Canada Gazette, Part I, Volume 152, Number 13: Regulations Amending the Special Import Measures Regulations and the Canadian International Trade Tribunal Regulations

March 31, 2018

Statutory authorities

Special Import Measures Act
Canadian International Trade Tribunal Act

Sponsoring department

Department of Finance

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

Canada's trade remedy laws were last reviewed in 1996. Since then, significant changes have occurred in the global economy. In recent years, there have been heightened concerns regarding the ability of Canada's trade remedy system to address the circumvention of anti-dumping and countervailing (anti-subsidy) duties and to calculate appropriate anti-dumping duty rates in situations where there are price distortions in the domestic market of the country of export.

In Budget 2017, the Government of Canada announced measures to modernize and increase the inclusiveness of the trade remedy system. Regulatory amendments are required to support these measures.

Background

Under World Trade Organization (WTO) rules, when domestic producers are injured by imports that are dumped (i.e. exported at a price lower than prices in the home market or at a price that is below costs) or that have benefited from certain types of government subsidies, anti-dumping or countervailing duties may be imposed to remedy the injury.

In Canada, domestic producers may seek to have anti-dumping and countervailing duties imposed pursuant to the Special Import Measures Act (SIMA) following investigations by the Canada Border Services Agency (CBSA) and the Canadian International Trade Tribunal (CITT), which determine whether imports were dumped or subsidized, and whether such imports injured Canadian producers. These investigations are conducted in an independent, impartial and transparent manner.

In recent years, concerns have been raised by Canadian producers, most notably by the steel industry (which is also the most frequent user of the trade remedy system), that improvements were required to enhance the effectiveness of the trade remedy system. In particular, concerns were raised regarding the need to adopt additional mechanisms to ensure that dumped and unfairly subsidized imports do not enter the Canadian market without the appropriate payment of anti-dumping or countervailing duties, given the growing problem of duty circumvention in global trade. Since many of Canada's key trading partners (e.g. the United States, the European Union and Australia) have established mechanisms to address these challenges, concerns were raised that Canadian producers could be disadvantaged when competing for investments if Canada's trade remedy system was perceived to be weaker and did not offer similar recourse.

In response to these concerns, the Government launched public consultations in summer 2016 to seek stakeholder views regarding potential amendments to SIMA that would help ensure that Canada's trade remedy system continues to provide adequate remedies to domestic producers and operates in a transparent and accessible manner.

Following these consultations, in Budget 2017, the Government announced measures to provide Canadian producers with a more rigorous response to unfair trade, improve the transparency of Canada's trade remedy system and better align Canada's trade remedy system with those of the country's major trading partners. These measures are the following:

• Anti-circumvention investigations: After the imposition of anti-dumping or countervailing duties, foreign producers may attempt to circumvent duties by making slight modifications to, or changing the pattern of production of, exported goods such that the goods no longer fall within the scope of goods on which duties apply.
  Circumvention undermines the effectiveness of the trade remedy system by allowing dumped and unfairly subsidized imports into the Canadian market without the proper assessment of duties. There was previously no mechanism allowing the CBSA to expand the scope of goods on which duties could be applied in order to capture importations of goods that circumvent anti-dumping and countervailing duties.
  Budget 2017 committed to the creation of new anti-circumvention investigations that would allow the CBSA to investigate allegations that anti-dumping and countervailing duties are being circumvented and, where warranted, to extend the scope of the duties to cover importations of goods that are circumventing existing duties.
• Scope proceedings: When enforcing anti-dumping and countervailing duties, the CBSA determines whether imported goods are subject to duties on the basis of the product's description and the country of origin (i.e. whether they are within the scope of the duties). In addition, prior to importation, exporters and importers can request that the CBSA provide informal advice as to whether a particular shipment would likely be subject to duties upon importation.
  However, determinations made upon importation were not public, and other interested parties (e.g. domestic producers) had no way to express views or challenge decisions with which they may have disagreed. Moreover, this informal advice was non-binding (i.e. the CBSA could make a different determination following the actual importation of the goods).
  Budget 2017 committed to providing greater transparency and opportunities for interested parties to participate in this process in two ways:
  • First, a new formal proceeding was created to allow interested parties, including domestic producers, to request a ruling from the CBSA as to whether a particular product is subject to anti-dumping and countervailing duties (i.e. whether it is within the scope of the duties). Unlike previous informal advice provided by the CBSA on scope, the scope proceedings would allow other interested parties to provide their views, and these rulings would be public and binding on the CBSA with respect to future importations of the same product models.
  • Second, interested parties would have the right to appeal re-determinations, made at the second level of review, by the CBSA on whether a product that has already been imported is or is not within the scope of the duties.
  These measures will provide interested parties with due process rights to fully defend their interests.
• Addressing price distortions: In anti-dumping investigations, dumping margins are normally calculated by comparing the prices of the goods when sold in the domestic market of the exporting country with the prices of goods when sold for export to Canada. However, alternative methodologies could be appropriate for calculating dumping margins if domestic prices in the exporting country do not allow for a proper comparison (i.e. they are distorted). This may arise because of the presence of a "particular market situation," such as where government intervention results in price distortion. Prior to Budget 2017, there was no flexibility in SIMA for the CBSA to disregard prices in the domestic market of the exporting country because of distortions in that market.
  Budget 2017 committed to providing the CBSA with the ability to use alternative methodologies when calculating margins of dumping in situations where price distortions in the country of export render those prices unreliable.
• Union participation: Labour unions did not previously have the explicit right to participate in trade remedy proceedings. Budget 2017 committed to providing unions with an explicit right to participate in trade remedy investigations. This measure would improve transparency and allow labour interests to be reflected in Canada's trade remedy system.

The implementation of these measures are in line with recommendations made in the report of the House of Commons Standing Committee on International Trade (the Committee), entitled "The Canadian Steel Industry's Ability to Compete Internationally," which was published on June 15, 2017. The report follows a study conducted by the Committee from October 2016 to March 2017, which included public hearings that heard from 23 witnesses, including representatives from Canadian steel producers, labour unions, trade associations, steel users and federal government officials.

The Government responded positively to the Committee report's six recommendations for improving Canada's trade remedy system. In particular, the Committee recommended that the Government reserve the right to use methods other than prices in the exporting country's market to establish the dumping margin when foreign companies cannot prove that they are operating under market economy conditions; that the Government grant labour unions an expanded role in Canada's trade remedy system; and that the Government work with its closest trading partners, particularly the United States, to ensure that those countries and Canada have adequate and effective trade remedy systems in place and that Canada does not become a dumping ground for foreign steel.

To implement the Budget 2017 measures, legislative amendments to SIMA were made through the Budget Implementation Act, 2017, No. 1 (BIA1 2017), which received royal assent on June 22, 2017. No objections were raised by stakeholders during the parliamentary process and the amendments received strong support from the Canadian Steel Producers Association.

To operationalize the legislative changes, amendments to the Special Import Measures Regulations (SIM Regulations) and the Canadian International Trade Tribunal Regulations (CITT Regulations) are required.

The SIM Regulations set out, among other things, the methodology used in anti-dumping and countervailing duty investigations, as well as the information that is required to be submitted in a properly documented complaint.

The CITT Regulations set out, among other things, the factors the CITT must consider when conducting safeguard inquiries and the rules for what constitutes a quorum of the CITT for different types of decisions.

Objectives

The objective of the proposed amendments is to enable the full implementation of measures announced in Budget 2017 and to enhance the effectiveness and inclusiveness of Canada's trade remedy system.

Description

Scope proceedings

The SIM Regulations would be amended to add new provisions that are required to operationalize scope proceedings, specifically to

• Define the "persons" that would have the right to make an application for a scope proceeding (e.g. domestic producers, importers and exporters), to appeal certain decisions made by the CBSA as to whether goods are subject to duties (e.g. domestic producers) and to appeal scope rulings made by the CBSA (e.g. any person who provided information during the proceeding).
• Prescribe the information that applicants would be required to include in an application for a scope ruling (e.g. the name and address of the applicant, a description of the good for which the applicant is seeking a scope ruling and an explanation of the applicant's position as to whether the product should be subject to duties).
• Prescribe the circumstances under which the CBSA could reject an application for a scope ruling (e.g. if the goods subject to the application have not actually been produced or the application is considered frivolous, vexatious or made in bad faith).
• Prescribe the factors that the CBSA would be required to consider in making a scope ruling (e.g. product description, technical specifications, product uses, channels of distribution and production activities).
• Prescribe the circumstances under which the CBSA could extend the period for making a scope ruling (e.g. because of the complexity or novelty of issues or other difficulties, including those related to considering or assessing evidence).
• Prescribe the circumstances under which the CBSA could terminate the scope proceeding without making a scope ruling (e.g. if the CBSA is unable to obtain necessary evidence or assess the accuracy of evidence for making a scope ruling).
• Require the CBSA to publish, on its website, the notice of a re-determination made at the second level of review, concerning whether a good is subject to duties, within 15 days of its decision.
• Prescribe the information that importers would be required to include when making a written request to have a scope ruling applied retroactively to goods that were imported no earlier than two years before the scope ruling took effect.
• Prescribe the circumstances under which the CBSA could review an existing scope ruling (e.g. if the scope of anti-dumping or countervailing duties is amended by the CITT following an interim or expiry review or there has been a material change in circumstances).

As a consequence of the proposed amendments to the SIM Regulations, certain amendments are also being proposed to the CITT Regulations. In particular, the CITT would hear appeals of scope rulings made by the CBSA. Since this would likely result in an increased caseload for the CITT, the proposed amendments to the CITT Regulations would allow one member to constitute a quorum of the CITT for the purpose of hearing appeals made pursuant to SIMA.

This proposed amendment would provide the CITT with additional flexibility for managing its caseload, since it would no longer require the attention of three members to hear cases (i.e. the other two members could hear different cases), and could result in a more expedient resolution of cases as members are more available to hear additional cases. This proposed amendment would align with the CITT's existing practice concerning appeals made under the Customs Act.

Anti-circumvention investigations

The SIM Regulations would be amended to add new provisions that are required for the operationalization of anti-circumvention investigations, specifically to

• Prescribe the activities that would constitute circumvention (i.e. assembly or completion of goods in Canada or a third country using parts or components from a subject country, or the slight modification of goods).
• Prescribe the factors that the CBSA could consider in determining whether the processes of assembly or completion of goods, using parts or components, in Canada or a third country are insignificant or whether the modification of the goods is slight (e.g. differences in the costs of production and the facilities required).
• Prescribe the factors that the CBSA could consider in determining whether there has been a change in the pattern of trade (e.g. change in the volume of imports into Canada).
• Prescribe the factors that the CBSA could consider in determining whether imports of goods to which a circumvention activity applies are undermining the remedial effects of existing anti-dumping and countervailing duties (e.g. the price of goods sold in Canada and whether those imports are sold to consumers who otherwise would have bought goods that are subject to duties).
• Prescribe the factors that the CBSA could consider in determining whether the principal cause of a change in trade pattern is the imposition of anti-dumping or countervailing duties (e.g. timing of the change in trade pattern).
• Prescribe the information that complainants would be required to include when submitting a complaint to the CBSA in respect of the alleged circumvention of existing duties (e.g. the name and address of the complainant and an explanation of the alleged circumvention).
• Prescribe the circumstances under which the CBSA could extend the period for making a decision in an investigation (e.g. in light of the complexity or novelty of issues).
• Require the CBSA to publish, on its website, reasons for various decisions (e.g. initiation of an investigation or findings following an investigation) and the statement of essential facts.
• Prescribe the information that exporters would be required to include when making a request to be exempted from the extension of anti-dumping and countervailing duties (e.g. the name and address of the applicant and justifications for the exemption).
• Adding the existence of circumvention as a factor that the CBSA could consider in determining whether the expiry of anti-dumping or countervailing duties is likely to result in the continuation or resumption of dumping or subsidizing of subject goods.
• Prescribe the circumstances under which applications and complaints in relation to scope proceedings or anti-circumvention investigations could be joined, as well as the circumstances under which scope proceedings and anti-circumvention investigations, once initiated, could be joined.

Anti-dumping and countervailing duties are applied and collected pursuant to an order made by the CITT. When the CBSA makes a finding of circumvention, the CITT would be required to amend the order that originally established the duties, so that it would cover the goods that are the subject of the CBSA's anti-circumvention decision. This procedure would be entirely consequential, as the CITT would have no discretion to alter the scope of the extension of duties in a different manner than what is set out in the CBSA's determination.

Given the procedural nature of these types of orders, the CITT Regulations would be amended to allow one member to constitute a quorum of the CITT for the purpose of making an order to give effect to the CBSA's determination of circumvention, in contrast to the three members that usually constitute a quorum for trade remedy inquiries.

Addressing price distortions

When calculating margins of dumping, the CBSA normally compares the prices charged in the exporter's domestic market with the prices charged when it exports to Canada. WTO rules allow the investigating authority to disregard certain sales in the exporter's domestic market for various reasons, including the existence of a "particular market situation." A "particular market situation" may exist where there is government intervention in the market that distorts prices so that they are artificially low, such that they are not appropriate to use for the price comparison.

Changes were made to SIMA through the BIA1 2017 to allow the CBSA to disregard sales in the exporter's domestic market where a "particular market situation" exists for the purpose of determining the price of goods in the exporting market. These changes allow the CBSA to use an alternative methodology to determine prices charged in the exporting market by calculating the cost to produce the good, and adding reasonable amounts for selling, general and administration costs and profit.

As a consequence of these changes, it is necessary to change the meaning of a "reasonable amount of profit" for the purpose of SIMA, which is set out in certain provisions of the SIM Regulations. A consequential amendment would allow the CBSA to disregard sales in the exporter's market where a particular market situation exists in determining the reasonable amount of profit when constructing the price charged in the exporter's domestic market.

Union participation

The SIM Regulations would be amended to require that domestic producers include a list of relevant unions in dumping and subsidizing complaints and to add unions to the list of parties ("person interested") that may make representations to the CITT in public interest inquiries.

The CITT Regulations would also be amended to add unions to the definition of parties ("other interested party") that may make representations for the purpose of safeguard proceedings.

"One-for-One" Rule

The proposed amendments would prescribe the specific information that must be contained in written applications that would be made to the CBSA by Canadian businesses when requesting the initiation of a scope proceeding or the retroactive application of a scope ruling; when appealing decisions of the CBSA on whether goods are subject to duties; and when requesting the initiation of an anti-circumvention investigation. The level of administrative burden associated with the application process would be the same as what is required for other types of proceedings provided for under SIMA (e.g. filing a complaint for dumping investigations).

However, the proposed amendments provide Canadian businesses with the opportunity to voluntarily request remedial action. Any business that chooses to make use of these recourse mechanisms would also voluntarily choose to take on the associated incremental administrative burden of their own accord. Therefore, the "One-for-One" Rule does not apply to these amendments.

Small business lens

The small business lens does not apply to these amendments, as there would be no costs imposed on small business.

Consultation

In 2016, Finance Canada launched public consultations to seek stakeholders' views on whether changes to SIMA would help ensure that the trade remedy system continues to provide adequate remedies to domestic producers and to operate in a transparent and accessible manner. A detailed consultation paper was published in the Canada Gazette, Part I, on April 30, 2016, that specifically solicited comments on proposed measures being considered by the Government of Canada on the establishment of scope proceedings and anti-circumvention investigations, as well as how to address price distortions.

A total of 46 submissions were received from a broad range of stakeholders, including Canadian businesses and business associations, foreign business associations, municipal governments, trade unions, law firms and members of Parliament.

Canadian steel producers and other users of the trade remedy system, who accounted for the majority of submissions received, were supportive of these measures, which served to address the continued impact of dumped and subsidized goods in the Canadian market. In contrast, submissions from counsel representing importer and exporter interests generally opposed measures that could allow the CBSA to extend the scope of anti-dumping and countervailing duties. Although the consultation paper did not specifically propose to include unions in the list of eligible participants in CITT proceedings, unions also made submissions requesting that they be granted the right to participate in trade remedy proceedings.

The measures announced by the Government in Budget 2017 were informed by this consultation process and include proposed measures that received broad support from stakeholders. During the development of these regulatory amendments, the views of stakeholders on the broader policy approach for improving Canada's trade remedy system were also taken into account.

Rationale

These amendments are needed to support the full implementation of the legislative changes made to SIMA through the BIA1 2017. The legislative changes, and supporting regulatory amendments, would serve to improve the effectiveness of Canada's trade remedy system by ensuring that anti-dumping and countervailing duties are not circumvented and that margins of dumping account for market distortions in the country of export.

The establishment of two new enforcement proceedings (i.e. scope and anti-circumvention) would also allow the CBSA to better enforce trade remedy measures. In particular, the scope proceedings would allow interested parties to inform decisions made by the CBSA concerning whether certain goods are subject to anti-dumping or countervailing duties. The anti-circumvention investigations would allow domestic producers to request that the CBSA investigate whether certain goods are being imported for the specific purpose of circumventing existing duties and undermining the remedial effect of duties. If warranted, the scope of existing duties may be extended to address circumvention.

In addition, provisions concerning price distortions in the country of export would allow the CBSA to better account for the effects of particular market situations when it calculates margins of dumping.

These measures would provide Canadian producers with access to similar mechanisms as those available to the producers of trading partners who are also major users of trade remedies (e.g. Australia, the European Union and the United States). This would ensure that Canada's trade remedy system is able to offer comparable levels of protection for domestic producers from the injurious effects of unfair trade. In this regard, alignment of measures with Canada's trading partners would allow Canadian producers to be more competitive in attracting investments.

Other stakeholders implicated in Canada's trade remedy system would also be expected to benefit through increased transparency and inclusiveness. Unions would be able to participate in trade remedy proceedings, which would allow workers' interests to be fully reflected. Further, importers could also benefit from the predictability afforded by the binding rulings made by the CBSA through a scope proceeding. These amendments would not result in any reduction of parties' existing rights.

The net resource implications for the CBSA as a result of the coming into force of the legislation and the supporting regulatory amendments would depend on the caseload generated by the new scope proceedings and anti-circumvention investigations, and the extent to which these proceedings would result in a decrease in the number of dumping or subsidizing complaints, given that domestic industries may be able to use circumvention proceedings instead of filing a new complaint to address circumvention.

Moreover, these proceedings were designed in a manner that would provide the CBSA with additional flexibility to manage its resources by allowing the CBSA to extend the timelines for conducting these proceedings when a particular case is complex or when there is a large variety of goods or number of interested parties involved in the proceeding.

Implementation, enforcement and service standards

The CBSA and the CITT would administer and interpret these amendments in the course of their administration of SIMA. The amendments made to SIMA through the BIA1 2017 and these regulatory amendments would come into force on the day after the day on which the Order in Council bringing the SIMA amendments into force is made.

Guidance on the process and the requirements that must be fulfilled by interested parties requesting the initiation of a scope proceeding or an anti-circumvention investigation would be published on the CBSA website following the coming into force of these amendments.

Contact

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, on the recommendation of the Minister of Finance, proposes to make the annexed Regulations Amending the Special Import Measures Regulations and the Canadian International Trade Tribunal Regulations pursuant to

(a) subsection 97(1)^{footnote a} of the Special Import Measures Act^{footnote b}; and

(b) section 40^{footnote c} of the Canadian International Trade Tribunal Act^{footnote d}.

Interested persons may make representations concerning the proposed Regulations within 15 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Alan Ho, International Trade Policy Division, Department of Finance, Ottawa, Ontario K1A 0G5 (email: alan.ho@canada.ca).

Ottawa, March 22, 2018

Jurica Čapkun
Assistant Clerk of the Privy Council

Regulations Amending the Special Import Measures Regulations and the Canadian International Trade Tribunal Regulations

Special Import Measures Act

Special Import Measures Regulations

1 Paragraph 13(a) of the Special Import Measures Regulations ^{footnote 1} is replaced by the following:

• (a) sales that are such as to permit a proper comparison are sales, other than any sale referred to in subsection 16(2) of the Act, that satisfy the greatest number of the conditions set out in paragraphs 15(a) to (e) of the Act, taking into account subsection 16(1) of the Act;

2 Section 37 of the Regulations is amended by adding the following after paragraph (b):

• (b.1) a list of the trade unions that represent persons employed in the production of like goods in Canada and the associations that include such trade unions, whom the complainant knows of;

3 Subsection 37.2(1) of the Regulations is amended by adding the following after paragraph (b):

• (b.1) whether there has been a decision setting out a finding of circumvention in respect of the order or finding that is subject to the expiry review or in respect of similar goods to the goods to which that order or finding applies;

4 The heading before section 38 and sections 38 to 40 of the Regulations are replaced by the following:

Joinder of Investigations and Proceedings

38 Subject to section 39, if the same goods, like goods or similar goods are

• (a) subject to more than one properly documented complaint in relation to the dumping or subsidizing of goods, the President may join the complaints for the purpose of initiating a single investigation;
• (b) subject to more than one preliminary inquiry, the Tribunal may join the preliminary inquiries and carry them out as a single preliminary inquiry;
• (c) subject to more than one dumping investigation or subsidy investigation, or one or more dumping investigations and one or more subsidy investigations, the President may join the investigations and carry them out as a single investigation;
• (d) subject to more than one application for a scope ruling, the President may join the applications for the purpose of initiating a single scope proceeding;
• (e) subject to more than one scope proceeding, the President may join the proceedings and carry them out as a single scope proceeding;
• (f) subject to more than one complaint respecting circumvention, the President may join the complaints for the purpose of initiating a single anti-circumvention investigation;
• (g) subject to more than one anti-circumvention investigation, the President may join the investigations and carry them out as a single anti-circumvention investigation;
• (h) subject to one or more applications for a scope ruling and one or more complaints respecting circumvention, the President may join the applications and complaints for the purpose of initiating a single anti-circumvention investigation, which includes consideration of the issue of scope; and
• (i) subject to one or more scope proceedings and one or more anti-circumvention investigations, the President may join the scope proceedings and the investigations and carry them out as a single anti-circumvention investigation, which includes consideration of the issue of scope.

39 (1) An investigation referred to in paragraph 38(c) is not to be joined with another investigation under that paragraph if a preliminary determination of dumping or subsidizing has been made in respect of at least one of those investigations.

(2) An investigation referred to in paragraph 38(g) or (i) is not to be joined with another investigation or proceeding under that paragraph if a statement of essential facts has been published in respect of at least one of those investigations.

40 (1) If complaints are joined under paragraph 38(a), the President shall cause written notice of the joinder to be provided to the complainants and government of each country of export involved in the complaints.

(2) If preliminary inquiries are joined under paragraph 38(b), the Tribunal shall cause written notice of the joinder to be provided to the President and the complainants, importers, exporters and government of each country of export involved in the inquiries.

(3) If investigations are joined under paragraph 38(c), the President shall cause written notice of the joinder to be provided to the Tribunal and the complainants, importers, exporters and government of each country of export involved in the investigations.

(4) If applications or complaints are joined under paragraph 38(d), (f) or (h), the President shall cause written notice of the joinder to be provided to the complainants and applicants involved in them.

(5) If proceedings or investigations are joined under paragraph 38(e), (g) or (i), the President shall cause written notice of the joinder to be provided to the complainants, applicants, importers, exporters, government of each country of export and domestic producers involved in them.

5 (1) Subsection 40.1(1) of the Regulations is replaced by the following:

40.1 (1) A request referred to in subsection 45(1) of the Act shall be made in writing to the Tribunal within 45 days after the issuance of an order or finding by the Tribunal under section 43 of the Act.

(2) Subsection 40.1(4) of the Regulations is replaced by the following:

(4) A request by a person referred to in subsection 45(6) of the Act to make representations to the Tribunal on the question referred to in that subsection shall be made in writing and filed with the Tribunal within 21 days after the date of publication of the notice referred to in subsection 45(2) of the Act.

6 Section 41 of the Regulations is replaced by the following:

41 For the purpose of subsection 45(6) of the Act, person interested means

• (a) a person who is engaged in the production, sale or export of any goods that are the subject of an investigation;
• (b) a person who is engaged in the purchase or import of any goods that are the subject of an investigation, or a trade union that represents persons employed in such purchase or import or an association that includes such trade unions;
• (c) a person who is engaged in the production, purchase or sale of any goods produced in Canada that are like goods in relation to any goods that are the subject of an investigation, or a trade union that represents persons employed in such production, purchase or sale or an association that includes such trade unions;
• (d) a person who is engaged in the production or sale of any goods produced in Canada that are used in the production of like goods in relation to any goods that are the subject of an investigation, or a trade union that represents persons employed in such production or sale or an association that includes such trade unions;
• (e) a person who is acting on behalf of a person referred to in any of paragraphs (a) to (d) or a trade union or association referred to in any of paragraphs (b) to (d);
• (f) a person who is required or authorized by any Act of Parliament or of the legislature of a province to make representations to the Tribunal on the question referred to in subsection 45(6) of the Act;
• (g) a person who is a user of any goods that are like goods in relation to any goods that are the subject of an investigation, or a trade union that represents persons employed by such a user or an association that includes such trade unions; or
• (h) an association whose purpose includes to advocate for consumer interests in Canada.

7 Section 47 of the Regulations is replaced by the following:

47 For the purposes of subsections 56(1.01) and (1.1), 58(1.1) and (2) and 70(1) to (3) of the Act, a request for a re-determination shall be delivered to the Canada Border Services Agency at the address specified on its website.

8 Section 51 of the Regulations is repealed.

9 The Regulations are amended by adding the following after section 52:

52.1 For the purposes of subsections 70(1) to (3) of the Act, a request for a re-determination shall be accompanied by

• (a) a statement that identifies which scope ruling the requester considers applicable to the imported goods;
• (b) arguments to support the requester's position that the scope ruling applies to the imported goods, along with a statement of facts in support of those arguments;
• (c) evidence in support of those arguments and facts; and
• (d) if the requester is the importer of the goods, a copy of
  • (i) the documentation used in accounting for the goods under subsection 32(1), (3) or (5) of the Customs Act, and
  • (ii) for goods that were released prior to accounting, any documentation that was used in making an interim accounting for the goods under subsection 32(2) of the Customs Act that is different from the documentation referred to in subparagraph (i).

52.2 For the purpose of subsection 60.1(2) of the Act, the notice of a re-determination is to be published on the website of the Canada Border Services Agency no later than 15 days after the day on which the re-determination was made.

52.3 (1) For the purpose of subsection 61(1.1) of the Act, interested person means any person who, in the opinion of the Tribunal, has a substantial interest in the matter and any person who

• (a) in respect of an appeal of a re-determination, is a domestic producer of like goods in relation to goods that are subject to the applicable order of the Governor in Council or order or finding of the Tribunal; and
• (b) in respect of an appeal of a scope ruling or an amendment to a scope ruling, provided information to the President for the purpose of either the proceeding that resulted in the scope ruling or the review that resulted in the amendment, or both.

(2) For the purpose of subsection 63(1) of the Act, interested person means

• (a) any person who is, or may become,
  • (i) an importer of goods that are or could be subject to the applicable order of the Governor in Council, order or finding of the Tribunal or undertaking, or
  • (ii) an exporter of such goods;
• (b) a foreign producer of such goods;
• (c) a domestic producer of like goods in relation to goods that are subject to the applicable order, finding or undertaking; or
• (d) any person who, in the opinion of the President, has a substantial interest in the matter.

(3) For the purpose of subsection 67(4) of the Act, interested person means any person who provided information to the President for the purpose of the review of the scope ruling.

10 The portion of section 53 of the Regulations before paragraph (a) is replaced by the following:

53 For the purposes of the definition government of a NAFTA country in subsection 2(1) of the Act, the following are prescribed departments for the purposes of subsections 56(1.01), 58(1.1), 59(3.1) and 70(1) to (3) of the Act:

11 The Regulations are amended by adding the following before section 54:

Official Publication

12 The Regulations are amended by adding the following after section 54:

Scope Ruling

54.1 An application for a scope ruling referred to in subsection 63(1) of the Act is complete if it contains the following information:

• (a) in all cases,
  • (i) the name and civic address and, if different, postal address of the interested person,
  • (ii) an indication as to which of subparagraph 52.3(2)(a)(i) or (ii) or of paragraph 52.3(2)(b), (c) or (d) describes the interested person,
  • (iii) an indication of any order of the Governor in Council, order or finding of the Tribunal and undertaking in respect of which an investigation has been suspended, for which the ruling is applied for,
  • (iv) an indication as to the claim in respect of whether the goods for which the ruling is applied for are of the same description as goods to which the applicable order, finding or undertaking referred to in subparagraph (iii) applies, along with arguments and documents in support of the claim,
  • (v) a description of the goods for which the ruling is applied for, notably a description of their physical characteristics, their composition, their uses, their packaging, including any other goods contained in the packaging, along with, if any, their technical specifications and their trade name,
  • (vi) each of the classification numbers under the Harmonized Commodity Description and Coding System attributed to the goods for which the ruling is applied for,
  • (vii) an indication as to whether those goods have been sold or consigned to an importer in Canada and whether those goods have been imported,
  • (viii) the name and civic address and, if different, postal address of each importer in Canada of those goods, if known,
  • (ix) the name and civic address and, if different, postal address of each producer and exporter of those goods, if known,
  • (x) the name and civic address and, if different, postal address of each domestic producer of like goods, and of any association of those domestic producers, if known, and
  • (xi) any other relevant information; and
• (b) if the basis for the ruling that is applied for is a claim as to whether the goods for which the ruling is applied for originate in a country that is subject to the applicable order, finding or undertaking referred to in subparagraph (a)(iii) or originate in a third country,
  • (i) the name of the subject country and the third country,
  • (ii) a description, at the time of their export from the subject country, of goods from which the goods for which the ruling is applied for are produced,
  • (iii) the name and civic address and, if different, postal address, of each producer and exporter of the goods for which their description is required by subparagraph (ii), if known,
  • (iv) a description of the movement of the goods for which their description is required by subparagraph (a)(v) from the third country to Canada and by subparagraph (ii) from the subject country to the third country, including a specification of any intermediate country that they entered and left or through which they were transhipped en route,
  • (v) a description of production activities, undertaken in the subject country, the third country and any intermediate country, in relation to goods for which their description is required by subparagraph (a)(v) and subparagraph (ii), and
  • (vi) any other relevant information.

54.2 For the purpose of subsection 63(4) of the Act, the President shall reject an application for a scope ruling if the application is incomplete or there is a scope ruling that applies to the goods for which the ruling is applied for.

54.3 For the purpose of subsection 63(5) of the Act, the President may reject an application for a scope ruling if any of the following circumstances apply:

• (a) the goods for which the ruling is applied for have not been produced as of the day on which the application is received;
• (b) the basis for which the ruling is applied for is the subject of a proceeding before the President, the Tribunal, the Federal Court of Appeal, the Supreme Court of Canada or a panel under Part I.1 or II of the Act;
• (c) following a decision setting out a finding of circumvention, the Tribunal makes an amending order referred to in section 75.3 of the Act that applies to the goods for which the ruling is applied for;
• (d) a decision by the Tribunal, the Federal Court of Appeal, the Supreme Court of Canada, or a panel under Part I.1 or II of the Act, applies to the ruling that is applied for; and
• (e) in the opinion of the President, the application is frivolous, vexatious or made in bad faith.

54.4 For the purpose of subsection 66(2) of the Act, the President may extend the period for making a scope ruling to 210 days if any of the following circumstances apply:

• (a) the issues presented by the scope proceeding are complex or novel;
• (b) it is difficult to obtain satisfactory evidence or to assess the accuracy of evidence; and
• (c) it is difficult to consider the information and evidence in light of the variety of goods in respect of which the scope proceeding has been initiated, the number of persons involved in the proceeding or any unusual difficulties.

54.5 For the purpose of subsection 66(3) of the Act, the President may terminate a scope proceeding if any of the following circumstances apply:

• (a) the President is unable to obtain necessary evidence or assess the accuracy of evidence;
• (b) in the opinion of the President, there are no grounds for making the scope ruling;
• (c) there is a scope ruling that applies to the goods in respect of which the scope proceeding has been initiated; and
• (d) a circumstance referred to in any of paragraphs 54.3(b) to (d) arises after the initiation of the proceeding.

54.6 For the purpose of subsection 66(6) of the Act, the President may take the following factors into account in making a scope ruling:

• (a) in all cases,
  • (i) the physical characteristics of the goods in respect of which the scope proceeding has been initiated, including their composition,
  • (ii) their technical specifications,
  • (iii) their uses,
  • (iv) their packaging, including any other goods contained in the packaging, along with the promotional material and documentation concerning the goods in respect of which the scope proceeding has been initiated, and
  • (v) their channels of distribution;
• (b) for a ruling as to whether goods in respect of which the scope proceeding has been initiated are of the same description as goods to which an order of the Governor in Council or an order or finding of the Tribunal applies,
  • (i) the description of the goods referred to in that order or that order or finding,
  • (ii) in the case of an order or finding of the Tribunal, the reasons for the order or finding, and
  • (iii) any relevant decision by the Tribunal, the Federal Court of Appeal, the Supreme Court of Canada, or a panel under Part I.1 or II of the Act;
• (c) for a ruling as to whether goods in respect of which the scope proceeding has been initiated are of the same description as goods to which an undertaking applies,
  • (i) the description of the goods referred to in the preliminary determination of dumping or subsidizing and in the undertaking, and
  • (ii) the reasons for the preliminary determination; and
• (d) if the basis for a ruling referred to in paragraph (b) or (c) is whether goods in respect of which the scope proceeding has been initiated originate in a country that is subject to the applicable order, finding or undertaking or originate in a third country,
  • (i) the production activities undertaken in the third country in respect of the goods and undertaken in the subject country in respect of goods from which the goods are produced,
  • (ii) the nature of the goods when they were exported from the third country and of goods from which the goods are produced when they were exported from the subject country, and
  • (iii) the costs of production of the goods incurred in the third country.

54.7 For the purpose of subsection 67(2) of the Act, the President may review a scope ruling in any of the following circumstances:

• (a) an order or finding is issued by the Tribunal with respect to goods of the same description as goods to which the ruling applies except that those goods originate in, or are exported from, a country that is different from a subject country in the ruling;
• (b) an order made under subsection 76.01(5) or 76.03(12) of the Act affects the ruling;
• (c) an order or finding made under subsection 61(3) or 62(2) of the Act relates to the scope ruling or a definitive decision that relates to the scope ruling is referred back under subsection 77.015(3) or (4), 77.019(5), 77.15(3) or (4) or 77.19(4) of the Act;
• (d) a decision referred to in subsection 75.1(1) of the Act sets out a finding of circumvention that relates to the scope ruling;
• (e) the ruling is based on erroneous information; and
• (f) there has been a material change in circumstances since the ruling was made.

Expedited Review

13 (1) The portion of subsection 55(1) of the Regulations before paragraph (a) is replaced by the following:

55 (1) For the purpose of subsection 13.2(2) of the Act, a request for a review shall contain the following information:

(2) Subsection 55(2) of the Regulations is replaced by the following:

(2) A request for a review shall be delivered to the Canada Border Services Agency at the address specified on its website.

14 The Regulations are amended by adding the following after section 57.1:

Anti-circumvention Investigations

57.11 For the purpose of paragraph 71(a) of the Act, the following factors may be considered in determining whether there has been a change in the pattern of trade:

• (a) any change in the volume of imports into Canada of goods subject to the applicable order of the Governor in Council or the applicable order or finding of the Tribunal;
• (b) any change in the volume of imports into Canada of goods in respect of which circumvention may be occurring;
• (c) any change in the volume of imports — from the country named in that applicable order or order or finding into the country from which goods referred to in paragraph (b) originate or are exported — of
  • (i) like goods in relation to goods referred to in paragraph (a), or
  • (ii) parts or components from which like goods referred to in subparagraph (i) are assembled or completed; and
• (d) any other relevant factor.

57.12 For the purpose of paragraph 71(b) of the Act, the following activities are prescribed:

• (a) the assembly or completion of like goods in Canada, by means of insignificant processes, using parts or components — that represent a major portion of the total cost of producing the like goods — originating in or exported from a country that is subject to the applicable order of the Governor in Council or the applicable order or finding of the Tribunal, whether or not those parts or components are the only ones used to assemble or complete the like goods in Canada;
• (b) the assembly or completion of like goods in a third country, by means of insignificant processes, using parts or components — that represent a major portion of the total cost of producing the like goods — originating in or exported from a country that is subject to the applicable order of the Governor in Council or the applicable order or finding of the Tribunal, whether or not those parts or components are the only ones used to assemble or complete the like goods in the third country; and
• (c) the slight modification — in a country that is subject to the applicable order of the Governor in Council or the applicable order or finding of the Tribunal or in a third country — of like goods originating in or exported from that subject country such that the slightly modified goods are no longer like goods.

57.13 The following factors may be considered in determining whether the processes of assembly or completion of the like goods referred to in paragraph 57.12(a) or (b) are insignificant:

• (a) the nature of those processes;
• (b) the nature of the facilities used to carry out those processes;
• (c) the level of investment related to those processes and to those facilities;
• (d) the level of research and development related to those processes;
• (e) the costs of those processes;
• (f) the proportion of those costs in relation to the cost of production of the like goods; and
• (g) any other relevant factor.

57.14 The following factors may be considered in 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 modified goods and the like goods;
• (c) each of the classification numbers under the Harmonized Commodity Description and Coding System attributed to the modified goods and the like goods;
• (d) the uses of the modified goods and the like goods;
• (e) the extent to which the modified goods could be substituted for the like goods and consumer preferences in relation to the modified goods and the like goods;
• (f) the packaging for the modified goods and the like goods, along with the promotional material and documentation concerning the modified goods and the like goods;
• (g) the channels of distribution for the modified goods and the like goods;
• (h) the difference in the processes to produce, the facilities used to produce and the costs of producing 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 relevant factor.

57.15 For the purposes of paragraph 71(b) of the Act, the following factors may be considered in determining whether imports of goods to which an activity referred to in section 57.12 applies are undermining the remedial effects of the applicable order of the Governor in Council or the applicable order or finding of the Tribunal:

• (a) the price and volume of like goods referred to in paragraph 57.12(a) sold in Canada or the price and volume of imports of like goods referred to in paragraph 57.12(b) or of slightly modified goods referred to in paragraph 57.12(c);
• (b) whether the goods referred to in paragraph (a) are sold to consumers that otherwise may have bought goods that are subject to the applicable order of the Governor in Council or the applicable order or finding of the Tribunal;
• (c) whether the goods referred to in paragraph (a) have the same use as goods that are subject to the applicable order of the Governor in Council or the applicable order or finding of the Tribunal; and
• (d) any other relevant factor.

57.16 For the purpose of paragraph 71(c) of the Act, the following factors may be considered in determining the principal cause of a change in trade pattern:

• (a) a difference in costs in respect of
  • (i) goods that are subject to the applicable order of the Governor in Council or the applicable order or finding of the Tribunal, and
  • (ii) the like goods referred to in paragraph 57.12(a) or (b) or the slightly modified goods referred to in paragraph 57.12(c);
• (b) the timing of when an activity referred to in section 57.12 began or substantially increased in relation to the day on which an order imposing a countervailing duty was made under section 7 of the Act or an investigation was initiated under section 31 of the Act, as the case may be;
• (c) the sale, in a country other than Canada, of like goods referred to in paragraph 57.12(b), of parts or components referred to in paragraph 57.12(a) or (b) or of slightly modified goods referred to in paragraph 57.12(c);
• (d) a change in consumer preferences in relation to goods referred to in subparagraph (a)(i) or (ii) or to parts or components referred to in paragraph 57.12(a);
• (e) a change in technology related to the production of goods referred to in subparagraph (a)(i) or (ii); and
• (f) any other relevant factor.

57.17 For the purpose of subsection 72(3) of the Act, a complaint in respect of the alleged circumvention of an order of the Governor in Council or an order or finding of the Tribunal shall contain the following information:

• (a) an indication of that order or that order or finding;
• (b) an explanation of the allegations, including a description of the goods whose importation is alleged to circumvent that order or that order or finding;
• (c) the name and civic address and, if different, postal address of the complainant, along with an indication of whether the complainant is an importer, exporter or producer of goods that are subject to that order or that order or finding or like goods in relation to those subject goods;
• (d) the name and civic address and, if different, postal address of each domestic producer of like goods referred to in paragraph (c) and of each association of such producers, if known;
• (e) the name and civic address and, if different, postal address of each producer, exporter and importer of goods referred to in paragraph (b), if known; and
• (f) any other relevant information.

57.18 For the purposes of paragraphs 73(1)(b), 75(3)(c), 75.1(1)(b) and 75.4(7)(c) of the Act, the reasons are to be published on the website of the Canada Border Services Agency.

57.19 (1) For the purpose of subsection 74(1) of the Act, the statement of essential facts is to be published on the website of the Canada Border Services Agency.

(2) For the purpose of subsection 74(2) of the Act, seven days after the day on which that statement is published constitutes sufficient time.

57.2 For the purpose of subsection 75.2(1) of the Act, the period for making a decision may be extended to 240 days in any of the following circumstances:

• (a) the issues presented by the anti-circumvention investigation are complex or novel;
• (b) it is difficult to obtain satisfactory evidence or to assess the accuracy of evidence;
• (c) it is unusually difficult to determine whether the investigation ought to be terminated under subsection 75(1) of the Act; and
• (d) it is difficult to consider the information and evidence in light of the variety of goods in respect of which the investigation was initiated, the number of persons involved in the investigation or any unusual difficulties.

57.21 (1) For the purpose of subsection 75.6(2) of the Act, a request for an exemption from the extension of duties made by an exporter to Canada shall contain the following information:

• (a) the name and civic address and, if different, postal address of the exporter, along with a list of associated persons in relation to the exporter;
• (b) confirmation, along with evidence in support, that the goods for which the request for exemption is made have been sold or consigned to an importer in Canada;
• (c) a detailed description of those goods;
• (d) if the decision setting out a finding of circumvention in respect of the applicable amending order referred to in section 75.3 of the Act is made in respect of a prescribed activity referred to in paragraph 57.12(a), the name and civic address and, if different, the postal address of each producer of parts or components referred to in that paragraph and, if known, the name and civic address and, if different, the postal address of each person that uses those parts or components;
• (e) if the decision setting out a finding of circumvention in respect of the applicable amending order referred to in section 75.3 of the Act is made in respect of a prescribed activity referred to in paragraph 57.12(b), the name and civic address and, if different, the postal address of any exporter or producer of parts or components used to assemble or complete those goods;
• (f) if the decision setting out a finding of circumvention in respect of the applicable amending order referred to in section 75.3 of the Act is made in respect of a prescribed activity referred to in paragraph 57.12(c), the name and civic address and, if different, the postal address of any exporter or producer of like goods that were slightly modified such that they became goods for which the request for exemption is made;
• (g) an indication of the applicable amending order referred to in section 75.3 of the Act; and
• (h) arguments in support of the request, along with supporting evidence.

(2) A request for an exemption shall be delivered to the Canada Border Services Agency at the address specified on its website.

Canadian International Trade Tribunal Act

Canadian International Trade Tribunal Regulations

15 (1) The portion of the definition other interested party before paragraph (a) in section 3 of the Canadian International Trade Tribunal Regulations ^{footnote 2} is replaced by the following:

other interested party, for the purposes of subsections 19.02(2), 25(2), 26(2), (3) and (4), 28(1) and (3), 29(2) and (4), 30(4), 30.01(5) and (8), 30.011(6) and (9), 30.012(7) and (10), 30.06(3), 30.07(2) and (3), 30.09(2), 30.3(2) and 30.31(4) and paragraph 30.32(a) of the Act, means

(2) The definition other interested party in section 3 of the Regulations is amended by adding the following after paragraph (a):

• (a.1) a trade union that represents persons employed in the domestic industry producing like goods or directly competitive goods, or an association that includes such trade unions,

(3) Paragraph (d) of the definition other interested party in section 3 of the Regulations is replaced by the following:

• (d) an association whose purpose includes to advocate for consumer interests in Canada,

16 (1) Paragraph 3.2(b) of the Regulations is replaced by the following:

• (b) hearing, determining, and dealing with any appeal made to the Tribunal pursuant to the Customs Act or the Special Import Measures Act;

(2) Subsection 3.2 of the Regulations is amended by adding "or" after paragraph (c) and adding the following after paragraph (c):

• (d) making an order under any of section 75.3 and subsections 75.4(8) and 75.6(7) of the Special Import Measures Act.

Coming into Force

17 These Regulations come into force on the day on which section 89 of Budget Implementation Act, 2017, No. 1, chapter 20 of the Statutes of Canada, 2017, comes into force, but if they are registered after that day, they come into force on the day on which they are registered.