Canadian Anti-dumping and Countervailing Investigation Initiated for Certain PET Resin

On August 18th, 2017, the Canada Border Services Agency (CBSA) initiated anti-dumping and countervailing investigations pursuant to the Special Import Measures Act (SIMA) relating to allegations of dumping and subsidizing of certain polyethylene terephthalate resin (PET resin) originating in or exported from the People’s Republic of China (China), the Republic of India (India), the Sultanate of Oman (Oman) and the Islamic Republic of Pakistan (Pakistan).

These investigations have been initiated as a result of a Complaint filed by Selenis Canada, a PET resin manufacturer operating out of Montreal.

PET resin is a thermoplastic polyester polymer. Products manufactured with PET resin are clear, sterile, light, and thermally stable.  PET resin may be sold in bulk form, such as chips or pellets, to end users.  It is ultimately used to produce bottles and containers for liquids and food products, industrial strapping, and carpet. The most common end-use applications for bottle-grade PET resin include soda bottles, water bottles, and other containers for food, beverages, household, and automotive product storage.

Prior to January 1, 2017, PET resin goods were normally classified under the following Harmonized System (HS) codes:

  • 3907.60.00.10
  • 3907.60.00.90

Beginning January 1, 2017, under the revised customs tariff schedule, the goods in question would normally be imported under the following HS codes:

  • 3907.61.00.00
  • 3907.69.00.10
  • 3907.69.00.90

In 2016, 117,773,036 kg of PET resin was imported into Canada at a total value of CAD 174,047,072.

With the initiation of these investigations, the Canadian International Trade Tribunal (“CITT”) has commenced a preliminary inquiry to determine whether the evidence adduced in the Complaint discloses a reasonable indication that imports are harming the Canadian producer. The CITT will issue its decision by October 17, 2017, with a Statement of Reasons to follow by November 1, 2017. Concurrently, the CBSA will investigate whether the imports are being sold in Canada at unfair and/or subsidized prices. It will make its preliminary decision by November 16, 2017, with a Statement of Reasons to follow by December 1, 2017.

Tereposky & DeRose regularly provides advice on Canadian anti-dumping and countervailing matters.  Should you have any questions regarding this matter or anti-dumping and countervailing issues more generally, we are at your disposal.

Jennifer Radford
613.903.7015, ext. 103
jradford@tradeisds.com

Daniel Hohnstein
613.903.7015, ext. 104
dhohnstein@tradeisds.com

 

 

U.N. Security Council’s Resolution Toughens its Sanctions Regime against North Korea

On August 5, 2017, in response to the Democratic People’s Republic of Korea’s (North Korea) recent ballistic missile tests, the United Nations Security Council (UNSC) unanimously adopted resolution 2371 (resolution), toughening the already existing sanctions against North Korea. By doing so, the UNSC hopes to pressure North Korea to recommence the Six-Party Talks (between the United States, China, Japan, Russia, South Korea and North Korea) on denuclearization which have been on hold since North Korea withdrew from them in 2009.

The resolution prohibits the supply, sale and transfer of several of North Korea’s key commodities, including coal, iron, iron ore, seafood, lead and lead ore.   It also directs member states not to increase the total number of work authorizations for North Korean nationals unless approved by the Security Council Committee established pursuant to resolution 1718 (2006) (Committee). It also directs member states to prohibit the opening of new joint ventures or cooperative entities with North Korean entities and individuals, or expand existing joint ventures through additional investments.

The UNSC reaffirms that the measures imposed by the resolution are not intended to have adverse humanitarian consequences for the civilian population of North Korea or to affect negatively those activities.  On a case-by-case basis, the Committee may exempt any activity from the measures imposed if it determines that such an exemption is necessary to facilitate the work of such organizations.

All member states are to report to the UNSC within 90 days of the adoption of the resolution on concrete measures they have taken in order to implement effectively its provisions. If successfully implemented and enforced, this new set of sanctions will further isolate North Korea’s economy from the international community. It is estimated that these new measures represent approximately $1 billion of North Korea’s estimated $3 billion annual export revenue.

Canada maintains its own sanctions regime against North Korea under the Special Economic Measures Act (SEMA). The Canadian sanctions already go well beyond the minimum UN requirements and the resolution. With the exception of very limited circumstances, Canadians are already prohibited from exporting and importing goods to and from North Korea. As such, the new UNSC resolution will not have any significant impact on existing Canadian businesses.  The only change the resolution will bring to Canada’s sanction regime is regarding the issuance of new work permits to North Korea nationals, although already issued permits will not be cancelled.

The lawyers at Tereposky & DeRose have significant experience in the design and implementation of sanctions-related compliance programs, including policies, procedures, employee training, and internal control mechanisms.  They also regularly assist both Canadian and international businesses, financial institutions, and individuals with internal investigations when “red flags” appear, and provide advice on compliance in these areas. Where breaches have occurred, they have worked closely with their clients in making voluntary disclosures and in engaging with the ensuing investigations conducted by the RCMP and Global Affairs Canada.

If you would like to discuss any aspect of the Canadian sanctions regime, contact Vince DeRose, Jennifer Radford or Stephanie Desjardins at:

Vince DeRose
613.903.7015, ext. 102
vderose@tradeisds.com

Jennifer Radford
613.903.7015, ext. 103
jradford@tradeisds.com

Stephanie Desjardins
sdesjardins@tradeisds.com