Where an investigation has not been terminated, a preliminary determination is made. The decision is made after the 60th day but on or before the 90th day following the date of initiation of the investigation, subject to the provisions previously noted regarding time limit extensions. Written notice of the decision is sent to all parties involved in the investigation and is published in the Canada Gazette. The CBSA will issue reasons for its decision 15 days later.

At the time of making a preliminary determination of dumping or subsidizing, the President:

• - estimates the margin of dumping or the amount of subsidy for each exporter of the goods, using the information available;
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• - specifies or describes the goods to which the determination applies;
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• - where the subsidy is in whole or in part a prohibited subsidy, estimates the amount which is a prohibited subsidy; and
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• - informs the Tribunal of the preliminary results of the investigation in order that it may commence its final inquiry as to whether injury is being caused to production in Canada.
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The President may in making a preliminary determination, using the information available, make the determination that the margin of dumping of, or the amount of subsidy on, the goods of an exporter is insignificant. Where such a determination is made, the investigation in respect of those goods continues but provisional duties will not be imposed on the goods. A margin of dumping less than 2% of the export price and an amount of subsidy less than 1% of the export price are normally considered insignificant. A margin of dumping or amount of subsidy that is equivalent to 0% of the export price of the goods is considered to be insignificant.

The term "available" is interpreted to mean furnished and verified whenever necessary. Therefore, for the purpose of the preliminary determination, the President bases the estimate on information which has been furnished to the CBSA by various sources, for example, complainants, exporters, importers, and other government departments, which is believed to be reliable. If an approximation is necessary because sufficient information has not been received at the time the preliminary determination is made, an estimate may be made using the information which is on hand.

With respect to subsidies, the CBSA is required to identify which portion, if any, of the subsidy is a prohibited subsidy as defined in the Act. SIMA permits retroactive application of countervailing duties in some cases where certain prohibited subsidies are provided.

(A) Designation of the importer

The President must specify the importer or importers of the goods at the time of making the preliminary determination. The requirement that the identity of the importer be established at the time of the preliminary determination is related to specific appeal procedures contained in SIMA under which any interested person may appeal to the Tribunal if it disagrees with the CBSA's designation of who is the importer. However, failure to identify any importer at this stage does not affect that importer's future liability under the legislation. For example, if an importer is only identified after the preliminary determination, the fact that the importer was not specified has no effect on the application of the legislation to the goods imported by that importer.

(B) Assessment of provisional duties

Generally, where the President makes a preliminary determination and considers that the imposition of duty is necessary to prevent injury, all dumped or subsidized imports from the countries involved in the investigation are subject to provisional duty. The provisional period starts on the date that the preliminary determination is made and ends on the earlier of the date that the President causes the investigation in respect of the goods of a particular exporter to be terminated or the date that the Tribunal issues its final decision on the matter of injury to Canadian production.

However, as mentioned above, if in making a preliminary determination, the President determined that the margin of dumping of, or the amount of subsidy on, the goods of an exporter is insignificant, provisional duties will not be imposed on goods of the same description imported into Canada during the provisional period.

Provisional duties are generally calculated and assessed based on a percentage of the export price of the subject goods imported into Canada during the provisional period. This percentage is equal to the exporter’s margin of dumping and/or amount of subsidy, expressed as a percentage of the export price of the goods, estimated in the President’s preliminary determination. In some situations, specific estimated normal values, or amounts of subsidy, are provided to all exporters that provided substantially complete information to the CBSA in the preliminary investigation. If the exporter ships at prices below the estimated normal values, provisional duty is assessed in an amount equal to the amount by which the estimated normal value exceeds the export price. In the case of subsidized goods, the amount of the provisional duty is the estimated amount of subsidy.

Provisional duty is to be paid at the time of accounting for the goods for Customs purposes, or when assessed by a Customs officer. In the case of provisional duty, the importer may elect to post approved security with Customs to cover the amount of the duty. Depending on the President’s final decision in the investigation or the decision issued by the Tribunal, the amount of duty is returned to the importer or is retained in whole or in part.

(C) Disclosure meetings following a preliminary determination of dumping

At the time of making a preliminary determination, the CBSA provides exporters with a complete explanation of how normal values and export prices were determined. Typically, at the same time, detailed spreadsheets showing these calculations are provided to the exporters.

In addition, the CBSA provides parties with an opportunity to participate in a disclosure meeting with the investigating officers to obtain further explanation of the decisions made in the investigation. The need for transparency, the constraints imposed by the confidential nature of much of the information, and the constraints imposed by the investigative procedures must be taken into account for disclosure meetings purposes as noted in the following paragraphs:

• - On request, after a preliminary determination, CBSA officers will review with individual exporters and foreign governments the calculations used in estimating their respective margin of dumping or amount of subsidy;
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• - The purpose of a disclosure meeting is to fully explain how the information submitted was used by the CBSA. Explanations of all calculations together with the reasoning underlying the calculations are given. Detailed calculation worksheets are provided and discussed, subject to the considerations outlined in the next two paragraphs;
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• - Information submitted by third parties may have been used in the calculations. In these circumstances, if the information has been designated "confidential", it is only divulged to counsel for a party to the proceedings who has signed a disclosure undertaking with the CBSA. If such an undertaking has not been signed by counsel, the results are discussed in general terms only so that confidentiality is not jeopardized;
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• - The approach which the CBSA plans to use for the final portion of the investigation is also discussed in general terms. Any additional informational requirements are explained and arrangements are made for any necessary verification meetings. Arguments made in relation to the dumping margin or subsidy amount or the methodology used in arriving at the estimates for the preliminary determination are considered for the final determination. Information and arguments presented orally by parties must be confirmed in writing as soon as possible after the disclosure meeting.

Source: Canada Border Services Agency