping investigation in respect of the goods of this exporter was terminated pursuant to paragraph 41(1)(a) of SIMA.

Zhejiang Glory Home Furnishings Co., Ltd.

[122] Zhejiang Glory Home Furnishings Co., Ltd (Glory) is a producer and exporter of subject goods located in Jiashan county, China.

[123] Glory provided a response to the Dumping RFI^{Footnote 21}, including a database of domestic sales of mattresses during the POI. For exports of subject goods by Glory where it had sufficient domestic sales of like goods that met the requirements of sections 15 and 16 of SIMA, the CBSA determined normal values in accordance with section 15 of SIMA based on prices of domestic sales of like goods.

[124] For all other exports of subject goods by Glory, the CBSA determined normal values in accordance with paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs, and a reasonable amount for profits.

[125] The cost of production was determined in accordance with paragraph 11(1)(a) of the SIMR, based on Glory’s cost data associated with the subject goods shipped to Canada. The amount for administrative, selling, and all other costs was determined in accordance with subparagraph 11(1)(c)(ii) of the SIMR, based on selling and administrative expenses incurred during the POI. The amount for profits was determined pursuant to subparagraph 11(1)(b)(ii) of the SIMR, based on Glory’s sales of goods in China, during the PAP, that were of the same general category as the subject goods exported to Canada.

[126] For subject goods exported to Canada by Glory during the POI, export prices were determined in accordance with section 24 of SIMA, based on the lesser of the exporter’s selling price and the importer’s purchase price less all costs, charges and expenses resulting from the exportation of the goods.

[127] For the purposes of the final determination, the total normal value compared to the total export price results in a margin of dumping of 3.7% for Glory, expressed as a percentage of the export price.

Zinus Xiamen Inc.

[128] Zinus Xiamen Inc. (Zinus Xiamen) is a producer and exporter of subject goods, located in Xiamen, China.

[129] Zinus Xiamen provided a response to the Dumping RFI^{Footnote 22}, including a database of domestic sales of mattresses during the POI. However, normal values could not be determined in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with all the terms and conditions referred to in sections 15 and 16 of SIMA as to permit a proper comparison with the sales of the goods to the importer in Canada.

[130] As such, normal values were determined pursuant to paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs and a reasonable amount for profits.

[131] The cost of production was determined in accordance with paragraph 11(1)(a) of the SIMR, based on Zinus Xiamen’s cost data associated with the subject goods shipped to Canada. The amount for administrative, selling, and all other costs was determined in accordance with subparagraph 11(1)(c)(ii) of the SIMR, based on Zinus Xiamen’s selling and administrative expenses incurred during the POI. The amount for profits was determined in accordance with subparagraph 11(1)(b)(iv), based on other producers’ sales of goods in China, during the PAP, that were of the same general category as the subject goods exported to Canada.

[132] During the POI, some of the subject goods exported to Canada by Zinus Xiamen were sold to related importers Mellow Inc. or Zinus Canada. Due to the relationship between the companies, reliability tests were performed to determine whether the section 24 export prices were reliable as envisaged by SIMA. These tests were conducted by comparing the section 24 export prices with the section 25 export prices. The test for sales to Zinus Canada revealed that the export prices determined in accordance with section 24 of SIMA were reliable and, therefore, export prices for sales of subject goods sold by Zinus Xiamen to Zinus Canada were determined in accordance with section 24 of SIMA. The test for sales to Mellow revealed that the export prices determined in accordance with section 24 of SIMA were unreliable and, therefore, export prices for sales of subject goods sold by Zinus Xiamen to Mellow were determined in accordance with section 25 of SIMA.

[133] For the subject goods exported by Zinus Xiamen to Canada during the POI sold to unrelated importers, export prices were determined in accordance with section 24 of SIMA, based on the lesser of the exporter’s selling price and the importer’s purchase price less all costs, charges and expenses resulting from the exportation of the goods.

[134] For purposes of the final determination, the total normal value compared to the total export price results in a margin of dumping of 22.4% for Zinus Xiamen, expressed as a percentage of the export price.

Zinus Zhangzhou Inc.

[135] Zinus Zhangzhou Inc. (Zinus Zhangzhou) is a producer and exporter of subject goods, located in ZhangPu-Xian, China.

[136] Zinus Zhangzhou provided a response to the Dumping RFI.^{Footnote 23} However, Zinus Zhangzhou did not have any domestic sales of like goods during the PAP, and as a result, normal values could not be determined in accordance with section 15 of SIMA.

[137] As such, normal values were determined pursuant to paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs and a reasonable amount for profits.

[138] The cost of production was determined in accordance with paragraph 11(1)(a) of the SIMR, based on Zinus Zhangzhou’s cost data associated with the subject goods shipped to Canada. The amount for administrative, selling, and all other costs was determined in accordance with subparagraph 11(1)(c)(ii) of the SIMR, based on Zinus Zhangzhou’s selling and administrative expenses incurred during the POI. The amount for profits was determined in accordance with subparagraph 11(1)(b)(iv), based on other producers’ sales of goods in China, during the PAP, that were of the same general category as the subject goods exported to Canada.

[139] During the POI, some of the subject goods exported to Canada by Zinus Zhangzhou were sold to Zinus Canada, a related importer. Due to the relationship between the two companies, a reliability test was performed to determine whether the section 24 export prices were reliable as envisaged by SIMA. This test was conducted by comparing the section 24 export prices with the section 25 export prices. The test revealed that the export prices determined in accordance with section 24 of SIMA were reliable and, therefore, export prices for Zinus Zhangzhou were determined in accordance with section 24 of SIMA.

[140] For the subject goods exported by Zinus Zhangzhou to Canada during the POI sold to unrelated importers, export prices were determined in accordance with section 24 of SIMA, based on the lesser of the exporter’s selling price and the importer’s purchase price less all costs, charges and expenses resulting from the exportation of the goods.

[141] For purposes of the final determination, the total normal value compared to the total export price results in a margin of dumping of 25.1% for Zinus Zhangzhou, expressed as a percentage of the export price.

All other exporters—China

[142] For exporters of subject goods that did not provide a response to the Dumping RFI or did not furnish sufficient information, the normal values and export prices were determined pursuant to a ministerial specification under subsection 29(1) of SIMA, which is based on a comparative analysis of facts available.

[143] In establishing the methodology for determining the normal values and export prices under ministerial specifications, the CBSA considered all the information on the administrative record, including the complaint filed by the domestic industry, the CBSA’s estimates at the initiation of the investigation, information submitted by exporters of mattresses from China, and customs import documentation.

[144] The CBSA decided that the normal values and export prices determined for the exporters whose submissions were complete for purposes of the final determination rather than the information provided in the complaint or estimated at initiation, would be used to establish the methodology for determining normal values since it reflects the trading practices of mattress exporters during the POI. 13 exporters in China provided complete information.

[145] The CBSA examined the difference between the normal value and the export price for each individual transaction from these exporters in order to obtain an appropriate amount for the normal value methodology. The transactions were examined to ensure that no anomalies affected the analysis, such as a very low volume and value, effects of seasonality or other business factors. A few anomalies were identified and removed.

[146] The CBSA considered that the highest amount by which the normal value exceeded the export price on an individual transaction of the 13 exporters mentioned above (expressed as a percentage of export price, excluding anomalies), was an appropriate basis for determining normal values. This methodology limits the advantage that an exporter may gain from not providing the necessary information requested in a dumping investigation as compared to an exporter that did provide the necessary information.

[147] The export prices were based on the declared selling prices on import documentation of mattresses. The CBSA considers this the best available information on which to base the export prices of goods for all other exporters as it reflects actual import data.

[148] Based on the above methodology, for exporters that did not provide a response to the Dumping RFI, the margin of dumping of subject goods originating in or exported from China was determined to be 146.6%, expressed as a percentage of export price.

Summary of results—dumping

[149] A summary of the results of the dumping investigation respecting all subject goods released into Canada during the POI are as follows:

[150] In order to make a final determination of dumping, the CBSA must be satisfied that:

• the subject goods have been dumped and
• that the margin of dumping is not insignificant

[151] Under paragraph 41(1)(a) of SIMA, the CBSA is required to terminate an investigation in respect of any goods of an exporter if it is satisfied that the goods have not been dumped or the margin of dumping of the goods of that exporter is insignificant, meaning a margin of dumping that is less than 2% of the export price of the goods.

[152] As indicated above, mattresses exported to Canada from China by Jiaxing Taien Springs Co., Ltd. and Xianghe Kaneman Furniture Ltd. were not dumped. Therefore, the CBSA terminated the dumping investigation with respect to these goods pursuant to paragraph 41(1)(a) of SIMA.

[153] The margins of dumping of mattresses determined for all other exporters of subject goods originating in or exported from China are greater than the threshold of 2% and are therefore not considered insignificant. As a result, the legislative requirements were satisfied for making a final determination of dumping respecting certain mattresses originating in or exported from China.

[154] A summary of the margins of dumping by exporter is presented in Appendix 1.

Summary of results—subsidy

[215] A summary of the results of the subsidy investigation respecting all subject goods released into Canada during the POI follows:

[216] Under paragraph 41(1)(a) of SIMA, the CBSA is required to terminate an investigation in respect of any goods of an exporter if the CBSA is satisfied that the goods have not been subsidized or the amount of subsidy on the goods of that exporter is insignificant.

[217] Pursuant to subsection 2(1) of SIMA, an amount of subsidy of less than 1% of the export price of the goods, for a developed country, is defined as insignificant.

[218] The amount of subsidy for Dongguan Sinohome Limited, Gold Lion Furniture (Shanghai) Co., Ltd., Guangdong Eonjoy Technology Ltd., Jinlongheng Furniture Co., Ltd., Xianghe Kaneman Furniture Ltd., Zinus Xiamen Inc. and Zinus Zhangzhou Inc. are below 1% of the export price and were, therefore, determined to be insignificant.

[219] The remaining goods under investigation have been subsidized and the amounts of subsidy determined for those goods, for a developed country, are greater than the threshold of 1% and are therefore not considered insignificant. As a result, the legislative requirement is satisfied for making a final determination of subsidy respecting certain mattresses from China.

[220] A summary of the results of the subsidy investigation respecting the subject goods released into Canada during the subsidy POI are presented in Appendix 1.

Dumping representations

Particular market situation (PMS)

Comments made during the investigations

During the investigations, counsel for Restwell submitted comments alleging that a PMS exists in China.^{Footnote 48} The allegations focused on the potential purchases of inputs from State Owned Enterprises for less than fair market value. Counsel further submitted that the CBSA should investigate whether a particular market situation exists with respect to the mattresses market in China.

Case briefs

Counsel for Jinlongheng and Kanemen submitted that there is no evidence of a PMS in the mattress industry in China.^{Footnote 49} Counsel alleged that there were no known support programs offered by the Chinese government, or regulations, policies, or plans that relate to the production or sale of mattresses or any of its co-products.

CBSA’s response

The CBSA reviewed the information submitted by the complainants and found the evidence did not sufficiently support the allegation that a PMS existed in China with respect to mattresses. As a result, the CBSA could not form an opinion under paragraph 16(2)(c) of the Special Import Measures Act (SIMA) that a PMS exists in the Chinese mattresses market.

Completeness and reliability of submissions

Comments made during the investigations

During the investigations, counsel for Restwell made representations concerning the completeness and accuracy of the information submitted by the exporters and importers, making specific allegations of deficiencies in the response.^{Footnote 50}

CBSA’s response

The CBSA has reviewed the responses from the exporters and suppliers to the RFIs and to the Supplemental RFIs. The CBSA has also conducted verifications of the exporters’ submissions by way of verification questionnaires. In instances where an exporter’s submission was considered substantially complete for the purposes of the final determination, the CBSA determined normal values, export prices and a margin of dumping on the basis of the exporter’s submission. For exporters who did not respond to the RFI or who did not provide sufficient information or whose submissions were considered unreliable, the CBSA determined normal values based on a ministerial specification pursuant to subsection 29(1) of SIMA.

Determination of normal values pursuant to paragraph 19(a)

Comments made during the investigations

During the investigation, counsel for Restwell submitted comments concerning the 19(a) information provided by exporters, alleging that the information is unreliable. Counsel made allegations of deficiencies regarding the responses of specific exporters.^{Footnote 51}

Case briefs

Counsel for several exporters submitted that normal values should be calculated in accordance with paragraph 19(a) of SIMA, stating that sufficient information was provided, and the sales accurately reflect the market value of subject goods sold to Canada.^{Footnote 52}

Counsel for Restwell submitted that the CBSA should not determine Normal Values in accordance with paragraph 19(a) of SIMA. Counsel noted that mattresses from China are subject to both an anti-dumping and countervailing duty order in the United States, and further alleges that exporters are continuing to dump to the United States, and as a result, the CBSA should not use information regarding sales to the United States for purposes of determining normal values. In addition, counsel reiterated its arguments from their comments made during the investigations.^{Footnote 53}

Reply Submissions

Counsel for Healthcare, Zinus Xiamen, Zinus Zhangzhou, Kaneman, and Jinlongheng reiterated arguments from their case briefs, submitting that sales to third countries is the most appropriate information.^{Footnote 54}

Counsel for Restwell reiterated arguments from their case briefs, submitting that Normal Values should not be determined pursuant to paragraph 19(a) of SIMA.^{Footnote 55}

CBSA’s response

The CBSA notes that the information regarding exporters’ export sales to other markets was submitted late in the investigations, and as a result, the CBSA was not able to issue Supplemental Requests for Information, or completely verify all of the information provided. In addition, the CBSA notes that export sales to other markets may not fairly reflect the market value of the goods at the time of the sale of the goods to the importer in Canada. As such, the cost of production information used to determine normal values pursuant to paragraph 19(b) was determined to be the best information available. Where there were insufficient domestic sales to determine normal values pursuant to section 15, normal values were determined pursuant to paragraph 19(b) of SIMA.

Cost allocation methodology

Case briefs

Counsel for Restwell argued that several exporters presented deficient and inaccurate model-specific costs for mattresses. Counsel argued that the allocation methodology used by the exporters are unreliable and do not reasonably reflect the cost of producing the goods. As such, counsel stated that the CBSA should apply a Ministerial Specification to determine normal values for the exporters who have used the methodology.

Counsels for several exporters argued that normal values should be determined using their submitted information.

Reply Submissions

In response to the exporters, counsel for the complainant submitted that the CBSA should continue to determine normal values under ministerial specification.

CBSA response

Based on the information on the administrative record and in accordance with SIMA and the SIMR, the CBSA took the representations on these issues into account when determining normal values and amounts of subsidy for each exporter.

Normal value determinations (Foshan EON and Guangdong Eonjoy)

Case briefs

Counsel for Foshan EON and Guangdong Eonjoy submitted that normal values must be determined pursuant to section 19 of SIMA. Counsel also argued that subparagraph 11(1)(b)(ii) of the Special Import Measures Regulations (SIMR) should be applied for the exporters, as they both have made a number of sales of goods that are of the same general category as the subject goods, and where the domestic sales permit a proper comparison.^{Footnote 56}

Reply Submissions

Counsel for Restwell argued that despite the arguments made by Foshan EON and Guangdong Eonjoy, the CBSA should apply a ministerial specification to determine normal values for the exporters.^{Footnote 57}

CBSA response

Based on the information on the administrative record and in accordance with SIMA and the SIMR, the CBSA took the representations on these issues into account when determining normal values and amounts of subsidy. As such, for Foshan EON, normal values were determined pursuant to paragraph 19(b) of SIMA. For Guangdong Eonjoy, some normal values were determined in accordance with section 15 of SIMA based on prices of domestic sales of like goods. For all other exports of subject goods by Guangdong Eonjoy, the CBSA determined normal values in accordance with paragraph 19(b) of SIMA.

Normal value determinations (Kaneman)

Case briefs

Counsel for Kaneman submitted that normal values should have been determined in accordance with section 15 of SIMA. Kaneman’s counsel argued that the company had a sufficient number of sales of like goods in the domestic market.^{Footnote 58}

CBSA response

Based on the information on the administrative record and in accordance with SIMA and the SIMR, the CBSA took the representations on these issues into account when determining normal values. As such, normal values for Kaneman were determined pursuant to section 15 and paragraph 19(b) of SIMA.

Amount for profits

Case briefs

Counsel for Kaneman and Jinlongheng submitted that profits should be determined under 11(1)(b)(i) and 11(1)(b)(ii) respectively. Kaneman’s counsel argued that their domestic sales volume is greater than 5%, and therefore sufficient to make a proper comparison with the sales to Canada. Counsel for Jinlongheng argued that determining an amount for profit pursuant to subparagraph 11(1)(b)(iv) was unreasonable. Counsel for Jinlongheng submitted that the profits earned on its domestic sales of goods of the same general category were sufficient to determine profit under subparagraph 11(1)(b)(ii).^{Footnote 59}

Counsel for the Zinus Group submitted that the amount for profit should be determined pursuant to a Ministerial Specification, pursuant to paragraph 29(1) of SIMA, based on Zinus Inc.’s publicly available information, or alternatively, based on information from other global producers of mattresses. Counsel further alleged that the profit calculated for the purposes of final determination was not reasonable.^{Footnote 60}

Reply Submissions

Counsel for Restwell argued that the CBSA should continue to determine a reasonable amount for profit under subparagraph 11(1)(b)(iv).^{Footnote 61}

Counsel for the Zinus Group reiterated in its reply submission that the President must determine a reasonable amount for profits according to paragraph 11(b) of the SIMR.^{Footnote 62}

CBSA response

Based on the information on the administrative record and in accordance with SIMA and the SIMR, the CBSA took the representations on these issues into account when determining amounts for profit.

For the purposes of paragraph 19(b), the CBSA determined a reasonable amount for profits under the hierarchy of subparagraphs 11(1)(b)(i) to 11(1)(b)(vi) of the SIMR, taking into consideration section 13 of the SIMR and sections 15 and 16 of SIMA. In order to determine a reasonable amount for profits for exporters in China where profit could not be determined under subparagraphs 11(1)(b)(i) to 11(1)(b)(iii) of SIMR, the CBSA determined a reasonable amount for profits under subparagraph 11(1)(b)(iv) of the SIMR, the weighted-average profit from domestic sales of the same general category of good made by other producers in China.

As such, for the purposes of the final determination, for Kaneman the amounts for profit was determined pursuant to subparagraph 11(1)(b)(i) of SIMR. For Jinlongheng, Zinus Xiamen, and Zinus Zhangzhou, the amounts for profit was determined pursuant to subparagraph 11(1)(b)(iv) of SIMR.

Export price determination (Zinus Xiamen and Zinus Zhangzhou)

Case briefs

Counsel for the Zinus Group submitted that export prices for both Zinus Xiamen and Zinus Zhangzhou should be determined pursuant to section 24 of SIMA based on the lesser of the exporter’s selling price and the importer’s purchase price, with adjustments.^{Footnote 63} Counsel further noted that Reliability Analyses were performed at the Preliminary Determinations, and the section 24 export prices were found to be reliable.

CBSA’s response

For the subject goods exported by Zinus Xiamen or Zinus Zhangzhou to Canada during the POI sold to unrelated importers, export prices were determined in accordance with section 24 of SIMA, based on the lesser of the exporter’s selling price and the importer’s purchase price less all costs, charges and expenses resulting from the exportation of the goods.

For the subject goods exported by Zinus Xiamen and sold to related importers, reliability tests were performed to determine whether the section 24 export prices were reliable as envisaged by SIMA. The test for sales to Zinus Canada revealed that the export prices determined in accordance with section 24 of SIMA were reliable and, therefore, export prices for sales of subject goods sold by Zinus Xiamen to Zinus Canada were determined in accordance with section 24 of SIMA. The test for sales to Mellow revealed that the export prices determined in accordance with section 24 of SIMA were unreliable and, therefore, export prices for sales of subject goods sold by Zinus Xiamen to Mellow were determined in accordance with section 25 of SIMA.

For the subject goods exported to Canada by Zinus Zhangzhou that were sold to Zinus Canada, a related importer, a reliability test was performed to determine whether the section 24 export prices were reliable as envisaged by SIMA. The test revealed that the export prices determined in accordance with section 24 of SIMA were reliable and, therefore, export prices for Zinus Zhangzhou were determined in accordance with section 24 of SIMA.

Subsidy representations

Determination of amount of subsidy

Representations made during the investigations

During the investigations, counsel for Restwell submitted comments concerning the lack of response from the Government of China (GOC) to the government Subsidy RFI.^{Footnote 64} Counsel submitted that due to the lack of response from the GOC, the CBSA should not consider the responses from the exporters while determining the amount of subsidy, and should consider other information.

Case briefs

Counsel for Restwell reiterated its arguments in their case brief submission, and stated that the CBSA should determine amounts of subsidy under ministerial specification.^{Footnote 65}

Counsels for several exporters submitted in their case briefs that a number of programs are not countervailable because they are not specific or are generally available programs, and the amount of subsidy received is insignificant.^{Footnote 66}

Reply Submissions

In their reply submission, counsel for Restwell repeated its arguments from their comments and case brief, reiterating that the amount for subsidy should be determined pursuant to a ministerial specification.^{Footnote 67} In addition, counsel argued that the CBSA should disregard comments made on behalf of exporters concerning the insignificance of subsidies received and the specificity of programs, due to the lack of response from the GOC.

In their reply submissions, counsel for several exporters reiterated arguments from case briefs, and submitted that the exporters’ submissions should be used to determine amounts of subsidy.^{Footnote 68}

CBSA’s response

The available information indicates that these programs do not appear to be generally available to all enterprises in the country of origin. As well, due to the lack of response by the GOC there is not sufficient information on the administrative record to determine that the subsidy is not specific pursuant to the criteria set out in subsection 2(7.1) of SIMA. Therefore, guided by the principles of subsection 2(7.2) or subsection 2(7.3) of SIMA and basing its opinion on the best information available, the CBSA has taken the position that the subsidy derived from these programs is likely to be specific.

As a result, the CBSA determined an amount of subsidy for the cooperative exporters/producers pursuant to a ministerial specification under subsection 30.4(2) of SIMA.

For producers/exporters who did not respond to the RFI or who did not provide sufficient information, the CBSA determined amounts of subsidy based on a ministerial specification pursuant to subsection 30.4(2) of SIMA, based on the methodology explained in the All other exporters—China section.

Subsidy programs used by the responding exporters

Category 1: Preferential loans and loan guarantees

Financial institutions may be considered to constitute “government” if they possess, exercise or are vested with government authority, which may be indicated by the following factors:

• Where a statue or other legal instrument expressly vests government authority in the entity concerned
• Evidence that an entity is, in fact, exercising governmental functions and
• Evidence that a government exercises meaningful control over an entity

Program 1: Loans from state-owned banks at preferential rates

General information

This program relates to government loans at a preferential rate of interest. The benefit provided in this case is a lower rate of interest than would otherwise be available if the enterprises had to obtain a non-guaranteed commercial loan (i.e. the benchmark non-guaranteed commercial loan).

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA, in that amounts that would otherwise be owing and due to the government are reduced and/or exempted, and confers a benefit to the recipient equal to the amount of the reduction/exemption.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Program 4: Preferential export financing and export credit guarantee/insurance

General information

This program was offered by the GOC to provide export financing and export credit aids to the targeted companies.

For example, The China Export & Credit Insurance Corporation (Sinosure) is a state-funded policy-oriented insurance company that was established to promote China’s foreign trade and economic cooperation. The China Exim Bank and Sinosure each provide export credit guarantees which, according to information from the Bank, have “played a key role in supporting Chinese companies to go global” and promoted “the export of new and high-tech products”.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA. That is, amounts that would otherwise be owing and due to the government are reduced and/or exempted, and confer a benefit to the recipient equal to the amount of the reduction/exemption.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Category 2: Grants and grant equivalents

Program 5: Insurance grants

General information

This program constitutes local and provincial government reimbursement grants on insurance fees.

Financial contribution

For the purposes of the final determination, this may be considered a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA as a direct transfer of funds from the government, and it confers a direct benefit to the recipient equal to the amount of the grant.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Program 6: Design, research and development grants

General information

A grant that provides financial aid for enterprises determined to have undertaken expenses in design or research and development.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA as a direct transfer of funds from the government, and it confers a direct benefit to the recipient equal to the amount of the grant.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Program 7: Export development and performance grants

General information

Companies in China receive such grants provided by the GOC to assist in the development of export markets or to recognize export performance.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA as a direct transfer of funds from the government, and it confers a direct benefit to the recipient equal to the amount of the grant.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Program 8: Performance award grants

General information

A grant that provides financial aid for enterprises with excellent performance.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA as a direct transfer of funds from the government, and it confers a direct benefit to the recipient equal to the amount of the grant.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Program 9: Reductions in land use and/or rental fees

General information

This program provides for the reduction in land use fees and rental rates for certain number of years. Examples of this program in action include: a document titled '[2003] No. 8 Preferential Supply of Land', in order to offset costs for industrial companies in the Ninghai Economic Development Zone; or similar initiatives in the Tianjin Binhai New Area and the Tianjin Economic and Technological Development Area.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA, in that amounts that would otherwise be owing and due to the government are reduced and/or exempted, and confers a benefit to the recipient equal to the amount of the reduction/exemption.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Program 10: Grant—patent assistance/award

General information

This is a grant for patents. Based on the information available to the CBSA, this program was provided in several provinces, such as Guangdong, Shanghai and Jiangsu.

For example, the GOC’s document associated with this program for Guangdong province may include: “Administrative Measures of Patent Award of Guangdong Province”. In Guangdong province, this program was administered by the Intellectual Property Office of Guangdong, the Bureau of Personnel of Guangdong Province and municipal level authorities. The program was established to support improvement in technology innovation and to promote intellectual property.

In addition, the GOC’s document associated with this program for Shanghai may include: “The administrative measures regarding the financial support/subsidy for Patents by Shanghai”. In Jiangsu province, this program was administrated by Jiangsu Intellectual Property Office.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA as a direct transfer of funds from the government, and it confers a direct benefit to the recipient equal to the amount of the grant.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Program 11: Environment protection grant

General information

These are grants provided by the GOC for the purposes of improving environmental performance, for example, monitoring and cleaning pollutants, improving energy efficiency, upgrading facilities to be more environmentally efficient, and waste water treatment.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA as a direct transfer of funds from the government, and it confers a direct benefit to the recipient equal to the amount of the grant.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Program 14: Subsidies related to company/enterprise development and innovation

General information

Subsidies under this program are related to company and enterprise development and innovation grants and awards.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA as a direct transfer of funds from the government, and it confers a direct benefit to the recipient equal to the amount of the grant.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Program 15: Subsidies related to employment, training and recruitment

General information

Subsidies under this program are related to employment, training and recruitment programs.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA as a direct transfer of funds from the government, and it confers a direct benefit to the recipient equal to the amount of the grant.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Program 16: Subsidies related to pandemic support

General information

Subsidies under this program are related to pandemic support programs.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA as a direct transfer of funds from the government, and it confers a direct benefit to the recipient equal to the amount of the grant.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Program 17: Subsidies related to quality & improvement

General information

Subsidies under this program are related to quality and improvement programs.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA as a direct transfer of funds from the government, and it confers a direct benefit to the recipient equal to the amount of the grant.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Program 18: Subsidies related to science and technology

General information

Subsidies provided under this program are related to science and technology grants and awards.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA as a direct transfer of funds from the government, and it confers a direct benefit to the recipient equal to the amount of the grant.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Program 19: Subsidies related to social security

General information

Subsidies provided under this program are related to social security programs.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA as a direct transfer of funds from the government, and it confers a direct benefit to the recipient equal to the amount of the grant.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Program 20: Subsidies related to talent and skills

General information

Subsidies provided under this program are related to talent and skills awards and grants.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA as a direct transfer of funds from the government, and it confers a direct benefit to the recipient equal to the amount of the grant.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Program 21: Subsidies to provide business support

General information

Subsidies provided under this program are related to programs providing business support.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA as a direct transfer of funds from the government, and it confers a direct benefit to the recipient equal to the amount of the grant.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Program 22: Subsidies for utilities for certain enterprises

General information

Subsidies provided under this program related to utilities for specific enterprise classes.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA as a direct transfer of funds from the government, and it confers a direct benefit to the recipient equal to the amount of the grant.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Category 3: Preferential Tax Programs

Program 25: Corporate income tax reduction for new high tech enterprises (“NHTE”)

General information

Under Article 28.2 of the Enterprise Income Tax Law in China, companies designated as high- or new-technology enterprises are entitled to a reduced income tax rate of 10 percent instead of the normal national corporate tax rate of 25 percent. The granting authority responsible for this program is alleged to be the State Administration of Taxation and the program is administered by local tax authorities. In its notification of subsidy programs to the World Trade Organization, the GOC listed this program.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA. That is, amounts that would otherwise be owing and due to the government are reduced and/or exempted, and confer a benefit to the recipient equal to the amount of the reduction/exemption.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Program 26: Municipal/local income tax property reductions

General information

This program covers reductions and exemptions in tax provided from Municipal/Local Income tax units. The CBSA has previously countervailed this program in investigations including Stainless Steel Sinks, Unitized Wall Modules, Photovoltaic Modules and Laminates, and Line Pipe under titles including “Reduction, Exemption or Refund of Land Use Fees, Land Rental Rates, and Land Purchase/Transfer Prices.”

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA. That is, amounts that would otherwise be owing and due to the government are reduced and/or exempted, and confer a benefit to the recipient equal to the amount of the reduction/exemption.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Program 27: Preferential tax policies for foreign-invested enterprises (FIEs)

General information

Despite the implementation of the new Enterprise Income Tax Law (EITL) in 2008, which officially superseded the old FIE Tax Law, FIEs have likely continued to benefit from various incentives that were provided under the older Foreign-Invested Enterprise Tax Law (FIE Tax Law). Specifically, Article 9 of the FIE Tax Law delegates to China’s provincial and local governments the authority to provide exemptions and reductions of local income taxes for “productive” FIEs. Eligibility criteria vary by province and the relevant governmental authorities administer the application process. Under this program, the companies in China may also receive the incentives for the reinvestment of profits earned by FIEs.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA. That is, amounts that would otherwise be owing and due to the government are reduced and/or exempted, and confer a benefit to the recipient equal to the amount of the reduction/exemption.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Program 28: Preferential tax policies related to research and investment

General information

Under this program, high- or new-technology enterprises may deduct an additional 50 to 100 percent of their total R&D expenses from their taxable income. Eligible expenses include design costs, expenses for materials and fuel consumed through R&D activities, wages, salaries, and benefits for personnel engaged in R&D activities, depreciation expenses on instruments and equipment, and many other expenses.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA. That is, amounts that would otherwise be owing and due to the government are reduced and/or exempted, and confer a benefit to the recipient equal to the amount of the reduction/exemption.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Category 5: Good/services provided by the government at less than fair market value

Program 33: Acquisition of government inputs/utilities at less than fair market value

General information

This program relates to the provision, by the government, of goods or services at prices lower than the fair market value of the goods or services in the territory of the government providing the subsidy. Specifically, the CBSA investigated the acquisition of raw material inputs or utilities (i.e. Electricity, Water) from SOEs or state-controlled enterprises used in the production of subject goods.

State-owned or state-controlled suppliers may be considered to constitute “government” if they possess, exercise or are vested with government authority, which may be indicated by the following factors:

• where a statute or other legal instrument expressly vests government authority in the entity concerned
• evidence that an entity is, in fact, exercising governmental functions and
• evidence that a government exercises meaningful control over an entity

In order to determine whether the exporter acquired its raw material or utilities from “government”, the CBSA requested detailed information from the exporters regarding their acquisition of raw materials and utilities. The Subsidy RFI also contained a small questionnaire intended for the domestic suppliers with instructions for the exporters to forward such questionnaire to their domestic suppliers. This questionnaire requested information regarding the ownership status of the supplier and other relevant information with respect to assessing whether the supplier is considered “government”.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(c) of SIMA. That is, the government provides goods or services, other than general infrastructure, or purchases goods.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Other potentially actionable subsidy programs identified by the CBSA that were not used by the responding exporters

Based on the information available, for purposes of the final determination, the CBSA has found that these programs were not used by the participating exporters in China. Based on the information available these programs may constitute financial contributions provided by the GOC, confer benefit to companies and appear to be specific. Therefore, For purposes of the final determination, these programs appear to be countervailable.

Category 1: Preferential loans and loan guarantees

Program 2: Loan guarantees through the government of China/SOE Banks/public bodies

General information

Assurance provided by the Government of China, a SOE bank or public body (the guarantor) to assume the debt obligation of a borrower if that borrower defaults. A guarantee can be limited or unlimited, making the guarantor liable for only a portion or all of the debt.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA. That is, amounts that would otherwise be owing and due to the government are reduced and/or exempted, and confer a benefit to the recipient equal to the amount of the reduction/exemption.

Specificity

Due to the lack of a response by the GOC, there is not sufficient information on the record to determine whether this program is specific pursuant to subsection 2(7.2) or subsection 2(7.3) of SIMA; nor is there sufficient information to indicate that the subsidy is not specific pursuant to the criteria set out in subsection 2(7.1). On the basis of the available information, this program does not appear to be generally available to all enterprises in China and thus appears to be specific.

Program 3: Debt and interest forgiveness on loans from state-owned banks

General information

To stimulate the economy and support the development of key industries, the state-owned banks write off bad debts or interest owed by state-owned enterprises.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA. That is, amounts that would otherwise be owing and due to the government are reduced and/or exempted, and confer a benefit to the recipient equal to the amount of the reduction/exemption.

Specificity

Due to the lack of a response by the GOC, there is not sufficient information on the record to determine whether this program is specific pursuant to subsection 2(7.2) or subsection 2(7.3) of SIMA; nor is there sufficient information to indicate that the subsidy is not specific pursuant to the criteria set out in subsection 2(7.1). On the basis of the available information, this program does not appear to be generally available to all enterprises in China and thus appears to be specific.

Category 2: Grants and grant equivalents

Program 12: Grants for the retirement of capacity

General information

The GOC’s 12th Five-Year Plan for Energy Conservation and Emission Reduction calls for accelerating and eliminating “backward production capacity” in certain industrial sectors, including the elimination of 48 million metric tonnes of steel production. In 2013, the State Council issued the “Guiding Opinion on Resolving the Problem of Severe Excess Capacity,” which called for establishing special funds to accelerate the elimination of backwards capacity and to also support industries with excess production capacity.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA as a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

Due to the lack of a response by the GOC, there is not sufficient information on the record to determine whether this program is specific pursuant to subsection 2(7.2) or subsection 2(7.3) of SIMA; nor is there sufficient information to indicate that the subsidy is not specific pursuant to the criteria set out in subsection 2(7.1). On the basis of the available information, this program does not appear to be generally available to all enterprises in China and thus appears to be specific.

Program 13: Grants for relocating production facilities

General information

As part of the GOC’s 12th Five-Year Steel Development Plan, the PRC has been locating urban based steel producers to locations outside of their current city. The GOC’s 12th Five-Year Plan for Energy Conservation and Emission Reduction calls for the relocation for “heavy polluting enterprises” and for measures to optimize the “regional spatial layout” of “key industries”.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA as a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

Due to the lack of a response by the GOC, there is not sufficient information on the record to determine whether this program is specific pursuant to subsection 2(7.2) or subsection 2(7.3) of SIMA; nor is there sufficient information to indicate that the subsidy is not specific pursuant to the criteria set out in subsection 2(7.1). On the basis of the available information, this program does not appear to be generally available to all enterprises in China and thus appears to be specific.

Program 23: Award for the establishment of non-manufacturing facilities

General information

Subsidies provided under this program relate to assistance in establishing non-manufacturing facilities.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA as a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

Due to the lack of a response by the GOC, there is not sufficient information on the record to determine whether this program is specific pursuant to subsection 2(7.2) or subsection 2(7.3) of SIMA; nor is there sufficient information to indicate that the subsidy is not specific pursuant to the criteria set out in subsection 2(7.1). On the basis of the available information, this program does not appear to be generally available to all enterprises in China and thus appears to be specific.

Category 3: Preferential tax programs

Program 24: Corporate income tax exemption and/or reduction in special economic zones (SEZs) and other designated areas

General iInformation

This program was established under the Rules for the Implementation of the Income Tax Law of the People's Republic of China for Enterprises with Foreign Investment and Foreign Enterprises, which came into effect on July 1, 1991. The program was allegedly established to absorb investment in special economic zones (SEZs) and designated areas to take the lead in their economic development. The granting authority responsible for this program is allegedly the State Administration of Taxation and the program is administered by local tax authorities. Under this program, it is alleged that an eligible enterprise may receive a reduced corporate income tax rate of 15%.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA. That is, amounts that would otherwise be owing and due to the government are reduced and/or exempted, and confer a benefit to the recipient equal to the amount of the reduction/exemption.

Specificity

Due to the lack of a response by the GOC, there is not sufficient information on the record to determine whether this program is specific pursuant to subsection 2(7.2) or subsection 2(7.3) of SIMA; nor is there sufficient information to indicate that the subsidy is not specific pursuant to the criteria set out in subsection 2(7.1). On the basis of the available information, this program does not appear to be generally available to all enterprises in China and thus appears to be specific.

Category 4: Relief from duties and taxes

Program 29: Offsets to taxable income related to purchases of domestic machinery

General information

Under this program, a tax credit up to 40% of the purchase price of domestic equipment may apply to the incremental increase in tax liability from the previous year. The legal bases of this program are the Provisional measures on enterprise income tax credit for investment in domestically produced equipment for technology renovation projects of July 1, 1999 and the Notice of the State Administration of Taxation on Stopping the Implementation of the Enterprise Income Tax Deduction and Exemption Policy of the Investments of an Enterprise in Purchasing Home-made Equipment, No. 52 [2008] of the State Administration of Taxation, effective January 1, 2008.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA. That is, amounts that would otherwise be owing and due to the government are reduced and/or exempted, and confer a benefit to the recipient equal to the amount of the reduction/exemption.

Specificity

Due to the lack of a response by the GOC, there is not sufficient information on the record to determine whether this program is specific pursuant to subsection 2(7.2) or subsection 2(7.3) of SIMA; nor is there sufficient information to indicate that the subsidy is not specific pursuant to the criteria set out in subsection 2(7.1). On the basis of the available information, this program does not appear to be generally available to all enterprises in China and thus appears to be specific.

Program 30: Exemption or refund of tariff and import value-added tax (VAT) for imported technologies and equipment

General information

The program was established to absorb investment in SEZs and encourage districts to take the lead in development. The granting authority responsible for this program is the General Administration of Customs and this program is administered by local customs authorities. Under this program, machinery and equipment, spare parts, raw and semi-processed materials, means of transportation and other capital goods necessary for production that are imported by enterprises in SEZs shall be exempted from import duties.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA. That is, amounts that would otherwise be owing and due to the government are reduced and/or exempted, and confer a benefit to the recipient equal to the amount of the reduction/exemption.

Specificity

Due to the lack of a response by the GOC, there is not sufficient information on the record to determine whether this program is specific pursuant to subsection 2(7.2) or subsection 2(7.3) of SIMA; nor is there sufficient information to indicate that the subsidy is not specific pursuant to the criteria set out in subsection 2(7.1). On the basis of the available information, this program does not appear to be generally available to all enterprises in China and thus appears to be specific.

Program 32: Deed tax exemption for SOEs undergoing mergers or restructuring

General information

The GOC imposes a deed tax on transfers of land and real estate. In the context of an ownership transfer by means of an asset sale, as opposed to a stock sale, a deed tax of three to five percent is levied on the amount of the purchase price, and the purchaser is responsible for paying the tax. The GOC’s “Notice of the Ministry of Finance and the State Administration of Taxation on Several Deed Tax Policies Concerning Enterprise Reorganization and Restructuring,” exempts this deed tax where the transfer of ownership occurs as part of the restructuring or merger of an SOE.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA. That is, amounts that would otherwise be owing and due to the government are reduced and/or exempted, and confer a benefit to the recipient equal to the amount of the reduction/exemption.

Specificity

Due to the lack of a response by the GOC, there is not sufficient information on the record to determine whether this program is specific pursuant to subsection 2(7.2) or subsection 2(7.3) of SIMA; nor is there sufficient information to indicate that the subsidy is not specific pursuant to the criteria set out in subsection 2(7.1). On the basis of the available information, this program does not appear to be generally available to all enterprises in China and thus appears to be specific.

Category 5: Goods/services provided by the government at less than fair market value

Program 34: Provision of land for less than adequate remuneration by government

General information

All land in China belongs to the government (i.e., either national or local governments, or through a “collective” at the township or village level), and government land agencies across China control the allocation of land through the granting of land-use right favored projects and producers.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA. That is, amounts that would otherwise be owing and due to the government are reduced and/or exempted, and confer a benefit to the recipient equal to the amount of the reduction/exemption.

Specificity

Due to the lack of a response by the GOC, there is not sufficient information on the record to determine whether this program is specific pursuant to subsection 2(7.2) or subsection 2(7.3) of SIMA; nor is there sufficient information to indicate that the subsidy is not specific pursuant to the criteria set out in subsection 2(7.1). On the basis of the available information, this program does not appear to be generally available to all enterprises in China and thus appears to be specific.

Other programs received by exporters but not previously addressed

Category 4: Relief from duties and taxes

Program 35: Exemption or refund of value-added tax (VAT) for purchases of domestic machinery

General information

Under this program, machinery and equipment necessary for production that are purchased domestically are exempted from taxes.

Financial contribution

For the purposes of the final determination, this program may be considered a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA. That is, amounts that would otherwise be owing and due to the government are reduced and/or exempted, and confer a benefit to the recipient equal to the amount of the reduction/exemption.

Specificity

For the purposes of the final determination, the program may be considered specific pursuant to paragraph 2(7.3) of SIMA in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.