Notice of normal value review: Hot-rolled carbon steel plate 7 (PLA7 2023 UP2)

Ottawa, December 12, 2023

The Canada Border Services Agency (CBSA) has today concluded a normal value review (review) to update normal values and export prices of hot-rolled carbon steel plate and high-strength low-alloy steel plate originating in or exported from South Korea by POSCO Co., Ltd. (POSCO).

The review is part of the CBSA’s enforcement of the Canadian International Trade Tribunal’s (CITT’s) order issued on March 13, 2020, in Expiry Review No. RR-2019-001, respecting the dumping of certain hot-rolled carbon steel plate from Brazil, Denmark, Indonesia, Italy, Japan, and South Korea, in accordance with the Special Import Measures Act (SIMA).

The product definition and the applicable tariff classification numbers of the goods subject to the CITT’s order can be found on the CBSA’s Measures in force.

Period of investigation

For this review, the period of investigation (POI) and the profitability analysis period (PAP) were from May 1, 2022 to April 30, 2023.

Normal value review process

At the initiation of the review, on May 31, 2023, the CBSA sent requests for information (RFIs) to POSCO and to other parties in order to solicit information for purposes of determining normal values and export prices applicable to subject goods exported to Canada.

POSCO submitted a response on July 7, 2023^{Footnote 1} and responded to all supplemental Requests for Information (SFRIs)^{Footnote 2}. An importer also submitted a response to the importer RFI. On-site verifications were conducted at the premises of POSCO in South Korea in September 2023^{Footnote 3}.

During the course of the review, counsel on behalf of the Canadian producer Algoma Steel Inc. (Algoma) submitted comments^{Footnote 4}, a case brief and a reply submission^{Footnote 5}. Counsel on behalf of POSCO also provided a case brief and a reply submission^{Footnote 6}.

Representations

Counsel on behalf of POSCO argued that the CBSA has discretion regarding which product characteristics should be used to determine normal values. POSCO argued that the CBSA should issue normal values for models which were not exported to Canada during the POI because doing so would be consistent with the CBSA’s existing policy. POSCO also argued that the existing ministerial specification applicable to new models should be revised and suggested that normal values for new models should be determined based on POSCO’s own margins of dumping, instead of the “all other exporter” rate of 59.7%. POSCO cited a WTO panel decision (i.e. Canada – Anti-Dumping Measures on Imports of Certain Carbon Steel Welded Pipe from the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu (DS482)) to support its argument.

Counsel on behalf of Algoma argued that the information submitted by POSCO was not reliable because POSCO failed to provide sufficient explanation respecting how certain models were selected and identified as like goods, and costs associated with certain product characteristics and production process were not reflected in POSCO’s cost data. Counsel also argued that the full product characteristics identified in the RFI should be used to determine normal values and the CBSA should not issue normal values for models not yet exported.

Counsel on behalf of Algoma argued that retroactive assessments of anti-dumping duties are warranted given that the existing normal values issued to POSCO have not been updated since the conclusion of the original Plate 7 investigation in 2014 and average South Korean export prices have increased during the period when the normal values were in effect.

CBSA response

The accuracy and veracity of the information, including selling prices and costs, provided by POSCO were thoroughly reviewed and verified during the on-site verifications, and can be reconciled to POSCO’s financial statements. The CBSA found that the information provided by POSCO was complete and reliable, and as such, was used to determine normal values for this review.

In the determination of normal values, the CBSA ensured to capture all costs associated with the production of the hot-rolled steel plate, consistent with prior plate proceedings, using POSCO’s verified information. There is no compelling evidence on the administrative record for this review that the CBSA should deviate from its past practices respecting which product characteristics should be used to determine normal values. The CBSA issued normal values for models produced and/or sold by POSCO including those models not exported to Canada in the POI.

Regarding POSCO’s request for revising the ministerial specification for Plate 7, the CBSA changed its previous practices of terminating an investigation where margins of dumping were insignificant on a country basis to on an individual exporter basis in order to comply to the WTO panel recommendations and rulings in DS482, and applied to all ministerial specifications established for purposes of investigations concluded after September 29, 2017. Any requests for changes of ministerial specifications established prior to such date on this matter are subject to a request from the Minister of Finance, pursuant to section 76.1 of SIMA.

Respecting the application of retroactive assessments, upon completion of the review, the CBSA will be conducting an analysis of subject imports from POSCO during the POI, to determine whether retroactive assessments are warranted.

Normal values

Specific normal values for future shipments of subject goods have been determined for POSCO. These normal values are effective today, December 12, 2023.

POSCO provided separate domestic sales and costing information for subject goods and like goods produced and/or sold by each of its two mills (i.e., Pohang and Gwangyang). As a result, normal values were determined separately for each of the two mills.

Some normal values were determined in accordance with section 15 of SIMA based on domestic selling prices of like goods, where POSCO had a sufficient number of domestic sales of like goods that met the conditions of sections 15 and 16 of SIMA. For the majority of the models, 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 plus a reasonable amount for profits.

As significant inputs in the production of the goods were acquired from associated suppliers, the costs of the significant inputs were determined pursuant to paragraphs 11.2(1)(a) of the Special Import Measures Regulations (SIMR). The amount for profits were determined under subparagraph 11(1)(b)(ii) of the SIMR, based on POSCO’s profitable domestic sales of goods that were of the same general category as the subject goods exported to Canada.

The normal values determined as a result of this review may be applied to any requests for re-determination of importations of subject goods that have not been processed prior to the conclusion of this review, regardless of the date that the requests were received. The normal values and export prices determined as a result of this review may be applied retroactively where the conditions described below are met.

Exporter responsibility

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. 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 properly notify the CBSA of any such changes, do not adjust export prices accordingly, or do not provide the information required to make any necessary adjustments to normal values and export prices, retroactive assessments will be applied where such action is warranted.

Importer responsibility

Importers are reminded that it is their responsibility to calculate and declare their anti-dumping 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 anti-dumping liability, importers should contact the exporter(s) to obtain the applicable normal values. 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 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.