WG 2020 IN: Wheat gluten
Statement of Reasons—final determination

Decision

Ottawa, April 7, 2021

Pursuant to paragraph 41(1)(b) of the Special Import Measures Act, the Canada Border Services Agency made a final determination on March 23, 2021 respecting the dumping of certain wheat gluten originating in or exported from Australia, Austria, Belgium, France, Germany and Lithuania.

Summary of events

[1] On June 24, 2020, the Canada Border Services Agency (CBSA) received a written complaint from ADM Agri-Industries Co. (ADM) (hereinafter, “the complainant”), alleging that imports of certain wheat gluten (wheat gluten) originating in or exported from Australia, Austria, Belgium, France, Germany and Lithuania (hereinafter, when referred to collectively, “the named countries”) are being dumped. The complainant alleged that the dumping has caused injury and is threatening to cause injury to the Canadian industry producing like goods.^{Footnote 1}

[2] On July 15, 2020, pursuant to paragraph 32(1)(a) of the Special Import Measures Act (SIMA), the CBSA informed the complainant that the complaint was properly documented. The CBSA also notified the governments of the named countries that a properly documented complaint had been filed with the CBSA.

[3] The complainant provided evidence to support the allegations that wheat gluten from the named countries has been dumped. The evidence also discloses a reasonable indication that the dumping has caused injury and is threatening to cause injury to the Canadian industry producing like goods.

[4] On August 14, 2020, pursuant to subsection 31(1) of SIMA, the CBSA initiated an investigation respecting the dumping of wheat gluten from the named countries.

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

[6] On October 13, 2020, pursuant to subsection 37.1(1) of SIMA, the CITT made a preliminary determination that there is evidence that discloses a reasonable indication that the dumping of wheat gluten from the named countries has caused injury or retardation or is threatening to cause injury to the domestic industry.^{Footnote 2}

[7] On November 5, 2020 the CBSA notified interested parties that the preliminary stage of the investigation will be extended pursuant to subsection 39(1) of SIMA.

[8] On December 23, 2020, as a result of the CBSA’s preliminary investigation and pursuant to subsection 38(1) of SIMA, the CBSA made a preliminary determination of dumping of wheat gluten from the named countries.

[9] On December 23, 2020, pursuant to subsection 8(1) of SIMA, provisional duty was imposed on imports of dumped goods that are of the same description as any goods to which the preliminary determination applies, and that are released during the period commencing on the day the preliminary determination was made and ending on the earlier of the day on which the CBSA causes the investigation in respect of any goods to be terminated pursuant to subsection 41(1) of SIMA or the day the CITT makes an order or finding pursuant to subsection 43(1) of SIMA.

[10] On December 24, 2020, the CITT initiated an inquiry pursuant to section 42 of SIMA to determine whether the dumping of the above-mentioned goods has caused injury or retardation or is threatening to cause injury to the Canadian industry.

[11] Based on the available evidence, the CBSA is satisfied that wheat gluten originating in or exported from the named countries has been dumped. Therefore, on March 23, 2021 the CBSA made a final determination of dumping pursuant to paragraph 41(1)(b) of SIMA in respect of those goods.

[12] The CITT’s inquiry into the question of injury to the Canadian industry is continuing, and it will issue its decision by April 22, 2021. Provisional duty will continue to be imposed on the subject goods from the named countries until the CITT renders its decision.

Period of investigation

[13] The Period of Investigation (POI) is January 1, 2019 to April 30, 2020.

Profitability analysis period

[14] The Profitability Analysis Period (PAP) is January 1, 2019 to April 30, 2020.

Interested parties

Product information

Product definition^{Footnote 6}

[26] For the purpose of this investigation, subject goods are defined as:

Additional product information^{Footnote 7}

[27] Wheat gluten is the natural protein found in wheat. “Gluten” consists of two main protein groups, gliadins and glutenins in approximately equal proportions. Wheat gluten is also sometimes referred to in the market as simply “gluten” or “wheat protein”.

[28] Wheat gluten is generally sold as a fine powder with a cream colour. For grades used in most food (including baking) applications, wheat gluten contains between 75 – 80% protein by weight on a dry basis using a Jones factor of 5.7, with the remainder of the weight being attributable to fiber, starch, fat and ash. Wheat gluten products with a wheat protein concentration in the range of 80% or more, which also contain sodium citrate, are often used to enhance whole-grain baked goods, noodles and pastas, pizza crusts and vegetarian products. Some wheat gluten grades that are used as a filler binder for processed meat products contain a lower percentage of protein by weight on a dry basis and are usually blended with a larger amount of wheat flour to obtain a lower percentage of protein. Wheat gluten is also sold to animal feed and pet food manufacturers as a source of protein.

[29] There are different ways to measure the protein content of a substance, but the most commonly used method involves isolating the mass of nitrogen in a given sample of the substance, because nitrogen is an element contained in all proteins but not found in the other macro-nutrients, i.e. fat and carbohydrates. In this respect, the mass of nitrogen isolated from the sample of a substance represents a proxy for the weight of the protein. The weight of the nitrogen is then multiplied by a “Jones factor” that corresponds to the type of protein under consideration (because not all proteins contain the same ratio of nitrogen containing amino acids to weight ratio).

Production process^{Footnote 8}

[30] At ADM, wheat gluten is co-produced with starch from milled wheat flour. As milled, wheat flour generally contains approximately 10-15% protein by weight on a dry basis, the remainder being starch, fiber, and ash. Wheat varieties that contain more protein by weight are generally referred to as “hard” wheats, and conversely, wheat varieties that contain less protein by weight are referred to as “soft” wheat.

[31] ADM’s wheat gluten is produced by separating it from the starch in flour through a “washing” process involving water; the wheat gluten is subsequently dried, sifted and purified; and ground into a fine powder before being packaged and sold.

[32] The first step involves adding water to the flour in a dough mixer to activate the wheat gluten. The hydrated mass then rests in a maturation tank until fully hydrated before being moved to a dilution tank where additional water is added. The mixture then passes through a series of rotative screens and hydro cyclones, where the hydrophilic starch and water are effectively washed away from the viscoelastic glob of hydrated gluten.

[33] Hydrated globs of gluten are then dried through a screen, press, and dryer, before passing through a series of sifters, grinders, and magnets, to remove impurities and any foreign metal objects that may have been introduced through the manufacturing process. During the sifting and grinding process, the gluten is also passed through an “Entoteler” machine which uses centrifugal force to kill any insect eggs and remove other debris, which are rejected from the mill flow by aspiration.

[34] The sifted and dry wheat gluten is then packaged in bags and totes to be stored and shipped to customers. Common bag and tote sizes for wheat gluten are 25KG and 750KG bags.

Product use

[35] Generally, wheat gluten is used by a wide range of food producers to:

• provide water absorption and structure building in breads
• enhance the structure of cereals and snacks
• provide texture and toughening for pastas and noodles
• provide strength and film forming in frozen foods and
• provide binding and emulsification in processed meat and in vegetarian meat applications

Classification of imports

[36] Subject goods are normally classified under the following tariff classification numbers:

• 1109.00.10.00
• 1109.00.20.00

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

Like goods and single class of goods

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

[39] In considering the issue of like goods, the CITT typically looks at a number of factors, including the physical characteristics of the goods (such as composition and appearance), their market characteristics (such as substitutability, pricing, distribution channels and end uses) and whether the domestic goods fulfill the same customer needs as the subject goods.

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

[41] In its preliminary injury inquiry for this investigation, the CITT further reviewed the matter of like goods and classes of goods. On October 28, 2020, the CITT issued its preliminary inquiry Statement of Reasons^{Footnote 9} for this investigation, indicating that it considered the subject goods to be comprised of a single class of goods.

The Canadian industry

[42] The complainant, and the supporting producer, Permolex Ltd, account for all known domestic production of like goods.

Imports into Canada

[43] During the final phase of the investigation, the CBSA refined the estimated volume and value of imports based on information received from exporters and importers.

[44] The following table presents the CBSA’s analysis of imports of wheat gluten for the purposes of the final determination:

Investigation process

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

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

[47] Several parties requested an extension to respond to their respective RFIs. The CBSA reviewed all requests and all exporters and governments that requested an extension were granted an extension of time that still provided CBSA adequate time to review their responses for purposes of the preliminary determination of the investigation.

[48] After reviewing the RFI responses, supplemental RFIs (SRFIs) were sent to respondents who submitted complete submissions in order to clarify information provided in the responses and request additional information, where necessary.

[49] Verifications were conducted by way of Verification Questionnaires for two exporters located in France and one exporter located in Lithuania, who had submitted complete information.

[50] For responding parties that did not provide complete information, deficiency letters were sent to them directly in order to notify the parties that information was missing and that without the missing information being furnished, preliminary and/or final determinations would be made on the basis of facts available.

[51] Details pertaining to the information submitted by the exporters in response to the Dumping RFI as well as the results of the CBSA’s dumping investigation, including the PMS, are provided in the Results of the dumping investigation section of this document.

[52] As part of the final phase of the investigation, case arguments were received in the form of additional submissions on the administrative record and/or in case briefs/reply submissions from counsel representing the following parties: the complainant, ADM Bazancourt, the Roquette Group and the Tereos Group. Details of the representations are provided in Appendix 2.

Results of the dumping investigation

Decision

[118] On March 23, 2021, pursuant to paragraph 41(1(b) of SIMA, the CBSA made a final determination of dumping respecting wheat gluten originating in or exported from Australia, Austria, Belgium, France, Germany and Lithuania.

Future action

[119] The provisional period began on December 23, 2020, and will end on the date the CITT issues its finding. The CITT is expected to issue its decision by April 22, 2021. Provisional anti-dumping duty will continue to apply until this date on imports of subject goods from the named countries. For further details on the application of provisional duty, refer to the Statement of Reasons issued for the preliminary determination.

[120] If the CITT finds that the dumped goods have not caused injury and do not threaten to cause injury, all proceedings will be terminated. In this situation, all provisional duty paid or security posted by importers will be returned.

[121] If the CITT finds that the dumped goods have caused injury, the anti-dumping duty payable on subject goods released by the CBSA during the provisional period will be finalized pursuant to section 55 of SIMA. Imports released by the CBSA after the date of the CITT’s finding will be subject to anti-dumping duty equal to the margin of dumping.

[122] The importer in Canada shall pay all applicable duties. If the importers of such goods do not indicate the required SIMA code or do not correctly describe the goods in the customs documents, an administrative monetary penalty could be imposed. The provisions of the Customs Act apply with respect to the payment, collection or refund of any duty collected under SIMA. As a result, failure to pay duty within the prescribed time will result in the application of interest.

Retroactive duty on massive importations

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

Publication

[124] A notice of this final determination of dumping will be published in the Canada Gazette pursuant to paragraph 41(3)(a) of SIMA.

Information

[125] This Statement of Reasons is posted on the CBSA’s website at the address below. For further information, please contact the officers identified as follows:

SIMA Registry and Disclosure Unit
Trade and Anti-dumping Programs Directorate
Canada Border Services Agency
11-100 Metcalfe St
Ottawa ON  K1A 0L8

• Telephone:
• Sean Robertson: 343-553-1584
• Laurie Trempe: 343-553-5588

Email: simaregistry-depotlmsi@cbsa-asfc.gc.ca

Original signed by Sean Borg for
Doug Band
Director General
Trade and Anti-dumping Programs Directorate

Appendix 1: Summary of margins of dumping

Appendix 2: Dumping representations

In the final stage of the investigation, submissions containing case arguments were received on behalf of ADM Agri-Industries Co.^{Footnote 37} and the Government of Lithuania.^{Footnote 38}

Following the February 1, 2021, closing of the record, case briefs were received on behalf of the complainant^{Footnote 39}, ADM Bazancourt^{Footnote 40}, and the Roquette Group.^{Footnote 41}

The CBSA received a reply submission on behalf of the Tereos Group.^{Footnote 42}

Certain details provided in case briefs and reply submissions were designated as confidential information by the submitting counsel. This has restricted the ability of the CBSA to discuss all issues raised in these submissions.

The CBSA has provided responses below to representations that relate to the final determination of dumping. The CBSA will not address representations pertaining to future enforcement in this Statement of Reasons.

The material issues raised by the parties are summarized as follows:

Margin of dumping calculations (ADM Bazancourt)

Case arguments

As part of their case brief, counsel for ADM Bazancourt submits that the CBSA should make exclusions regarding ADM Bazancourt’s margin of dumping calculations for the purposes of the final determination. Counsel argues the exclusions would be consistent with previous CBSA practices in calculating margins of dumping. To support their argument, counsel for ADM Bazancourt references correspondences between the parties involved, as well as sales documentation provided to the CBSA during the investigation.^{Footnote 43}

Counsel for ADM Agri-Industries (ADM Candiac) also references the exclusions in their case brief, pertaining to the determination of the Ministerial Specification rate.^{Footnote 44}

CBSA’s position

The CBSA considered all of the information on the administrative record provided by ADM Bazancourt and ADM Candiac, however, the CBSA finds that there is insufficient information or reason to support the exclusions from ADM Bazancourt’s margin of dumping calculations.

Status of late and incomplete submissions (Tereos Group)

Case arguments

Counsel for the Complainant submits that the revised RFI response submitted by Tereos Group^{Footnote 45} on the date of the close of the record remains deficient, unverified, and was filed in an untimely manner. They assert that given the timing of the filing, the CBSA had no opportunity to review Tereos’ revised response and follow up on deficiencies, let alone verify the exporter’s data before the close of the record. It was also pointed out that in terms of the response itself, several deficiencies remained involving missing financial, costing and sales data as well as accompanying reconciliations that would be required to determine normal values and export prices for the company.^{Footnote 46}

Reply submissions

Counsel for Tereos Group submits that since the CBSA has added the revised RFI submission to the administrative record, the CBSA should give due consideration to the exporter’s information in making its final determination, and should not simply disregard the information out of hand.

Counsel for Tereos Group further argued that given the challenge of presenting costing for the subject goods in the usual CBSA format, the CBSA should rely on selling price comparisons between Canada and the exporter’s home market. The exporter submits that Tereos Group should be considered a cooperative exporter, and that the exporter’s information should therefore be useable by the CBSA in order to determine exporter specific normal values and export prices.^{Footnote 47}

CBSA’s position

The final RFI submission provided by the Tereos Group was submitted one minute before the close of the record, approximately four months after it was due, and over three months after a deficiency letter had been sent to the exporter outlining the vital information that was missing in its original RFI response.^{Footnote 48} In addition, there remained several deficiencies in this final response.

The CBSA considered all of the information provided by the Tereos group including the information provided immediately before the close of the record. As noted above, the final RFI submission provided by the Tereos group was submitted approximately four months after it was due and therefore did not allow the CBSA sufficient time to analyze and verify the information provided. The CBSA finds that due to the belatedness of the response, which resulted in the CBSA not having the opportunity to verify the information therein, the response cannot be relied upon for the purposes of determining normal values and export prices.

The CBSA has determined normal values and export prices for each of the Tereos Group companies based on the all other exporters methodology for the country in which the goods originated.

Legal standard for the application of particular market situation provisions

Case arguments

In their case brief, counsel for Roquette Frères, Roquette Amilina and Roquette America Inc. (“the Roquette Group”) filed representations relating to the applicable legal standard for applying particular market situation provisions in accordance with paragraph 16(2)(c) of SIMA and Article 2.2 of the Anti-Dumping Agreement.^{Footnote 49} In particular, counsel for the Roquette Group argues that the particular market situation provisions of SIMA require a two part analysis whereby the CBSA must first determine whether a particular market situation exists, in respect of any goods of a particular exporter or of a particular country and, if so, determine whether that PMS affects the domestic sales of like goods such that a proper comparison is not possible, on an exporter-by-exporter basis.^{Footnote 50}

With respect to the second part of the analysis, counsel for the Roquette Group submits that WTO jurisprudence and the Anti-Dumping Agreement provide guidance on the appropriate interpretation. Specifically, it is argued that the investigating authority must examine whether a proper comparison of the domestic sales and the export price is permitted and, in doing so, it is necessary to conduct a qualitative assessment that considers how the PMS affects domestic and export prices and their comparison.^{Footnote 51}

According to counsel for the Roquette Group, the evidence does not establish the existence of a PMS in the wheat gluten markets of France or Lithuania. However, counsel for the Roquette Group also states that if the CBSA were to determine otherwise, a further analysis is required to determine whether the domestic sales of the individual exporters do not permit a proper price comparison of domestic and export prices, due to the PMS.^{Footnote 52} It is counsel’s view that domestic sales of Roquette Frères and Roquette Amilina do permit a proper comparison with their export sales of subject goods to importer in Canada.^{Footnote 53}

CBSA’s position

In conducting this investigation, the CBSA analyzed the impact of the alleged regulations, programs and policies on the supply and prices of wheat gluten and its inputs in Austria, Belgium, France and Lithuania. The CBSA further assessed whether any such impact affected domestic sales of like goods such that they do not permit a proper comparison with the sales to the importer in Canada.

Particular market situation analysis

Representations prior to the close of the record

Prior to the preliminary determination, counsel for the complainant argued that the information submitted by the EU, France, Lithuania, Germany and Belgium in RFI responses contains deficiencies which prevent the CBSA from properly assessing whether a PMS exists. In this respect, they argued that in the absence of full cooperation by the country respondents, the CBSA should consequently draw negative inferences and determine a PMS on the basis of the facts available by using Ministerial Specification.^{Footnote 54}

As part of their submission, counsel for the complainant provided a walkthrough of each government response, highlighting a number of elements that they allege support the existence of a PMS in the EU and its member-states. As part of this exercise, counsel for the complainant identified additional information that they argue should be requested by the CBSA from the different governments and producers/exporters^{Footnote 55} and made other specific arguments to the CBSA in support of a PMS.^{Footnote 56}

On November 20, 2020, counsel for the complainant made a submission related to the CBSA’s preliminary determination, including allegations of a PMS. While counsel argued that the PMS questionnaire responses of the European Union and Members States are woefully inadequate and incomplete for reasons set out in ADM’s deficiency comments, it was argued that the information that the EU and Member States have chosen to provide supports the conclusion that a particular market situation indeed exists in the EU and its member-states.^{Footnote 57} With respect to the allegation of government support programs, counsel for the complainant also claimed that financial support contained in EU and member-state legislation may not be and need not be specific to wheat, wheat gluten, or wheat gluten co-products but can still benefit the producers of these products.^{Footnote 58}

On January 29, 2021 the European Commission (Commission) made a submission concerning the CBSA’s preliminary determination, including the alleged PMS.^{Footnote 59} While the Commission acknowledges EU support to the agricultural sector through “decoupled support” and “voluntary coupled support”, the Commission states that the EU does not grant any specific support to wheat.^{Footnote 60} Further, the Commission claims that the EU market price follows the world market for similar quality.

With respect to allegations of support for bioethanol, the Commission claims that there are no dedicated support measures in EU legislation that promote the production of bioethanol specifically from wheat.^{Footnote 61} The Commission acknowledges the presence of legislative initiatives such as the Renewable Energy Directive and the Energy Taxation Directive, which include targets for renewable energies and possible tax exemptions or reductions. In this respect, the Commission argued that various renewable energy carriers can be used to achieve such targets and references limits that have been put in place on the share of food and feed crops (i.e. wheat) that can be used. In addition, the Commission states that there is no specific requirement that wheat be used as the source from which biomass based biofuels must be produced. The Commission argues against the allegation that support for biofuels impact production volumes and prices of wheat gluten, stating that the volume of biofuels produced and consumed is stable. According to the Commission, there is no PMS in the EU wheat gluten market.^{Footnote 62}

The Government of Lithuania (GOL) also filed comments relating to the alleged particular market situation.^{Footnote 63} Specifically, the GOL submits that substantial information was provided to the CBSA through the particular market situation RFIs which prove that market economy conditions prevail in the wheat gluten markets of Lithuania and other EU member states.^{Footnote 64} The GOL argues that further claims regarding the PMS would be in violation of the WTO rules.

Case arguments

Counsel for the Roquette Group submits that the evidence on the record does not disclose the existence of a PMS within the meaning of paragraph 16(2)(c) of SIMA and Article 2.2 of the WTO Anti-Dumping Agreement.^{Footnote 65} Counsel for the Roquette Group argues that the measures alleged by the complainant, including support to EU farmers and initiatives relating to the production, blending and consumption of bioethanol, do not apply specifically to wheat or wheat gluten. It is also argued that there is no positive evidence connecting these measures to domestic prices of wheat gluten in the EU.^{Footnote 66}

With respect to the allegation that the price of wheat gluten inputs (i.e. wheat) are distorted by support provided to the EU agricultural sector, counsel for the Roquette Group states that there is no evidence that the benefit passes through to producers of wheat gluten. Further, counsel for the Roquette Group submits that Roquette Frères and Roquette Amilina purchase all of their wheat at market prices and that there is no evidence that the price of soft wheat in the EU is distorted.^{Footnote 67} In support of this, counsel for the Roquette Group discusses a number of factors that they submit should be considered by the CBSA.^{Footnote 68}

Counsel for the Roquette Group also addressed the complainant’s allegations relating to EU measures concerning bioethanol, stating that there is no evidence that EU measures that concern the production, consumption or blending of biofuels have distorted the production or domestic selling prices of wheat gluten in the EU. In this respect it is also submitted that none of the wheat gluten exported to Canada by the Roquette Group is produced in association with bioethanol production.^{Footnote 69}

Counsel for the Roquette Group argues that there is no evidence of a PMS in the wheat gluten markets in France or Lithuania and that the domestic sales of wheat gluten of Roquette Frères and Roquette Amilina are not distorted.^{Footnote 70} Is it further stated that the domestic sales of like goods of Roquette Frères and Roquette Amilina do permit a proper comparison with their export sales of the subject goods to Canada.^{Footnote 71} As a result, Counsel for the Roquette Group submits that normal values for the Roquette Group should be determined in accordance with section 15 of SIMA.^{Footnote 72}

CBSA’s position

Using information available on the administrative record, the CBSA investigated allegations that a particular market situation exists in the named countries in Europe. While there are no known government regulations or policies setting price floors or ceilings, production quotas, or trade controls applied to wheat gluten directly, evidence on the record confirms the presence of policies, regulations, or directives in the EU and in certain member states relating to the agricultural sector and concerning renewable energy. The CBSA therefore analyzed the impact that government regulations, support programs and taxation policies have on the production and pricing of wheat and wheat gluten. On the basis of this analysis, the CBSA does not find that the prices of wheat or wheat gluten in Austria, Belgium, France or Lithuania were distorted such that they do not reflect market prices. The CBSA has not formed the opinion that a PMS exists in the wheat gluten markets of the named countries in Europe during the PAP that affects domestic sales such that they do not permit a proper comparison with the sales to the importers in Canada.

Period of investigation

Representations prior to the close of the record

The GOL submits that the CBSA’s use of a 16 month Period of Investigation (POI) for this investigation is not properly explained and unfairly includes Lithuania as a subject country.^{Footnote 73} The GOL argues that POIs normally cover one year periods and that this practice is supported by the WTO Antidumping Agreement and the Committee on Anti-dumping Practices. Further, the GOL states that imports from Lithuania were negligible during the most recent period and that the investigation with respect to wheat gluten imported from Lithuania must be terminated.

According to the Commission, the 16 month POI is not in line with the recommendation of the Committee on anti-dumping practices, is against common practice, and puts undue burden on exporters.^{Footnote 74} The Commission suggests that imports of wheat gluten from Lithuania would have been negligible if a 12 month POI was used, which would have resulted in the termination of the investigation for this country. According to the Commission, a longer POI “…is not opportune in this case.”^{Footnote 75}

CBSA’s position

For purposes of establishing the CBSA’s POI at the initiation of this investigation, the CBSA found that the period of January 1, 2019 to April 30, 2020 accurately reflects the exporters' price levels to Canada and relates to the time period during which the Canadian industry alleges that injurious dumping has occurred. Noting that the WTO AD Agreement does not establish any specific period of investigation, the CBSA did not find there to be reasonable justification for changing the POI in the final phase of the investigation.

CBSA’s investigative process

Representations prior to the close of the record

According to the GOL, the CBSA’s preliminary Statement of Reasons “…does not allow for a reasonable understanding of the substance and does not allow interested parties to exercise their rights of defence.”^{Footnote 76} The GOL requested summaries of the relevant confidential information from all countries.

The Commission also made comments relating to the CBSA’s calculations and process.^{Footnote 77} Specifically, the Commission stated that a number of producers/exporters provided responses to the CBSA’s Dumping RFI with the aim of cooperating with the investigation, but have not been able to provide production costs for wheat gluten. The Commission indicates that it is regrettable that only three producer responses were considered complete for purposes of the CBSA’s preliminary determination. According to this submission, “…the approach of [the] CBSA in this investigation is obviating the reality of the EU starch industry”.^{Footnote 78} The Commission also references arguments made by EU companies which allege a lack of transparency in the CBSA’s dumping calculations and requests that the CBSA provide the necessary explanations to parties.

CBSA’s position

The CBSA’s Statement of Reasons is a public document that describes the facts and rationale of the CBSA’s decision(s) taken without releasing confidential information. Detailed explanations relating to specific parties, which may contain information designated confidential by those parties, is included in the notices of final determination sent to exporters and importers on March 23, 2021. In addition, with respect to responding parties that did not provide complete information, deficiency letters were promptly sent which notified the parties that information was missing.

Canadian domestic industry for wheat gluten

Representations prior to the close of the record

In its submission dated January 29, 2021, the GOL made various representations relating to the CBSA’s investigation and preliminary determination.^{Footnote 79} Among these claims, were requests that the CBSA exclude the complainant from the definition of domestic producers with respect to injury and that the CBSA terminate the investigation due to the failure of the complainant to present evidence of injury to a major proportion of Canadian production. According to the GOL, imports from the EU increased after CETA but only to replace imports from China and that the Canadian industry is using the proceeding to close the market.^{Footnote 80}

CBSA’s position

At the initiation of the investigation the CBSA stated that the information provided in the complaint disclosed a reasonable indication that the alleged dumping has caused injury and is threatening to cause injury to the Canadian domestic industry. Subsequent to this, the Canadian International Trade Tribunal (CITT) conducted a preliminary injury inquiry into whether the evidence discloses a reasonable indication that the dumping of wheat gluten has caused injury or retardation or is threatening to cause injury. On October 13, 2020, the CITT determined that there is evidence that discloses a reasonable indication that the dumping of the subject goods has caused or is threatening to cause injury to the domestic industry. The CITT is continuing its inquiry and is required to make a finding with respect to which the final determination of dumping applies. As the determination of whether the evidence discloses a reasonable indication that the dumping of the goods has caused injury or retardation or is threatening to cause injury is part of the CITT’s mandate, the CBSA will not comment on arguments related to injury.

The ministerial specification rate

Case arguments

In their case brief, counsel for the complainant argued that the methodology used by the CBSA at the preliminary determination to establish normal values and export prices for all other exporters did not result in a sufficient difference between the margins of dumping found for “cooperative” and “non-cooperative” exporters.^{Footnote 81}

Counsel for the complainant argued that for the purposes of the final determination, the CBSA should adopt an alternative approach to a Ministerial Specification, including exploring using data submitted in the complaint or estimated at initiation. Counsel argued that this would result in a larger difference in the dumping margins of cooperative and non-cooperative exporters, and thus incentivize exporters to fully cooperate in future investigations.

CBSA’s position

As discussed in the relevant “all other exporters” sections of this document, the CBSA decided that the normal values and export prices determined for the exporters whose submissions were complete and reliable for the final determination, rather than the information provided in the complaint or estimated at initiation, would be used to establish the methodology for determining normal values since it reflects exporters’ actual trading practices during the POI.

The CBSA examined the difference between the normal value and the export price for each individual transaction of each of the exporters that provided a complete and reliable response, and considered that the highest amount (expressed as a percentage of the export price), was an appropriate basis for determining normal values. This methodology relies on information related to goods that were shipped to Canada during the POI. The CBSA finds that this methodology sufficiently limits the advantage that an exporter may gain from not providing necessary information requested in a dumping investigation as compared to an exporter that did provide the necessary information.

Accuracy and Completeness of the Submissions of the Roquette Group

Case arguments

Counsel for the complainant made representations regarding the accuracy and completeness of information submitted by the Roquette Group in response to the Dumping RFI, supplemental RFIs and Verification Questionnaires. Counsel submits that the normal value and export price for goods sold by the Roquette Group be determined pursuant to a ministerial specification or that adjustments be performed to rectify the stated deficiencies.

Counsel made specific representations regarding Roquette America Inc.’s responses with regards to the completeness of supporting documentation^{Footnote 82}, the accuracy and completeness of Appendices A and B^{Footnote 83} and the accuracy and reliability of allocations pertaining to costs incurred in reselling the goods in Canada.^{Footnote 84}

Counsel also made specific representations regarding the completeness of Roquette Frère’s RFI response^{Footnote 85} and the accuracy and reliability of the data pertaining to the cost of production.^{Footnote 86}

In addition, counsel made specific representations regarding the accuracy and reliability of Roquette Amilina’s data pertaining to the cost of production of the goods.^{Footnote 87}

CBSA’s response

The CBSA has reviewed the responses from the parties of the Roquette Group to the RFIs and supplemental RFIs. The CBSA has also conducted verifications of the exporters’ submissions through Verification Questionnaires. The exporter and importer submissions of the Roquette Group were considered complete and reliable for the purposes of the final determination and the CBSA determined normal values, export prices and the margins of dumping on the basis of the submissions.

Export Price of goods sold by Roquette Amilina

Case arguments

Counsel for the complainant made representations stating that due to a lack of data on the record, that export prices for goods sold by Roquette Amilina be determined pursuant to a ministerial specification.^{Footnote 88}

The embassy of the Republic of Lithuania to Canada made representations stating that Roquette Amilina’s export price to its related parties is fully reliable and should be taken into account in the dumping margin calculations.^{Footnote 89}

CBSA’s response

The CBSA considered all of the information on the administrative record and determined that sufficient information was available to enable to determination of the export price of the goods sold by Roquette Amilina pursuant to sections 24 and 25 of SIMA.

A reliability test was performed for the goods exported to Canada by Roquette Amilina that were sold to a related importer. This test was conducted by comparing the section 24 export prices with the section 25 export prices. The test revealed that the export prices determined in accordance with section 24 of SIMA were unreliable and, therefore, export prices for these sales were determined in accordance with section 25 of SIMA.