What are Anti-Dumping and Countervailing Duties?

The Purpose of Anti-Dumping and Countervailing Duties

Anti-dumping and countervailing duties have been hot topics in the news recently with the US President instituting additional duties on imports of steel. Canada’s own version of these duties are administered under the Special Import Measures Act (SIMA). Imagine that your activities are harmed by others selling goods to Canadian importers at unprofitable prices or prices lower than the selling price of comparable goods in the country of export. Or imagine that you’re being harmed by goods which are being imported into Canada and benefiting from foreign government financial assistance (such as preferential loans, grants and tax incentives).

Both of these examples are problems that exist in the market. The former is otherwise known as dumping, and the latter, subsidizing. They don’t paint a pretty picture and you’d no doubt want to do something about them if they were happening to you, to give you the opportunity to compete fairly with the imported goods. Fortunately, SIMA was designed primarily to combat these two unsavory practices.

Who Is Responsible for Enacting and Enforcing these Duties?

The Canadian International Trade Tribunal (CITT) and the Canada Border Services Agency (CBSA) are jointly responsible for the administration of SIMA. The CITT’s role is to investigate complaints made by Canadian producers of goods that are identical or similar to the competing imports and who suspect that such goods are being dumped or subsidized, causing injury to Canadian industry. Injury may be shown by:

• Decreased profits
• Lost sales or market share
• Reduced prices

Not only must complaints be supported by producers representing at least 25% of Canadian production, but the total production of those producers must be greater than the total production of those who oppose the complaint.

If the CITT establishes harmful dumping or subsidizing of imported goods, the CBSA has the authority to impose anti-dumping or countervailing duties on dumped or subsidized imports. This duty is generally imposed for a period of at least 5 years and offsets the price advantage caused by dumping or subsidizing.

Will Your Goods Be Affected?

The CBSA publishes an up-to-date list of goods currently subject to anti-dumping or countervailing measures on its website. Taking a good look at the measures currently in force is the best way to reliably determine whether your imported goods could be subject to duties under SIMA. If this is the case, as well as your regular customs responsibilities, you will also be responsible for:

• Properly describing the imported goods
• Using the correct SIMA code (and failing to do this could result in an administrative monetary penalty)
• Calculating and paying the correct amount of SIMA duty
• Maintaining detailed records for imports of your SIMA goods
 

How Can Customs Brokers Help?

If you feel out of your depth on this topic, a Canadian Customs Broker can assist you in fulfilling your responsibilities. Orbit Brokers can help demystify the application of anti-dumping and countervailing duties to any future goods you intend to purchase, or goods you’ve already bought and imported through customs clearance.

Likewise, if you are the subject of an investigation by the CITT or would like to file a complaint with the CBSA regarding competing goods that you suspect are being dumped or subsidized, we can help guide you in relation to the procedure and the evidence you will need to prove your claim. Our team of experienced and certified professionals can be reached at (905) 673-8798 or contact us