Notice of conclusion of normal value review: Carbon and Alloy Steel Line Pipe 2 (LP2 2023 UP1)

Period of investigation

The period of investigation (POI) and the profitability analysis period (PAP) for the normal value review were from July 1, 2022 to June 30, 2023.

Normal value review process

At the initiation of the normal value review, the CBSA sent Requests for Information (RFIs) to the exporter Husteel and Husteel Canada to solicit information on the costs and selling prices of subject and like goods. The information was requested for purposes of determining normal values and export prices for subject goods imported into Canada.

The responses to the CBSA’s RFIs and supplemental RFIs (SRFIs) were received accordingly from Husteel and Husteel Canada. On-site verifications were conducted at the premises of Husteel and Husteel Canada in November 2023.

As part of the normal value review, case briefs and reply submissions were submitted on behalf of the Canadian producers and the responding exporter.

Representations

During the course of the normal value review, counsel for the Canadian producers, Exporter and Importer discussed various concerns pertaining to the responses to the RFIs and SRFIs provided by the exporter and importer. Issues raised included: cost of production reporting methodologies, input purchases, pricing and other various alleged inconsistencies and deficiencies within the responses.

There were a number of exporter specific issues that were raised by counsel for the complainants as well. In order to respect the confidentiality designations made by interested parties, the CBSA is limited in the information that can be divulged in response to arguments made concerning certain topics.

Counsel for the Canadian producer made several arguments pertaining to retroactive assessment of duties. Counsel argued that, given these circumstances, the CBSA should consider issuing retroactive anti‑dumping duty assessments.

CBSA response

Due consideration has been given to submissions on the topics raised in case briefs on a case by case basis and appropriate adjustments were made, as applicable, in accordance with SIMA and SIMR. Additional information on the calculation of normal values is provided to exporters in the confidential exporter conclusion letters.

Upon completion of the normal value review, the CBSA will be conducting an analysis of subject imports from exporters of subject goods during the POI, to determine whether retroactive assessments are warranted. The analysis will rely on information provided via RFI and Supplemental RFI responses received, representations submitted by parties, on-site verifications and any other available relevant information.

Normal values and export prices

Normal value

Specific normal values for future shipments of subject goods have been determined for the participating exporter. These normal values are effective today, March 27, 2024.

The exporter’s RFI response included a domestic sales database of like goods, as such, normal values were determined in accordance with paragraph 15 of SIMA where possible.

Where there were insufficient domestic sales of like goods that met the requirements of sections 15 and 16 of SIMA, normal values were determined pursuant to paragraph 19(b) of SIMA, based on the aggregate of the cost of production of the goods, a reasonable amount for administrative, selling and all other costs, and a reasonable amount for profits.

Export prices

During the POI, all of the subject goods exported to Canada by Husteel were sold to a related importer. Due to the relationship between the two companies, a reliability test was performed to determine whether the section 24 export prices were reliable as envisaged by SIMA. This test was conducted by comparing the section 24 export prices with the section 25 export prices. The amount for profit used for the section 25 calculations was determined in accordance with paragraph 22(a) of the SIMR, based on the profit information provided in the 2022 re-investigation and relating to vendors that operated at a profit during the POI and are at the same or substantially the same trade level as the importer. The test revealed that the export prices determined in accordance with section 24 of SIMA were unreliable. Therefore, export prices for sales to Husteel Canada on or after March 27, 2024 will be determined in accordance with section 25 of SIMA.

Exporter responsibility

All parties are cautioned that where there are increases in domestic prices and/or costs, as noted above, the export price should be increased accordingly to ensure that any sale made to Canada is not only above the normal value but at or above selling prices and full costs and profit of the goods in the exporter’s domestic market. If exporters do not adjust export prices accordingly, retroactive assessments of anti-dumping duties may be warranted.

Please note that exporters with normal values are required to promptly inform the CBSA in writing of changes to domestic prices, costs, market conditions or terms of sale associated with the production and sales of the goods. As noted in paragraph 12 of Memorandum D14-1-8 Re-investigation and Normal Value Review Policy – Special Import Measures Act (SIMA), these changes may be taken into account when determining whether to initiate a re-investigation or normal value review, as appropriate.

Importer responsibility

Importers are reminded that it is their responsibility to calculate and declare their anti-dumping and countervailing duty liability. If importers are using the services of a customs broker to clear importations, the brokerage firm should be advised that the goods are subject to SIMA measures and be provided with sufficient information necessary to clear the shipments. To determine their liability for anti-dumping and countervailing duty, importers should contact the exporters to obtain the applicable normal values and amounts of subsidy. For further information on this matter, refer to Memorandum D14-1-2, Disclosure of normal values, export prices, and amounts of subsidy established under the Special Import Measures Act.

The Customs Act (Act) applies, with any modifications that the circumstances require, with respect to the accounting and payment of anti-dumping and countervailing duties. As such, failure to pay the duties within the prescribed time will result in the application of the interest provisions of the Act.

Should the importer disagree with the determination made on any importation of goods, a request for re-determination may be filed. For more information on how to file a request for re-determination, please refer to the Guide for appealing a duty assessment.