Canada-U.S. Blog

Trade Lawyers Cyndee Todgham Cherniak and Susan K. Ross

Trans-Gender Rights To Be Added To Canada’s Human Rights Code And Suggestions For The CBSA

Posted in Canada's Federal Government

160602_pride-on-parliament_mixed-bag-mag_01On June 15, 2017, Canada’s Senate passed Bill C-16 “An Act to Amend the Canadian Human Rights Act and the Criminal Code” at third reading.  Canada’s Senate has a majority of Conservative Senators. On November 18, 2016, Bill C-16 passed third reading in Canada’s House of Commons.  The Liberals are the majority in the House of Commons.  The last step in Canada’s legislative process is Royal Assent – which should occur very soon.  There is no reason for delay.  Pride month is the right time to memorialize trans-gender and non-binary gender rights into Canada’s human rights laws. Bill C-16 adds  protection of “gender identity and expression” to the Canadian Human Rights Act and Canada’s Criminal Code.

Section 2 of Bill C-16 amends the “purpose” section of the Canadian Human Rights Act.  The purposes of the bill are set out as follows:

“The purpose of this Act is to extend the laws in Canada to give effect, within the purview of matters coming within the legislative authority of Parliament, to the principle that all individuals should have an opportunity equal with other individuals to make for themselves the lives that they are able and wish to have and to have their needs accommodated, consistent with their duties and obligations as members of society, without being hindered in or prevented from doing so by discriminatory practices based on race, national or ethnic origin, colour, religion, age, sex, sexual orientation, gender identity or expression, marital status, family status, disability or conviction for an offence for which a pardon has been granted or in respect of which a record suspension has been ordered.”

Section 3 of Bill C-16 amends the Canadian Human Rights Act to prohibit discrimination on the basis of identity or expression:

“For all purposes of this Act, the prohibited grounds of discrimination are race, national or ethnic origin, colour, religion, age, sex, sexual orientation, gender identity or expression, marital status, family status, disability and conviction for an offence for which a pardon has been granted or in respect of which a record suspension has been ordered.”

Section 4 of Bill C-16 adds to the hate crime provisions of the Criminal Code crimes motivated by prejudice or hate based on “gender identity or expression”, or on any other similar factor.

I cannot add much enlightened insight on the legal elements of Bill C-16 because I have never represented a person who has experienced trans-gender discrimination in a way that warranted legal action – and I am not the type of lawyer who would be asked to do this type of legal work. However, as a customs lawyer, I ask myself whether the Canada Border Services Agency’s (“CBSA”) policies would meet the new human rights requirements.  I want to help start this important dialogue.

I have looked at the CBSA web-site www.cbsa.gc.ca and, surprisingly, I could not locate any LGBT-Q policy on body searches on trans-gender or transitioning or inter-sex individuals at the Canadian border. It is hard to find any information of the CBSA web-site directed at trans-gender travelers.  I am familair with the CBSA web-site.  If I cannot find something, others will not be able to find the policies (or it is not there for any of us to find).

I did find a 2011 McLeans article entitled “Trans-border crossings” and could not believe what I was reading.  I could not find the protocol referred to in the article.  According to the author of that article, according to the protocol:

  1. A trans-gender person may ask to be searched by a male officer;
  2. A trans-gender person may ask to be searched by a female officer; or
  3. A trans-gender person may ask for a “split search”

According to the article, individuals who are “split searched”, would experience the following:

“Two groups of officers perform the search. The person being examined strips the clothes from their upper body, and a team of officers from one sex perform the search. Then, the person puts their top back on and strips off the bottom half of their clothing before a second group of officers of the other sex scrutinizes down there. The whole process is observed by at least one non-participating officer to ensure everything is on the level. For those counting, that’s at least five officers for every split search.”

My response is that cannot be the protocol – really? (actually, I swore a bit).  There is another 2011 article on a trans-gender web-site referring to the protocol that does not provide a link to any protocol.  My first reaction is that the CBSA ties itself into knots with this unavailable protocol.  I can see the desire to be respectful and create an environment in which the trans-gender person has a degree of control over the body examination procedures.  I also think that what is well-intentioned converts into longer wait times (to find the CBSA officers to conduct the search and less privacy (by having 5 sets of hands or eyes involved). What might have been deveoped with the bset of intentions has unintended negative consequences.

If the CBSA does not revisit its policies/protocols for trans-gender individuals and consider the necessary adjustments to comply with Bill C-16, human rights tribunals will review the CBSA policies.  Canadian courts will also weigh in.

There is a way to prevent the unnecessary bad publicity,  The CBSA can take the opportunity to become more transparenct to an increasing trans-gender community. I would like to make the following recommendations to the CBSA (and Minister Goodale), who will have to implement transparent and published policies or protocols that are consistent with the spirit of Bill C-16:

  1. Minister Goodall and the CBSA should consider 5 things – dignity, respect, wait times, frequency and community outreach;
  2. The CBSA should post a page on the CBSA web-site about trans-gender rights at the border and what information will be useful for trans-gender travelers, who are welcome to Canada.  Publicize that Canada is a country that respcts trans-gender individuals by letting people know about the web-site page;
  3. The CBSA should develop a balanced policy on body searches/examinations of trans-gender and transitioning individuals (everyone can be examined/searched at the border for contraband and prohibited goods);
  4. When discussing the CBSA’s trans-gender policy, it should be clear that the trans-gender individual is in charge of deciding how the search should be undertaken.  The trans-gender person is the only person who can decide if he/she wants a male CBSA officer to conduct the search, a female officer to conduct the search or a split search with officers of specified genders.  The traveler cannot choose to not be searched as all travelers may be searched – the trans-gender individual does have power to maintain his/her dignity;
  5. Recognize that a trans-gender or transitioning individual may be intimidated by overly masculine or assertive CBSA officers and may need to speak with a CBSA officer who is more understanding or sensitive to trans-gender issues;
  6. Recognize that a body search of a trans-gender person may be a sensitive matter for both the traveler and the CBSA officer involved and consider whether additional considerations are required before such searches are conducted and whether the searches can be conducted by a more limited number of CBSA officers who have had special training;
  7. Recognize that split searches involve greater wait times for the trans-gender individual.  More officers must be gathered to perform the search.  The CBSA officers should recognize that any human being would be anxious about unknown hands touching the person.  The wait times and number of CBSA offices involved will increase anxiety levels;
  8. Consider what training should be required so that all CBSA officers respond appropriately to trans-gender travelers;
  9. Recognize that the first time a trans-gender person updates his/her NEXUS membership information after making gender identification changes (that is, after changing gender identity) may be stressful to the individual and complicated.  It would be helpful to have guidance on the CBSA web-site as to what information will be required by the CBSA to amend an individuals’ gender for customs purposes.  There should be guidelines as to what documents are needed and will be accepted.  This is not something that should depend on the officer who answers the call or who is at the NEXUS desk;
  10. The CBSA should maintain statistics on searches of transgender individuals and ask whether CBSA profiling causes more trans-gender individuals to be searched.  The statistics should be published on a n annual basis as there needs to be accountability; and
  11. The CBSA should engage in community out-reach and speak directly with the LGBT-Q community about mutual issues.  What the CBSA does not now, it can learn.

We welcome other ideas about what the CBSA can do to make the border-crossing experience better and fair and humane for trans-gender and transitioning individuals.  It is time for this dialogue to occur.  I acknowledge that my comments do not come from personal experiences with clients and I am guessing as to what would be useful.  However, my voice can start the dialogue.  Bill C-16 is the opportunity (because it is 2017 and will be the law).

I am a human being.  I have friends who are trans-gender.  I share this legal development as I share their successes (maybe I share my friends’ successes less publicly).  When you know someone who is trans-gender, you do not walk in their shoes – but, you walk with them and you learn.  We all learn from those around us.  I have some (very small) insights and am continuing to learn.  I have a long way to go to understand the forms of discrimination trans-gender individuals experience.  I am not a subject-matter expert on being a good friend either and will make mistakes that my friends will forgive.

I know the hard part is ahead of Canadians as we must learn from mistakes. Ensuring this new law has the desired effect is the hard part. Admitting to mistakes is the hard part.  Getting the right balance is the hard part. Forgiveness can be hard too.  But, the fact that it will be hard does not mean that we shall not move forward.  The fact that it is hard is the reason to more forward.  Important goals must be reached.

Canada’s Privacy Commissioner Raises Concerns About UPCBP Searches Of Electronic Devices

Posted in Border Security, Canada's Federal Government, Cross-border trade, U.S. Federal Government

Canada-US GlobeOn June 8, 2017, Canada’s Privacy Commissioner sent a letter to the Parliamentary Committee reviewing Bill C-23 “Preclearance Act, 2016” to ask for amendments to cover searches of electronic devices by US Customs and Border Protection in Canada’s Pre-Clearance Areas.  Bill C-23 has passed second reading in Canada’s House of Commons and is currently being considered by the Standing Committee on Public Safety and National Security.  The Standing Committee on Public Safety and National Security has been holding meetings and receiving written and oral testimony concerning Bill C-23.

Canada’s Privacy Commissioner has raised important concerns about searches of electronic devices at the border.  On June 8, 2017, the Privacy Commissioner wrote a second follow-up letter to the Parliamentary Committee and stated, in part:

“The fundamental problem with groundless searches of electronic devices is that these searches do not recognize that they are extremely privacy intrusive. Yet Bill C-23 recognizes the sensitivity of other searches, namely searches of persons, from the relatively un-intrusive frisk or pat-down searches to the more intrusive strip and body cavity searches. These searches legally cannot be performed unless an officer has reasonable grounds to suspect some legal contravention, notably the concealment of goods. In my view, it is extremely clear that searches of electronic devices can generally be much more intrusive than frisk searches, for electronic devices can contain the most personal and intimate information we hold.

The idea that electronic devices should be considered as mere goods and therefore subject to border searches without legal grounds is clearly outdated and does not reflect the realities of modern technology. Border controls are important and legitimate for reasons of sovereignty and public safety, but they should not be exercised arbitrarily. I recommend that Bill C-23 be amended to place border searches of electronic devices on the same footing as searches of persons and therefore their performance should require reasonable grounds to suspect. A consequential amendment to the Customs Act would elevate to a rule of law the Canadian policy which provides that such searches may be conducted only if there are grounds or indications that evidence of contraventions may be found on the digital device or media.

The enforcement of such a rule would still be constrained by the state immunity principle, meaning it could not be enforced in a court of law. But my understanding is that, according to the government, the protections of s.11 would not be completely hollow because in the event of a violation of Canadian law, here a potential requirement for grounds to suspect before the search of an electronic device can be performed, the violation could be brought to the attention of the Preclearance Consultative Group, a bilateral working group created pursuant to Article XII of the 2015 Agreement on Land, Rail, Marine and Air Transport Preclearance, for discussions from state to state.”

On May 24, 2017, the Privacy Commissioner sent the Parliamentary Committee submissions on Bill C-23 and first raised concerns about searches of electronic devices.  At that time, the Privacy Commissioner wrote, in part:

“My immediate concern stems from recent announcements by the US administration that they intend to search at their discretion and without legal grounds other than a desire to protect homeland security the electronic devices of any and all aliens who seek to enter the United States. This would include intent to require persons seeking admission to the US to provide the password of their cellphone or social media accounts. It would appear that this policy would equally apply at preclearance locations in Canada. By contrast, the Government of Canada’s policy is to perform border searches of persons seeking admission to Canada only if there are grounds or indications that evidence of contraventions may be found on the digital device or media.

The search of an electronic device is an extremely privacy intrusive procedure. This has been recognized by the Supreme Court of Canada on a number of occasionsFootnote1. While I understand that state agents have broader search powers at the border, it is unlikely Canadian courts would uphold as constitutional searches without grounds of electronic devices or of the content of social media accounts. That may be why Canada’s policy is more nuanced.

As is the case under the existing Preclearance Agreement, preclearance officers would be required to comply with the laws of the host country while in that country. This would apply for both Canada Border Services Agency (CBSA) officers working in the US and Customs and Border Protection (CBP) officers working in Canada. Under the Agreement, any US preclearance activities in Canada would have to be carried out in a manner consistent with Canadian law, including the Canadian Charter of Rights and Freedoms, the Canadian Bill of Rights,and the Canadian Human Rights Act. This is reflected in section 11 of Bill C-23.

Although in principle, it appears that by operation of section 11 of Bill C-23, fundamental Canadian rights will be protected, section 39 of the Bill provides that civil proceedings against the US remain subject to the State Immunity Act, 1985. This significantly limits access to civil remedies against the US for the actions of CBP officers in the performance of their preclearance duties.

To be clear, the principle of state immunity as enacted by the State Immunity Act, 1985 would appear to make the protections of section 11 of Bill C-23 hollow, as these protections could not be enforced in a court of law, except in circumstances largely irrelevant to the present discussion.

There are no obvious solutions to this difficult question. Subsection 20(2) of Bill C-23 provides that a preclearance officer “is not permitted to collect biometric information unless notification that travelers may withdraw from preclearance is provided in the preclearance area, through signage or other means of communciation.” The content of electronic devices can be as privacy sensitive as biometric information, depending on context. Subsection 20(2) of Bill C-23 could perhaps be extended to searches without grounds of electronic devices.

In many situations, however, it would appear that Canadians who wish to enter the US will, at pre-clearance locations in Canada as well as at border points in the US, have to face the difficult choice of either accepting a search without grounds or foregoing their wish to travel to the US.”

The Privacy Commissioner is an important government representative in Canada.  His word carries significant weight in Canada. Whether or not Canada can amend Bill C-23 to limit the powers of US CBP officers to search laptops and other electronic devices on Canadian soil, at Canadian airports and other pre-clearance airports is an interesting one.  It is hoped that amendment is possible so that Canadians have legal due process.

It is important to note that Canada cannot force US CBP to not search electronic devices.  Also, If the amendments are made to Bill C-23, those amendments would only apply to pre-clearance areas (such as the U.S. pre-clearance area at Toronto Pearson airport). Bill C-23 does not affect what happens at U.S. airports located in the United States or at U.S. land border crossings.

If you have any questions, please contact Cyndee Todgham Cherniak at 416-307-4168 or at Cyndee@LexSage.com.

Canada May Not Celebrate CETA Provisional Implementation on July 1, 2017

Posted in Canada's Federal Government, Canada-EU CETA, Cross-border trade, Customs Law, Government Procurement, Imports Restrictions

CETAMonths ago it was announced that the Canada-EU Comprehensive Economic and Trade Agreement (“Canada-EU CETA”) would be provisionally implemented on July 1, 2017.  Bill C-30 “Canada-European Union Comprehensive Economic and Trade Agreement Implementation Act received Royal Assent on May 16, 2017.  This does not mean that Canada has taken the formal steps required to ratify the Canada-EU CETA.  To the best of our knowledge, Canada has not sent the formal notification (a diplomatic note) to the EU concerning formal ratification.  Canada has passed a statute (that is, Bill C-30), but still must implement the necessary regulations (that is, many regulations) and establish governmental processes required to implement the Canada-EU CETA.  Provinces also must take legislative and regulatory steps to implement the Canada-EU CETA.  It is now June 14, 2017 and the Canada Gazette is not full of CETA-related regulations.  Could all of this happen before July 1, 2017? I am concerned that the target date will come and go without regulations, ratification and, therefore, provisional implementation.

Today, a dispute relating to cheese quota was reported by the CBC in an article entitled “Canada-EU trade deal’s July 1 target threatened by new cheese dispute”.  This has caused Prime Minister Trudeau to respond (as reported by the CBC in a video “Trudeau on new Canada EU cheese dispute”. This is breaking news because everyone has been wondering when the Government of Canada would announce the process for applying for the Canada-EU CETA new entrants quota.

In short, it has been leaked that Canada will provide 60% of the new cheese quota to domestic dairy producers and farmers (in Quebec).  It has been reported that the proposed allocation (which has not yet been publicly announced) has caused the European Union to become concerned.  In Annex 2-B, “Declaration of the Parties concerning tariff rate quota administration” of the Canada-EU CETA, Canada has agreed to allocate cheese quota using an import licensing system on an annual basis.  The EU cheese quota allocation method must allow for new entrants each year. During the phase-in period from Year 1 to Year 5, at least 30 per cent of the tariff rate quota must be available to new entrants every year. After the end of the phase-in period from Year 6 and in subsequent years, at least 10 percent of the tariff rate quota quantity will be available for new entrants. Canada’s proposed allocation to domestic producers rather than retailers, specialty cheese retailers and restaurants may go against the spirit of the CETA agreement.  During the Canada-EU CETA negotiations, cheese quota was an important negotiating point for the EU negotiators.  Allowing Canadian dairy producers to control much of that quota is believed to diminish the agreed-upon market access provisions.

Cheese is an important sticking point that has arisen, but is not the only sticking point.  Canada’s proposed regulations (which also have not been released to the public) also pose some concerns.  Which regulations are of concern is not known – I have only been informed that the issues go beyond cheese.  This was confirmed by Minister Champagne in a statement reported by the CBC in which Minister Champagne said:

“The final few days before provisional implementation involve a number of conversations and discussions to make sure that both sides understand the regulations that are being put in place.”

We have been informed that some would prefer to delay implementation to get the regulations right, rather than rushing.  This does not bode well for a Canada Day celebration with EU cheese and wine and spirits.

We also understand that one or more provinces have not taken the steps required to implement their government procurement commitments into provincial law.  We are trying o determine which provinces are causing the delay (we assume it is British Columbia and Nova Scotia who recently held elections, but are also looking at whether Ontario and Quebec have taken all steps required).  This is the more important issue because the value of the trade in goods and services under the procurement chapter of the Canada-EU CETA dwarfs the cheese quota.

In other words, there are a few hurdles before provisional implementation of the Canada-EU CETA.

It would be helpful to Canadian businesses if the Canadian government would be more transparent about the provisional implementation date and the problems that are arising.  Canadian businesses need to prepare for provisional implementation.  Goods cannot arrive for July 1, 2017 provisional implementation if they are not ordered in advance.  While Trade Minister Champagne is saying that the hope is that the issues will be resolved in the next 10-14 days (that means by June 28, 2017), this is not certain and does not give Canadian businesses much time to review new regulations, apply for cheese quota and place orders for European goods.

If you require more information, please do not hesitate to contact Cyndee Todgham Cherniak at 416-307-4168 or at cyndee@lexsage.com.  We have posted other articles about the Canada-EU CETA on the LexSage website.

 

U.S. Boaters Soon Will Be Able To Venture Into Canadian Waters Without Reporting To Canada Customs

Posted in Customs Law

boatingOn June 12, 2017, the Canadian Parliament passed at third reading Bill S-233 “Conveyance Presentation and Reporting Requirements Modernization Act”, which is a bill that already passed in Canada’s Senate on April 11, 2017.  What this means is that Bill S-233 will become law as soon as it receives Royal Assent (which should occur soon).  What Bill S-233 does is amend the Customs Act to not require certain US boaters out for a pleasant day on Canada-US waters to report to the Canada Border Services Agency (“CBSA”).  Boaters cruising the Great Lakes and other bodies of water that are in both Canada and the United States can sail more easily and not worry about a large CBSA fine, seizure of a boat and/or cancellation of NEXUS passes.

As a general rule, anyone coming to Canada must report to the CBSA as soon as possible after arrival in Canadian waters.  Subsection 11(1) of the Customs Act sets out the general rule and provides:

“Every person arriving in Canada shall, except in such circumstances and subject to such conditions as may be prescribed, enter Canada only at a customs office designated for that purpose that is open for business and without delay present himself or herself to an officer and answer truthfully any questions asked by the officer in the performance of his or her duties under this or any other Act of Parliament.”

Subsection 11(3) of the Customs Act requires that the captain of the boat ensure that passengers and crew report to the CBSA (in other words, steer the boat to a reporting location) and provides that:

“Every person in charge of a conveyance arriving in Canada shall, except in such circumstances and subject to such conditions as may be prescribed, ensure that the passengers and crew are forthwith on arrival in Canada transported to a customs office referred to in subsection (1).”

Bill S-233 adds the following exception to the general rule:

“Subject to the regulations, subsections (1) and (3) do not apply to any of the following persons, unless an officer requires them to comply with those subsections:
(a) a person who enters Canadian waters, including the inland waters, or the airspace over Canada on board a conveyance directly from outside Canada and then leaves Canada on board the conveyance, as long as the person was continuously on board that conveyance while in Canada and
(i) in the case of a conveyance other than an aircraft, the person did not land in Canada and the conveyance did not anchor, moor or make contact with another conveyance while in Canadian waters, including the inland waters, or
(ii) in the case of an aircraft, the conveyance did not land while in Canada; and
(b) a person who leaves Canadian waters, including the inland waters, or the airspace over Canada on board a conveyance and then re-enters Canada on board the conveyance, as long as the person was continuously on board that conveyance while outside Canada and
(i) in the case of a conveyance other than an aircraft, the person did not land outside Canada and the conveyance did not anchor, moor or make contact with another conveyance while outside Canada, or
(ii) in the case of an aircraft, the conveyance did not land while outside Canada.”
Subsection 12(1) of the Customs Act also establishes as a general rule that all goods that are being imported into Canada shall be reported  to the CBSA and provides:
“…all goods that are imported shall, except in such circumstances and subject to such conditions as may be prescribed, be reported at the nearest customs office designated for that purpose that is open for business.”
Bill S-233 provides an exception to this general rule:
“Subject to the regulations, unless an officer otherwise requires, this section does not apply in respect of goods on board a conveyance
(a) that enters Canadian waters, including the inland waters, or the airspace over Canada directly from outside Canada and then leaves Canada, as long as
(i) in the case of a conveyance other than an aircraft, the conveyance did not anchor, moor or make contact with another conveyance while in Canadian waters, including the inland waters, or
(ii) in the case of an aircraft, the conveyance did not land while in Canada; or
(b) that leaves Canadian waters, including the inland waters, or the airspace over Canada and then re-enters Canada, as long as
(i) in the case of a conveyance other than an aircraft, the conveyance did not anchor, moor or make contact with another conveyance while outside Canada, or
(ii) in the case of an aircraft, the conveyance did not land while outside Canada.”
We must wait for regulations to see if there are any exceptions to the exception to the general rules.
If you require more information, please contact Cyndee Todgham Cherniak at 416-307-4168.  For more information about Canada’s customs laws, please go to the LexSage website.

US ITC Makes Preliminary Determination to Continue Boeing-Bombardier Aircraft Dispute

Posted in Uncategorized

sports_2008015797-1113int.epsOn June 9, 2017, the United States International Trade Commission (“US ITC”) voted on and made affirmative preliminary determinations in its preliminary injury phase antidumping and countervailing duty investigations concerning 100- to 150-Seat Large Civil Aircraft from Canada.  Reasons may not be available for a few weeks to a month. The US ITC often issues affirmative preliminary injury determinations since the “reasonable indication” threshold is a low threshold for complaining companies to initially meet.

In April, Boeing, filed a petition with the US ITC asking it to consider anti-dumping and countervailing duties against Bombardier’s CSeries passenger aircraft. Boeing has requested that the U.S. Department of Commerce impose countervailing duties of 79.41 per cent and anti-dumping duties of 79.82 per cent.

The US ITC determinations are important because Canada and Bombardier were not able to end this ill-advised case prior to the imposition of antidumping and/or countervailing duties.  Preliminary antidumping and/or countervailing duties will be imposed if the U.S. Department of Commerce makes affirmative preliminary antidumping and or subsidy determinations in the coming weeks.  It is anticipated that the U.S. Department of Commerce will issue affirmative preliminary determinations in order to have “leverage” in the NAFTA renegotiations.  While trade remedies are not supposed to be influenced by political considerations, have you every heard of “Softwood Lumber”?

How Does The UK Election Results Affect Canada-UK Trade?

Posted in Canada-EU CETA, Trade Agreeements

Shipping Container Above Stacked OthersOn June 8, 2017, the election in the United Kingdom saw the May Conservative Government go from a majority Conservative Government to a minority Conservative Government (possibly to be supported by the Democratic Unionist Party). On June 23, 2016 (almost a year ago), the United Kingdom voted for Brexit (that is, to exit the European Union).  On October 30, 2016 (approximately half a year ago), Canada and the European Union (including the United Kingdom) executed the Canada-European Union Comprehensive Economic and Trade Agreement (the “Canada-EU CETA”). These are three key and developments in the United Kingdom, an important trading partner with Canada.

So, this latest development leaves Canadian businesses asking- how does the June 8, 2017 United Kingdom election results affect Canada-UK trade?

Canada-EU CETA

For starters, it makes ratification of the Canada-EU CETA by the UK Government more problematic.  The majority May Government did not ratify the Canada-EU CETA prior to the election.  As a result, now a coalition Conservative-DUP Government must ratify the Canada-EU CETA.  Ratification of the Canada-EU CETA may be politicized in the UK and may not pass as easily as it could have.

According to www.parliament.uk, the ratification process for the Canada-EU CETA is as follows:

“In the UK, the agreement must be laid before Parliament for a period of 21 sitting days. The agreement can only be ratified if the 21 day period has passed without either House having resolved that it should not be ratified. In the event of such a resolution by the Commons, a further period of 21 days is triggered during which the Commons can again raise objections.”

This ratification process has not been completed in the UK.  There is little information on whether the process was started prior to the June 8, 2017 UK election or if the steps were formally completed.  It is likely that the UK was waiting for the EU-Singapore FTA ECJ legal opinion (issued May 16, 2017) before commencing the ratification process.

There is an interesting Paper written by Dominic Webb entitled “CETA: the EU-Canada Free Trade Agreement” that discusses a variety of issues involving the UK and the Canada-EU CETA.

Canada-UK FTA

In the United Kingdom, the term for a parliament is five years.  An election may be called before the five year term ends by the leader (like what happened before the June 8th election) or if the government is defeated by way of a non-confidence vote. This is important because if Brexit proceeds and the UK negotiates a free trade agreement with Canada, that negotiation process may be affected by the coalition politics.

Prior to the June 8, 2017 Election, the UK Conservative Party issued a Manifesto in which it states a policy to “seek to replicate all existing EU free trade agreements and support the ratification of trade agreements entered into during our EU membership.”  Without a majority government, the Conservatives may not be able to follow the Manifesto or may need to re-write a coalition-approved manifesto.

Current Trade Between Canada and UK

The June 8, 2017 should have little effect on current trade.  Businesses will continue as they have been. Canada-UK trade was not an election issue.  That being said, it is possible, if not likely, to expect that the recent terrorist incidents in the United Kingdom (March 22, 2017 Westminster terrorist attack, May 22, 2017 Manchester terrorist incident at the Arianna Grande concert and June 3, 2017 London Bridge/Borough Market terrorist attack) will result in a thickening of the UK border.  What this means is that Canadian goods exported to the United Kingdom may be subject to new national security measures and may not enter the UK as seamlessly and quickly as before.  It would be prudent for the Canadian Government to discuss a Fast and Secure Trade Program with the UK similar to what is in place between Canada and the United States.  Canadian businesses should consider what steps can be taken to ensure that their goods flow most efficiently.

NEXUS/Registered Traveler Program

Since 2016, Canadians who travel to the United Kingdom frequently (3 or more times per year) are eligible for a Canada-UK NEXUS card/registered traveler card.  The Canada-UK NEXUS Program allows pre-screened and approved travelers to get through the UK border faster.  In light of recent developments, this program may be more beneficial for Canadian travelers.

Conclusion

There is uncertainty for Canada-UK trade.  It is not that trade will stop.  It is more than likely that progress on trade will be slow and some trade will be negatively affected by new security measures in the UK.

For more information, please contact Cyndee Todgham Cherniak at 416-307-4168 or cyndee@lexsage.com or Heather Innes at 416-350-1234 or heather@lexsage.com.  There are many useful articles posted on the LexSage website.

Canada Initiates New Antidumping Case Against Carbon And Alloy Steel Line Pipe From South Korea

Posted in Antidumping, Trade Remedies

Cyrstal Ball MoneyOn June 8, 2017, the Canada Border Services Agency (“CBSA”) issued a Notice of Initiation stating that it has initiated an antidumping case against carbon and alloy steel line pipe from South Korea.  This is not the first line pipe case.  In 2016, the CBSA initiated an antidumping case against line pipe from China and the Canadian International Trade Tribunal issued a positive determination on March 29, 2016.

The subject goods are carbon and alloy steel line pipe from South Korea.  Normally, we look to the complaint for the definition of the subject goods – but te CBSA has not posted it.  In the previous line pipe case, the subject goods were defied as follows:

The subject goods are defined as follows:

“Carbon and alloy steel line pipe … welded or seamless, having an outside diameter from 2.375 inches (60.3 mm) up to and including 24 inches (609.6 mm), including line pipe meeting or supplied to meet any one or several of API 5L, CSA Z245.1, ISO 3183, ASTM A333, ASTM A106, ASTM A53-B or their equivalents, in all grades, whether or not meeting specifications for other end uses (e.g. single-, dual-, or multiple-certified, for use in oil and gas, piling pipe, or other applications), and regardless of end finish (plain ends, beveled ends, threaded ends, or threaded and coupled ends), surface finish (coated or uncoated), wall thickness, or length, excluding galvanized line pipe and excluding stainless steel line pipe (containing 10.5 percent or more by weight of chromium), excluding goods covered by the Canadian International Trade Tribunal’s finding in Inquiry No. NQ-2012-002 and goods covered by the Canadian International Trade Tribunal’s order in Expiry Review No. RR-2012-003.

For greater certainty, the product definition includes unfinished line pipe (including pipe that may or may not already be tested, inspected and/or certified to line pipe specifications) originating in the People’s Republic of China and imported for use in the production or finishing of line pipe meeting final specifications, including outside diameter, grade, wall thickness, length, end finish or surface finish, and non-prime and secondary pipes (“limited service products”).”

Prior to January 1, 2017, the goods in question were usually classified under the following Harmonized System classification numbers:

  • 7304.19.00.11
  • 7304.19.00.12
  • 7304.19.00.21
  • 7304.19.00.22
  • 7305.11.00.11
  • 7305.11.00.19
  • 7305.12.00.11
  • 7305.12.00.19
  • 7305.19.00.11
  • 7305.19.00.19
  • 7306.19.00.10
  • 7306.19.00.90

Beginning January 1, 2017, under the revised customs tariff schedule, subject goods would usually be imported under the following tariff codes for line pipe:

  • 7304.19.00.10
  • 7304.19.00.20
  • 7305.11.00.10
  • 7305.11.00.20
  • 7305.12.00.10
  • 7305.12.00.30
  • 7305.19.00.10
  • 7305.19.00.20
  • 7306.19.00.10
  • 7306.19.00.90

It is important to note that in the previous case, the CITT excluded, at the request for Bri-Steel (which is not mentioned to be a supporter of the Complainant in the new AD proceeding) the following goods:

“unfinished seamless carbon or alloy steel line pipe in the form of mother tubes having outside diameters of 184, 197, 210, 235, 260, 286, 328, 350, 368, 377, 394, 402, 419, 426, 450, 475, 480, 500, 521, 530, 560, 585 or 610 mm, in wall thicknesses from 9 mm to 110 mm and in lengths ranging from 7.72 m to 15.24 m, not stenciled as meeting any line pipe product specification, but imported for use in the production, and not solely for finishing, of seamless line pipe made to any one or several of API 5L, CSAZ245.1, ISO 3183, ASTM A333, ASTM A335, ASTM A106, ASTM A53 or their equivalents.”

Timeline:

There are two separate proceedings: 1) The CBSA conduct and antidumping investigation.  Within the first 90 days, the CBSA sends Exporter Requests for Information that must be filed on or before the specified deadline.  The CBSA may send supplemental requests for information.  The Requests for Information permit the CBSA to calculate preliminary dumping margins.  It is preferable to obtain a company-specific dumping margin – especially if an exporter has not dumped goods into Canada; and 2) The CITT conducts a Preliminary Injury Inquiry within the first 60 days.  See our post on What is a Preliminary Interest Inquiry? In the Preliminary Injury Inquiry, the CITT looks at whether the complaint discloses a reasonable indication of injury.  Normally, the CITT will consider issues on (1) scope, (2) classes of goods and (3) evidentiary issues.  Since this is a regional case, arguments about test for regional cases and whether this is an appropriate regional case will likely be very relevant.  Companies should participate early and raise relevant issues with the CITT. The CBSA conducts a Preliminary Dumping Investigation within the first 90 days (the period overlaps with the CITT Preliminary Injury Inquiry).The CBSA’s timeline of important dates is as follows: July 3, 2017 – CBSA: Importer responses to CBSA Requests for Information are due July 17, 2017 – CBSA: Exporter responses to CBSA Requests for Information are due (no extensions are granted)September 6, 2017 – CBSA issues preliminary dumping determination (unless the CBSA extends by up to 45 days)October 24, 2017 – CBSA: Closing of the Record Date October 31, 2017 – CBSA: Case arguments due from all parties November 7, 2017 – CBSA: Reply submissions are due December 5, 2017 – CBSA issues final determination

We recently posted an article entitled “Exporters Who Receive De Minimis Dumping Margins in Canadian AD Cases Now Being Excluded From Final Orders” in which we highlight the benefits of participating in a Canadian antidumping case.  If an exporter can achieve a de minimis dumping margin (less than 2%), the dumping investigation will be terminated against that exporter.  This would allow that exporter to continue to sell to importers in Canada.

If you require any assistance, please contact Cyndee Todgham Cherniak at 416-307-4168 or cyndee@lexsage.com.

Other articles we have written concerning Canada’s antidumping regime:

Top 10 Mistakes Make By Exporters When Completing Antidumping Requests For Information

Who is the Exporter for Special Import measures Act (SIMA) Purposes?

CBSA Has Revised The D-Memorandum On The Anti-dumping/Countervailing Duty Redetermination Process

CITT Finds Reduction Or Elimination of Rebar AD/CVD Duties Not In Public Interest

 

Exporters Who Receive De Minimis Dumping Margins in Canadian AD Cases Now Being Excluded From Final Orders

Posted in Antidumping, Trade Remedies, World Trade Organization

globe and calculatorForeign producers and exporters who receive a de minimis dumping margin (2% or less) in a Canadian antidumping case are now being excluded from final injury orders (that is, final orders for the imposition of antidumping duties).  What this means is that any foreign producer or exporter who priced at undumped levels (above domestic selling prices and above cost of production + GSA + reasonable profit) should fully participate in the Canada Border Services Agency (“CBSA”) preliminary determination of dumping and final determination of dumping processes.  Foreign producers and exporters can be rewarded for completing the CBSA’s Exporter Request for Information and answering all supplemental requests for information (and permitting an on-site verification).  A 0% dumping margin and exclusion from a final order can mean continued business with Canadian importers and likely new customers in Canada.  In other words, participating in a CBSA dumping investigation can open new doors for business is goods where properly priced during the period of investigation.  All that is needed is hard work proving to the CBSA that the goods were priced properly and in accordance with antidumping laws.

The Canadian International Trade Tribunal (the “CITT”) recently excluded three exporters from final antidumping orders based on their receipt of de minimis dumping margins calculated by the CBSA.  The exporters participated fully in the CBSA process and acheived good results.  In Certain Concrete Reinforcing Bar, NQ-2016-003, the CITT made the following Finding:

“…[t]he Canadian International Trade Tribunal hereby finds, pursuant to subsection 43(1) of the Special Import Measures Act, that the dumping of the above-mentioned goods originating in or exported from the Republic of Belarus, Chinese Taipei (excluding those goods exported by Feng Hsin Steel Co., Ltd.), the Hong Kong Special Administrative Region of the People’s Republic of China, Japan, the Portuguese Republic and the Kingdom of Spain has caused injury to the domestic industry.”

In Certain Fabricated Industrial Steel Components, NQ-2016-004, the CITT made the following Finding:

“…[t]he Canadian International Trade Tribunal hereby finds, pursuant to subsection 43(1) of the Special Import Measures Act, that the dumping of the above-mentioned goods originating in or exported from the People’s Republic of China, the Republic of Korea (excluding those goods exported by Hanmaek Heavy Industries Co., Ltd.) and the Kingdom of Spain (excluding those goods exported by Cintasa, S.A.), and the subsidizing of the above-mentioned goods from the People’s Republic of China, have caused injury to the domestic industry.”

Feng Hsin Steel Co., Ltd., and Cintasa S.A. received a 0% dumping margin during the CBSA dumping investigations.  In the spirit of full disclosure, we acted for Cintasa S.A..  Hanmaek Heavy Industries Co., Ltd. received a de minimis dumping margin during the CBSA dumping investigation.

In the CITT Reasons in Certain Concrete Reinforcing Bar, the Tribunal used its discretionary authority in subsection 43(1) of the Special Import Measures Act (“SIMA”) to grant the exclusion. The Tribunal stated:

“In the past, the Tribunal has refused to grant producer exclusions for non-dumping exporters solely on the basis that this would allow the exporter a “license to dump” in the future.  However, the recent WTO decision in Canada-Welded Pipe concluded that, inter alia, article 5.8 of the Anti-dumping Agreement required the termination of an investigation in respect of exporters with individual de minimis margins of dumping. …

In the present case, the Tribunal’s finding that the dumping of the subject goods has caused injury to the domestic industry cannot include the subject goods exported by Feng Hsin given that it has been found to have not been dumping by the CBSA.  In such circumstances, the WTO Anti-dumping Agreement requires termination in relation to Feng Hsin.

Accordingly, in these circumstances, the Tribunal finds it appropriate to exercise discretion to effectively terminate the present proceedings with respect to Feng Hsin’s goods …”

The CITT will issue Reasons in Certain Fabricated Industrial Steel Components on June 9, 2017 and it is expected that similar language will be provided in respect of the exporter exclusions granted for Cintasa S.A. and Hanmaek Heavy Industries Co. Ltd.,

It is important to note that in the 2017 Federal Budget, the Government of Canada announced changes to SIMA so that the CBSA would terminate antidumping proceedings against exporters who achieve 0% or de minimis dumping margins during the investigation.  Legislative provisions have been included in Bill C-44 “An Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017 and other measures” (known as “Budget Implementation Act, 2017, No. 1″).  The amendments to SIMA are in sections 68 – 102 of Bill C-44.  The amendments granting the President of the CBSA power to terminate a proceeding are at section 79:

“79 Subsections 41 (1) and (2) of the Act are replaced by the following:
41(1) Within 90 days after making a preliminary determination under subsection 38(1), the President shall
(a) terminate the investigation in respect of any goods of a particular exporter if, on the available evidence, the President is satisfied that there has been no dumping or subsidizing of the goods or that the margin of dumping of, or amount of subsidy on, those goods is insignificant; and
(b) make a final determination of dumping or subsidizing in respect of the goods that are the subject of the investigation and for which the investigation has not been terminated under paragraph (a) if, on the available evidence, the President is satisfied that there has been dumping or subsidizing and the President shall specify, in relation to each exporter of goods in respect of which the investigation is made, as follows:
(i) in the case of dumped goods, the goods to which the determination applies and the margin of dumping of the goods, and
(ii) in the case of subsidized goods,
(A) the goods to which the determination applies,
(B) the amount of subsidy on the goods, and
(C) subject to subsection (2), if the whole or any part of the subsidy on the goods is a prohibited subsidy, the amount of the prohibited subsidy on the goods.
Exception
(2) The President shall not specify anything under clause (1)‍(b)‍(ii)‍(C) if the President is of the opinion that, having regard to the country that is providing the export subsidy, the nature of the goods and the circumstances under which the export subsidy is provided, provision of the export subsidy in relation to those goods is not inconsistent with that country’s obligations under the international agreement known as the General Agreement on Tariffs and Trade, 1994.”
What this means is that after Bill C-44 receives Royal Assent, the CBSA will terminate an antidumping investigation against specific exporters who fully cooperate and participate and are able to demonstrate that their goods were not dumped during the period of inquiry.
Exporters and foreign producers who do not want to be subject to Canada’s antidumping duties should hire Canadian legal counsel quickly after the initiation of an antidumping proceeding.  Counsel will be able to explain what is required by the CBSA when responding to Exporter Requests for Information.  Counsel can assist in the development an RFI preparation schedule so that information is gathered and organized.  The CBSA does not give extensions of time.  Where translations are required, counsel will advise.  Most importantly, counsel can provide advice about what is required by SIMA and the Special Import Measures Regulations and CBSA policy.  Questions are asked to elicit specific information.  How that information is provided and what information is provided can be the difference between a 0% dumping margin and a higher margin.  In the last 5 years, we have achieved 0% dumping margins for 2 foreign producers.
For more information, please do not hesitate to contact Cyndee Todgham Cherniak at 416-307-4168 or Cyndee@LexSage.com.  Please also go to the LexSage Website to review articles about antidumping, such as

Make Your Own Opportunities: Canada’s NAFTA Renegotiation Consultations

Posted in NAFTA Renegotiations

Canada-US GlobeOn June 3, 21017, the Government of Canada posted on the Global Affairs website a Notice inviting Canadian businesses to engage in “online consultations” relating to the renegotiation of the North American Free Trade Agreement (“NAFTA”).  Canadian businesses should look at this as an opportunity to ask for market access (goods, services, financial services, investment, government procurement), ask for improvements to NAFTA rules, ask for job creation opportunities, ask for reductions in cross-border bureaucratic tape (e.g., unfavourable regulations), etc.  Small and medium sized enterprises, in addition to large businesses, should take advantage of a golden opportunity to communicate with Canada’s NAFTA negotiating team.

Global Affairs Canada has provided a link to a portal to submit views. Don’t be confused by the words used by Global Affairs.  The negotiators do not need your views.  The negotiators need to know what you need them to ask for so that you may succeed (sell more, export more, make more money and hire more employees).  They need to know where you are having problems accessing the United States (and Mexican) market.  They want to know where you have had problems with the NAFTA rules of origin, whether the goods were being exported from Canada into the United States or Mexico or imported into Canada from the United States or Mexico.  They want to know what U.S. regulations are preventing you from accessing the U.S. goods and services and procurement markets.  They want to know where you have had difficulties from a labour mobility perspective.

Global Affairs Canada also needs to know what Canadian laws really help your business and where you would not like concessions made during the NAFTA renegotiation process.  The U.S. has a similar consultation process and the United States negotiators are preparing their long list of asks.  For example, we already know that the U.S. negotiators are going to seek changes to Canada’s supply management regime for dairy, poultry and eggs. Shouldn’t Canadian negotiators make a similar list of U.S. protectionist policies that we would like to see removed or lessened?

Similarly, the Canadian negotiators need to know about your NAFTA supply chains.  Just because you have been audited by the Canada Revenue Agency or undergone a verification by the Canada Border Services Agency or filed applications with Health Canada does not mean that the Canadian negotiators have that information.  Do not assume they know. Participate in the consultation process so that you actively take steps to ensure they have information.  You do not want your established, working supply chain disrupted by changes to NAFTA.

The Notice asks “Are there areas of the agreement that could be clarified? Are there parts that should be updated? Are there any new sections that should be part of a modernized agreement?”  What this means is that everything is on the table.  Almost every chapter can be modernized to reflect current market conditions (NAFTA was negotiated over 20 years ago and things have changed).  For example, the following Chapters of NAFTA may be improved and new Chapters added to NAFTA:

  • small & medium size businesses;
  • digital economy;
  • rules of origin;
  • intellectual property;
  • services commitments;
  • government procurement commitments;
  • labour mobility;
  • dispute settlement; and
  • etc.

Hire a trade lawyer or trade consultant to assist you in the preparation of your submission to Global Affairs Canada.  There may be better ways to present your “asks”.

For more information, please contact Cyndee Todgham Cherniak at 416-307-4168 (cyndee@lexsage.com) or Heather Innes at 416-355-1234 (heather@lexsage.com). Also, please look at the LexSage website as we have posted other articles about NAFTA.

 

Canada-Ukraine Free Trade Agreement Implementation Act Receives Royal Assent

Posted in Canada-Ukraine FTA

On June 1, 2017, the Canada- Ukraine Free Trade Agreement Implementation Act (Bill C-31) received Royal Asset in Canada’s Hose of Commons.  On May 18, 2017, Bill C-31 passed third reading in Canada’s Senate.  On February 14, 2017, Bill C-31 passed third reading in Canada’s House of Commons.  The remaining step is ratification by Canada and implementation.  Are you ready?

The Canada-Ukraine FTA is a trade in goods agreement (that is, it does not cover services and investment). Canada has agreed to reduce most customs duty rates to “free” or 0% immediately upon implementation on goods that meet the rules of origin.  Pursuant to Chapter 2 of the Canada-Ukraine FTA, each party shall reduce or eliminate customs duties on goods originating in either party in accordance with the tariff elimination schedules in Annex 2-B.  In Article 1 of Annex 2-B, Canada agrees to eliminate customs duties on all goods in Chapters 1-97 of the Harmonized System that provides for Most-Favoured-Nation rate of duty, with the exception of any goods Canada has listed in Annex 2-B (which is a short list).  We have prepared a chart that sets out H.S. Chapters and which Chapters become duty-free immediately upon implementation.

Some of the goods that Canadian importers may look forward to importing on a duty free basis are:

  • Ukrainian beer;
  • Ukrainian vodka;
  • Ukrainian chocolate;
  • Pysanka/pysanky;
  • Table cloths;
  • Ceramics;
  • Clothes;
  • Toys;
  • Copper; and
  • Walking sticks.

Some of the good that Canadian exporters may look forward to exporting are:

  • grain,
  • canola;
  • beef,
  • pork;
  • fish;
  • wines/ice wines;
  • maple syrup;
  • softwood lumber;
  • animal feed;
  • medications;
  • cosmetics and skin care;
  • cars;
  • mining equipment;
  • semi-trailers;
  • air compressors;
  • tires;
  • asphalt;
  • plastics; and
  • etc.

The Canada-Ukraine FTA does not cover services, financial services, investment or energy. For more information, please contact Cyndee Todgham Cherniak at 416-307-4168 or cyndee@lexsage.com.  Other articles are posted on the LexSage website.