PETR 2017 IN
Certain Polyethylene Terephthalate Resin
Statement of Reasons

[1] On June 29, 2017, the Canada Border Services Agency (CBSA) received a written complaint from Compagnie Selenis Canada (Selenis Canada), of Montreal, Québec, (hereinafter, “the Complainant”), alleging that imports of certain polyethylene terephthalate resin (PET resin) originating in or exported from the People’s Republic of China (China), the Republic of India (India), the Sultanate of Oman (Oman), the Islamic Republic of Pakistan (Pakistan) and the Republic of Turkey (Turkey) are being dumped, and that certain PET resin from China, India, Oman and Pakistan are being subsidized. The Complainant alleged that the dumping and subsidizing have caused injury and are threatening to cause injury to the Canadian industry producing like goods.

[2] On July 20, 2017, pursuant to paragraph 32(1)(a) of the Special Import Measures Act (SIMA), the CBSA informed the Complainant that the complaint was properly documented. The CBSA also notified the governments of China, India, Oman, Pakistan and Turkey that a properly documented complaint had been received. The governments of China, India, Oman and Pakistan were also provided with the non confidential version of the subsidy portion of the complaint and were invited for consultations pursuant to Article 13.1 of the Agreement on Subsidies and Countervailing Measures (ASCM), prior to the initiation of the subsidy investigation.

[3] On August 14, 2017, consultations were held between the Government of Canada and the Government of Oman via conference call. During the consultations, the Government of Oman made representations with respect to its views on the evidence presented in the non confidential version of the subsidy portion of the complaint. On August 17, 2017, the Government of Oman provided written representations where it addressed the alleged subsidy programs. The CBSA considered the representations made by the Government of Oman in its analysis.

[4] On August 15, 2017, consultations were held in Ottawa between the Government of Canada and the Government of Pakistan. During the consultations, the Government of Pakistan made representations with respect to its views on the evidence presented in the non confidential version of the subsidy portion of the complaint. On August 16, 2017, the Government of Pakistan provided written representations where it addressed each of the alleged programs. The CBSA considered the representations made by the Government of Pakistan in its analysis. No other governments requested consultations prior to the initiation of the subsidy investigation.

[5] The Complainant provided evidence to support the allegations that certain PET resin from the named countries have been dumped and subsidized. With the exception of certain PET resin from Turkey, the evidence also disclosed a reasonable indication that the dumping and subsidizing have caused injury and are threatening to cause injury to the Canadian industry producing like goods. With respect to certain PET resin from Turkey, the CBSA was of the opinion that the evidence did not disclose a reasonable indication that the dumping of those goods has caused or is threatening to cause injury to the Canadian industry. For this reason, the CBSA did not initiate a dumping investigation in respect of certain PET resin from Turkey.

[6] On August 18, 2017, pursuant to subsection 31(1) of SIMA, the CBSA initiated investigations respecting the dumping and subsidizing of certain PET resin from China, India, Oman and Pakistan (hereinafter “the named countries”).

[7] Upon receiving notice of the initiation of the investigations, the Canadian International Trade Tribunal (CITT) commenced a preliminary injury inquiry, pursuant to subsection 34(2) of SIMA, into whether the evidence discloses a reasonable indication that the alleged dumping and subsidizing of the above-mentioned goods have caused injury or retardation or are threatening to cause injury to the Canadian industry producing the like goods.

[8] On October 17, 2017, pursuant to subsection 37.1(1) of SIMA, the CITT made a preliminary determination that there is evidence that discloses a reasonable indication that the alleged dumping and subsidizing of certain PET resin from China, India, Oman and Pakistan have caused injury to the domestic industry.

[9] On November 7, 2017, pursuant to Article 13.2 of the ASCM, additional consultations were held in Ottawa between the Government of Canada and the Government of Pakistan. On November 14, 2017, the Government of Pakistan provided written representations. The CBSA will consider the representations made by the Government of Pakistan in its analysis.

[10] On November 16, 2017, as a result of the CBSA’s preliminary investigations and pursuant to subsection 38(1) of SIMA, the CBSA made preliminary determinations of dumping and subsidizing of certain PET resin originating in or exported from China, India, Oman and Pakistan.

[11] On November 16, 2017, pursuant to subsection 8(1) of SIMA, provisional duty was imposed on imports of dumped and subsidized goods that are of the same description as any goods to which the preliminary determinations apply, and that are released during the period commencing on the day the preliminary determinations were made and ending on the earlier of the day on which the CBSA causes the investigation in respect of any goods to be terminated pursuant to subsection 41(1) of SIMA or the day the CITT makes an order or finding pursuant to subsection 43(1) of SIMA. Where an exporter’s estimated margin of dumping and/or estimated amount of subsidy is insignificant, provisional anti-dumping and/or countervailing duties will not be applied.

[12] The Period of Investigation (POI) for these investigations is April 1, 2016, to March 31, 2017.

[13] The Profitability Analysis Period (PAP) for the dumping investigation is April 1, 2016, to March 31, 2017.

Complainant

[14] The Complainant accounts for all of the production of like goods in Canada.

[15] The contact information of the Complainant is as follows:

Compagnie Selenis Canada
3498 Broadway
Montréal East, Québec H1B 5B4

[16] The Complainant’s PET resin production facility in Montreal, QC was first built in 2004 by a joint venture of Shell International, B.V. and Societe generate de financement (now Investissement Quebec) as a poly trimethylene terephthalate (PTT) plant.^{Footnote 1} At the time, the company was named PTT Poly Canada. The facility was converted to PET resin production in 2010 by Control PET, S.A. (Control PET), a subsidiary of IMO Group, after this company purchased the company in 2009 and changed the name to Selenis Canada Inc. The facility began producing PET resin in May, 2011, becoming the only virgin PET production facility in Canada. On August 1, 2016, DAK Americas LLC (DAK) completed a transaction with Control PET to acquire a controlling interest in Selenis Canada’s operations. DAK is a wholly owned subsidiary of Alfa S.A.B. of Mexico. With DAK’s acquisition of a controlling interest, the company officially changed its name to Compagnie Selenis Canada.^{Footnote 2}

Importers

[17] At the initiation of the investigations, the CBSA identified 31 potential importers of the subject goods based on both information provided by the Complainant and CBSA import entry documentation. Two additional importers were identified during the preliminary phase of the investigations. The CBSA sent an Importer Request for Information (RFI) to all potential importers of the goods. The CBSA received 12 responses to the Importer RFI.

Exporters

[18] At the initiation of the investigations, the CBSA identified 19 potential exporters/producers of the subject goods from information provided by the Complainant and CBSA import entry documentation. An Exporter Dumping RFI and an Exporter Subsidy RFI were sent to each of the potential exporters/producers.

[19] Three exporters provided substantially complete responses to the Dumping RFI, one in each of China, India, and Oman. See “Dumping Investigation” for detailed information on each of these companies.

[20] Three exporters/producers provided substantially complete responses to the Subsidy RFIs; including one in each of India, Oman and Pakistan. See “Subsidy Investigation” for detailed information on each of these companies.

[21] Three exporters/producers, one in each of China, India and Pakistan, and one vendor located in the United States of America (USA), provided incomplete responses to the Dumping RFI, which were not used for the purposes of the preliminary determination.

[22] Deficiencies were communicated to these companies, however, complete information was not subsequently provided in time for purposes of the preliminary determination.

[23] Further, one producer of PET resin in India provided a response to the Dumping RFI but given the company was not a producer or exporter of subject goods, its response was not used for the purposes of the preliminary determination.

[24] Two exporters/producers, one in each of China and India, provided incomplete responses to the Subsidy RFI, which were not used for the purposes of the preliminary determination. Deficiencies were communicated to these companies, however, complete information was not subsequently provided in time for purposes of the preliminary determination.

[25] Further, one producer of PET resin in India provided a response to the Subsidy RFI but given the company was not a producer of subject goods, its response was not used for the purposes of the preliminary determination.

Governments

[26] For the purposes of these investigations, “Government of China (GOC)”, “Government of India (GOI)”, “Government of Oman (GOO)”, and “Government of Pakistan (GOP)” refer 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, 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.

[27] At the initiation of the investigation, the CBSA sent a Government Subsidy RFI to each of the countries involved in the subsidy investigation. Substantially complete responses were received from the GOO and the GOP. The GOI provided an incomplete response to the Government Subsidy RFI, which could not be used for the purposes of the preliminary determination. A response was not received from the GOC.

Definition

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

Polyethylene terephthalate ("PET’’) resin having an intrinsic viscosity of at least 0.70 deciliters per gram but not more than 0.88 deciliters per gram, including PET resin that contains various additives introduced in the manufacturing process, as well as blends of virgin PET resin and recycled PET containing 50 percent or more virgin PET resin content by weight, originating in or exported from the People’s Republic of China, the Republic of India, the Sultanate of Oman and the Islamic Republic of Pakistan.

Additional Product Information^{Footnote 3}

[29] Polyethylene terephthalate (PET) is a clear, strong and lightweight plastic belonging to the polyester family. PET is typically called polyester when used for fibers or fabrics and PET or PET resin when used for bottles, jars, containers and packaging applications.

[30] One of the most important characteristics of PET is referred to as intrinsic viscosity (IV). The IV of the material is measured in decilitres per gram (dl/g) and it is a measure of the polymer’s molecular chain length and molecular weight.

[31] PET resin may contain some recycled material, although PET resin for packaging end uses (i.e. meeting the product definition parameters of 0.70 to 0.88 IV) is generally limited to a recycled content of 20%, and in any case, would not exceed a recycled content of 50%, which is a threshold included in the product definition.

Production Process^{Footnote 4}

[32] The production of PET begins by mixing monoethylene glycol (MEG) and purified terephthalic acid (PTA) at ambient temperatures to form a slurry. PTA is the preferred feedstock for production but dimethyl terephthalate (DMT) can be used in some facilities that use older production technologies. It is more economical to produce most grades of PET polymer from PTA than from DMT. For that reason, DMT is generally not used for production of commodity PET resin.

[33] There are varying qualities of terephthalic acid (TPA) but the preferred one is PTA, which is the one marketed to PET resin producers. PET resin lines can use qualities of TPA other than PTA, but if non purified forms of TPA are used in PET resin manufacturing then the producers must do additional in line chemical processing to accommodate the lower quality raw material.

[34] PTA, TPA and DMT are all produced using paraxylene, a petrochemical. MEG is produced from ethylene, which is also a petrochemical. PET resin is roughly 65% PTA or TPA, 25% MEG and 10% co monomers, basic additives and functional additives.

[35] Typical co monomers are Diethylene Glycol (“DEG”), which is a by product of the MEG monomer during polymerization; Purified Isophthalic Acid (“PIA” or “IPA”); and CycloHexaneDiMethanol (“CHDM”).

[36] Basic additives include catalysts for chemical reaction (Sb, Co, Ti, Ge). Organic toners and/or Cobalt are added to improve color. Thermal stabilizers (phosphoric/phosphorous acid) minimize yellowing during polymerization and re-melting into containers.

[37] Functional additives include infrared (“IR”) absorbers (carbon black or graphite, sequestered antimony), molecular chain extenders and slip and anti blocking agents for friction reduction on preform and bottle surfaces.

[38] The slurry is heated through an esterification process to 290° centigrade and reacts to form a monomer. Additives and catalysts are added to the monomer to provide reheat and color characteristics for the final product. The monomer is then heated under vacuum in a polymerization process, and certain gases are exhausted. The resulting polymer is quenched in water and cut into chips, known as amorphous PET (“AMPET”). AMPET has a short polymer chain length and a low IV, generally 0.50 to 0.65.

[39] The AMPET chips are then subjected to a solid-state polymerization (“SSP”) treatment. To make PET resin, the AMPET chips are baked during the SSP treatment in large cylindrical reaction towers. In the towers, the AMPET chips flow through an oxygen-free, nitrogen-gas atmosphere at above 200°C temperatures for a period of 18 24 hours, known as the crystallization and annealing process. After the baking is completed, the PET resin pellets exit the bottom of the reaction tower and undergo air cooling in a closed circuit heat exchanger prior to storage for transport by rail or truck. The SSP treatment increases the intrinsic viscosity of the AMPET pellet to the level as defined by the scope of this complaint. This process also removes Acetaldehyde.

[40] PET resin must be protected from moisture and contamination during transport. Both imported and exported products are typically shipped offshore in sealed, one metric ton poly bags (super sacks) within large metal shipping containers. Imported products may be removed from the containers and temporarily stored in order to have some local inventory and save on demurrage. Both imported and domestically-produced PET resin may be shipped bulk inland on truck beds or in specially lined railcars in lots of 50,000 or 200,000 pounds.

Product Use

[41] The subject goods are typically used in the production of plastic beverage bottles, in packaging for food and manufactured products, in containers for household and automotive products, and in industrial strapping. The most common use for PET resin containers is to package carbonated soft drinks and bottled water.

Classification of Imports

[42] Prior to January 1, 2017, the subject goods were normally classified under the following Harmonized System (HS) codes:

• 3907.60.00.10
• 3907.60.00.90

[43] Since January 1, 2017, the subject goods are normally imported under the following HS codes:

• 3907.61.00.00
• 3907.69.00.10
• 3907.69.00.90

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

[45] Subsection 2(1) of SIMA defines “like goods” in relation to any other goods as goods that are identical in all respects to the other goods, or in the absence of any identical goods, goods the uses and other characteristics of which closely resemble those of the other goods.

[46] In considering the issue of like goods, the CITT typically looks at a number of factors, including the physical characteristics of the goods, their market characteristics and whether the domestic goods fulfill the same customer needs as the subject goods.

[47] After considering questions of use, physical characteristics and all other relevant factors, the CBSA initiated its investigations under the premise that domestically produced PET resin are like goods to the subject goods. Further, the CBSA was of the opinion that subject goods and like goods constitute only one class of goods.

[48] In its preliminary injury inquiry for this investigation, the CITT further reviewed the matter of like goods and classes of goods. On November 1, 2017, it issued its preliminary injury inquiry determination and reasons indicating that “The Tribunal, in view of this fact, will conduct its analysis on the basis that PET resin produced in Canada that is of the same description as the subject goods is “like goods” in relation to the subject goods and that there is one class of goods.”^{Footnote 5}

[49] As previously stated, the Complainant accounts for all of the known domestic production of like goods.

[50] During the preliminary phase of the investigations, the CBSA refined the estimated volume and value of imports based on information from CBSA import entry documentation and other information received from exporters and importers.

[51] The following table presents the CBSA’s analysis of imports of certain PET resin for purposes of the preliminary determinations:

Imports of PET resin
(% of Volume*)

Country	POI (April 1, 2016 to March 31, 2017)
China	10.5%
India	7.3%
Oman	13.0%
Pakistan	24.9%
All Other Countries	44.4%
Total Imports	100.0%

*The amounts shown, having been rounded, may not add up to exactly 100%.

[52] On August 16, 2017, prior to initiation of the investigations, the GOP provided written representations where it addressed each of the alleged programs.^{Footnote 6} The GOP made additional written representations on November 14, 2017, where it described each alleged subsidy programs and provided comments on these programs. The GOP argued that the information and evidence it provided, along with the information provided by the exporter in Pakistan, Novatex Limited, clearly demonstrates that the alleged subsidy schemes are either not a subsidy in accordance with provisions of the ASCM or the Pakistani exporter/producer of the subject goods has not benefited from such schemes. The CBSA considered the representations made by the GOP in its analysis and will continue to consider all evidence on the record in the final phase of the investigation.

[53] On August 17, 2017, prior to initiation of the investigation, the CBSA received written representations on behalf of the GOO.^{Footnote 7} The GOO referred to past subsidy investigations by the CBSA and by the USA’s Department of Commerce (US DOC), which resulted in terminations due to de minimis findings. The GOO argued that investigated programs have not changed or been altered in any material ways and that as such, there is no basis for Canada to conclude that another investigation will come to conclusions that are any different from those already reached with respect to the same programs. Further, the GOO provided information and arguments with respect to each of the alleged programs. Finally, the GOO argued that there was no basis in fact or in law for the CBSA to conduct an investigation regarding their particular programs. The CBSA has noted these arguments and evidence submitted in the representations and will take them into consideration in the course of its investigation.

[54] Representations from counsel for the Complainant were received on November 3, 2017.^{Footnote 8} In these representations, the Complainant provided comments with respect to the dumping and subsidy RFI responses received and noted deficiencies in these responses. With respect to the dumping investigation, the Complainant argued that the Dumping RFI responses from Dragon Special Resin (Xiamen) Co., Ltd. and Jiangsu Sanfangxiang Group Co., Ltd., of China, Reliance Industries Limited and IVL Dhunseri Petrochem Industries Pvt. Ltd. of India, OCTAL SAOC FZC, of Oman, and Novatex Limited, of Pakistan, are incomplete and unreliable for the purposes of the preliminary determination. With respect to the subsidy investigation, the Complainant argued that the Subsidy RFI responses from Jiangsu Sanfangxiang Group Co., Ltd., of China, Reliance Industries Limited and IVL Dhunseri Petrochem Industries Pvt. Ltd. of India, OCTAL SAOC FZC, of Oman, and Novatex Limited, of Pakistan, along with the responses from the GOI and the GOP, are incomplete and unreliable for the purposes of the preliminary determination.

[55] The CBSA has noted these arguments and evidence submitted in the representations and will take them into consideration in the course of verifying information for the purposes of final decisions.

[56] Regarding the dumping investigation, information was requested from all known and potential exporters, producers, vendors and importers, concerning shipments of certain PET resin released into Canada during the POI.

[57] Regarding the subsidy investigation, information related to potential actionable subsidies was requested from all known and potential exporters and producers in the named countries. The exporters/producers were requested to forward a portion of the RFI to their input suppliers, who were asked to respond to questions pertaining to their legal characterization as state owned enterprises (SOEs). Information was requested in order to establish whether there had been financial contributions made by any level of government, including SOEs possessing, exercising or vested with government authority and, if so, to establish if a benefit has been conferred on persons engaged in the production, manufacture, growth, processing, purchase, distribution, transportation, sale, export or import of PET Resin; and whether any resulting subsidy was specific in nature. Information was also requested from the governments of those countries, concerning financial contributions made to exporters or producers of certain PET resin released into Canada during the subsidy POI. The respective governments were also requested to forward the RFIs to all subordinate levels of government that had jurisdiction over the exporters.

[58] The governments and the exporters/producers were also notified that failure to submit all required information and documentation, including non confidential versions, failure to comply with all instructions contained in the RFI, failure to permit verification of any information or failure to provide documentation requested during the verification visits may result in the amount dumping, the amount of subsidy and the assessment of dumping and/or countervailing duties on subject goods being based on facts available to the CBSA. Further, they were notified that a determination on the basis of facts available could be less favorable to their firm than if complete, verifiable information was made available.

[59] Several parties (i.e., importer, exporter and government) requested an extension to respond to their respective RFIs. The CBSA reviewed each request and granted extensions in instances where the reasons for making the request constituted unforeseen circumstances or unusual burdens. Where an extension request was denied, the CBSA informed the parties that it could not guarantee that submissions received after the RFI response deadline would be taken into consideration for purposes of the preliminary phase of the investigation.

[60] After reviewing the RFI responses, supplemental RFIs (SRFIs) were sent to several responding parties to clarify information provided in the responses and request any additional information.

[61] Preliminary determinations are based on the information available to the CBSA at the time of the preliminary determinations. During the final phase of the investigations, additional information may be obtained and selected responding parties may be verified on-site, the results of which will be incorporated into the CBSA’s final decisions, which must be made by February 14, 2018.

[62] The following presents the preliminary results of the investigation into the dumping of PET resin originating in or exported from China, India, Oman and Pakistan.

[63] At the initiation of the investigation, all known and potential exporters were sent a Dumping RFI in order to solicit information required for purposes of determining normal values and export prices of subject goods in accordance with the provisions of SIMA. As such, all exporters were given the opportunity to participate in the investigation. In the RFI, the exporters were notified that failure to submit all required information and documentation, including non confidential versions, or failure to permit verification of any information, may result in the normal values of the subject goods exported by their company being based on the facts available. It was further stated that such a decision would be less favorable to their company than if complete and verifiable information were made available.

Normal Value

[64] Normal values are generally estimated 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 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.

Export Price

[65] The export price of goods sold to importers in Canada is generally estimated 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.

Margin of Dumping

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

Preliminary Results of the Dumping Investigation by Country and Exporter

[67] The CBSA received a substantially complete response to the Dumping RFI from one exporter in China.^{Footnote 9}

[68] The CBSA received a substantially complete response to the Dumping RFI from one exporter in India.^{Footnote 10}

[69] The CBSA received a substantially complete response to the Dumping RFI from one exporter in Oman.^{Footnote 11}

[70] Three exporters/producers, namely one each in China, India and Pakistan, and one vendor located in the USA, provided incomplete responses to the Dumping RFI, which could not be used for the purposes of the preliminary determination. These companies are Dragon Special Resin (Xiamen) Co., Ltd.^{Footnote 12}, IVL Dhunseri Petrochem Industries Private Limited (Dhunseri)^{Footnote 13}, Novatex Limited (Novatex)^{Footnote 14} and Vinmar Group^{Footnote 15}, respectively.

[71] Deficiencies were communicated to these companies, however, complete information was not subsequently provided in time for purposes of the preliminary determinations.

[72] Further, one producer of PET resin in India, Micro Polypet Private Limited^{Footnote 16}, provided a response to the Dumping RFI but given the company was not a producer or exporter of subject goods, its response was not used for the purposes of the preliminary determination.

China

Jiangsu Sanfangxiang Group Co. Ltd. (Sanfangxiang)

[73] Sanfangxiang is a producer and exporter of subject goods to Canada and is situated in Jiangsu, China. Sanfangxiang has two subsidiaries which manufactured and exported the subject goods during the POI; Jiangyin Xingyu New Material Co., Ltd. (Xingyu) and Jiangsu Xingye Plastic Co., Ltd. (Xingye), both located in Jiangsu, China. Sanfangxiang provided information for the two subsidiaries that produced and sold subject goods, and also for other subsidiaries.

[74] Sanfangxiang provided a substantially complete response to the Dumping RFI and to a SRFI.^{Footnote 17} The CBSA will continue to collect and verify information from Sanfangxiang during the final phase of the investigation.

[75] Sanfangxiang had sufficient domestic sales of PET resin during the PAP. Consequently, the methodology of section 15 of SIMA was used to estimate the normal values of the PET resin exported to Canada.

[76] For subject goods exported from Sanfangxiang to Canada during the POI, export prices were estimated using the methodology of section 24 of SIMA, based on the exporter’s selling price adjusted by deducting the costs, charges and expenses incurred in preparing the goods for shipment to Canada and resulting from the exportation and shipment of the goods.

[77] For the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 3.3% for Sanfangxiang, expressed as a percentage of the export price.

All Other Exporters – China

[78] For exporters of subject goods originating in or exported from China that did not provide a response to the Dumping RFI or did not furnish sufficient information, the normal values and export prices were estimated on the basis of facts available.

[79] In establishing the methodology for estimating normal values and export prices, 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 and information submitted by exporters of PET resin from the named countries: China, India, Oman and Pakistan.

[80] The CBSA decided that the normal values and export prices estimated for the exporters whose submissions were substantially complete for the preliminary determination, rather than the information provided in the complaint or estimated at initiation, would be used to establish the methodology for estimating normal values since it reflects more closely Chinese exporters’ trading practices during the POI. The CBSA first considered whether the information from the exporter of PET resin in China who provided substantially complete information was appropriate to use as the basis for estimating the margin of dumping for all other exporters in China. The only substantially complete information on the record with respect to goods originating in or exported from China was from Sanfangxiang.

[81] The CBSA examined the difference between the normal value and export price for each individual transaction from that exporter in order to obtain an appropriate amount for the normal value methodology. The transactions were examined to ensure that no anomalies were considered, such as very low volume and value, effects of seasonality or other business factors. No such anomalies were identified.

[82] The CBSA considered that the highest amount by which the normal value exceeded the export price on an individual transaction of Sanfangxiang (expressed as a percentage of the export price), was an appropriate basis for estimating normal values. This methodology relies on information related to goods that originated in or were exported from China and limits the advantage that an exporter may gain from not providing necessary information requested in a dumping investigation as compared to an exporter that did provide the necessary information. Therefore, the normal values were estimated based on the estimated export price, plus an amount equal to 17.4% of that estimated export price.

[83] The CBSA considered that the information submitted on the CBSA customs entry documentation was the best information on which to estimate the export price of the goods for all other exporters as it reflects actual import data.

[84] Based on the above methodologies, for exporters that did not provide a response or provided an incomplete response to the Dumping RFI, the margin of dumping of subject goods originating in or exported from China was estimated to be 17.4%, expressed as a percentage of the export price.

India

Reliance Industries Limited (Reliance)

[85] Reliance is a producer and exporter of subject goods to Canada. Reliance’s head office is located in Mumbai, India and it has two production facilities capable of producing subject goods located in Dahej, India and Hazira, India. During the POI, all subject goods exported by Reliance to Canada were produced and shipped directly from these two production facilities in India and sold to unrelated importers in Canada.

[86] Reliance provided a substantially complete response to the Dumping RFI and to two SRFIs, which were sent to gather additional information and seek clarification regarding their original Dumping RFI response.^{Footnote 18} The CBSA will continue to collect and verify information from Reliance.

[87] Reliance had sufficient domestic sales of like goods during the PAP. Consequently, the methodology of section 15 of SIMA was used to estimate the normal values of PET resin exported to Canada.

[88] For subject goods exported from Reliance to Canada during the POI, export prices were estimated using the methodology of section 24 of SIMA, adjusted by deducting the costs, charges and expenses incurred in preparing the goods for shipment to Canada and resulting from the exportation and shipment of the goods.

[89] For the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 34.0% for Reliance, expressed as a percentage of the export price.

All Other Exporters – India

[90] For exporters of subject goods originating in or exported from India that did not provide a response to the Dumping RFI or did not furnish sufficient information, the normal values and export prices were estimated on the basis of facts available.

[91] In establishing the methodology for estimating normal values and export prices, 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 and information submitted by exporters of PET resin from the named countries: China, India, Oman and Pakistan.

[92] The CBSA decided that the normal values and export prices estimated for the exporters whose submissions were substantially complete for the preliminary determination, rather than the information provided in the complaint or estimated at initiation, would be used to establish the methodology for estimating normal values since it reflects more closely Indian exporters’ trading practices during the POI. The CBSA first considered whether the information from the exporter of PET resin in India who provided substantially complete information was appropriate to use as the basis for estimating the margin of dumping for all other exporters in India. The only substantially complete information on the record with respect to goods originating in or exported from India was from Reliance.

[93] The CBSA examined the difference between the normal value and export price for each individual transaction from that exporter in order to obtain an appropriate amount for the normal value methodology. The transactions were examined to ensure that no anomalies were considered, such as very low volume and value, effects of seasonality or other business factors. No such anomalies were identified.

[94] The CBSA considered that the highest amount by which the normal value exceeded the export price on an individual transaction of Reliance (expressed as a percentage of the export price), was an appropriate basis for estimating normal values. This methodology relies on information related to goods that originated in or were exported from India and limits the advantage that an exporter may gain from not providing necessary information requested in a dumping investigation as compared to an exporter that did provide the necessary information. Therefore, the normal values were estimated based on the estimated export price, plus an amount equal to 45.6% of that estimated export price.

[95] The CBSA considered that the information submitted on the CBSA customs entry documentation was the best information on which to estimate the export price of the goods for all other exporters as it reflects actual import data.

[96] Based on the above methodologies, for exporters that did not provide a response or provided an incomplete response to the dumping RFI, the margin of dumping of subject goods originating in or exported from India was estimated to be 45.6% expressed as a percentage of the export price.

Oman

OCTAL SOAZ FZC (Octal)

[97] Octal is a producer and exporter of subject goods to Canada. Octal’s head office is located in Muscat, Oman and has production facilities capable of producing subject goods located in Salalah, Oman. During the POI, all subject goods exported to Canada were produced and shipped directly from the Salalah production facility in Oman and sold to unrelated importers in Canada and vendors in the USA.

[98] Octal provided a substantially complete response to the Dumping RFI and to a SRFI, which was sent to Octal to gather additional information and seek clarification regarding their original Dumping RFI response.^{Footnote 19} The CBSA will continue to collect and verify information from Octal.

[99] Although Octal had domestic sales of like goods during the PAP, there were not such a number of sales that met the conditions of paragraph 16(2)(b) and, as such, the methodology of section 15 of SIMA could not be used to estimate the normal values of PET resin. Consequently, normal values were estimated using the methodology of paragraph 19(b) of SIMA, based on the aggregate of cost of production, a reasonable amount for administrative, selling and all other costs, and a reasonable amount for profits.

[100] The amount for profits was estimated in accordance with subparagraph 11(1)(b)(v) of the Special Import Measures Regulation (SIMR) by using all of Octal’s profitable domestic sales of goods that were of the group or range of goods that is the next largest to the same general category as the subject goods exported to Canada during the POI. This group or range includes further manufactured products of other non-subject PET resin.

[101] For subject goods exported from Octal to Canada during the POI, export prices were estimated using the methodology of section 24 of SIMA, adjusted by deducting the costs, charges and expenses incurred in preparing the goods for shipment to Canada and resulting from the exportation and shipment of the goods.

[102] For the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 22.2% for Octal, expressed as a percentage of the export price.

All Other Exporters – Oman

[103] For exporters of subject goods originating in or exported from Oman that did not provide a response to the Dumping RFI or did not furnish sufficient information, the normal values and export prices were estimated on the basis of facts available.

[104] In establishing the methodology for estimating normal values and export prices, 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 and information submitted by exporters of PET resin from the named countries: China, India, Oman and Pakistan.

[105] The CBSA decided that the normal values and export prices estimated for the exporters whose submissions were substantially complete for the preliminary determination, rather than the information provided in the complaint or estimated at initiation, would be used to establish the methodology for estimating normal values since it reflects more closely Omani exporters’ trading practices during the POI. The CBSA first considered whether the information from the exporter of PET resin in Oman who provided substantially complete information was appropriate to use as the basis for estimating the margin of dumping for all other exporters in Oman. The only substantially complete information on the record with respect to goods originating in or exported from Oman was from Octal.

[106] The CBSA examined the difference between the normal value and export price for each individual transaction from that exporter in order to obtain an appropriate amount for the normal value methodology. The transactions were examined to ensure that no anomalies were considered, such as very low volume and value, effects of seasonality or other business factors. No such anomalies were identified.

[107] The CBSA considered that the highest amount by which the normal value exceeded the export price on an individual transaction of Octal (expressed as a percentage of the export price), was an appropriate basis for estimating normal values. This methodology relies on information related to goods that originated in or were exported from Oman and limits the advantage that an exporter may gain from not providing necessary information requested in a dumping investigation as compared to an exporter that did provide the necessary information. Therefore, the normal values were estimated based on the estimated export price, plus an amount equal to 41.3% of that estimated export price.

[108] The CBSA considered that the information submitted on the CBSA customs entry documentation was the best information on which to estimate the export price of the goods for all other exporters as it reflects actual import data.

[109] Based on the above methodologies, for exporters that did not provide a response or provided an incomplete response to the dumping RFI, the margin of dumping of subject goods originating in or exported from Oman was estimated to be 41.3% expressed as a percentage of the export price.

Pakistan

All Exporters – Pakistan

[110] For exporters of subject goods originating in or exported from Pakistan that did not provide a response to the Dumping RFI or did not furnish sufficient information, the normal values and export prices were estimated on the basis of facts available.

[111] In establishing the methodology for estimating normal values and export prices, 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 and information submitted by exporters of PET resin from the named countries: China, India, Oman and Pakistan.

[112] The CBSA decided that the normal values and export prices estimated for the exporters whose submissions were substantially complete for the preliminary determination, rather than the information provided in the complaint or estimated at initiation, would be used to establish the methodology for estimating normal values since it reflects more closely exporters’ trading practices during the POI. As no exporters of PET resin from Pakistan provided a complete response to the Dumping RFI, the CBSA considered the substantially complete information from exporters with respect to goods originating in or exported from the other named countries.

[113] The CBSA considered that the information in respect of goods from India provides a reasonable basis to estimate normal values for the subject goods from Pakistan. At the initiation of the investigation, the CBSA’s estimates of normal values for Pakistan included certain available financial data (amount for profit) from India, in addition, India is in close geographical proximity to Pakistan, with similar economic and market conditions. As such, domestic pricing and costs of production are expected to be somewhat similar and therefore the normal values in India may be comparable to those in Pakistan. As such, the substantially complete information on the record with respect to India from the exporter Reliance was considered the most appropriate in establishing an all other exporters’ rate for Pakistan.

[114] The CBSA examined the difference between the normal value and export price for each individual transaction from that exporter in order to obtain an appropriate amount for the normal value methodology. The transactions were examined to ensure that no anomalies were considered, such as very low volume and value, effects of seasonality or other business factors. No such anomalies were identified.

[115] The CBSA considered that the highest amount by which the normal value exceeded the export price on an individual transaction of Reliance (expressed as a percentage of the export price), was an appropriate basis for estimating normal values. This methodology limits the advantage that an exporter may gain from not providing necessary information requested in a dumping investigation as compared to an exporter that did provide the necessary information. Therefore, the normal values were estimated based on the estimated export price, plus an amount equal to 45.6% of that estimated export price.

[116] The CBSA considered that the information submitted on the CBSA customs entry documentation was the best information on which to estimate the export price of the goods for all other exporters as it reflects actual import data.

[117] Based on the facts available, for exporters that did not provide a response or provided an incomplete response to the dumping RFI, the margin of dumping of subject goods originating in or exported from Pakistan was estimated to be 45.6%, expressed as a percentage of the export price.

Summary of Preliminary Results - Dumping

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

Summary of Preliminary Results - Dumping
Period of Investigation (April 1, 2016 to March 31, 2017)

Country of Origin or Export	Estimated Margin of Dumping*
China
Jiangsu Sanfangxiang Group Co. Ltd.	3.3%
All Other Exporters	17.4%
India
Reliance Industries Limited	34.0%
All Other Exporters	45.6%
Oman
OCTAL SOAZ FZC	22.2%
All Other Exporters	41.3%
Pakistan
All Exporter	45.6%

* Expressed as a percentage of the export price

[119] Under section 35 of SIMA, if at any time before making a preliminary determination the CBSA is satisfied that the actual and potential volume of goods of a country is negligible, the CBSA is required to terminate the investigation with respect to goods of that country.

[120] Pursuant to subsection 2(1) of SIMA, the volume of goods of a country is considered negligible if it accounts for less than 3% of the total volume of goods that are released into Canada from all countries that are of the same description as the goods.

[121] The volumes of subject goods from China, India, Oman and Pakistan are each above 3% of the total volume of goods released into Canada from all countries. Based on the definition above, the volumes of subject goods from these countries are therefore not negligible.

[122] If, in making a preliminary determination, the CBSA determines that the margin of dumping of the goods of a particular exporter is insignificant pursuant to section 38 of SIMA, the investigation will continue in respect of those goods but provisional duties will not be imposed on goods of the same description imported during the provisional period.

[123] Pursuant to subsection 2(1) of SIMA, a margin of dumping of less than 2% of the export price of the goods is defined as insignificant. The margins of dumping, estimated for exporters in China, India, Oman and Pakistan, are greater than the threshold of 2% and are therefore not considered insignificant.

[124] A summary of the estimated margins of dumping and provisional duties by exporter are presented in Appendix 1.

[125] In accordance with section 2 of SIMA, a subsidy exists if there is a financial contribution by a government of a country other than Canada that confers a benefit on persons engaged in the production, manufacture, growth, processing, purchase, distribution, transportation, sale, export or import of goods. A subsidy also exists in respect of any form of income or price support within the meaning of Article XVI of the General Agreement on Tariffs and Trade, 1994, being part of Annex 1A to the World Trade Organization (WTO) Agreement that confers a benefit.

[126] Pursuant to subsection 2(1.6) of SIMA, there is a financial contribution by a government of a country other than Canada where:

1. practices of the government involve the direct transfer of funds or liabilities or the contingent transfer of funds or liabilities;
2. amounts that would otherwise be owing and due to the government are exempted or deducted or amounts that are owing and due to the government are forgiven or not collected;
3. the government provides goods or services, other than general governmental infrastructure, or purchases goods; or
4. the government permits or directs a non governmental body to do anything referred to in any of paragraphs (a) to (c) where the right or obligation to do the thing is normally vested in the government and the manner in which the non governmental body does the thing does not differ in a meaningful way from the manner in which the government would do it.

[127] Where subsidies exist they may be subject to countervailing measures if they are specific in nature. According to subsection 2(7.2) of SIMA a subsidy is considered to be specific when it is limited, in a legislative, regulatory or administrative instrument, or other public document, to a particular enterprise within the jurisdiction of the authority that is granting the subsidy; or is a prohibited subsidy.

[128] A“prohibited subsidy” is either an export subsidy or a subsidy or portion of a subsidy that is contingent, in whole or in part, on the use of goods that are produced or that originate in the country of export. An export subsidy is a subsidy or portion of a subsidy contingent, in whole or in part, on export performance. An “enterprise” is defined as including a group of enterprises, an industry and a group of industries. These terms are all defined in section 2 of SIMA.

[129] Notwithstanding that a subsidy is not specific in law, under subsection 2(7.3) of SIMA a subsidy may also be considered specific having regard as to whether:

1. there is exclusive use of the subsidy by a limited number of enterprises;
2. there is predominant use of the subsidy by a particular enterprise;
3. disproportionately large amounts of the subsidy are granted to a limited number of enterprises; and
4. the manner in which discretion is exercised by the granting authority indicates that the subsidy is not generally available.

[130] For purposes of a subsidy investigation, the CBSA refers to a subsidy that has been found to be specific as an “actionable subsidy,” meaning that it is subject to countervailing measures if the persons engaged in the production, manufacture, growth, processing, purchase, distribution, transportation, sale, export or import of goods under investigation have benefited from the subsidy.

[131] Financial contributions provided by state-owned enterprises (SOEs) may also be considered to be provided by the government for purposes of this investigation. A SOE may be considered to constitute “government” for the purposes of subsection 2(1.6) of SIMA if it possesses, exercises, or is vested with governmental authority. Without limiting the generality of the foregoing, the CBSA may consider the following factors as indicative of whether the SOE meets this standard: 1) the SOE is granted or vested with authority by statute; 2) the SOE is performing a government function; 3) the SOE is meaningfully controlled by the government; or some combination thereof.

Preliminary Results of the Subsidy Investigation

[132] The following presents the preliminary results of the investigation into the subsidizing of certain PET resin originating in or exported from China, India, Oman, and Pakistan.

[133] At the initiation of the investigation, the CBSA sent Subsidy RFIs to the government of the countries under investigation, as well as to all known exporters/producers and identified vendors of certain PET resin. The respective governments were also requested to forward the RFIs to all subordinate levels of government that had jurisdiction over the exporters. As well, the exporters were requested to forward a portion of the RFI to their input suppliers, who were asked to respond to questions pertaining to their legal characterization as SOEs.

[134] The governments and the exporters/producers were also notified that failure to submit all required information and documentation, including non confidential versions, failure to comply with all instructions contained in the RFI, failure to permit verification of any information or failure to provide documentation requested during the verification visits may result in the amount of subsidy and the assessment of countervailing duties on subject goods being based on facts available to the CBSA. Further, they were notified that a determination on the basis of facts available could be less favorable to their firm than if complete, verifiable information was made available.

[135] The GOO and GOP provided a substantially complete response to the CBSA’s government Subsidy RFI.

[136] The CBSA also received substantially complete responses to the Subsidy RFI from three exporters/producers. The programs used by the responding exporters are listed in Appendix 2.

[137] The CBSA will continue to analyze the companies’ information during the final phase of the investigation. The CBSA may also consider any other potential subsidy programs that have not yet been identified.

[138] Estimated amounts of subsidy relating to each of the exporters that provided a response to the RFI are presented in a summary table in Appendix 1 while the estimated amount of subsidy for each country can be found in a summary table at the end of this section.

Preliminary Results of the Subsidy Investigation by Country and Exporter

[139] The GOO^{Footnote 20} and the GOP^{Footnote 21} provided substantially complete responses to the CBSA’s Government Subsidy RFI, the GOI response was incomplete for purposes of the preliminary determination and the GOC did not provide a response.

[140] The CBSA received a substantially complete response to the Subsidy RFI from one exporter in India.^{Footnote 22}

[141] The CBSA received a substantially complete response to the Subsidy RFI from one exporter in Oman.^{Footnote 23}

[142] The CBSA received a substantially complete response to the Subsidy RFI from one exporter in Pakistan.^{Footnote 24}

[143] Two exporters/producers, namely one each in China and India, provided incomplete responses to the Subsidy RFI, which could not be used for the purposes of the preliminary determination. These companies are Jiangsu Sanfangxiang Group Co. Ltd.^{Footnote 25} and Dhunseri^{Footnote 26}, respectively. Deficiencies were communicated to these companies, however, complete information was not subsequently provided in time for purposes of the preliminary determinations.

[144] Further, one producer of PET resin in India, Micro Polypet Private Limited^{Footnote 27}, provided a response to the Subsidy RFI but given the company was not a producer or exporter of subject goods, its response was not used for the purposes of the preliminary determination.

China

All Exporters - China

[145] For exporters that did not provide a response to the Subsidy RFI or did not furnish sufficient information, the amount of subsidy was estimated based on an analysis of facts available.

[146] In establishing the methodology for estimating an amount of subsidy, 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 and information submitted by exporters of PET resin from the named countries: China, India, Oman and Pakistan.

[147] As substantially complete information was not received from any exporter in China, the CBSA considered information from the other named countries in determining the amount of subsidy for all exporters in China. Since subsidy reflects specific government practices within a country, using information of exporters from the other named countries was not considered suitable in establishing an all other exporters rate for China.

[148] As a result, given that no exporters in China provided a response to the Subsidy RFI, the CBSA estimated an amount of subsidy for all exporters in China based on the facts available, which incorporated the methodology used at the initiation of the investigation. The estimated amount of subsidy at initiation was based on the difference between the estimated average cost of production from producers in China during the POI and the average export price of the goods during the POI from China, as declared on import documentation.

[149] This methodology uses the best information available from China to estimate an amount of subsidy as it represents the differential between the producers’ costs and the export price at which the goods were actually sold. Subsidies reduce the cost to produce a good, thereby allowing producers to sell their goods at a lower price.

[150] Using the above methodology, for the preliminary determination, the estimated amount of subsidy for all exporters in China is 22.8%, expressed as a percentage of the export price.

India

Reliance Industries Limited (Reliance)

[151] Reliance is a producer and exporter of subject goods to Canada. It provided a substantially complete response to the Subsidy RFI^{Footnote 28} and a SRFI.^{Footnote 29}

[152] A review of the information submitted by Reliance led to the identification of new subsidy programs being used by the producer during the POI. Added to the list of identified subsidy programs and incentives for purposes of the preliminary determination are Income Tax Deductions for Research and Development Expenses (IT) (Program 39) and Gujarat Electricity Duty Exemption Scheme (GEDES) (Program 40).

[153] For purposes of the preliminary determination, it is estimated that Reliance benefitted from the following subsidy programs during the POI:

[154] For purposes of the preliminary determination, the above subsidy programs were considered to be specific and therefore actionable. This decision was based on an analysis of the information provided by Reliance.

[155] The estimated amount of subsidy for Reliance is 3.9%, expressed as a percentage of the export price.

All Other Exporters – India

[156] For all other exporters of subject goods originating in or exported from India that did not provide sufficient information or did not export subject goods to Canada during the POI, the CBSA estimated an amount of subsidy on the basis of the following methodology:

1. the amount of subsidy for each of the 5 programs, as found at the preliminary determination, for the exporter, Reliance, located in India that provided a substantially complete response to the Subsidy RFI, plus;
2. the average of the amount of subsidy for the 5 programs listed in (1), applied to each of the remaining 35 potentially actionable subsidy programs for which sufficient information is not available or has not been provided at the preliminary determination.

[157] Using the above methodology, for the preliminary determination, the estimated amount of subsidy for all other exporters in India is 31.1%, expressed as a percentage of the export price.

Oman

OCTAL SOAZ FZC (Octal)

[158] Octal is a producer and exporter of subject goods to Canada. Octal provided substantially complete responses to the Subsidy RFI^{Footnote 30} and a SRFI^{Footnote 31}.

[159] For purposes of the preliminary determination, the CBSA estimated that Octal benefitted from the following subsidy program during the POI:

[160] For purposes of the preliminary determination, the above subsidy program was considered to be specific and therefore actionable. This decision was made from the analysis of the information provided by Octal and the GOO.

[161] The estimated amount of subsidy for Octal is 0.50%, expressed as a percentage of the export price.

All Other Exporters – Oman

[162] For all other exporters of subject goods originating in or exported from Oman that did not provide sufficient information or did not export subject goods to Canada during the POI, the CBSA estimated an amount of subsidy on the basis of the following methodology:

1. the amount of subsidy for the one program, as found at the preliminary determination, for the exporter, Octal, located in Oman that provided a substantially complete response to the Subsidy RFI, plus;
2. the amount of subsidy for the one program listed in (1), applied to each of the remaining seven potentially actionable subsidy programs for which sufficient information is not available or has not been provided at the preliminary determination.

[163] Using the above methodology, for the preliminary determination, the estimated amount of subsidy for all other exporters in Oman is 4.0%, expressed as a percentage of the export price.

Pakistan

Novatex Limited (Novatex)

[164] Novatex is a producer and exporter of subject goods to Canada. It provided a substantially complete response to the Subsidy RFI^{Footnote 32} and a SRFI^{Footnote 33}.

[165] For purposes of the preliminary determination, the CBSA estimated that Novatex benefitted from the following subsidy programs during the POI:

[166] For purposes of the preliminary determination, the above subsidy programs were considered to be specific and therefore actionable. This decision was made from the analysis of the information provided to date by Novatex and the GOP. Additional analysis and clarification on the other referenced subsidy programs will continue for purposes of the final determination.

[167] The estimated amount of subsidy for Novatex is 0.51%, expressed as a percentage of the export price.

Other Exporters – Pakistan

[168] For all other exporters of subject goods originating in or exported from Pakistan that did not provide sufficient information or did not provide information in a timely fashion, the CBSA estimated an amount of subsidy on the basis of the following methodology:

1. the amount of subsidy for each of the 2 programs, as found at the preliminary determination, for the exporter Novatex located in Pakistan that provided a substantially complete response to the Subsidy RFI, plus;
2. the average of the amount of subsidy for the 2 programs listed in (1), applied to each of the remaining 6 potentially actionable subsidy programs for which sufficient information is not available or has not been provided at the preliminary determination.

[169] Using the above methodology, the estimated amount of subsidy for all other exporters in Pakistan is 2.3%, expressed as a percentage of the export price.

Summary of Preliminary Results – Subsidy

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

Country of Origin or Export	Estimated Amount of Subsidy*
China
All Exporters	22.8%
India
Reliance Industries Limited	3.9%
All Other Exporters	31.1%
Oman
OCTAL SOAZ FZC	0.50%
All Other Exporters	4.0%
Pakistan
Novatex Limited	0.51%
All Other Exporters	2.3%

* Expressed as a percentage of the export price.

[171] Under section 35 of SIMA, if, at any time before making a preliminary determination, the CBSA is satisfied that the actual and potential volume of goods of a country is negligible, the CBSA is required to terminate the investigation with respect to goods of that country.

[172] Pursuant to subsection 2(1) of SIMA, the volume of goods of a country is considered negligible if it accounts for less than 3% of the total volume of goods that are released into Canada from all countries that are of the same description as the goods.

[173] The volume of subject goods from each country is above 3% of the total volume of goods released into Canada from all countries. Based on the definition above, the volume of subject goods from each country is therefore not negligible.

[174] If, in making a preliminary determination, the CBSA determines that the amount of subsidy on the goods of a country is insignificant pursuant to subsection 38(1.1) of SIMA, the investigation will continue in respect of those goods but provisional duties will not be imposed on goods of the same description imported during the provisional period.

[175] Pursuant to subsection 2(1) of SIMA, an amount of subsidy of less than 1% of the export price of the goods is defined as insignificant. The amount of subsidy estimated in respect of exports to Canada from Oman by Octal did not exceed 1% of the export price and was, therefore, determined to be insignificant. The amount of subsidy estimated in respect of exports to Canada from Pakistan by Novatex did not exceed 1% of the export price and was, therefore, determined to be insignificant. As a result, the investigation will continue in respect of these goods but provisional countervailing duties will not be imposed on goods from Octal and Novatex of the same description imported into Canada during the provisional period.

[176] The remaining goods under investigation have also been subsidized and the estimated amounts of subsidy on the goods are above 1% and are, therefore, not insignificant. In respect of these goods, provisional countervailing duties will be imposed on goods of the same description imported during the provisional period.

[177] On November 16, 2017, pursuant to subsection 38(1) of SIMA, the CBSA made preliminary determinations of dumping and subsidizing respecting certain PET resin originating in or exported from China, India, Oman and Pakistan.

[178] Pursuant to subsection 8(1) of SIMA, provisional duty payable by the importer in Canada will be applied to dumped and subsidized imports of certain PET resin that are released from the CBSA during the period commencing on the day the preliminary determinations are made and ending on the earlier of the day on which the CBSA causes the investigation in respect of any goods to be terminated, in accordance with subsection 41(1), or the day on which the CITT makes an order or finding. The CBSA considers that the imposition of provisional duty is needed to prevent injury. As noted in the CITT’s preliminary determination, there is evidence that discloses a reasonable indication that the dumping and subsidizing of PET resin have caused injury or are threatening to cause injury to the domestic industry.

[179] Imports of certain PET resin originating in or exported from China, India, Oman and Pakistan released by the CBSA on or after November 16, 2017, will be subject to provisional duties equal to the estimated margin of dumping and estimated amount of subsidy, where applicable, expressed as a percentage of the export price of the goods per exporter. Appendix 1 contains the estimated margins of dumping, estimated amounts of subsidy and the rates of provisional duty.

[180] Importers are required to pay provisional duty in cash or by certified cheque. Alternatively, they may post security equal to the amount payable. Importers should contact their CBSA regional office if they require further information on the payment of provisional duty or the posting of security. If the importers of such goods do not indicate the required SIMA code or do not correctly describe the goods in the import documents, an administrative monetary penalty could be imposed. The imported goods are also subject to the Customs Act. As a result, failure to pay duties within the specified time will result in the application of the provisions of the Customs Act regarding interest.

The Canada Border Services Agency

[181] The CBSA will continue its investigations of the dumping and subsidizing and will make final decisions by February 14, 2018.

[182] If the margins of dumping or amounts of subsidy are found to be insignificant, the CBSA will terminate the investigations in respect of those goods and any provisional duty paid or security posted will be refunded to importers, as appropriate. If the CBSA is satisfied that the goods were dumped and/or subsidized, final determinations will be made.

The Canadian International Trade Tribunal

[183] The CITT has begun its inquiry into the question of injury to the Canadian industry. The CITT is expected to issue its finding by March 16, 2018.

[184] If the CITT finds that the dumping has not caused injury, retardation or is not threatening to cause injury, the proceedings will be terminated and all provisional anti-dumping duty collected or security posted will be refunded.

[185] If the CITT makes a finding that the dumping has caused injury, retardation or is threatening to cause injury, anti-dumping duty in an amount equal to the margin of dumping will be levied, collected and paid on imports of PET resin that are of the same description as goods described in the CITT’s finding.

[186] If the CITT finds that the subsidizing has not caused injury, retardation or is not threatening to cause injury, the proceedings will be terminated and all provisional countervailing duty collected or security posted will be refunded.

[187] If the CITT makes a finding that the subsidizing has caused injury, retardation or is threatening to cause injury, countervailing duties in the amount equal to the amount of subsidy on the imported goods will be levied, collected and paid on imports of PET Resin that are of the same description as goods described in the CITT’s finding.

[188] For purposes of the preliminary determination of dumping or subsidizing, the CBSA has responsibility for determining whether the actual and potential volume of goods is negligible. After a preliminary determination of dumping or subsidizing, the CITT assumes this responsibility. In accordance with subsection 42(4.1) of SIMA, the CITT is required to terminate its inquiry in respect of any goods if the CITT determines that the volume of dumped or subsidized goods from a country is negligible.

[189] Under certain circumstances, anti-dumping and/or countervailing duty can be imposed retroactively on subject goods imported into Canada. When the CITT conducts its inquiry on material injury to the Canadian industry, it may consider if dumped and/or subsidized goods that were imported close to or after the initiation of the investigation constitute massive importations over a relatively short period of time and have caused injury to the Canadian industry. Should the CITT issue a finding that there were recent massive importations of dumped and/or subsidized goods that caused injury, imports of subject goods released by the CBSA in the 90 days preceding the day of the preliminary determination could be subject to anti-dumping and/or countervailing duty.

[190] In respect of importations of subsidized goods that have caused injury, this provision is only applicable where the CBSA has determined that the whole or any part of the subsidy on the goods is a prohibited subsidy. In such a case, the amount of countervailing duty applied on a retroactive basis will equal the amount of subsidy on the goods that is a prohibited subsidy. An export subsidy is a prohibited subsidy according to subsection 2(1) of SIMA.

[191] After a preliminary determination of dumping by the CBSA, an exporter may submit a written undertaking to revise selling prices to Canada so that the margin of dumping or the injury caused by the dumping is eliminated. An acceptable undertaking must account for all or substantially all of the exports to Canada of the dumped goods.

[192] Similarly, after a preliminary determination of subsidizing by the CBSA, a foreign government may submit a written undertaking to eliminate the subsidy on the goods exported or to eliminate the injurious effect of the subsidy, by limiting the amount of the subsidy or the quantity of goods exported to Canada. Alternatively, exporters with the written consent of their government may undertake to revise their selling prices so that the amount of the subsidy or the injurious effect of the subsidy is eliminated.

[193] In view of the time needed for consideration of undertakings, written undertaking proposals should be made as early as possible, and no later than 60 days after the preliminary determinations of dumping and subsidizing. Further details regarding undertakings can be found in the CBSA’s Memorandum D14-1-9, available online at: www.cbsa-asfc.gc.ca/publications/dm-md/d14/d14-1-9-eng.html.

[194] Interested parties may provide comments regarding the acceptability of undertakings within nine days of the receipt of an undertaking by the CBSA. The CBSA will maintain a list of parties who wish to be notified should an undertaking proposal be received. Those who are interested in being notified should provide their name, telephone and fax numbers, mailing address and e-mail address to one of the officers identified in the “Information” section of this document.

[195] If undertakings were to be accepted, the investigations and the collection of provisional duties would be suspended. Notwithstanding the acceptance of an undertaking, an exporter may request that the CBSA’s investigations be completed and that the CITT complete its injury inquiry.

[196] A notice of these preliminary determinations of dumping and subsidizing will be published in the Canada Gazette pursuant to paragraph 38(3)(a) of SIMA.

[197] This Statement of Reasons has been provided to persons directly interested in these proceedings. It is also posted on the CBSA’s website at the address below. For further information, please contact the officers identified as follows:

The following table lists the estimated margins of dumping, the estimated amounts of subsidy, and the provisional duty by exporter as a result of the decisions mentioned above. Imports of subject goods released from the Canada Border Services Agency on or after November 16, 2017, will be subject to provisional duties at the rates specified below.

Country of Origin or Export	Estimated Margin of Dumping*	Estimated Amount of Subsidy*	Total Provisional Duty Payable*
China
Jiangsu Sanfangxiang Group Co. Ltd. (i.e. Jiangyin Xingyu New Material Co., Ltd. and Jiangsu Xingye Plastic Co., Ltd.)	3.3%	22.8%	26.1%
All Other Exporters	17.4%	22.8%	40.2%
India
Reliance Industries Limited	34.0%	3.9%	37.9%
All Other Exporters	45.6%	31.1%	76.7%
Oman
OCTAL SOAZ FZC	22.2%	0.50%**	22.2%
All Other Exporters	41.3%	4.0%	45.3%
Pakistan
Novatex Limited	45.6%	0.51%**	45.6%
All Other Exporters	45.6%	2.3%	47.9%

* As a percentage of export price.

** The amounts of subsidy on certain PET resin for the exporter OCTAL SOAZ FZC (Octal), in Oman and for the exporter Novatex Limited (Novatex), in Pakistan, are insignificant. As such, no provisional countervailing duties will be assessed on subject goods from Octal and Novatex.

This Appendix consists of descriptions of the subsidy programs which the responding companies benefited from during the course of the Period of Investigation (POI), other potentially actionable subsidy programs identified by the Canada Border Services Agency (CBSA), programs that were not used by the exporters in the POI and programs found not to exist.

The CBSA has used the best information available to describe the potentially actionable subsidy programs that were not used by the responding exporters in the current investigation. This includes using information obtained from CBSA research on potential subsidy programs in the named countries and information provided by the responding governments, exporters and related suppliers and descriptions of programs in the complaint.

China

The Government of China (GOC) did not submit a response to the subsidy RFI, which limited the CBSA’s ability to conduct an analysis of the programs for the preliminary determination. Furthermore, no exporter in China submitted a complete response to the Subsidy RFI for the purposes of the preliminary determination.

The following programs are included in the current investigation. Questions concerning these programs were included in the subsidy RFIs sent to the GOC and to all known producers/exporters of PET resin in China. For the purposes of the preliminary determination of subsidizing, sufficient information was not available to make a determination in respect of these potentially actionable subsidy programs. The CBSA will continue to investigate these programs in the final phase of the investigation.

Potentially Actionable Subsidy Programs Identified by the CBSA

Preferential Loans and Loan Guarantees

Grants and Grant Equivalents

Preferential Tax Programs

Relief from Duties and Taxes on Inputs, Material and Machinery

Reduction in Land Use Fees

Goods / Services Provided by the Government at Less Than Fair Market Value

India

As noted in the body of this document, the government of India (GOI) did not submit a complete response to the Subsidy RFI, which has limited the CBSA’s ability to conduct a proper analysis of the programs for the preliminary determination. However, in recognition of the amount of cooperation and the volume of information provided by one exporter that provided a substantially complete response to the RFI (cooperative exporter), the CBSA has estimated the amounts of subsidy, based on the information provided in the response to the Subsidy RFI^{Footnote 34}.

This appendix consists of descriptions of the potentially actionable subsidy programs which the cooperative exporter benefitted from during the course of the POI in the current investigation, followed by a listing of other potentially actionable subsidy programs identified by the CBSA.

Subsidy Programs Used by the Responding Exporter

The CBSA has used the best information available to describe the potentially actionable subsidy programs used by the cooperative exporter in the current investigation. This includes using information obtained from CBSA research on potential subsidy programs in India, information provided by the cooperative exporter and descriptions of programs that the CBSA has previously published publicly in recent Statement of Reasons relating to subsidy investigations involving India.

Relief from Duties and Taxes on Inputs, Materials and Machinery

On the basis of the available information^{Footnote 35}, the following programs under Relief from Duties and Taxes on Inputs, Materials and Machinery constitute a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA, i.e. practices of the government involve the direct transfer of funds or the contingent transfer of funds, or paragraph 2(1.6)(b) of SIMA, i.e. amounts that would otherwise be owing and due to the government are reduced or exempted. As a result, these programs confer a benefit to the recipient equal to the amount of the funds or the amount of the reduction/exemption.

Due to the lack of a complete response by the GOI and the lack of details provided by the exporters, there is not sufficient information on the record to determine whether programs under Relief from Duties and Taxes on Inputs, Materials and Machinery are 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^{Footnote 36}, these programs do not appear to be generally available to all enterprises in India and therefore appear to be specific.

During the POI, the cooperative exporter received a benefit under this program in the form of excessive duty drawback. While the legislative basis of this program is not clear, the CBSA noted that paragraph 26 of Chapter 3 and Chapter 22 of the Customs Manual of Instructions provide some information regarding its administration^{Footnote 37}.

Under this program, the cooperative exporter was given a series of cash payments in lieu of duty drawback on input materials^{Footnote 38}. The amount of cash payment was determined by applying a rate prescribed for the PET resin industry to the value of exported products, irrespective of the actual amount of duties paid on input materials^{Footnote 39}. As the CBSA has information on the record which suggests that these payments, which are contingent on export, were made in excess of actual duties paid on input materials^{Footnote 40}, on the basis of the available information, the program was found to be potentially actionable as per section 35 of the Special Import Measures Regulations (SIMR). This will be further analyzed in the final phase of the investigation.

Based on the available information^{Footnote 41}, the program does not appear to be generally available to all enterprises in India and therefore appears to be specific.

During the POI, the cooperative exporter received a benefit under this program in the form of reduced customs duty rates on importation of certain capital goods. The program is administered as per Foreign Trade Policy 2015 – 2020^{Footnote 42}, and it allows eligible enterprises to import capital goods for pre-production, production and post-production at reduced customs duty rates^{Footnote 43}. Based on the available information^{Footnote 44}, the program does not appear to be generally available to all enterprises in India and therefore appears to be specific.

During the POI, the cooperative exporter received a benefit under this program in the form of reduced future customs duty. During the preliminary review of the available information, it was found that MEIS is a continuation of the Focus Product Scheme^{Footnote 45}. While the legislative basis of this program is not clear, the CBSA noted that some information pertaining to the policy for application and the eligibility criteria can be found in Chapter III of the Foreign Trade Policy and Handbook of procedures, as published by the Directorate General of Foreign Trade^{Footnote 46}.

The stated objective of MEIS is to offset infrastructural inefficiencies and associated costs involved in the export of goods and products that are produced and manufactured in India^{Footnote 47}. The program appears to focus on certain categories of merchandises, including PET resin, because they enhance India’s export competitiveness and have a high export intensity and employment potential^{Footnote 48}.

Under this program, the cooperative exporter received a series of rewards in the form of freely transferable financial instrument known as scrips^{Footnote 49}. The amount of reward was determined by applying a prescribed rate to the value of exported products, and it was also found that scrips can be used for the payment of future customs duty^{Footnote 50}. As the CBSA has information on the record which suggests that these rewards were not used in relation to any actual duties borne by the input materials^{Footnote 51}, the program, which is contingent on export, was found to be potentially actionable as per section 35 of the SIMR. This will be further analyzed in the final phase of the investigation.

Based on the available information^{Footnote 52}, the program does not appear to be generally available to all enterprises in India and therefore appears to be specific.

Preferential Tax Programs

On the basis of the available information^{Footnote 53}, the following program under Preferential Tax Programs constitutes a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA, i.e. amounts that would otherwise be owing and due to the government are reduced or exempted, and confers a benefit to the recipient equal to the amount of the reduction/exemption.

Due to the lack of a complete response by the GOI and the lack of details provided by the exporter, there is not sufficient information on the record to determine whether the program under Preferential Tax Programs 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 India and therefore appears to be specific.

In the course of the investigation, the CBSA found that the cooperative exporter received a benefit under this program during the POI, in the form of reduced corporate income taxes. The program is administered under section 35 (2AB) of the Income Tax Act, 1961^{Footnote 54}, and it allows eligible enterprises to deduct certain research and development expenses for income tax purposes^{Footnote 55}. Based on the available information^{Footnote 56}, the program appears to benefit only certain types of industries and enterprises.

Subsidy Programs provided by the State Government of Gujarat (SGOG)

On the basis of the available information^{Footnote 57}, the following program under Subsidy Programs provided by the SGOG constitutes a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA, i.e., amounts that would otherwise be owing and due to the government are reduced or exempted, and confers a benefit to the recipient equal to the amount of the reduction/exemption.

Due to the lack of a complete response by the GOI and the lack of details provided by the exporter, there is not sufficient information on the record to determine whether the program under Subsidy Programs provided by the SGOG 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 India and therefore appears to be specific.

In the course of the investigation, the CBSA discovered that the cooperative exporter received a benefit under this program during the POI, in the form of exempted electricity duty. The program is administered under the authority of the Gujarat Electricity Duty Act, 1958^{Footnote 58}, and it exempts certain eligible enterprises that establish an additional production facility in the State of Gujarat from the payment of electricity duty for a set period of time^{Footnote 59}. Based on the available information^{Footnote 60}, the program appears to benefit only a limited number of enterprises.

Other Potentially Actionable Subsidy Programs that Require Further Examination

The following programs are also included in the current investigation. Questions concerning these programs were included in the subsidy RFIs sent to the GOI and to all known producers/exporters of PET resin in India. Without a complete response to the subsidy RFI from the GOI, the CBSA does not have detailed descriptions of these programs. For the purposes of the preliminary determination of subsidizing, sufficient information was not available to make a determination in respect of these potentially actionable subsidy programs. The CBSA will continue to investigate these programs in the final phase of the investigation.

Special Economic Zones (SEZ) Programs

Export Oriented Unit (EOU) Programs

Grants and Grant Equivalents

Preferential Loans and Loan Guarantees

Preferential Tax Programs

Relief from Duties and Taxes on Inputs, Material and Machinery

Subsidy Programs provided by the State Government of Gujarat (SGOG)

Subsidy Programs provided by the State Government of Maharashtra (SGOM)

Oman

Subsidy Programs Used by the Responding Exporter

The Salalah Free Zone (SFZ) was established under the Royal Decree No. 62/2006^{Footnote 61} and is regulated through Ministerial Decisions No. 15/2011^{Footnote 62} and No. 45/2011^{Footnote 63}.

One of the benefits provided by the Government of Oman (GOO) to companies located in the SFZ is the exemption of custom taxes on goods imported into or exported from the SFZ.

For the purposes of the preliminary determination, this program constitutes a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA, i.e., 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.

For the purposes of the preliminary determination, this program is considered to be a specific subsidy under subsection 2(7.3) of SIMA as 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 that Require Further Examination

The following programs are also included in the current investigation. Questions concerning these programs were included in the Subsidy RFIs sent to the GOO and to all known producers/exporters of PET Resin in Oman. For the purposes of the preliminary determination of subsidizing, sufficient information was not available to make a determination in respect of these potentially actionable subsidy programs. The CBSA will continue to investigate these programs in the final phase of the investigation.

The SFZ was established under the Royal Decree No. 62/2006^{Footnote 64} and is regulated through Ministerial Decisions No. 15/2011^{Footnote 65} and No. 45/2011^{Footnote 66}.

One of the benefits provided by the GOO to companies located in the SFZ is the exemption of income tax for the period of the lease contract/investment agreement, or thirty years^{Footnote 67}.

This program potentially constitutes a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA, i.e., 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.

This program may be considered to be a specific subsidy under subsection 2(7.3) of SIMA as the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Electricity is regulated, owned and controlled by the GOO. Under Royal Decree No. 78/2004, the Authority for Electricity and Regulation determines electricity rates for different categories of consumers.^{Footnote 68}

This program potentially constitutes a financial contribution pursuant to paragraph 2(1.6)(c) of SIMA, i.e., the government provides goods or services, other than general governmental infrastructure or purchases goods.

This program may be considered to be a specific subsidy under subsection 2(7.3) of SIMA as the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

In the establishment of the SFZ, the Salalah Free Zone Company SAOC (SFZCO) was named the operational body of the SFZ, under Royal Decree No. 62/2006^{Footnote 69}. Through Ministerial Decisions No. 15/2011, the SFZCO coordinates the provision of all services and facilities within the SFZ^{Footnote 70}.

This program potentially constitutes a financial contribution pursuant to paragraph 2(1.6)(c) of SIMA, i.e., the government provides goods or services, other than general governmental infrastructure or purchases goods.

This program may be considered to be a specific subsidy under subsection 2(7.3) of SIMA as the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

In the establishment of the SFZ, the SFZCO was named the operational body of the SFZ, under Royal Decree No. 62/2006^{Footnote 71}. Through Ministerial Decisions No. 15/2011, the SFZCO signs the lease contracts for land with companies that choose to locate in the SFZ, and collects the proceeds of the leases^{Footnote 72}.

This program potentially constitutes a financial contribution pursuant to paragraph 2(1.6)(c) of SIMA, i.e., the government provides goods or services, other than general governmental infrastructure or purchases goods.

This program may be considered to be a specific subsidy under subsection 2(7.3) of SIMA as the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

Subsidy Program that were Not Used by the Exporter

The CBSA has determined that these programs were not used by the exporter in Oman.

This program is administered by the Oman Development Bank which provides development loans for projects in key economic sectors.

The exporter, Octal, did not avail itself of this program.

This program is administered by the Export Credit Guarantee Agency of Oman (ECGA)^{Footnote 73}.

The exporter, Octal, did not avail itself of this program.

This program is administered by the ECGA^{Footnote 74}.

The exporter, Octal, did not avail itself of this program.

Pakistan

Subsidy Programs Used by the Responding Exporter

This program is administered under the State Bank of Pakistan SBP Act, 1956, Section 22 in conjunction with Section 17(2) (d) Annexure to the MFD Circular No. 7, dated December 31, 2001 of the State Bank of Pakistan.^{Footnote 75} Under this program long term financing is provided to export oriented projects to purchase imported and locally manufactured plant and machinery.

For the purposes of the preliminary determination, this preferential financing constitutes 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 or exempted, and would confer a benefit to the recipient equal to the amount of the reduction/exemption.

For the purposes of the preliminary determination, this program is considered to be a specific subsidy under subsection 2(7.3) of SIMA as the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available.

This program is administered by the Ministry of Finance and Economic Affairs (Customs) S.R.O. No. 554(I)/98, dated June 12, 1998 in conjunction with the Customs Act, 1969 (IV of 1969).^{Footnote 76} This program provides for the exemption of customs duty and sales tax on imports of plant and machinery that is not manufactured domestically.

For the purposes of the preliminary determination, this program constitutes 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 or exempted, and would confer a benefit to the recipient equal to the amount of the reduction/exemption.

For the purposes of the preliminary determination, this program is considered to be a specific subsidy under subsection 2(7.3) of SIMA as 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 that Require Further Examination

The following programs are also included in the current investigation. Questions concerning these programs were included in the Subsidy RFIs sent to the GOP and to all known producers/exporters of PET resin in Pakistan. For the purposes of the preliminary determination of subsidizing, sufficient information was not available to make a determination in respect of these potentially actionable subsidy programs. The CBSA will continue to investigate these programs in the final phase of the investigation.

This program is administered by the Federal Board of Revenue, Income Tax Ordinance 2001 and the Income Tax Rules 2002.^{Footnote 77} Under the Final Tax Regime (FDR) a withholding tax of 1% is deducted on the total value of the export transaction of foreign exchange proceeds, regardless of any profit of the company. This withholding tax deduction is to be considered a final tax on the income arising from the export transactions. In comparison, the tax regime on domestic sales are at a rate of 35% applied on the net income of a domestic sale. To the extent that this tax regime results in exports are taxed at a lower rate than domestic sales, this scheme could be considered to be a subsidy.

This program potentially constitutes 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 or exempted, and would confer a benefit to the recipient equal to the amount of the reduction/exemption.

This program is administered by the Federal Board of Revenue S.R.O. No. 450(I)/2001, dated June 18, 2001 in conjunction with the Customs Act 1969, Section 219 of Chapter XX.^{Footnote 78} This program provides for the exemption of customs duty on imports of raw materials and inputs.

This program potentially constitutes 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 or exempted, and would confer a benefit to the recipient equal to the amount of the reduction/exemption.

Subsidy Program that were Not Used by the Exporter

The CBSA has determined that these programs were not used by the exporter in Pakistan.

This program is administered by the Trade and Development Authority of Pakistan. The purpose of the program was to encourage exporters/manufacturers to obtain various quality, environmental and social certifications.^{Footnote 79}

The exporter, Novatex, did not avail itself of this program.

This program is administered by Export Processing Zones Authority (EPZA). This program allows for the duty free importation of plant machinery, equipment and raw materials.^{Footnote 80}

The exporter, Novatex, did not avail itself of this program.

This program is administered by The National Industrial Parks Development and management Company (NIPDMC) and the Export Processing Zones Authority (EPZA). This program may provide land leases at the concessionary rates for producers located in Export Processing Zones.^{Footnote 81}

The exporter, Novatex, did not avail itself of this program.

This program is administered by the Trade and Development Authority of Pakistan. The purpose of the program is to provide financial assistance to exporters to establish a warehouse in any country where a potential market for Pakistani exports may exist.^{Footnote 82}

The exporter, Novatex, did not avail itself of this program.