UDS 2020 IN: Certain upholstered domestic seating
Statement of Reasons—preliminary determinations

Particular market situation

[101] The CBSA is investigating allegations that a PMS exists with respect to China’s UDS market. The complainant made the allegation that a PMS may exist in China due to the combined effect of a multitude of factors. Based on the PMS factors outlined in section 5.2.2.9. of the SIMA Handbook, the most relevant of the factors that are potentially having a significant impact on the domestic sales of like goods in China are:

• government support programs (financial or otherwise)
• the acquisition of production inputs or processing services that do not reflect market based costs because they are acquired from suppliers which are state owned or state controlled or that are affected by government influence or control and
• evidence of distorted input costs

[102] For the allegations concerning inputs, the complainant alleged that steel, wood, and chemical inputs are sourced from SOEs and are purchased at distorted costs. At initiation there was insufficient evidence to justify estimating normal values using a PMS methodology.

[103] At the initiation of the dumping investigation, the CBSA sent a PMS RFI to the GOC. The Dumping RFI sent to exporters in China also included questions relating to PMS. While the GOC did not respond to the PMS RFI, it did make a submission that included a statement that there are no government regulations, programs, or other policies that impact the UDS industry.^{Footnote 30} This statement also included representations that the CBSA’s PMS investigation is not being done in accordance with the ADA and the WTO jurisprudence.

[104] The CBSA has considered and attempted to verify the evidence, information and comments provided by the complainant, the responding exporters/producers, the governments, as well as all of the other information on the administrative record. For the purposes of the preliminary determination, there is insufficient evidence for the CBSA to form the opinion that a particular market situation exists in the UDS market in China that affects the domestic sales such that they do not permit a proper comparison with the sales to the importers in Canada.

[105] In the final phase of the investigation, the CBSA will continue to review and analyze the information available and will seek to gather additional information necessary in order to form an opinion as to whether a PMS exists in China.

Normal values and export prices

Anji Cozy Home Co., Ltd.

[106] Anji Cozy Home Co., Ltd (Cozy Home) is a producer and exporter of subject goods, located in Huzhou City, China.

[107] Cozy Home provided a response to the Dumping RFI^{Footnote 31}, including a database of domestic sales of UDS during the POI. However, normal values could not be estimated in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with all the terms and conditions referred to in sections 15 and 16 of SIMA as to permit a proper comparison with the sales of the goods to the importer in Canada.

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

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

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

[111] For purposes of the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 40.54% for Cozy Home, expressed as a percentage of the export price.

Anji Hengrui Furniture Co., Ltd.

[112] Anji Hengrui Furniture Co., Ltd. (Hengrui) is a producer and exporter of subject goods located in Huzhou City, China.

[113] Hengrui is associated with three additional companies involved in the production and export of subject goods:

• Anji Hengyi Furniture Co., Ltd. (China) is a producer and exporter of subject goods
• Henglin Home Furnishings Co., Ltd. (China) is a producer and exporter of subject goods and
• Vietnam Hang Phong Furniture Co., Ltd. (Vietnam) is a producer and exporter of subject goods

[114] Hengrui provided a response to the Dumping RFI^{Footnote 32}, including a database of domestic sales of UDS during the POI. However, normal values could not be estimated in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with all the terms and conditions referred to in sections 15 and 16 of SIMA as to permit a proper comparison with the sales of the goods to the importer in Canada.

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

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

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

[118] For purposes of the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 70.23% for Hengrui, expressed as a percentage of the export price.

Anji Hengyi Furniture Co., Ltd.

[119] Anji Hengyi Furniture Co., Ltd. (Hengyi) is a producer and exporter of subject goods, located in Huzhou City, China.

[120] Hengyi provided a response to the Dumping RFI^{Footnote 33}, including a database of domestic sales of UDS during the POI. However, normal values could not be estimated in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with all the terms and conditions referred to in sections 15 and 16 of SIMA as to permit a proper comparison with the sales of the goods to the importer in Canada.

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

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

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

[124] For purposes of the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 32.25% for Hengyi, expressed as a percentage of the export price.

Anji UES Furniture Co., Ltd.

[125] Anji UES Furniture Co., Ltd (Anji UES) is a producer and exporter of subject goods located in Huzhou, China.

[126] Anji UES provided a response to the Dumping RFI^{Footnote 34}, including a database of domestic sales of UDS during the POI. However, normal values could not be estimated in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with all the terms and conditions referred to in sections 15 and 16 of SIMA as to permit a proper comparison with the sales of the goods to the importer in Canada.

[127] Normal values were estimated pursuant to paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs and a reasonable amount for profits, where the cost of production was provided.

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

[129] Where the cost of production was not provided, normal values were estimated using the All other exporters—China methodology described below.

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

[131] For purposes of the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 84.37% for Anji UES, expressed as a percentage of the export price.

Dongguan Tianhang Furniture Co., Ltd.

[132] Dongguan Tianhang Furniture Co., Ltd. (Tianhang) is a producer and exporter of subject goods, located in Dongguan, China.

[133] Tianhang is associated with an additional company involved in the sales of subject goods, named Happy Home (HK) Furniture Co., Limited^{Footnote 35} (Happy Home) (Hong Kong), a trading company of furniture products.

[134] Tianhang provided a response to the Dumping RFI.^{Footnote 36} However, Tianhang did not have any domestic sales of like goods during the PAP, and as a result, normal values could not be estimated in accordance with section 15 of SIMA.

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

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

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

[138] For purposes of the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 41.09% for Tianhang, expressed as a percentage of the export price.

Gu Jia Intelligent Household Jiaxing Co., Ltd.

[139] Gu Jia Intelligent Household Jiaxing Co., Ltd. (Gu Jia) is a producer and exporter of subject goods, located in Jiaxing City, China. Gu Jia is a subsidiary of another exporter, Jason Furniture.

[140] Gu Jia is associated with four companies involved in the production or procurement of inputs into the subject goods, and production and sale of subject goods:

• Jason Furniture (Hangzhou) Co., Ltd. (China) is a producer and exporter of subject goods^{Footnote 37}
• Zhejiang Kuka Merlin Furniture Co., Ltd. (China) is a producer and exporter of subject goods^{Footnote 38}
• Zhejiang Sinomax Gu Sponge Co., Ltd. (China) is a producer of sponge for use as an input in the manufacture of subject goods by its associated exporters listed above^{Footnote 39} and
• Kuka (HK) Trade Co., Limited (Hong Kong) assisted its associated exporters with their sales to customers in Canada^{Footnote 40}

[141] Gu Jia provided a response to the Dumping RFI^{Footnote 41}, including a database of domestic sales of UDS during the POI. However, normal values could not be estimated in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with the requirements of sections 15 and 16 of SIMA to permit a proper comparison with the sales of the subject goods to the importers in Canada.

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

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

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

[145] For purposes of the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 33.07% for Gu Jia, expressed as a percentage of export price.

Haining Nicelink Home Furnishings Co., Ltd.

[146] Haining Nicelink Home Furnishings Co., Ltd. (Nicelink) is a producer and exporter of subject goods, located in Haining City, China.

[147] Nicelink provided a response to the Dumping RFI^{Footnote 42}, including a database of domestic sales of UDS during the POI. However, normal values could not be estimated in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with all the terms and conditions referred to in sections 15 and 16 of SIMA as to permit a proper comparison with the sales of the goods to the importer in Canada.

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

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

[150] Where the cost of production was not provided, normal values were estimated using the All other exporters—China methodology described below.

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

[152] For purposes of the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 11.01% for Nicelink, expressed as a percentage of the export price.

Henglin Home Furnishings Co., Ltd.

[153] Henglin Home Furnishings Co., Ltd. (Henglin) is a producer and exporter of subject good, located in Huzhou City, China.

[154] Henglin provided a response to the Dumping RFI^{Footnote 43}, including a database of domestic sales of UDS during the POI. However, normal values could not be estimated in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with all the terms and conditions referred to in sections 15 and 16 of SIMA as to permit a proper comparison with the sales of the goods to the importer in Canada.

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

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

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

[158] For purposes of the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 38.16% for Henglin, expressed as a percentage of the export price.

HHC Changzhou Corp.

[159] HHC Changzhou Corp (Changzhou Corp) is a producer and exporter of subject goods, located in Changzhou City, China.

[160] Changzhou Corp is associated with two additional companies involved in the production or procurement of inputs into the subject goods as well as one producer and exporter of subject goods:

• Changzhou FBS Manufacturing Corp.^{Footnote 44} (FBS) (China) is a producer of mechanical and electronic products
• HHC YourWay Mechs. Corp.^{Footnote 45} (YourWay) (China) is a producer of mechanical components and
• Motomotion Vietnam Limited Company (Motomotion) (Vietnam) is a producer and exporter of subject goods

[161] Changzhou Corp provided a response to the Dumping RFI^{Footnote 46}, including a database of domestic sales of UDS during the POI. However, normal values could not be estimated in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with all the terms and conditions referred to in sections 15 and 16 of SIMA as to permit a proper comparison with the sales of the goods to the importer in Canada.

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

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

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

[165] For purposes of the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 39.19% for Changzhou Corp, expressed as a percentage of the export price.

HTL Furniture (China) Co., Ltd.

[166] HTL Furniture (China) Co., Ltd. (HTL-FC) is a producer and exporter of subject goods, located in Kunshan Development Zone, China.

[167] HTL-FC is associated with seven additional companies involved in the production or procurement of inputs into the subject goods, and production and sale of subject goods:

• HTL Furniture (Huai An) Co., Ltd.^{Footnote 47} (China) is a producer and exporter of subject goods
• HTL Manufacturing Pte Ltd.^{Footnote 48} (Singapore) is the vendor that sold subject goods to importers in Canada that were exported from China by HTL Furniture (Huai An) Co., Ltd. and HTL Furniture (China) Co., Ltd.
• HTL Leather (China) Co., Ltd.^{Footnote 49} (China) is a producer of leather used in the manufacture of subject goods by associated exporters
• HTL Furniture (Changshu) Co., Ltd.^{Footnote 50} (China) acquired inputs for use in the manufacture of subject goods by associated exporters
• HTL Furniture (Kunshan) Co., Ltd.^{Footnote 51} (China) acquired inputs for use in the manufacture of subject goods by associated exporters and
• Trends Leather (Yangzhou) Co., Ltd.^{Footnote 52} (Japan) acquired inputs for use in the manufacture of subject goods by associated exporters

[168] The subject goods exported by HTL-FC were sold to importers in Canada by a related vendor located in Singapore, HTL Manufacturing Pte Ltd. (HTL-MP). HTL-MP purchased the subject goods from HTL-FC and sold them to the importers in Canada, though the goods were shipped directly from production facilities of HTL-FC in China to the importers in Canada. For purposes of the preliminary determination, the CBSA found HTL-FC to be the exporter of the subject goods as it is located in the country of export, China, and based on other information designated by HTL-FC as confidential.

[169] HTL-FC provided a response to the Dumping RFI^{Footnote 53}, including a database of domestic sales of UDS during the POI. For exports of subject goods by HTL-FC where it had sufficient domestic sales of like goods that met the requirements of sections 15 and 16 of SIMA, the CBSA estimated normal values in accordance with section 15 of SIMA based on prices of domestic sales of like goods. For all other exports of subject goods by HTL-FC, the CBSA estimated normal values in accordance with paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs and a reasonable amount for profits.

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

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

[172] For purposes of the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 58.38% for HTL-FC, expressed as a percentage of the export price.

HTL Furniture (Huai An) Co., Ltd.

[173] HTL Furniture (Huai An) Co., Ltd. (HTL-HA) is a producer and exporter of subject goods, located in Huai An City, China.

[174] The subject goods exported by HTL-HA were sold to importers in Canada by a related vendor located in Singapore, HTL Manufacturing Pte Ltd. (HTL-MP). HTL-MP purchased the subject goods from HTL-HA and sold them to the importers in Canada, though the goods were shipped directly from production facilities of HTL-HA in China to the importers in Canada. For purposes of the preliminary determination, the CBSA found HTL-HA to be the exporter of the subject goods as it is located in the country of export, China, and based on other information designated by HTL-HA as confidential.

[175] HTL-HA provided a response to the Dumping RFI.^{Footnote 54} However, HTL-HA did not have domestic sales of UDS during the PAP and as a result, normal values could not be estimated in accordance with section 15 of SIMA.

[176] As such, the CBSA estimated normal values for HTL-HA in accordance with paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs and a reasonable amount for profits.

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

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

[179] For purposes of the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 58.76% for HTL-HA, expressed as a percentage of the export price.

Jason Furniture (Hangzhou) Co., Ltd.

[180] Jason Furniture (Hangzhou) Co., Ltd. (Jason Furniture) is a producer and exporter of subject goods, located in Hangzhou, China.

[181] Jason Furniture provided a response to the Dumping RFI^{Footnote 55}, including a database of domestic sales of UDS during the POI. However, normal values could not be estimated in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with the requirements of sections 15 and 16 of SIMA to permit a proper comparison with the sales of the subject goods to the importers in Canada.

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

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

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

[185] For purposes of the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 47.87% for Jason Furniture, expressed as a percentage of export price.

Taizhou Delancey Street Furniture Co., Ltd.

[186] Taizhou Delancey Street Furniture Co., Ltd. (Taizhou Delancey) is a producer and exporter of subject goods and is located in Taizhou City, China.

[187] Taizhou Delancey provided a response to the Dumping RFI.^{Footnote 56} However, Taizhou Delancey did not have any domestic sales of like goods during the PAP, and as a result, normal values could not be estimated in accordance with section 15 of SIMA.

[188] As such, normal values were estimated pursuant to 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.

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

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

[191] For purposes of the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 50.77% for Taizhou Delancey, expressed as a percentage of the export price.

UE Furniture Co., Ltd.

[192] UE Furniture Co., Ltd. (UE) is a producer and exporter of subject goods located in Huzhou, China. UE has three factories that were involved in the production of subject goods during the POI.

[193] UE provided a response to the Dumping RFI^{Footnote 57}, including a database of domestic sales of UDS during the POI. However, normal values could not be estimated in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with all the terms and conditions referred to in sections 15 and 16 of SIMA as to permit a proper comparison with the sales of the goods to the importer in Canada.

[194] Normal values were estimated pursuant to paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs and a reasonable amount for profits, where the cost of production was provided.

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

[196] Where the cost of production was not provided, normal values were estimated using the All other exporters—China methodology described below.

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

[198] For purposes of the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 68.88% for UE, expressed as a percentage of the export price.

Vanguard Industrial JiaXing Co., Ltd.

[199] Vanguard Industrial JiaXing Co., Ltd. (Vanguard) is a producer and exporter of subject goods, located in Jiaxing City, China.

[200] Vanguard is associated with three additional companies involved in the production and export of subject goods:

• Sovereign Industrial JiaXing Co., Ltd. (Sovereign) (China) is a producer of steel, plastic, hardware, wood furniture and wood products
• United Ocean Holdings Ltd. (United Ocean) (British Virgin Islands) is a trading company of furniture products and
• Ontai Group Limited Taiwan Branch (Ontai) (Taiwan) is a trading company of furniture products

[201] Vanguard provided a response to the Dumping RFI^{Footnote 58}, including a database of domestic sales of UDS during the POI. However, normal values could not be estimated in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with all the terms and conditions referred to in sections 15 and 16 of SIMA as to permit a proper comparison with the sales of the goods to the importer in Canada.

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

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

[204] Where the cost of production was not provided, normal values were estimated using the All Other Exporters—China methodology described below.

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

[206] For purposes of the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 58.37% for Vanguard, expressed as a percentage of the export price.

Violino Furniture (Shenzhen) Ltd.

[207] Violino Furniture (Shenzhen) Ltd. (Violino SZ) is a producer and exporter of subject goods, located in Shenzhen, China.

[208] Violino SZ is associated with an additional company involved in the production of inputs into subject goods, named Dongguan LokYin Foam Manufacturing Co., Ltd. (Dongguan Lokyin), a producer of foam.

[209] Violino SZ provided a response to the Dumping RFI^{Footnote 59}, including a database of domestic sales of UDS during the POI. Normal values could not be estimated in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with all the terms and conditions referred to in sections 15 and 16 of SIMA as to permit a proper comparison with the sales of the goods to the importer in Canada.

[210] As such, normal values were estimated pursuant to paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs and a reasonable amount for profit, where the cost of production was provided.

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

[212] Where the costs of production were not provided, normal values were estimated using the All other exporters—China methodology described below.

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

[214] For purposes of the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 20.65% for Violino SZ, expressed as a percentage of the export price.

Zhejiang Chuanyang Furniture Co., Ltd.

[215] Zhejiang Chuanyang Furniture Co., Ltd. (Chuanyang) is a producer and exporter of subject goods, located in Haining City, China.

[216] Chuanyang is associated with an additional company involved in the production or procurement of inputs into the subject goods, named Zhejiang Chuanyang New Material Inc.^{Footnote 60} (New Material) (China), a producer of foam.

[217] Chuangyang provided a response to the Dumping RFI^{Footnote 61}, including a database of domestic sales of UDS during the POI. Normal values could not be estimated in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with all the terms and conditions referred to in sections 15 and 16 of SIMA as to permit a proper comparison with the sales of the goods to the importer in Canada.

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

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

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

[221] For purposes of the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 50.63% for Chuanyang, expressed as a percentage of the export price.

Zhejiang Kuka Merlin Furniture Co., Ltd.

[222] Zhejiang Kuka Merlin Furniture Co., Ltd. (Kuka Merlin) is a producer and exporter of subject goods, located in Jiaxing City, China. Kuka Merlin is a subsidiary of Jason Furniture.

[223] Kuka Merlin provided a response to the Dumping RFI^{Footnote 62}, including a database of domestic sales of UDS during the POI. However, normal values could not be estimated in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with the requirements of sections 15 and 16 of SIMA to permit a proper comparison with the sales of the subject goods to the importers in Canada.

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

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

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

[227] For purposes of the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 26.70% for Kuka Merlin, expressed as a percentage of export price.

All other exporters—China

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

[229] In establishing the methodology for estimating the 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, information submitted by exporters of UDS from China, and customs import documentation.

[230] The CBSA decided that the normal values and export prices estimated for the exporters whose submissions were complete for purposes of 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 the trading practices of UDS exporters during the POI. Eighteen exporters in China provided complete information.

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

[232] The CBSA considered that the highest amount by which the estimated normal value exceeded the estimated export price on an individual transaction of the 18 exporters mentioned above (expressed as a percentage of export price, excluding anomalies), was an appropriate basis for estimating normal values. This methodology limits the advantage that an exporter may gain from not providing the necessary information requested in a dumping investigation as compared to an exporter that did provide the necessary information.

[233] Based on the above methodology, for exporters that did not provide a response to the Dumping RFI, the margin of dumping of subject goods originating in or exported from China was estimated to be 206.36%, expressed as a percentage of export price.

Particular market situation

[234] The CBSA is investigating allegations that a PMS exists with respect to Vietnam’s UDS market. The complainant made the allegation that a PMS may exist in Vietnam due to the combined effect of a multitude of factors. Based on the PMS factors outlined in section 5.2.2.9. of the SIMA Handbook, the most relevant of the factors that are potentially having a significant impact on the domestic sales of like goods in Vietnam are:

• government support programs (financial or otherwise)
• the acquisition of production inputs or processing services that do not reflect market based costs because they are acquired from suppliers which are state owned or state controlled or that are affected by government influence or control and
• evidence of distorted input costs

[235] For the allegations concerning inputs, the complainant alleged that steel is acquired from SOEs, while steel, wood, and chemicals are purchased at distorted costs. At initiation there was insufficient evidence to justify estimating normal values using a PMS methodology.

[236] At the initiation of the dumping investigation, the CBSA sent a PMS RFI to the GOV. The Dumping RFI sent to exporters in Vietnam also included questions relating to PMS. The GOV did provide a response to the PMS RFI.^{Footnote 63}

[237] The CBSA has considered and attempted to verify the evidence, information and comments provided by the complainant, the responding exporters/producers, the governments, as well as all of the other information on the administrative record. For the purposes of the preliminary determination, there is insufficient evidence for the CBSA to form the opinion that a particular market situation exists in the UDS market in Vietnam that affects the domestic sales such that they do not permit a proper comparison with the sales to the importers in Canada.

[238] In the final phase of the investigation, the CBSA will continue to review and analyze the information available and will seek to gather additional information necessary in order to form an opinion as to whether a PMS exists in Vietnam.

Normal values and export prices

Motomotion Vietnam Limited Company

[239] Motomotion Vietnam Limited Company (Motomotion) is a producer and exporter of subject goods, located in Ben Cat Town, Vietnam.

[240] Motomotion is associated with three additional companies involved in the production or procurement of inputs into the subject goods as well as one producer and exporter of subject goods:

• Changzhou HHC Strategic Solutions Corp.^{Footnote 64} (HHC Strategic Solutions) (China) is a trading company involved in the procurement of inputs
• YourWay (China) is a producer of mechanical components and
• Changzhou Corp^{Footnote 65} is a producer of inputs and a producer and exporter of subject goods from China

[241] Motomotion provided a response to the Dumping RFI.^{Footnote 66} However, Motomotion did not have any domestic sales of like goods during the PAP, and as a result, normal values could not be estimated in accordance with section 15 of SIMA.

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

[243] The cost of production was estimated in accordance with paragraph 11(1)(a) of the SIMR, based on Motomotion’s unverified cost data associated with the subject goods shipped to Canada. The amount for administrative, selling, and all other costs was estimated in accordance with subparagraph 11(1)(c)(ii) of the SIMR, based on Motomotion’s selling and administrative expenses incurred during the PAP. The amount for profits could not be estimated in accordance with subparagraphs 11(1)(b)(i) to 11(1)(b)(vi) as there were not a sufficient amount of profits from exporters from Vietnam. As such, the amount for profits was estimated using the weighted-average of the amount for profits estimated for one responding exporter from Vietnam together with the amount for profits estimated for three responding exporters from China.

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

[245] For purposes of the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 34.98% for Motomotion, expressed as a percentage of the export price.

Vietnam Hang Phong Furniture Company Ltd.

[246] Vietnam Hang Phong Furniture Company Ltd. (Hang Phong) is a producer and exporter of subject goods located in Khu Phố Tân Bình City, Vietnam.

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

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

[249] The cost of production was estimated in accordance with paragraph 11(1)(a) of the SIMR, based on Hang Phong’s unverified cost data associated with the subject goods shipped to Canada. The amount for administrative, selling, and all other costs was estimated in accordance with subparagraph 11(1)(c)(ii) of the SIMR, based on Hang Phong’s selling and administrative expenses incurred during the PAP. The amount for profits could not be estimated in accordance with subparagraphs 11(1)(b)(i) to 11(1)(b)(vi) as there were not a sufficient amount of profits from exporters from Vietnam. As such, the amount for profits was estimated using the weighted-average of the amount for profits estimated for one responding exporter from Vietnam together with the amount for profits estimated for three responding exporters from China.

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

[251] For purposes of the preliminary determination, the total estimated normal value compared to the total estimated export price results in a margin of dumping of 45.60% for Hang Phong, expressed as a percentage of the export price.

Wendelbo Interiors A/S

[252] Wendelbo Interiors A/S (Wendelbo Interiors) is an exporter of subject goods located in Risskov, Denmark.

[253] Wendelbo Interiors is associated with an additional company involved in the production and export of subject goods, named Wendelbo SEA JSC (Vietnam), a producer and exporter of subject goods. Wendelbo Interiors is an exporter of UDS produced by Wendelbo SEA JSC in Vietnam.

[254] Wendelbo Interiors provided a response to the Dumping RFI^{Footnote 68}, including a database of domestic sales of UDS during the POI. However, normal values could not be estimated in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with all the terms and conditions referred to in sections 15 and 16 of SIMA as to permit a proper comparison with the sales of the goods to the importer in Canada.

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

[256] The cost of production was estimated in accordance with paragraph 11(1)(a) of the SIMR, based on Wendelbo Interiors’ unverified cost data associated with the subject goods shipped to Canada. The amount for administrative, selling, and all other costs was estimated in accordance with subparagraph 11(1)(c)(ii) of the SIMR, based on Wendelbo Interiors’ selling and administrative expenses incurred during the PAP. The amount for profits was estimated in accordance with subparagraph 11(1)(b)(ii) of the SIMR, based on Wendelbo Interiors’ sales of goods in Denmark, during the PAP, that were of the same general category as the subject goods exported to Canada and includes the profit earned by the producer of the goods, in accordance with subsection 11(2) of the SIMR.

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

[258] For purposes of the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 69.37% for Wendelbo Interiors, expressed as a percentage of the export price.

Wendelbo SEA JSC

[259] Wendelbo SEA JSC (Wendelbo SEA) is a producer and exporter of subject goods, located Di An City, Vietnam.

[260] Wendelbo SEA provided a response to the Dumping RFI^{Footnote 69}, including a database of domestic sales of UDS during the POI. However, normal values could not be estimated in accordance with section 15 of SIMA as there were not such a number of sales of like goods that complied with all the terms and conditions referred to in sections 15 and 16 of SIMA as to permit a proper comparison with the sales of the goods to the importer in Canada.

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

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

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

[264] For purposes of the preliminary determination, the total estimated normal value compared to the total estimated export price results in an estimated margin of dumping of 17.44% for Wendelbo SEA, expressed as a percentage of the export price.

All other exporters—Vietnam

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

[266] In establishing the methodology for estimating the 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, information submitted by exporters of UDS from Vietnam, and customs import documentation.

[267] The CBSA decided that the normal values and the export prices estimated for the exporters whose submissions were complete for purposes of 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 the trading practices of UDS exporters during the POI. Four exporters in Vietnam provided complete information.

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

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

[270] Based on the above methodologies, for exporters that did not provide a response to the Dumping RFI, the margin of dumping of subject goods originating in or exported from Vietnam was estimated to be 89.77%, expressed as a percentage of export price.

Category 1: preferential loans and loan guarantees

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

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

Program 1: Loans from State-Owned Banks at Preferential Rates

General information

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

Financial contribution

For the purposes of the 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 and/or exempted, and confers a benefit to the recipient equal to the amount of the reduction/exemption.

Specificity

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

Program 2: Loan Guarantees Through the Government of China/SOE Banks/Public Bodies

General information

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

Financial contribution

For the purposes of the 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 and/or exempted, and confers a benefit to the recipient equal to the amount of the reduction/exemption.

Specificity

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

Program 4: Preferential Export Financing and Export Credit Guarantee/Insurance

General information

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

Financial contribution

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

Specificity

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

Category 2: grants and grant equivalents

Program 5: Insurance Grants

General information

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

Financial contribution

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

Specificity

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

Program 6: Design, Research and Development Grants

General information

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

Financial contribution

For the purposes of the preliminary determination, this program constitutes a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA from the government that involve a direct transfer of funds. This grant confers a direct benefit to the recipient and the benefit is equal to the amount of the grant provided.

Specificity

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

Program 7: Export Development and Performance Grants

General information

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

Financial contribution

For the purposes of the preliminary determination, this program constitutes a financial contribution, pursuant to paragraph 2(1.6)(a) of SIMA, from the government that involves a direct transfer of funds. This grant confers a direct benefit to the recipient and the benefit is equal to the amount of the grant provided.

Specificity

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

Program 8: Performance award Grants

General information

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

Financial contribution

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

Specificity

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

Program 10: Grant—Patent Assistance/Award

General information

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

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

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

Financial contribution

For the purposes of the preliminary determination, this program constitutes a financial contribution, pursuant to paragraph 2(1.6)(a) of SIMA, from the government that involves a direct transfer of funds. This grant confers a direct benefit to the recipient and the benefit is equal to the amount of the grant provided.

Specificity

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

Program 11: Environment Protection Grant

General information

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

Financial contribution

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

Specificity

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

Category 3: preferential tax programs

Program 16: Corporate Income Tax Exemption and/or Reduction in Special Economic Zones (SEZs) and Other Designated Areas

General information

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

Financial contribution

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

Specificity

For the purposes of the preliminary determination, the program is considered specific pursuant to paragraph 2(7.2) of SIMA because it is limited to enterprises in certain geographic areas.

Program 17: Corporate Income Tax Reduction for New High Tech Enterprises

General information

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

Financial contribution

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

Specificity

For the purposes of the preliminary determination, the program is considered specific pursuant to paragraph 2(7.2) of SIMA because it is limited to enterprises in certain industries.

Program 18: Municipal/Local Income Tax Property Reductions

General information

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

Financial contribution

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

Specificity

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

Program 20: Preferential Tax Policies Related to Research and Investment

General information

Under this program, based on the 2008 corporate tax law, high- or new-technology enterprises may deduct 50 percent of their total R&D expenses from their taxable income. Eligible expenses include design costs, expenses for materials and fuel consumed through R&D activities, wages, salaries, and benefits for personnel engaged in R&D activities, depreciation expenses on instruments and equipment, and many other expenses.

Financial contribution

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

Specificity

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

Category 4: relief from duties and taxes

Program 22: Exemption or Refund of Tariff and Import Value-added Tax (VAT) for Imported Technologies and Equipment

General information

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

Financial contribution

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

Specificity

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

Program 23: Relief from Duties and Taxes on Imported Material and Other Manufacturing Inputs

General information

Under a duty drawback program, a subsidy may exist where the amount of duties and taxes relieved or refunded on inputs incorporated into exported goods is found to be in excess of the actual liability that existed on those imports.

Financial contribution

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 and/or exempted, and confers a benefit to the recipient equal to the amount of the reduction/exemption.

Specificity

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

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

Program 26: Provision of Land for Less Than Adequate Remuneration by Government

General information

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

Financial contribution

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

Specificity

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

Category 1: relief from import tax and duty

Program 1: Exemptions of Import Tax and Duty

General information

Due to their similarities, the following programs identified by the complainant will be grouped into one program to be investigated: Exemptions of Import Tax and Duty.

1. Preferential policies on import tax
2. Import Duty Exemptions for Supporting Industries
3. Import Duty Exemptions for Enterprises within Economic Zones, Industrial Parks or Other Designated Areas
4. Exemption of Import Tax on Equipment and Machinery Imported to Create Fixed Assets
5. Import Duty Exemptions on Imports of Raw Materials for Exporting Goods
6. Import Duty Exemption on Imports of Spare Parts and Accessories for Companies in Industrial Zones
7. Import Duty Exemptions for Foreign-Invested Entities
8. Import Duty Exemptions on Imported Raw Materials for Export Processing Enterprises and Export Processing Zones

This program is administered by the Ministry of Finance and grant tax and/or duty exemptions on certain imported goods to certain companies, including on goods imported for manufacture of domestic exports, for fixed assets used for eligible investment incentives, and a five-year exemption from import duties on raw materials, supplies and components as described in Articles 12, 14 and 15 of Decree No. 134/2016/ND-CP^{Footnote 107} respectively.

The programs of import duty exemptions are made available pursuant to the Law No. 107/2016/QH1 dated April 6, 2016, on export and import duties (Law No. 107) and Decree No. 134/2016/ND-CP dated September 1, 2016, on guidelines for the law on export and import duties (Decree No. 134). Law No. 107 replaced the Law on Export and Import Tax No. 45/2005/QH11 dated June 14, 2005, on detailing a number of articles of the law on export and import duties (Law No. 45). Decree 134 replaced Decree No. 87/2010/ND-CP dated August 13, 2010, guiding the implementation of a number of articles of the Law on Export Tax and Import Tax (Decree No. 87).

Financial contribution

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 and/or exempted, and confer a benefit to the recipient equal to the amounts of the reductions and exemptions.

Specificity

Due to the lack of a full response by the GOV, there is not sufficient information on the record to determine whether this program is specific pursuant to subsection 2(7.2) or subsection 2(7.3) of SIMA; nor is there sufficient information to indicate that the subsidy is not specific pursuant to the criteria set out in subsection 2(7.1). On the basis of the available information, this program appears to be specific pursuant to subsection 2(7.2) of SIMA because they are limited to either enterprises in certain geographic areas or investment projects specified in Appendix 1 and Appendix 2 of Decree No. 118/2015/ND-CP dated November 12, 2015, guiding the implementation of a number of articles of the law on investment. This will be further analyzed in the final phase of the investigation.

Program 2: Refunds of Import Duties

General information

Due to similarities, the following programs identified by the complainant will be grouped into one program to be investigated: Refunds of Import Duties

• Import Duty Refund for Supporting Industries
• Import Duty Refund for Enterprises within Economic Zones, Industrial Parks or Other Designated Areas

These programs are administered by the Ministry of Finance and allow a refund of duties on certain imported goods, including on certain re-exported imports as described in Article 34 of Decree No. 134/2016/ND-CP, to enterprises located in certain geographic areas.^{Footnote 108}

The import duty refund programs are made available pursuant to the Law No. 107/2016/QH13 dated April 6, 2016, on export and import duties (Law No. 107) and Decree No. 134/2016/ND CP dated September 1, 2016, on guidelines for the law on export and import duties (Decree No. 134). Law No. 107 replaced the Law on Export and Import Tax No. 45/2005/QH11 dated June 14, 2005, on detailing a number of articles of the law on export and import duties (Law No. 45). Decree 134 replaced Decree No. 87/2010/ND-CP dated August 13, 2010, guiding the implementation of a number of articles of the Law on Export Tax and Import Tax (Decree No. 87). Duty refund is stipulated in Article 19 of Law No. 45 and Law No. 107 and specified in Article 15 of Decree No. 87 and Article 33 to 37 of Decree No. 134.

Financial contribution

For 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 and/or exempted, and confer a benefit to the recipient equal to the amounts of the refund.

Specificity

Due to the lack of a full response by the GOV, there is not sufficient information on the record to determine whether this program is specific pursuant to subsection 2(7.2) or subsection 2(7.3) of SIMA; nor is there sufficient information to indicate that the subsidy is not specific pursuant to the criteria set out in subsection 2(7.1). On the basis of the available information, this program appears to be specific pursuant to subsection 2(7.2) of SIMA because it is limited to enterprises located in certain geographic areas or contingent upon export performance and, therefore, may constitute a prohibited subsidy as defined in subsection 2(1) of SIMA. This will be further analyzed in the final phase of the investigation.

Category 3: preferential loans and loan guarantees

Program 5: Export And Import Support In Forms Of Preferential Loan, Guarantee And Factoring

General information

Due to their similarities, the following programs identified by the complainant will be grouped into one program to be investigated: Export and Import Support in Forms of Preferential Loan, Guarantee and Factoring

• Preference in Crediting for Supporting Industries
• Export and Import Support in Forms of Preferential Loan, Guarantee and Factoring
• Preferential Lending and Export Credits from the Vietnam Development Bank
• Preferential Lending to Exporters
• Interest Rate Support Program
• Export Factoring
• Financial Guarantees for Export Activities

This program provides financial support to enterprises exporting/importing goods in the forms of preferential loans, guarantees and factoring.^{Footnote 109}

Investment credit and export credit are made available pursuant to Decree No. 75/2011/ND-CP dated August 30, 2011, on state investment credit and export credit (Decree No. 75) and Decree No. 151/2006/ND-CP dated December 20, 2006, on state investment credit and export credit (Decree No. 151).

Investment credit is stipulated in Chapter II and Appendix I of Decree No. 75 and in Chapter II and List of Eligible Projects for Investment Credit of Decree No. 151. Export credit is stipulated in Chapter III and Appendix II of Decree No. 75 and in Chapter III and List of Eligible projects for export credit of Decree No. 151. The regulation of guarantee operation is detailed in the Circular 28/2012/TT-NHNN issued by the State Bank of Vietnam.

Financial contribution

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

Specificity

Due to the lack of a full response by the GOV, there is not sufficient information on the record to determine whether this program is specific pursuant to subsection 2(7.2) or subsection 2(7.3) of SIMA; nor is there sufficient information to indicate that the subsidy is not specific pursuant to the criteria set out in subsection 2(7.1). On the basis of the available information, this program appears to be specific pursuant to paragraph 2(7.2)(b) of SIMA as it is contingent upon export performance and, therefore, constitute a prohibited subsidy as defined in subsection 2(1) of SIMA. This will be further analyzed in the final phase of the investigation.

Category 4: preferential tax programs

Program 7: Vat Preferences, Exemptions and Reductions

General information

Due to their similarities, the following programs identified by the complainant will be grouped into one program to be investigated: Vat Preferences, Exemptions and Reductions.

• Preference in VAT for Supporting Industries
• Preference in VAT Exemptions/Reductions for Enterprises within Economic Zones, Industrial Parks or Other Designated Areas

This program provides VAT preferences in the form of preferential rates, exemptions and/or reductions to individuals and organizations of supporting industries or to enterprises located within certain eligible geographic areas.

Financial Contribution

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 and/or exempted, and confer a benefit to the recipient equal to the amounts of the reductions and exemptions.

Specificity

Due to the lack of a full response by the GOV, there is not sufficient information on the record to determine whether this program is specific pursuant to subsection 2(7.2) or subsection 2(7.3) of SIMA; nor is there sufficient information to indicate that the subsidy is not specific pursuant to the criteria set out in subsection 2(7.1). On the basis of the available information, this program appears to be specific pursuant to subsection 2(7.2) of SIMA because eligibility is limited to supporting industries or enterprises located in specific geographical areas. This will be further analyzed in the final phase of the investigation.

Category 2: relief from land rent, tax and levy

Program 3: Incentives On Non-Agricultural Land Use Tax

General information

This program grants tax exemptions and reductions for non-agricultural land use. The complainant stated upholstered furniture production is considered a non-agricultural land use.^{Footnote 110}

Based on CBSA research, non-agricultural land use tax is regulated by Law No. 48/2010/QH12 dated June 17, 2010, on non-agricultural land use tax (Law No. 48); Decree 53/2011/ND-CP dated July 1, 2011, guiding the implementation of this Law No. 48; and Circular No. 153/2011/TT-BTC dated November 11, 2011, guiding on non-agricultural land use tax (Circular No. 153). Articles 9 and 10 of Law No. 48 provide for tax exemption and reduction for non-agricultural land use.

Appendix 1 of Decree No. 118/2015/ND-CP dated November 12, 2015, guiding the implementation of the Law on Investment (Decree No. 118), defines domains eligible for investment promotion and domains eligible for special investment preferences. Appendix 2 of Decree No. 118 defines areas with extreme socio-economic difficulties, areas with socio-economic difficulties eligible for investment preferences.

Financial contribution

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 and/or exempted, and confers a benefit to the recipient equal to the amount of the reduction/exemption.

Specificity

Based on the CBSA’s prior decision, the program is considered specific pursuant to subsection 2(7.2) of SIMA because it is limited to industries located in the regions prescribed.

Program 4: Exemptions/Reductions of Land Rent, Tax and Levy

General information

Due to their similarities, the following programs identified by the complainant will be grouped into one program to be investigated: Exemptions/Reductions of Land Rent, Tax and Levy.

• Preferences in leases of land and water surface
• Preference for SMEs in land rents and water surface rents
• Preferences on Land Rents for Enterprises within Economic Zones, Industrial Parks or Other Designated Areas
• Land-Use Levy Exemption/Reduction
• Land Rent Exemption/Reduction
• Land Rent Exemptions for Exporters
• Land Rent Exemptions for Foreign-Invested Enterprises
• Land Rent Exemptions for Enterprises Located in Special Zones

This program grants exemptions or reductions of land rents, taxes and levy to enterprises operating in certain domains and regions entitled to investment incentives.

Land used for production and business purposes is governed by Law No. 45/2013/QH13 dated June 21, 2013, on Land (Law No. 45); Decree No. 46/2014/ND-CP dated May 15, 2014, on regulating the collection of land rents and water surface rents (Decree No. 46); Circular No. 77/2014/TT-BTC dated June 16, 2014, guiding Decree No. 46/2014/ND-CP; and Circular No. 333/2016/TT-BTC dated December 26, 2016, amending and supplementing a number of articles of Circular No. 77/2014/TT-BTC. Land rent exemption and reduction in land rent are provided in Articles 19 and 20 of Decree No. 46.

The land-use levy exemption/reduction program was terminated on July 1, 2014, as the effective date of the Law No. 45/2013/QH13 dated June 21, 2013, on Land (Law No. 45), replaced Law No. 13. Although this program was terminated on July 1, 2014, companies that were eligible for the program could have benefited from the subsidy while it was in effect. Depending on the size of the benefits, the benefits could potentially be amortized over the following subsequent years.

Financial contribution

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 and/or exempted, and confers a benefit to the recipient equal to the amounts of the reductions and exemptions.

Specificity

Further to the CBSA’s prior decision, the program is considered specific pursuant to subsection 2(7.2) of SIMA because it is limited to the List of domains entitled to investment incentives and the List of regions entitled to investment incentives as specified in Article 110 of the Law on Land 2013; Section II, Chapter II of Decree No. 46; and Appendix II of Decree 118/2015/ND-CP.

Category 4: preferential tax programs

Program 6: Enterprise Income Tax Preferences, Exemptions And Reductions

General information

Due to their similarities, the following programs identified by the complainant will be grouped into one program to be investigated: Enterprise Income Tax Preferences, Exemptions And Reductions

• Preferential policies on corporate income tax
• Preference in Environmental Protection for Supporting Industries
• Corporate Income Tax Exemptions/Reductions for Enterprises within Economic Zones, Industrial Parks or Other Designated Areas
• Establishments Dealing with Exported Goods
• Tax Exemptions and Reductions for Investment in Disadvantaged Regions
• Tax Exemptions and Reductions for Encouraged Sectors
• Enterprise Income Tax Exemption/Reduction for Business Expansion and Intensive Investment Projects
• Tax Preferences for Investors Producing and/or Dealing in Export Goods
• Establishments Dealing with Exported Goods
• Preferential Income Tax Rates for Enterprises Within Economic Zones or Industrial Parks
• Tax Exemptions and Reductions for Foreign-Invested Enterprises
• Income Tax Preferences to Companies in Special Zones
• Income Tax Preferences for Exporters
• Income Tax Preferences for Small And Medium-Sized Enterprises
• Income Tax Exemptions and Reductions for Business Expansion and Intensive Investment
• Preferential Income Tax Programs for Foreign Invested Entities

This program provides corporate income tax preferences and benefits in the form of preferential rates, exemptions and/or reductions to certain types of enterprises either involved in specific operations or located in specific geographical areas.

Corporate income tax and tax benefits are governed by Law No. 14/2008/QH12 dated June 3, 2008, on Enterprise Income Tax 2008 (Law No. 14); Law No. 32/2013/QH13 dated June 19, 2013, on amending and supplementing a number of articles of Law on Enterprise Income Tax 2008 (Income Tax 2008 Amending); Law No. 71/2014/QH13 dated December 8, 2014, on amending and supplementing a number of articles of the laws on taxes (Law No. 71); Decree No. 218/2013/ND-CP dated December 26, 2013, on detailing and guiding the implementation of law on corporate income tax (Decree No. 218) and Decree No. 12/2015/ND-CP dated February 12, 2015, on elaboration of the law on amendments to tax laws (Decree No. 12). Income tax rate preference is provided in Article 15 of Decree No. 218 and tax exemptions and reductions is provided in Article 16 of Decree No. 218.

Article 20.2 of Decree 218 allows the continuation of the application of corporate income tax preferences granted before the Decree’s effective date as of February 15, 2014, if those preferences are more advantaged than those granted under Decree 218.

According to Article 15 of Law No. 67/2014/QH13 dated November 26, 2014, on the Law on Investment (Law No. 67), corporate income tax preferences apply to: (1) Economic zone, high-tech zone established by Decision of the Prime Minister in area with difficult socio-economic conditions; (2) Industrial, processing zone established by Decision of the Prime Minister in areas with special difficult socio-economic conditions specified in Attachment II to Decree No. 118/2015/ND-CP dated November 12, 2015, on guidelines for some articles of the law on Investment (Decree No. 118).

Financial contribution

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 and/or exempted, and confers a benefit to the recipient equal to the amount of the reduction/exemption.

Specificity

Further to the CBSA’s prior decisions, the program is considered specific pursuant to subsection 2(7.2) of SIMA because it is limited to investment projects within certain eligible geographic areas as specified in Article 15 of Law No. 67.

Program 8: Accelerated Depreciation of Fixed Assets

General information

This program lets certain enterprises operating in investment incentive sectors and geographical areas accelerate the depreciation of fixed assets, hereby conferring a benefit in the form of a reduction or exemption of an otherwise amount owing and due to the government.

Financial contribution

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 and/or exempted, and confers a benefit to the recipient equal to the amount of the reduction/exemption.

Specificity

Due to the lack of a full response by the GOV, there is not sufficient information on the record to determine whether this program is specific pursuant to subsection 2(7.2) or subsection 2(7.3) of SIMA; nor is there sufficient information to indicate that the subsidy is not specific pursuant to the criteria set out in subsection 2(7.1). On the basis of the available information, this program appears to be specific pursuant to subsection 2(7.2) of SIMA because it is limited to particular enterprises with fixed assets and specialized technological capabilities. This will be further analyzed in the final phase of the investigation.

Category 5: grants and grant equivalents

Program 9: Investment Support

General information

Due to their similarities, the following programs identified by the complainant will be grouped into one program to be investigated: Investment Support.

• Preference for SMEs in Investment Credits
• Preference in investment by geographical areas

Investment Support programs provide extra financial support for new investment projects to enterprises of certain sectors operating in certain geographical areas.

Investment Support is made available pursuant to Decree 108/2006/ND-CP of the Government, dated September 22, 2006. Decree 108 details in which areas the government will support new investments.

Financial contribution

For the purposes of the preliminary determination, this program constitutes a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA, in that amounts confer a benefit to the recipient equal to the amount of the extra support received from the government.

Specificity

Further to the CBSA’s prior decision, the program is considered specific pursuant to subsection 2(7.2) of SIMA because it is limited to a list of sectors entitled to investment incentives and a list of geographical areas entitled to investment incentives as specified in Appendix I and II and of the Law.

Program 10: Export Promotion

General information

This program provides funds for trade promotion related activities to enterprises for specific trade promotion schemes.

The National Trade program was established by Decision No. 279/2005/QD-TTg of November 3, 2005. The Decision constituted the framework for state-funded trade promotion activities from 2006 to 2010. The state funding of these activities was derived from the Export Promotion Fund, established pursuant to Prime Minister's Decision No. 195/1999/QD-TTg. The Decision 279 was amended and supplemented by Prime Minister's Decision No. 80/2009/QD-TTg of May 21, 2009.

Financial contribution

For the purposes on the preliminary determination, this program constitutes a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA, where a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

Due to the lack of a full response by the GOV, there is not sufficient information on the record to determine whether this program is specific pursuant to subsection 2(7.2) or subsection 2(7.3) of SIMA; nor is there sufficient information to indicate that the subsidy is not specific pursuant to the criteria set out in subsection 2(7.1). On the basis of the available information, this program appears to be specific pursuant to subsection 2(7.2) of SIMA because Article 9 of Decision 279 specifies the types of trade promotion schemes that are eligible for support and Article 10 specifies the level of support that is available for each of the eligible schemes. This will be further analyzed in the final phase of the investigation.

Program 11: Consultancy Support for Small and Medium-Sized Enterprises

General information

This program provides a benefit in the form of a financial contribution to SMEs for consulting support offered via a consultant network. Through this program, micro-businesses, small and medium enterprises can benefit from 10%, 30% or 100% in subsidy of the consultancy contract value up to a certain amount, depending on their enterprise size and the value of the contract.

This program is governed by Circular No. 06/2019/TT-BKHDT dated March 29, 2019, on guidelines for organization and operation of consultant network, consultancy support for small and medium-sized enterprises through consultant network. The program took effect on May 12, 2010, and is given authority by The Ministry of Planning and Investment.

Financial contribution

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

Specificity

Due to the lack of a full response by the GOV, there is not sufficient information on the record to determine whether this program is specific pursuant to subsection 2(7.2) or subsection 2(7.3) of SIMA; nor is there sufficient information to indicate that the subsidy is not specific pursuant to the criteria set out in subsection 2(7.1). On the basis of the available information, this program appears to be specific pursuant to subsection 2(7.3) of SIMA, in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available. This will be further analyzed in the final phase of the investigation.

Program 12: Support for the Human Resources Development of Small and Medium-Sized Enterprises

General information

This program provides a benefit in the form of a financial contribution to women-owned small and medium-sized enterprises (SMEs) for training-related activities in the fields of entrepreneurship and business administration for women employees. SMEs may receive 100% subsidy for training expenses for women at women-owned SMEs and a subsidy of at least 50% for the organization of a training course in entrepreneurship and business administration. Per Decree No. 118.2015/ND-CP, SMEs may receive a 100% subsidy for training expenses if they are located in extremely disadvantaged areas.

This program is governed by Circular 05/2019/TT-BKHDT dated March 29, 2019 on support for the human resources development of SMEs. The program took effect on May 12, 2020, and is given authority by The Ministry of Planning and Investment.

Financial contribution

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

Specificity

Due to the lack of a full response by the GOV, there is not sufficient information on the record to determine whether this program is specific pursuant to subsection 2(7.2) or subsection 2(7.3) of SIMA; nor is there sufficient information to indicate that the subsidy is not specific pursuant to the criteria set out in subsection 2(7.1). On the basis of the available information, this program appears to be specific pursuant to subsection 2(7.3) of SIMA, in that the manner in which discretion is exercised by the granting authority indicates that the subsidy may not be generally available. This will be further analyzed in the final phase of the investigation.

Program 13: Grants to Firms that Employ More than 50 Employees

General information

This program provides direct financial support to enterprises of a certain size. The CBSA investigated this program in Copper Pipe Fittings 2 and Cold-Rolled Steel. The CBSA identified this program as a potentially actionable subsidy in Copper Pipe Fittings 2.

This program is made available pursuant to Decree No. 51/1999/ND-CP dated July 8, 1999, detailing the implementation of Law No. 3/1998/QH10 on Domestic Investment Promotion (Amended) (Decree No. 51). Article 15 of Decree No. 51 provides the eligibility criteria for investment preferences. Articles 16 to 27 provides for various types of preferences for eligible investments.

The last date that a company could apply for or claim benefits under this program was July 1, 2006, the date which Law No. 59/2005/QH11 dated November 29, 2005, on the Law on Investment (Law No. 59) came into effect. Articles 27 to 31 of Law No. 59 provides for the domains and sectors entitled to investment preference, including “labour intensive industries”. Articles 32 to 44 provides for investment preferences and supports.

Financial contribution

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

Specificity

Due to the lack of a full response by the GOV, there is not sufficient information on the record to determine whether this program is specific pursuant to subsection 2(7.2) or subsection 2(7.3) of SIMA; nor is there sufficient information to indicate that the subsidy is not specific pursuant to the criteria set out in subsection 2(7.1). On the basis of the available information, this program appears to be specific pursuant to subsection 2(7.2) of SIMA because it is limited to particular enterprises with a certain size that are entitled to investment preferences because of operations in certain domains and sectors. This will be further analyzed in the final phase of the investigation.

Program 14: Assistance to Enterprises Facing Difficulties Due to Objective Reasons

General information

This program provides benefits in the form of direct financial support or reductions or exemptions of amounts owed to the government to companies facing difficulties that arise as the result of unforeseen reasons, such as policy changes in terms of taxation and other dues to the state budget; relocation of enterprises upon request of competent authorities; loss due to natural disaster, etc.

Financial contribution

Notwithstanding, for purposes of the preliminary determination, this program constitutes either a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA as a direct transfer of funds from the government that confers a benefit to the recipient equal to the amount of the grant, or pursuant to paragraph 2(1.6)(b) of SIMA, in that amounts that would otherwise be owing and due to the government are reduced and/or exempted, and confers a benefit to the recipient equal to the amount of the reduction/exemption.

Specificity

Due to the lack of a full response by the GOV, there is not sufficient information on the record to determine whether this program is specific pursuant to subsection 2(7.2) or subsection 2(7.3) of SIMA; nor is there sufficient information to indicate that the subsidy is not specific pursuant to the criteria set out in subsection 2(7.1). On the basis of the available information, this program appears to be specific pursuant to subsection 2(7.2) of SIMA because it is limited to particular enterprises targeted by the GOV. This will be further analyzed in the final phase of the investigation.

Category 6: goods/services provided by the government at less than fair market value

Program 15: Utilities Provided at Less than Fair Market Value for Enterprises in Industrial Zones

General information

This program provides rates of water, power and other utilities for Less Than Adequate Remuneration (LTAR) to enterprises located in industrial zones in designated geographic regions.

This program was specifically identified by the complainant citing the USDOC final determination in the countervailing duty investigation of Laminated Woven Sacks from Vietnam.

Financial contribution

For the purposes of the preliminary determination, this program constitutes a financial contribution pursuant to paragraph 2(1.6)(c) of SIMA as it involves the provision of services, other than general governmental infrastructure.

Specificity

Due to the lack of a full response by the GOV, there is not sufficient information on the record to determine whether this program is specific pursuant to subsection 2(7.2) or subsection 2(7.3) of SIMA; nor is there sufficient information to indicate that the subsidy is not specific pursuant to the criteria set out in subsection 2(7.1). On the basis of the available information, this program appears to be specific pursuant to subsection 2(7.2) of SIMA because it is limited to enterprises located in industrial zones in designated geographic regions. This will be further analyzed in the final phase of the investigation.