5 Common mistakes companies make when responding to a CBSA dumping or subsidy RFI

As a company engaged in international trade, you may encounter a request for information (RFI) from the Canada Border Services Agency (CBSA) if your goods are suspected of being dumped into the Canadian market. An RFI is a formal request for detailed information about your company and its products, and failure to respond accurately and completely can result in serious consequences. To avoid costly mistakes, here are five common errors that companies make when responding to the CBSA's dumping request for information:

Number 1 - Providing inadequate responses

Providing incomplete or inaccurate responses to the CBSA's RFI is a significant mistake that can result in negative findings. The RFI requires companies to provide comprehensive information about their products, production process, costs, sales and pricing.

When a company omits relevant information or provides inaccurate data, the CBSA will request the missing information and seek clarifications regarding inaccuracies which can lead to additional requests for clarification requiring more time and money investment. In some cases, companies end up having their responses being deemed incomplete as they the CBSA runs out of time to gather the information and complete the verification process before the date of the closing of the record.

To avoid this mistake, companies should ensure that they provide complete and accurate information in their responses to the RFI. The company's management should review the responses carefully to ensure that all relevant information is included and that the information provided is accurate. Providing complete and accurate information can help the company's defense and avoid any negative outcomes.

Number 2 - Missing deadlines

Anti-dumping investigations involve strict timelines that must be followed by both the CBSA and companies involved in the investigation. Missing a deadline can result in significant consequences, such as delays, increased costs, and even a finding of dumping. Therefore, it is critical for companies to carefully review the deadlines provided by the CBSA and ensure that they submit all required information on time.

For example, failing to submit a complete response to a dumping/subsidy RFI by the deadline provided by the CBSA can result in the company being deemed uncooperative, leading to rceiving normal values determined under Ministerial specification, which typically is the highest single normal value found in the country of export..

Don’t forget that late submissions may or may not be considered and it is up to the CBSA’s discretion to determine if it has enough resources available to accept it. To avoid missing deadlines, companies should establish a timeline for responding to the CBSA's requests and ensure that they allocate sufficient time to gather and review all relevant information. It is also recommended that companies engage a trade remedy consultant, such as J.T. Trade Remedies, to assist with the investigation process and ensure that they comply with all deadlines and requirements. By understanding the timelines and complying with the CBSA's requests, companies can avoid potential delays and achieve a more favorable outcome.

Number 3 - Failing to understand the legal framework and how normal values are calculated

Companies can sometimes struggle to understand the legal framework surrounding CBSA's dumping investigation process. Failing to understand the legal framework of anti-dumping investigations can lead to significant mistakes that can harm a company's defense. The Canadian government has established laws and regulations to investigate allegations of dumping, and it is crucial for companies to understand the process, timelines, and legal requirements involved.

Additionally, companies often struggle to differentiate between which costs to include and exclude in certain areas such as General, Selling, and Administrative (GS&A) costs. In general, GS&A costs should include all the normal and necessary costs for producing and selling the subject goods. However, some companies mistakenly include costs that are not relevant, such as capital expenditures, research and development costs, costs for producing goods that are not under investigation, or unusual or one-time expenses that can be excluded. Including these costs in the information provided to the CBSA can artificially inflate the normal values of a company, thus increasing the chances of a finding, and the minimum price at which would be forces to sell subject goods in Canada. It is crucial for companies to understand which costs are appropriate to include and exclude when submitting information to the CBSA to avoid potential mistakes that could result in an unfavorable outcome.

Number 4 - Inadequate internal coordination

Adequate internal coordination is essential for providing accurate and complete responses to the CBSA's RFI. The RFI process requires input from various departments within a company, such as finance, sales, and legal. Failing to coordinate effectively between these departments can lead to inadequate responses or missed deadlines.

For instance, a company's sales department may not have the required information about production costs or pricing that the CBSA requests in the RFI. Inadequate coordination between the sales and finance departments can cause a delay in obtaining the required information, resulting in a missed deadline. Similarly, failure to involve legal experts in the RFI process can lead to incomplete or inaccurate responses, resulting in negative findings.

To avoid this mistake, companies should establish a clear communication plan and involve all relevant departments in the RFI process. The company's management should assign clear roles and responsibilities to each department and set up a timeline for providing the required information. It's essential to maintain ongoing communication and ensure that everyone is aware of the RFI's requirements and deadlines. By coordinating effectively, companies can provide complete and accurate responses to the CBSA's RFI, which can increase their chances of a positive outcome.

Number 5 - Not using the format provided by the CBSA

Another mistake that companies can make when responding to the CBSA's dumping RFI is ignoring the provided Appendices and presenting the information in a different format. The CBSA provides four appendices to companies as part of the RFI, and failing to provide information in the specified format can lead to negative consequences.

According to Annex II of the WTO Anti-dumping agreement, investigative authorities can request a particular medium for responses, as long as it is reasonable. If a company decides not to provide the information in the provided format, the investigative authority may deem the interested party uncooperative and disregard the information provided. It's crucial to follow the CBSA's instructions and provide the information in the specified format to avoid any negative findings.

Conclusion

In conclusion, responding to an RFI from the CBSA is a critical part of any company's international trade strategy. To avoid costly mistakes, it's essential to be thorough, understand the legal framework, coordinate effectively, and seek expert when necessary. By avoiding these common errors and working with experts like J.T. Trade Remedies, you can ensure that your response is accurate, complete, and submitted on time, giving you the best chance of success.