Nothing Good Happens After Midnight: Canada, Mexico and the EU Hit with Tariffs on Steel and Aluminum

This morning, on May 31, 2018, U.S. President Donald Trump announced that Canada, Mexico and the European Union would no longer benefit from a tariff exemption on steel and aluminum. Canada and Mexico were initially exempt from the duties announced on March 8th, pending negotiations of the North American Free Trade Agreement. The exemptions were set to expire on June 1st, 2018. Commerce Secretary Wilbur Ross said insufficient progress had been made in the North American Free Trade Agreement negotiations and in separate talks with the EU to warrant extensions of the temporary exemptions or permanent exclusions for those countries.

Tariffs of 25 percent on steel and 10 percent on aluminum imports from Canada, Mexico and the EU will take effect at midnight tonight.

Canada has not yet released a statement on whether retaliatory measures would be taken. However, when there were first discussions on the possibility of tariffs on steel and aluminum, Foreign Affairs Minister Chrystia Freeland indicated that Canada would take “responsive measures to defend its trade interests and workers” should restrictions be imposed on Canadian steel and aluminum products.

Tariff exemptions continue to apply to Argentina, Brazil, and Australia, which have all agreed to restrict exports of steel and aluminum to the United States. Tariff exemption for South Korean steel also continues to apply due to the country’s undertaking to restrict steel exports to the US.

Tereposky & DeRose advises and represents private sector clients — including industry associations, large corporations, and small and medium-sized businesses — as well as government entities on the full range of issues arising in cross-border trade. Should you have any questions regarding this matter, we are at your disposal.

Greg Tereposky
613-237-1210
gtereposky@tradeisds.com

Vincent DeRose
613.237.8862
vderose@tradeisds.com

Stephanie Desjardins
613-237-0483
sdesjardins@tradeisds.com

Elections in Venezuela Trigger Further Economic Sanctions by Canada

On May 20, 2018, the Venezuelan government held presidential, regional and local council elections. The electoral process and results have been rejected by Canada on the basis that they did not meet international standards.

On May 29, 2018, Canada amended the Special Economic Measures (Venezuela) Regulations (the “Regulations”) to add fourteen (14) individuals to the list of forty (40) listed persons that Canada had initially identified as responsible for the current social and economic situation in the country. This amendment is in direct response to Canada’s public view that the Venezuelan elections lacked transparency, legitimacy and credibility.

The sanctions against Venezuela were first introduced on September 22, 2017. Under the Regulations, it is prohibited for any person in Canada or any Canadian outside Canada to knowingly do anything that causes, facilitates or assists in dealing with any property, wherever situated, that is owned, held or controlled by a listed person or by an agent of a listed person. It is also illegal to enter into or facilitate such a transaction, or to provide any financial or related service in respect of such dealings. Finally, it is also illegal to make available any goods to a listed person or to a person acting on their behalf.

While there are some limited exceptions, the sanctions effectively prohibit Canadians from carrying on almost any business dealings with the 54 listed persons – who are all senior Venezuelan officials and individuals, including President Nicola Maduro.

The imposition of economic sanctions does not mean that Canadians must cease business with Venezuela. On-going business is permitted so long as it does not involve, directly or indirectly, a listed person. The introduction of economic sanctions does, however, impose on Canadians conducting business with Venezuela an obligation to scrutinize ongoing business transactions to ensure compliance.

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
613.237.8862
vderose@tradeisds.com

Jennifer Radford
613.237.9777
jradford@tradeisds.com

Stephanie Desjardins
613.237.0483
sdesjardins@tradeisds.com

 

CANADA INITIATES AD AND CVD INVESTIGATIONS AGAINST CERTAIN COLD-ROLLED STEEL FROM CHINA, SOUTH KOREA AND VIETNAM

On May 25, 2018, the Canada Border Services Agency initiated investigations regarding the alleged dumping and subsidizing of certain cold-rolled steel in coils or cut lengths from China, South Korea and Vietnam. The investigations follow a complaint filed by ArcelorMittal Dofasco.

The CBSA’s preliminary determinations will be issued by August 23, 2018, with its Statement or Reasons to follow 15 days later.

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

Vincent DeRose
613.237.8862
vderose@tradeisds.com

Greg Tereposky
613.237.1210
gtereposky@tradeisds.com

 

Canada Initiates AD and CVD Investigations Against Certain Sucker Rods from China

On May 18, 2018, the Canada Border Services Agency initiated investigations under the Special Import Measures Act, respecting the alleged injurious dumping and subsidizing of certain sucker rods from China. Sucker rods, commonly used in the oil industry, are steel rods used to connect the surface and downhole components of a rod pumping system. They are typically threaded at both ends to enable the downhole components to be run and retrieved easily.

The investigations follow a complaint filed by Dover Canada ULC – Alberta Oil Tool Division.

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

Vincent DeRose
613.237.8862
vderose@tradeisds.com

Greg Tereposky
613.237.1210
gtereposky@tradeisds.com