On February 13, 2023, the Canadian International Trade Tribunal (“CITT”) issued a notice that it was beginning an expiry review in respect of certain liquid dielectric transformers (large power transformers) originating in or exported from the Republic of Korea (South Korea).  Anyone wanting to participate in the expiry review must file a Notice of Participation with the CITT by February 28, 2023!

Both domestic producers and exporters should consider participating in the expiry review, as current anti-dumping duties (“ADDs”) for goods without a normal value are 101%!

The Subject Goods are defined in the Order as follows:

Liquid dielectric transformers having a top power handling capacity equal to or exceeding 60,000 kilovolt amperes (60 megavolt amperes), whether assembled or unassembled, complete or incomplete, originating in/or exported from the Republic of Korea.

Background

Canada Border Services Agency (“CBSA”) originallyinitiated an investigation in respect of the Subject Goods on April 23, 2012, in response to a complaint from Canadian producers ABB Inc. and CG Power Systems Canada Inc. about imports from South Korea.

The CBSA made a preliminary determination that the Subject goods were being dumped on July 23, 2012, and on October 22, 2012 the CBSA made a final determination as to dumping.  The two Korean exporters who cooperated with the investigation were assigned specific normal values in respect of their products.

On November 20, 2012, the CITT issued a finding that the dumping of the Subject Goods (as defined in the finding) from South Korea caused injury or was threatening to cause injury to the Canadian domestic industry.  As a result of this finding, the ADD and normal values determined by the CBSA came into effect in respect of Subject Goods originating in or exported from South Korea.

The CBSA’s original determination of dumping was appealed to the Federal Court of Appeal (“FCA”) and remitted back to the CBSA.  On March 6, 2014, the CBSA made a new final determination that Subject Goods were being dumped (a subsequent appeal was dismissed).  The CITT continued its finding in an Order dated May 31, 2016.

CBSA Re-Investigations

When goods are sold for export to Canada at or above the normal value assigned by CBSA, no ADDs apply.  However, unless exporters cooperate in an investigation or subsequent re-investigation, and CBSA assigns them normal values, the default ADDs apply.

CBSA may re-investigate the normal values following significant changes (i.e., in costs, pricing, etc.) warranting further CBSA review.  

The CBSA has conducted multiple re-investigations regarding liquid dielectric transformers.  During its first re-investigation which concluded on July 5, 2017, CBSA updated the specific normal values for the two Korean exporters.  Further normal value reviews for IEN Hanchang Co., Ltd. and Hyundai Electric & Energy Systems Co., Ltd. concluded in 2019, and a further export price review of Hyundai Electric concluded on February 8, 2022.

Prior Expiry Review

Separate from the CBSA’s re-investigations, the CITT is mandated to conduct expiry reviews every 5 years by section 76.03 of the Special Import Measures Act. The CITT initiated its first expiry review in 2017, and on May 31, 2018, continued its finding (and the ADD).

The CITT is now commencing its second expiry review.

What’s Next?

If no domestic producer files a notice of participation by February 28, 2023, the CITT has indicated it will likely terminate the expiry review and let its previous finding lapse, terminating the ADD.

This preliminary step puts a new significant time pressure on domestic producers who may have been used to waiting for an RFI from CBSA to nudge them into action!

Businesses importing goods that may fall within the definition of Subject Goods should seek legal advice before import, otherwise they could find themselves paying massive anti-dumping duties!

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