Sections 57.11 to 57.16 of the SIMR outline several factors that may be considered in assessing the various elements of circumvention. No single factor is necessary to prove/disprove an element of circumvention, instead, they will be considered holistically in making a judgement. However, all elements of circumvention must be present for a finding of circumvention to be made. The factors may be considered on a country level or on an exporter-specific level depending on the nature of the investigation.

 

The factors outlined in the sections of SIMR are as follows:

 

1. Change in Pattern of Trade

When determining if there has been a change in the pattern of trade referred to in paragraph 71(a) of SIMA, the CBSA may consider the following factors under section 57.11 of the SIMR:

 

          a. any change in the import volume of subject goods;

 

          b. any change in the import volume of goods that are allegedly circumventing the order or finding;

 

          c. any change in the import volumes of like goods, or the components that can be assembled into like goods, from a country that is named in the applicable order or finding into a third country that is part of the anti-circumvention investigation; and

 

          d. any other factor that is relevant in the circumstances.

 

2. Prescribed Activity

The activities referred to in paragraph 71(b) of SIMA represent the manner in which circumvention may take place. They are prescribed under section 57.12 of the SIMR as follows:

 

a. the assembly or completion of like goods in Canada using parts or components originating in or exported from a country subject to the applicable order or finding. Under this activity,

          a. the parts or components must represent a major portion of the total cost of producing the like goods;

          b. the process of assembling or completing the like good must be insignificant; and

          c. the parts or components from the subject country do not need to be the only ones used to assemble or complete the like goods.

 

b. the assembly or completion of like goods in a third country using parts or components originating in or exported from a country subject to the applicable order or finding. Under this activity,

          a. the parts or components must represent a major portion of the total cost of producing the like goods;

          b. the process of assembling or completing the like goods must be insignificant; and

          c. the parts or components from the subject country do not need to be the only ones used to assemble or complete the like goods.

 

c. the slight modification of like goods originating in or exported from a country subject to the applicable order or finding, whether the modification took place in the subject country or a third country, so that the goods are no longer like goods.

 

3. Significance of the Process of Assembly or Completion

Paragraphs 57.12(a) and (b) of the SIMR require that the processes of assembly or completion be insignificant. For the purpose of determining whether these processes are insignificant, the CBSA may consider the following factors outlined in section 57.13 of SIMR:

 

          a. the nature of the processes;

          b. the nature of the facilities in which the processes are carried out;

          c. the level of investment in Canada or a third country into the processes or facilities;

          d. the level of research and development in Canada or a third country related to the processes;

          e. the costs of the processes in Canada or a third country;

          d. the costs of the processes in Canada or a third country as a proportion of the total cost of production of the assembled or completed like goods; and

          g. any other factor that is relevant in the circumstances.

 

4. Considerations in assessing “slight modifications”

In accordance with section 57.14 of the SIMR, the CBSA may consider the following factors when determining whether a modification of like goods referred to in paragraph 57.12(c) is slight:

 

          a. the physical characteristics of the modified goods and the like goods, including their composition;

          b. the technical specifications of the like goods and the modified goods;

          c. the HS classification numbers attributed to the like goods and the modified goods;

          d. the end uses before and after modification;

       e. substitutability between the modified goods and the like goods as well as consumer preferences in relation to the like goods and the modified goods;

     f. the manner in which the goods are packaged and advertised before and after modification (including promotional material and documentation related to the goods);

          g. the channels of distribution before and after modification;

          h. the differences in production processes, costs and facilities between the modified goods and the like goods;

          i. the cost of the modification and, if it is possible to reverse the modification, the cost of reversing it; and

          j. any other factor that is relevant in the circumstances.

 

5. Undermining the Remedial Effects of Existing Duties

When determining whether imports of goods to which a prescribed activity applies are undermining the remedial effects of duties as referred to in paragraph 71(b) of SIMA, the CBSA may consider the following factors which are set out in section 57.15 of the SIMR:

 

         a. price and volume of the like goods that are assembled or completed in Canada and sold in Canada, or the price and import volume of like goods that are assembled or completed in a third country or of slightly modified like goods;

          b. whether the goods are sold to the same consumers that otherwise may have bought goods subject to the order or finding;

          c. whether the goods have the same end use as the goods subject to the order or finding; and

          d. any other factor that is relevant in the circumstances.

 

6. “Principal Cause” of Change in Trade Pattern

When determining if the principal cause of the change in trade pattern is the imposition of SIMA duties under paragraph 71(c) of SIMA, the CBSA may consider the following factors which are set out in section 57.16 of the SIMR:

 

          a. differences in costs between the goods that are subject to the applicable order or finding and the completed/assembled like goods or the slightly modified like goods;

         b. when the prescribed activity started, or substantially increased, in relation to the day on which an the dumping or subsidy investigation was initiated;

          c. any sales, in a country other than Canada, of the:

                   a. like goods that have been completed or assembled in the third country,

                   b. parts or components that are being sold to Canada or the third county for assembly/completion, or

                   c. slightly modified goods;

          d. changes in consumer preferences;

          e. changes in technology; and

          f. any other factor that is relevant in the circumstances.

Source: Canada Border Services Agency