On December 21, 2020, the CBSA initiated a dumping and subsidy investigation into certain upholstered domestic seating (“UDS”) from China and Vietnam under the Special Imports Measures Act (“SIMA”). In the Notice of Initiation of Investigations, the subject goods under investigation were described as follows:

Upholstered seating for domestic purposes originating in or exported from China and Vietnam, whether motion (including reclining, swivel and other motion features) or stationary, whether upholstered with a covering of leather (either full or partial), fabric (including leather-substitutes) or both, including, but not limited to seating such as sofas, chairs, loveseats, sofa‑beds, day‑beds, futons, ottomans, stools and home‑theatre seating (“HTS”).

The Notice also specified certain exclusions from the definition and provided further information on and characteristics of the UDS under investigation.

By way of background, a dumping and/or subsidy investigation under SIMA is conducted through two phases: (1) the preliminary injury inquiry phase, and (2) the final injury inquiry phase.

On February 19, 2021, as part of the preliminary injury inquiry, the Canadian International Trade Tribunal (CITT) issued its preliminary determination of injury. The CITT determined that “there [was] evidence that disclose[d] a reasonable indication that the dumping and subsidizing of the subject goods have caused injury or are threatening to cause injury to the domestic industry”.

The CBSA will subsequently make a preliminary determination of dumping – and, if affirmative, the matter will proceed into the final injury inquiry phase.

At the final injury inquiry phase, if there is a final determination of ‘dumping’ and/or ‘subsidizing’ which have injured to Canadian domestic industry, SIMA duties will be imposed on the subject goods.

Product Exclusions

Businesses that import goods which fall within the description of the UDS under investigation may be interested in the process for requesting an exclusion for their specific products.  

The CITT has jurisdiction to exclude products that would otherwise be subject to a finding of injury. If a product exclusion is granted, those products would not be subject to any anti-dumping or countervailing duties under SIMA. Exclusions will only be granted where in cases where they will not cause (or threaten to cause) injury to the domestic industry.

Product exclusion requests can be made at the final injury inquiry stage, and businesses wishing to make these requests must become parties to the proceedings before the CITT.

Given the potentially significant duties that may be imposed depending on the result of the inquiry, affected businesses should keep an eye on the proceedings and take steps as necessary to ensure their interests are represented—including seeking the appropriate legal advice!

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