CBSA Now Applying Important Changes to Canada’s Anti-Dumping and Countervailing Duty Laws that Favour Exporters Who Cooperate in Investigations and are Found to Have Margins of Dumping less than 2% and/or Amounts of Subsidization less than 1%

The Canada Border Services Agency (CBSA) is now applying the changes to the Special Import Measures Act (SIMA) that implement the findings of the WTO panel in Canada – Welded Pipe (DS482). That panel faulted Canada for, among other things, not immediately terminating anti-dumping investigations against individual exporters found in the final determination to have a de minimis margin of dumping (i.e., less than 2 percent of the export price). Canada had previously based the de minimis threshold on the country-wide average margin of dumping. This prevented individual exporters from being excluded from investigations, even if their individual margin of dumping was de minimis, if the average margin of dumping for all exporters from the same country was above de minimis. Consequently, such exporters were subject to the arduous duty administration, re-investigations and reviews that were ongoing during the life of the duties.

Bill C-44, which was assented to on 22 June 2017, amended the SIMA.  One of the amendments requires the President of the CBSA to terminate an investigation against an individual exporter if the final determination of the margin of dumping or amount of subsidy for that exporter is “insignificant”, defined as less than 2% and 1% of export price, respectively. Although not specifically ruled on by the WTO panel, the inclusion of the de minimis threshold for subsidization is a logical extension of the panel’s finding.

On 29 September 2017, the CBSA issued the results of its review of the final determination in Certain Carbon Steel Welded Pipe, the investigation that was the subject of the WTO ruling.  In that review, the CSBA terminated the investigation against two steel companies found to have insignificant margins of dumping in the original final determination, although the anti-dumping duties remained in place against other exporters from Chinese Taipei.

On 3 October 2017, the CBSA terminated the investigation in Certain Silicon Metal against individual exporters from Brazil, Norway and Thailand because their margins of dumping were insignificant or zero.

The possibility of having an investigation terminated and having the burdens associated with the duties removed is a huge incentive for exporters to fully participate in Canadian anti-dumping and countervailing duty investigations.

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, please contact us.


Greg Tereposky

613.903.7015, ext. 101


Canada-EU Free Trade Agreement Now in Force

On September 21st, the Canada-EU Comprehensive Economic and Trade Agreement (CETA) entered into provisional application, meaning that the majority of its provisions are now in force in Canada. These provisions include, among other benefits:

  • the immediate elimination of most customs duties on imported EU-origin goods to which tariff rates previously applied;
  • guaranteed market access and non-discriminatory treatment for EU firms when they participate in public procurement opportunities at the federal, provincial/territorial, and municipal levels of government in Canada (for contracts above the applicable value thresholds), and equivalent rights for Canadian firms in the European Union;
  • enhanced intellectual property (IP) rights, including new protections for certain geographical indications (GI) identifying goods originating in specific regions (e.g., “Feta cheese” from Greece);
  • and liberalized rights of mobility and temporary stay for key business personnel and investors, independent professionals, and contractual service suppliers visiting Canada from the European Union and vice versa.

In practical terms, what does this mean for business owners and other stakeholders?

In some cases, it will mean new opportunities for trade and commerce. For example, a Canadian retail business can now import leather handbags or wallets from Italy on a duty-free basis. Yesterday, customs duties would have applied to these goods at rates of 10 per cent and 8 per cent, respectively. This represents an opportunity not only for Italian producers, but also for Canadian distributors and retailers. Tariff elimination is even more dramatic on men’s and women’s suits and leather footwear (a drop from 17-18 per cent yesterday to duty free today).

Similarly, EU construction firms will have preferential market access to high-value infrastructure projects procured by municipal governments throughout Canada; none of Canada’s other trading partners have guaranteed access to these opportunities. Until the Government of Canada completes its electronic single point of access for notices of all public procurements at every level of government throughout Canada, information on Canadian opportunities can be accessed through the “Doing Business” hub on the official website of the Canadian Free Trade Agreement (CFTA): Canadian firms will have equivalent access to government procurement opportunities throughout the European Union, which can be identified on the “tenders electronic daily” (TED) website:

The other perspective, however, is that the market access and non-discrimination commitments in the CETA will mean increased competition for Canadian and EU businesses in their local markets, i.e., from the new overseas sources of high-quality or lower-cost goods and services. Thus, in some sectors, the negotiated outcomes of the CETA will mean a shake-up in the existing trade flows and supply chains, as market forces establish the most efficient relationships, structures, and prices. In navigating these changes in the competitive landscape, the businesses that will enjoy the greatest success are those that are most attentive and adaptable to the CETA’s effects.

Market access under the CETA is neither effortless nor without compliance considerations. To take advantage of the new preferential tariff treatment, for example, businesses must ensure that their goods satisfy the requirements set forth in the CETA Protocol on Rules of Origin and Origin Procedures, as implemented into the domestic laws of Canada and the European Union, respectively. This involves determining whether a good produced in Canada or an EU Member State qualifies as “originating” (e.g., pursuant to the applicable tariff shift rules and/or regional value content requirements that constitute “sufficient production”), and ensuring that a declaration of origin is correctly made out and fully supported by the appropriate documentation. If a declaration of CETA origin cannot be substantiated during a customs audit, a business may be required to pay, on a retroactive basis, the standard rates of duty applicable to all shipments that it has imported into Canada. Considering that this liability can extend to all imports going back for a period of up to four years, it is essential for companies to ensure that their declarations of origin are accurate and their record-keeping is precise.

Tereposky & DeRose LLP has undertaken a provision-by-provision analysis of the CETA, closely monitored its implementation into Canadian law, and assessed the opportunities and limitations of the market access and other benefits that it provides to Canadian and EU stakeholders.


Daniel Hohnstein

Tel: 613.903.7015, ext. 104



Parliamentary Standing Committee Calls For Improvements in Canada’s Sanctions Regime

The Standing Committee on International Affairs and International Development recently released its report entitled “A Coherent and Effective Approach to Canada’s Sanctions Regimes: Sergei Magnitsky and Beyond”.

The report looks at the effectiveness of sanctions as a foreign policy tool, and considers the regulatory and administrative structures the Government of Canada has put in place to implement sanctions measures through the Freezing Assets of Corrupt Foreign Officials Act, the Special Economic Measures Act and related legislation. The report goes on to discuss issues related to private sector compliance with sanctions regulations as well as their enforcement by the Government. Thirteen recommendations are made in the report, with a focus on promoting an effective and coherent Canadian sanctions program.

One of Tereposky & DeRose’s partners, Vince DeRose, testified before the Standing Committee. Mr. DeRose’s testimony was relied upon by the Standing Committee in developing several of its recommendations.

Canada’s Sanctions Regime is Complex

The report highlights the complexity of Canada’s sanctions system.

There exist significant differences between sanctions regimes and the variety of measures imposed. These range from blanket prohibitions to sectoral or geographic measures, and those targeting individuals and entities.

The use of multiple pieces of legislation, namely the Freezing Assets of Corrupt Foreign Officials Act, the Special Economic Measures Act, the United Nations Act, the Export and Import Permits Act, further complicates the imposition of sanctions. A given sanctions regime can be governed by a series of regulations, each with their own enabling Act, all of which must be read and interpreted together.

Moreover, this complexity extends into the administration of Canada’s sanctions system, which has both domestic and international elements, and involves law enforcement, financial regulation and border control.

Restructuring the Administration of Canada’s Sanctions Regime

While the government enacts and administers Canada’s sanctions regimes, its effectiveness ultimately rests with the private sector.

Private sector firms must have a clear understanding of the scope of sanctions measures – including clear understandings of both the restriction put in place and related exceptions. Vagueness and lack of clarity result in over-compliance, wherein firms and individuals choose to follow the safest or broadest interpretation of a measure to avoid risking punishment for non-compliance. The cost of complying with sanctions regulations also affects how the private sector chooses to implement sanctions measures.

The more difficult sanctions regulations are to interpret, the greater the risk for over-compliance. The cost of complying with a sanctions regime further amplifies this problem, as Canadian businesses unwilling to bear the compliance costs will turn away legitimate business from a country targeted by sanctions.

While significant, large sophisticated institutions like banks can carry the burden of compliance, smaller businesses, often lack the resources and expertise to do so. Many companies in Canada, particularly small and medium-sized enterprises, do not have sophisticated and expensive control systems in place to ensure that they remain compliant with Canada’s economic sanctions.

The Standing Committee concluded that there is a need to restructure the administration of Canada’s sanctions regime. Changes are needed to better reflect their essentially dual nature – as both a tool of international statecraft and a domestic regulatory system – and to ensure that the proper resources are provided to fulfil both elements of their administration.

A number of witnesses, including Vince DeRose from Tereposky & DeRose, requested written guidance on how programs for compliance with Canadian economic sanctions can be developed and how Canadian companies that have already developed compliance programs can determine whether their existing compliance programs are adequate from the perspective of the Canadian government. The Standing Committee agreed, recommending that the Government of Canada provide comprehensive, publicly available, written guidance to the public and private sectors regarding the interpretation of sanctions regulations to maximize compliance. The Standing Committee also concluded that the Government of Canada should produce and maintain a comprehensive, public and easily accessible list of all individuals and entities targeted by Canadian sanctions containing all information necessary to assist with the proper identification of those listed.

In our view, implementation of these recommendations will improve Canada’s sanctions regime. Most importantly, such changes should better facilitate cost-effective compliance with Canada’s sanctions regime by the private sector.

The Enforcement of Sanctions Legislation

The Standing Committee was of the view that criminal violations are likely occurring and going uninvestigated.

The Standing Committee also observed that the reasons why so few criminal investigations and prosecutions for sanctions violations have occurred was not fully answered by testimony. Neither the RCMP nor CBSA representatives suggested that any aspect of the legislation impeded prosecutions, nor was this suggestion made by any other witness.

The testimony from a number of witnesses supported a conclusion that the lack of investigations arose because of the combination of lack or resources, the prioritization of investigations by the RCMP with focus placed on anti-terrorism and violent crime, and a general expectation and assumption by the government that Canadian companies will comply with Canadian law.

The Standing Committee concluded that the proper enforcement of sanctions measures is critical to the overall effectiveness of Canada’s sanctions regimes and that the Government should make enforcement a priority. The Standing Committee recommended that the Government ensure that law enforcement agencies highly prioritize the enforcement of sanctions measures and are given the necessary resources to fulfil their duties.

As this recommendation is implemented, it will become more important than ever for Canadian businesses to ensure compliance with Canada’s sanctions regime.

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 or Jennifer Radford at:


Vince DeRose

613.903.7015, ext. 102


Jennifer Radford

613.903.7015, ext. 193

Canada–US Trade Tensions Continue to Intensify with Imposition of a Second Layer of Lumber Tariffs

On June 26, 2017, the U.S. Department of Commerce (Commerce) announced its affirmative preliminary  determination of dumping in the antidumping duty (AD) investigation of imports of softwood lumber from Canada. The AD investigation has been proceeding alongside a countervailing duty (CVD) investigation. The CVD investigation resulted in an affirmative preliminary determination of subsidization on April 24th and the imposition of preliminary countervailing duties ranging from 3-24% on imports of softwood lumber from Canada. The latest determination imposes an additional layer of antidumping duties ranging from 4.59% to 6.87% on those imports.  Thus, the combined duties applied to imports of Canadian softwood lumber now range from approximately 7% to 31%.

Similar to the CVD investigation, Commerce also made a preliminary finding that “critical circumstances” exist with respect to companies subject to the “all others rate” (i.e., all companies other than Canfor, Resolute, Tolko, and West Fraser, the four mandatory respondents). Consequently, the provisional AD duties will be imposed retroactively on entries of softwood lumber from Canada going back 90 days prior to the publication of the preliminary determination in the Federal Register (i.e., back to the end of March).

Finally, Commerce made a preliminary determination that certain softwood lumber products certified by the Atlantic Lumber Board as being first produced in the Provinces of Newfoundland and Labrador, Nova Scotia, or Prince Edward Island (the Atlantic Provinces) from logs harvested in these three provinces should be excluded from both the AD and CVD investigations.

Additional details on the softwood lumber investigation can be found at:


Jennifer Radford
613.903.7015, ext. 103

Dan Hohnstein
613.903.7015, ext. 104

The Consent of the Domestic Industry is Not Enough to Secure an Exclusion from Anti-Dumping Protection

The Canadian International Trade Tribunal recently concluded its inquiry to determine whether dumping of certain fabricated structural steel components (“FISC”) by China, Korea and Spain (and the subsidizing of these goods by China) caused injury or was threatening to cause injury to the Canadian domestic market.

In the inquiry, the Tribunal received requests from six parties to exclude products from a potential finding of injury or threat of injury. After concluding that the dumping of FISC from China, Korea and Spain and subsidizing of it by China had caused injury to the domestic market, the Tribunal went on to consider the exclusion requests. In explaining its findings regarding whether to grant the requests, the Tribunal set out the general principles governing such requests.

The Special Import Measures Act (SIMA) implicitly authorizes the Tribunal to grant exclusions from the scope of a finding.  Exclusion requests are granted at the Tribunal’s discretion, when it is satisfied that the exclusions will not cause injury to the domestic industry. The underpinning rationale is this: despite the general conclusion that the dumping and/or subsidizing of the goods has caused injury to the domestic industry, there may be case-specific evidence that imports of particular products captured by the definition of the goods have not caused injury.

In determining whether an exclusion is likely to cause injury to the domestic industry, the Tribunal considers factors such as whether the domestic industry produces, actively supplies or can produce like goods in relation to the subject goods for which the exclusion is requested.

The onus falls on the requester to demonstrate that imports of the specific goods for which the exclusion is requested will not result in injury. The evidentiary burden is on the requestor to file evidence in support of its request. In turn, if no consent is provided by the domestic industry, the domestic industry must file evidence to rebut the evidence filed by the requester.

The Tribunal clarified that it will exercise its discretion to grant product exclusions based on its assessment of the totality of the evidence on the record. Consents to exclusions, or lack of them, are not evidence.  Moreover, consents do not fetter the Tribunal’s discretion in making such determinations.  Notwithstanding that the domestic industry consented, the Tribunal denied the requests that were not also substantiated with sufficient evidence.

The Tribunal’s findings serve as a strong reminder of the necessity of filing evidence to assist the Tribunal in its assessment of exclusion requests. Domestic industry consent is not enough.

Tereposky & DeRose regularly assists domestic industries, manufacturers, exporters, and importers in navigating the investigation and inquiry processes into dumping and subsidizing.  Should you have any questions regarding this inquiry or dumping and subsidizing issues more generally, we would be pleased to assist you.


Jennifer Radford
613.903.7015, ext. 103

Dan Hohnstein
613.903.7015, ext. 104

Bill C-30 receives Royal Assent; Federal regulatory changes to follow

On Tuesday, May 16th, Bill C-30 — the proposed legislation to implement the Canada-EU Comprehensive and Economic Trade Agreement (CETA) at the federal level — was granted Royal Assent by the Governor General (see Hansard No. 178 (may 16, 2017) at p. 1725). Bill C-30 is now law in Canada, although its provisions will not enter into force until a day (or days) to be fixed by order of the Governor in Council. The date(s) on which the provisions of Bill C-30 enter into force will coincide with the date on which the CETA enters into provisional application as between Canada and the European Union.

The next step for the federal implementation of the CETA in Canada is the process of making the necessary regulatory changes. This process is expected to proceed immediately.

Ordinarily, proposed regulatory changes are pre-published in the Canada Gazette – Part I for a period of public review. The regular edition of Part I is published every Saturday. It is possible, however, that an “extra edition” of Part I will be published before the end of the week in order to expedite the regulatory process.

Any regulatory changes for which an exemption to the pre-publication period has been granted by the Special Committee of Council will be published as law in the Canada Gazette – Part II, without any period for public review. The regular edition of Part II, which is published every other Wednesday, was published earlier today. It did not include any regulatory changes related to the CETA. As the next regular edition of Part II will be published on May 31st, it is reasonable to expect that an “extra edition” of Part II may be published in the meantime for the purposes of CETA implementation.

Tereposky & DeRose is closely monitoring all aspects of CETA implementation.  Please feel free to contact us if you have any questions relating to the matters raised in this article or the CETA more generally.



Dan Hohnstein

613.903.7015, ext. 104