On March 31, 2020, Canada's Federal Court of Appeal ("FCA") released its decision in Angang Steel Company Limited v. Attorney General (Canada) et al., 2020 FCA 67 in which it dismissed a judicial review of the Canada Border Services Agency's ("CBSA") final calculation of a dumping margin for Angang in the antidumping investigation against corrosion-resistant steel sheet from China. This is an important case because it means that if an exporter disagrees with the CBSA's application of Canadian law in calculating a normal value, export price, or dumping margin, judicial review is not an option to correct the CBSA's mistakes (if mistakes were made).
The President of the CBSA determined that the Angang Request for Information ("RFI") and supplemental RFI responses were not sufficient to allow the determination of the normal value and export prices for the subject goods (corrosion-resistant steel originating in or exported from China). As a result, the President of the CBSA calculated the normal value and export price pursuant to a ministerial specification made under subsection 29(1) of the Special Import Measures Act ("SIMA"). The normal value for Angang was determined to be the export price plus an amount equal to 53.3% of that export price (the "All Others" exporters' prospective antidumping rate applciable to uncooperative exporters and those who provided inadequate responses). Usually the "All Others" dumping margin is prohibitively high and prevents new exports to Canada of subject goods.
If the President had calculated normal values and export prices, Angang would have received normal values for the particular models or SKUs or types of corrosion-resistant steel sheet shipped to Canada during the period of review for the dumping investigation. If, for future exports to Canada, Angang sold the goods at prices above normal values, then no antidumping duties would be collected by the CBSA at the time of importation. Importers would have certainty when buying corrosion-resistant steel sheet from Angang.
However, due to the decision by the President of the CBSA to not calculate normal values for Angang, all imports into Canada would be subject to a 53.3% antidumping duty and the importer would not know how much of a refund they could expect if they appealled and requested a redetermination. Due to the uncertainty, it is less risky to purchase from other sources, including the domestic industry.
Angang took the position that the President of the CBSA should not have used the ministerial specification under subsection 29(1) of SIMA to determine its margin of dumping. The CBSA should have calculated a lower dumping margin rate.
There is no right of appeal to the courts for a calculation of a dumping margin. An aggrieved party may file a judicial review in limited circumstances to correct errors made by the President of the CBSA or to address issues related to the use of discretion. That being said, the right to a judicial review is limited in section 96.1 of SIMA.
Pursuant to subsection 96.1(1) of SIMA, a judicial review is only possible in respect of the following decisions:
"Subject to section 77.012 or 77.12, an application may be made to the Federal Court of Appeal to review and set aside
(a) a decision of the President of the CBSA under paragraph 41(1)(a);
(b) a final determination of the President of the CBSA under paragraph 41(1)(b);
(c) a decision of the President of the CBSA under subsection 53(1) to renew or not to renew an undertaking;
(c.1) an order or finding of the Canadian International Trade Tribunal ("CITT") under subsection 43(1);
(c.2) a decision of the President of the CBSA under subsection 75.1(1);
(c.3) a decision of the President of the CBSA under subsection 75.4(6);
(c.4) a determination of the President of the CBSA under subsection 75.6(5);
(d) an order of the CITT under subsection 76.01(4) or 76.03(5);
(d.1) a determination of the President of the CBSA under paragraph 76.03(7)(a);
(e) an order or finding of the CITT under subsection 76.02(4) respecting a review under subsection 76.02(1);
(f) an order of the CITT under subsection 76.01(5) or 76.03(12); or
(g) an order or finding of the CITT under subsection 91(3)."
Subsection 96.1(2) of SIMA limits the grounds for the judicial review to situations where the President of the CBSA or the CITT:
(a) acted without jurisdiction, acted beyond the jurisdiction of the President or the Tribunal or refused to exercise that jurisdiction;
(b) failed to observe a principle of natural justice, procedural fairness or other procedure that the President or the Tribunal was required by law to observe;
(c) erred in law in making a decision or an order, whether or not the error appears on the face of the record;
(d) based a decision or order on an erroneous finding of fact that the President or the Tribunal made in a perverse or capricious manner or without regard for the material before the President or the Tribunal;
(e) acted, or failed to act, by reason of fraud or perjured evidence; or
(f) acted in any other way that was contrary to law.
If the issue does not fit with the limitations above, the FCA lacks jurisdiction to consider the matter.
The FCA dismissed the judicial review of a decision of the President of the CBSA under paragraph 41(1)(a) of SIMA on the basis that it lacked jurisdication under section 96.1 of SIMA. The FCA took the position that it could not set aside the decision of the President of the CBSA with respect to Angang because there was no basis to set aside the entire decision of the CBSA made pursuant to paragraph 41(1)(a) of SIMA. The dumping margin for China as a whole was not insignificant (less than 2%) and, therefore, the final determination of dumping against China would not be affected. In other words, dumpnig duties would be imposed.
The FCA stated:
"The text requires separate actions of the President – the making of a final determination of dumping and the specification of the particular goods and the margin of dumping. The right of review provided in paragraph 96.1(1)(b) of SIMA is specific and only applies to the final determination of the President."
The Federal Court went on to conclude:
"In my view, the change in the wording of section 41 does not change the result that a final determination of dumping cannot be set aside by this Court simply because the margin of dumping for a particular exporter, rather than a particular country, would be less than the amount as found by the President, if the margin of dumping would still be significant. The threshold for the final determination that goods have been dumped under paragraph 41(1)(b) of SIMA is the finding that the margin of dumping is 2% or more. The same final determination that the goods of a particular exporter have been dumped and that the margin of dumping is not insignificant will be found whether the margin of dumping is 15% or 50%. "
Relief Still Available to an Exporter
The FCA commented that relief is still available to the exporter in respect of goods imported during the provisional period (between the preliminary determination of dumping by the CBSA and the final injury determination of the CITT) and after the final determination of injury by the CITT.
Within 6 months after the final determination of injury, the CBSA conducts a review under section 55 of SIMA to recalculate the antidumping duties owing during the provisional period. If antidumpnig duties were overpaid based on the final determination (that is the provision rate is higher than the final rate), a refund would be issued for the difference.
With respect to the period during which an antidumping order is in place, the FCA stated that
"[i]t is clear that Parliament did not intend that the margin of dumping, as specified by the President, would be used to impose the anti-dumping duty."
After the Tribunal's injury determination, section 56 of SIMA contemplates that a designated CBSA officer will make a determination of the normal value and export price for any subject goods that are imported. Section 56 of SIMA does not state that the margin of dumping will be the amount as specified by the President of the CBSA in making the final determination of dumping. Sections 56 to 62 of SIMA set out the rights of re-determination and appeal applicable to any determination made under subsection 55(1) or subsection 56(1) of SIMA. In other words, a new calculation may be undertaken for each importation of subject goods while an antidumping order is in place.
Based on the decision in the Angang case, exporters who disagree with an antidumping calculation by the CBSA should work with their importers to appeal every importation of subject goods. This will trigger a normal value review. If complete and verifiable information is provided by the exporter, the CBSA must calculate the actual amount of antidumping duties that are payable within one year of filing the appeal. Overpayments of antidumping duties at the time of importation will be refunded.
We recommend that exporters prepare a spreadsheet to properly calculate normal values before setting prices for shipments of subject goods to Canada. We also recommend that exporters carefully consider how to persuade the CBSA to calculate antidumping duties. If the CBSA has raised an issue with data during an antidumping investigation, reinvestigation, or normal value review, it would be best to correct those errors and solve those problems.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.