The SIMA Self-Assessment Guide

What You Should Know Before Importing Goods Subject To SIMA

June 2004

Table of Contents

Is this guide for you?

What is SIMA?

How do I know if SIMA duties apply to the goods I import?

• SIMA Monthly Index
• Customs D15 Memoranda
• Importer Notices

What are the Canada Border Services Agency's responsibilities?

What are my responsibilities as an importer of SIMA goods?

1. Properly describing the imported goods
2. Using the proper SIMA Code
3. Maintaining proper records
4. Calculating and paying the proper amount of SIMA duties

• Normal value
• Export price
• Anti-dumping duty
• Countervailing duty
• Provisional duty
• Converting currency
• Payment

Administrative Monetary Penalty System (AMPS)

What if I make a mistake?

• Self-Adjustments
• Request for Re-determination (Appeals)

Where can I go for help?

Appendix 1: Regional offices

Appendix 2: Sources of Information

Relevant Customs Memorandum

Is this guide for you?

This guide is intended to help importers and their brokers fulfill their responsibilities when they import goods that are subject to duties under the Special Import Measures Act (SIMA). The information in this guide is provided for reference only. If you need more technical information, please contact your regional Customs office or the Anti-dumping and Countervailing Directorate in Ottawa at the numbers provided in the Appendices.

What is SIMA?

SIMA is a law that protects Canadian manufacturers and producers from dumped and subsidized goods imported from foreign countries.

Dumping occurs when goods are sold to importers in Canada at prices that are lower than the selling price of comparable goods in the country of export, or when goods are sold to Canada at unprofitable prices. If the dumping is injuring the Canadian industry, anti-dumping duties can be applied to the imported goods to offset the amount of dumping.

Subsidizing occurs when goods imported into Canada benefit from foreign government financial assistance. If the subsidy does not conform to certain international rules, and is injuring the Canadian industry, countervailing duties can be applied to the imported goods to offset the subsidy.

SIMA duties are only applied to imported goods that have been found to be dumped or subsidized as a result of an investigation by the Anti-dumping and Countervailing Directorate of the Canada Border Services Agency (CBSA) and found to be causing, or threatening to cause, injury to the Canadian industry as a result of an investigation by the Canadian International Trade Tribunal (CITT). The SIMA Brochure provides a brief overview of the investigation process and can be obtained by contacting our Directorate or visiting our web site.

How do I know if SIMA duties apply to the goods I import?

There are a number of ways to determine if SIMA duties apply to goods you are importing.

SIMA Monthly Index

Each month the CBSA issues a SIMA Index which lists the goods to which SIMA duties apply. The index is available from your regional Customs office, the Canadian Association of Importers and Exporters Inc. and the Canadian Society of Customs Brokers. You can also access an electronic copy of the SIMA Index from our web site at: www.cbsa-asfc.gc.ca/sima. The electronic Index provides a direct link to "Statements of Reasons" issued by the CITT. These documents include detailed product descriptions. They also list any similar products that are excluded from SIMA duties.

Customs D15 Memoranda

D15 Memoranda are published by Customs for all goods subject to SIMA duties. These memos provide detailed product descriptions, identify excluded products and provide the proper Harmonized System classification numbers. You can get copies of Customs Memoranda from your broker, any regional Customs office or from the Customs web site at: www.cbsa-asfc.gc.ca/customs/general/publications/menu-e.html.

Importer Notices

The CBSA and CITT notify all known importers during their investigations. These notices contain detailed product descriptions and identify excluded products, if any. These notices also provide specific information on how to fulfill your importing responsibilities for SIMA purposes.

What are the Canada Border Services Agency's responsibilities?

We, at the CBSA, are responsible for providing you with the assistance you need to properly fulfill your importing responsibilities.

If you need advice or guidance on specific goods you are importing, or would like more information in general, please do not hesitate to contact your regional Customs office or the Anti-dumping and Countervailing Directorate in Ottawa. Each regional office has a client services unit that is available to answer your questions about Customs. As well, each region has a SIMA liaison officer that can answer your SIMA related enquiries.

We are also responsible for monitoring importations of goods subject to SIMA duties to ensure full compliance with the law. This includes ensuring that importers and their agents fulfill all of the responsibilities identified below.

What are my responsibilities as an importer of SIMA goods?

The responsibilities for importers of goods subject to SIMA are in addition to your regular Customs responsibilities. As an importer of SIMA goods, you are responsible for:

• properly describing the imported goods;
• using the proper SIMA code;
• maintaining proper records, in Canada, for your imports of goods subject to SIMA; and
• calculating and paying the proper amount of SIMA duty at the time of accounting.

If you are using the services of an agent or broker, make sure your representative has the information necessary to fulfill your responsibilities.

1. Properly describing the imported goods

As an importer, you must properly describe the goods that you are importing, whether the information is submitted in paper or electronic format. Customs Memorandum D17-1-1 explains the normal Customs requirements. However, these requirements are often not enough for SIMA purposes.

When importing goods subject to SIMA duties, you must provide a more detailed product description. You should refer to the detailed description in the relevant Customs D15 Memoranda or your importer notice for help in properly describing your goods. If you are claiming that the imported good is excluded from SIMA duties, a full and complete description must be provided. If we do not have proper and complete information, an incorrect assessment may result.

The product description is reported in field 22 of the Canada Customs Coding Form B3 (B3). Your complete product description should be provided on the commercial or Canada Customs Invoice, or in the description section of the Accelerated Commercial Release Operating System (ACROSS). When describing the product, you should follow any instructions that have been sent to you by Customs.

2. Using the proper SIMA Code

The SIMA code is to be reported in field 32 on the B3. SIMA codes are two-digit numbers. The first digit is from 1 to 5 and represents the type of assessment (see Chart 1 below). The second digit is from 0 to 2 and represents the form of payment (see Chart 2 below).

As an example, code "51" indicates that the goods are subject to an injury finding and/or a Surtax Order, that the SIMA duties and/or the amount of surtax are payable and they are being paid in cash (which includes any accepted cash payment method, i.e. credit card, debit, etc.).

Chart 1 - The first digit is the assessment type:

Chart 2 - The second digit indicates the payment type:

Note: When goods are subject to a CITT injury finding and/or a Surtax Order and the SIMA duties and/or the amount of surtax are exempted by a remission order, importers must use SIMA code "50" and enter the OIC number in field 26 on the form B3.

3. Maintaining proper records

Every person who imports goods into Canada must keep proper records. Generally, the records must be kept in Canada and be detailed enough to allow a Customs officer to verify that the information submitted to Customs is correct and to determine that the correct amount of duty was paid.

When importing goods subject to SIMA duties, importers must keep proper records to allow for the verification of the following information and records:

• date of sale;
• description of the goods;
• date and location of release;
• commercial invoice;
• purchase order;
• proof of payment, including credits and adjustments; and
• any other information as requested in a written notice, such as an importer notice.

4. Calculating and paying the proper amount of SIMA duties

Before you calculate your duty liability, you have to understand certain terms used in the calculation, such as normal value, export price, anti-dumping duties, countervailing duties, and provisional duties. SIMA duties payable are to be recorded in Canadian dollars in field 39 on the B3.

Normal value

The normal value is generally the selling price of the good in the country where it was produced or exported. In some situations, normal values are based on the costs of production plus an amount for general, selling, administrative and all other expenses plus an amount for profit.

Normal values are calculated by the Anti-dumping and Countervailing Directorate based on confidential information submitted by exporters and manufacturers in foreign countries. As a result, these values are often considered confidential and are not always publicly available. We recommend that you ask your exporter to provide you with the normal values for their goods. If the exporter does not give you the values, we can provide assistance in determining your SIMA liabilities. Customs Memoradum D14-1-2 allows us to:

• Provide normal values so that you may obtain release of a shipment, or account for goods previously released;
• Provide normal values when goods that you have purchased are in-transit; and
• Inform you if a price offered by the exporter will result in SIMA duties.

Requests for normal values and potential duty liabilities are to be provided in writing and proof of purchase, proof that the goods are in-transit, or proof of the price offered by the exporter are required.

The normal value is often expressed in the exporting country's currency, or in U.S. dollars, which means that you have to convert it to Canadian dollars to determine any duty you may owe (see Converting Currency below).

If we do not have a normal value because there is not enough information, or the exporter or manufacturer did not co-operate with us during our investigation, we determine the normal value under the authority of the Minister of National Revenue (called a ministerial specification). A ministerial specification is usually a set percentage that we apply to the export price. This percentage varies for each case and is based on available information. The use of a ministerial specification generally results in a higher assessment. We also use a ministerial specification if we do not have sufficient information on documents submitted to Customs by importers or their brokers.

Export price

The export price is generally the exporter's selling price reduced by any export charges that are included in the price, such as freight and insurance. This export price is determined using the commercial invoice and subtracting any identified export charges.

In certain unique circumstances, the export price may be calculated under the authority of the Minister of National Revenue (called a ministerial specification). If the export price is based on a specification, it is generally a set amount or a set percentage of the commercial invoice price and varies for each investigation. These export prices may be obtained by referring to the specific Customs D15 Memoradum for the subject good, by contacting your regional Customs office, or by contacting the Anti-dumping and Countervailing Directorate.

Anti-dumping duty

In dumping cases, anti-dumping duties are imposed after the CITT has issued an injury finding. Where the foreign manufacturer and exporter has cooperated in our investigation and we have normal values for their goods, the proper amount of anti-dumping duty to pay is calculated based on the formula:

Normal value - Export price = Anti-dumping duty (or Margin of dumping)

These duties are calculated on a per unit basis, i.e. per kilogram, per ton, per bushel, etc. If the export price is equal to the normal value, or is more than the normal value, no anti-dumping duty is payable. Two examples are provided below.

Alternatively, if there are no specific normal values, the amount of anti-dumping duty will be calculated based on the use of the ministerial specification as explained above. The amount of anti-dumping duty owing is calculated by multiplying the export price by a set percentage.

Countervailing duty

In subsidy cases, countervailing duties are imposed after the CITT has issued an injury finding. The countervailing duty is equal to the amount of subsidy on the product. If imported goods are subject to countervailing duties, there is always an amount payable. This is because countervailing duty is a set amount, usually on a per unit basis (i.e. per kilogram, per ton, per bushel, etc.). Countervailing duty rates are usually publicly available and can be obtained by contacting your regional Customs office or the Anti-dumping and Countervailing Directorate.

Provisional duty

Provisional duties are similar to anti-dumping and countervailing duties but these duties are based on estimates and only apply during the investigation period. This period begins on the day the CBSA makes a preliminary decision on dumping or subsidizing and ends on the day the CITT issues its final decision on injury. Because these duties are temporary they cannot be appealed.

When the CBSA has made a final determination that the goods have been dumped or subsidized, and the CITT finds that the imports are causing injury, the amount of provisional duty owing or paid is reviewed. It is the responsibility of the Anti-dumping and Countervailing Directorate to review the provisional duty and to determine the final amount of duty owing. An importer may appeal the final amount of duty by following the instructions provided below under Request for re-determination.

If we determine that the goods are not dumped or subsidized, or the CITT finds that the imports were not causing injury to the Canadian industry, we will refund all provisional duty paid.

Where the importer has not paid provisional duty or posted security within the prescribed time, interest applies to the provisional duties owing. The same rules apply to provisional duty outstanding or refunded as the rules for customs duties. The interest calculated on amounts owing or returned are determined under the Customs Act. The rate of interest used is set in the Interest Rate for Customs Purposes Regulations (refer to Customs Memorandum D17-1-19).

Converting currency

The amount of SIMA duty to be paid must be calculated and reported in Canadian dollars. Therefore, the normal value must be converted to Canadian dollars. If the export price is not in Canadian dollars, you will have to convert it to Canadian dollars as well. To do this, you have to use the exchange rate from the date the goods were sold. If you do not know the date of sale, use the date the goods were shipped to Canada.

You can get exchanges rates by contacting your regional Customs office or by calling the Automated Customs Information Service (ACIS) at 1-800-461-9999. The ACIS provides exchange rates, by recorded messages, for the nine most frequently used currencies, or provides an option to speak directly to a Customs officer for information on other currencies.

Payment

Provisional duty may be paid by cash or guarantied by posting a security bond. Cash payment includes payment by credit or debit card. If you chose to post a security bond, it must be sufficient to cover the amount of provisional duty payable. To learn more about using security bonds to guarantee provisional SIMA duties, refer to Customs Memorandum D14-1-5.

You have to pay anti-dumping and countervailing duties when you account for your shipment. Payments are made in the same way and within the prescribed time as Customs duties are paid. You may refer to Customs Memorandum D17-1-0 for complete details on how to pay Customs duty.

The amount of any interest on duties owing or returned under SIMA is determined under the Customs Act. This allows for the same rules to be followed in the application of interest on either SIMA duties or customs duties. The rate of interest used is set in the Interest Rate for Customs Purposes Regulations (refer to Customs Memorandum D17-1-19).

Administrative Monetary Penalty System (AMPS)

The CBSA has introduced a new Administrative Monetary Penalty system. This system was implemented to update and improve our ability to deal with those who do not comply with the law. AMPS is designed to level the playing field by ensuring that importers that play by the rules are not disadvantaged by importers that do not. Under AMPS, Customs may assess penalties against importers that do not properly fulfill their responsibilities under the Customs Act, the Customs Tariff and the SIMA. The penalties will work on a scale beginning with warnings and increasing to larger and larger fines. Monetary penalties have been in effect since October 7, 2002.

For SIMA purposes, penalties are imposed if you do not provide a proper product description, do not use the correct SIMA code or do not keep proper records for your shipments subject to SIMA. Failure to provide proper product descriptions, or proper SIMA codes can result in fines ranging from $100 or 5% of the value for duty (whichever is greater) to $400 or 20% of the value for duty, to a maximum of $25,000. Failure to keep proper records can result in fines ranging from $1,000 to $25,000.

If you are assessed a penalty under AMPS, you may ask a Customs Officer to review the penalty to correct any errors. You may also file a written appeal to the Adjudication Division of the Customs Branch. To learn more about AMPS, visit the AMPS web site at: www.cbsa-asfc.gc.ca/customs/general/amps/menu-e.html or contact your regional Customs office.

What if I make a mistake?

You can correct errors in two ways:

• by adjusting the information you submitted to Customs yourself (Self-Adjustment); or
• by appealing the amount of SIMA duties paid on a specific transaction (Requesting a Re-determination).

Both types of changes are made by completing and submitting a Canada Customs - Adjustment Request, Form B2. This form is available from any regional office or electronically on the Customs web site under "Forms and Publications".

Self-Adjustments

You can correct information previously submitted to Customs if this correction does not change the amount of duties you owe, or if the correction increases the amount of duty you owe. Your completed B2 form must be sent to the regional Customs office where the goods were released and any additional duties owing should be submitted with the adjustment.

For complete details on Self-adjustments, refer to Customs Memorandum D11-6-6 or D14-1-3.

Request for Re-determination (Appeals)

If you believe that you, or your agent, overpaid SIMA duties when calculating and paying your duties, or you believe we made an error in a DAS issued to you, you can ask us to review the transaction. This is called a request for re-determination and is used when you are asking for a refund of SIMA duties.

You must complete a B2 form and deliver it by hand or by registered mail to the Director General of the Anti-dumping and Countervailing Directorate in Ottawa (see Appendix 2 for the address). Your request must be made within 120 days from the date you accounted for the goods, or 90 days from the date of the DAS. You must pay your SIMA duties before you submit the request and you must provide:

• a written statement describing why you want a re-determination;
• the facts on which you base your request;
• the evidence to support the facts;
• copies of the original Form B3, if available;
• copies of the Canadian Customs Invoice (or the commercial invoice);
• the cargo control document;
• any certificates or permits; and
• proof of payment of SIMA duties (date stamped copy).

For complete details on time limits and information requirements, refer to Customs Memorandum D14-1-3. If these requirements are not met, your request may be rejected.

If you disagree with the re-determination, you can appeal to the President of the CBSA, the CITT or the Federal Court, depending on the circumstances.

If you import goods from a NAFTA country, the exporter, manufacturer, producer, or the government of the NAFTA country may file a request for re-determination, whether or not you have paid all the duties owing. This does not remove your liability for the SIMA duties. It simply means that we will begin processing the request even though you have not paid the duties. If your SIMA duties are still unpaid and we have given you a notice, we may detain your future imports until you have paid the duties.

Where can I go for help?

A SIMA liaison officer is available in each of our regional offices to help you with SIMA related inquiries. Each region also has a client service area to answer your Customs questions. Appendix 1 lists the addresses and telephone numbers for the regional Customs offices.

You can also refer to the following documents at www.cbsa-asfc.gc.ca/sima:

• the SIMA Monthly Index, which provides a listing of all goods subject to SIMA duties;
• under SIMA Publications;
• the Special Import Measures Act (SIMA) Brochure, which provides a brief overview of the SIMA legislation; and
• the Statement of Administrative Practices, which details the steps in the investigation process;
• "Statements of Reasons", which provide details of the dumping and/or subsidy investigation for all imported goods subject to SIMA duties;
• frequently asked questions; and
• useful links to other web sites, including the CITT's web site.

You can also get Customs information from:

• our Internet web site at: www.cbsa-asfc.gc.ca;
• by calling any regional Customs office; and
• by calling the Anti-dumping and Countervailing Directorate in Ottawa.

Appendix 1: Regional offices

Appendix 2: Sources of Information

Director of Operational Policy
Anti-dumping and Countervailing Program

Trade Programs Directorate
Canada Border Services Agency
100 Metcalfe Street, 11^th floor
Ottawa, ON  K1A 0L8

Relevant Customs Memorandum

D1-4-1 Invoice Requirements of Canada Customs

D14-1-1 Special Import Measures Regulations

D14-1-2 Disclosure of Normal Value and Export Price

D14-1-3 Procedures for Filing an Appeal or to Make a Request for Re-determination Under the Special Import Measures Act

D14-1-4 Exchange Rate for Calculations Under the Special Import Measures Act and Regulations

D14-1-5 Procedures for Release from Customs of Goods Subject to Provisional Duty Under the Special Import Measures Act for Control of Bonds Used to Secure Payment of Provisional Duty

D14-1-6 Liability for Payment of Provisional Duty, Anti-dumping Duty and Countervailing Duty Under SIMA

D14-1-7 Assessment of Anti-dumping Duty and Countervailing Duties Under the Special Import Measures Act

D14-1-8 Re-investigation Policy Under the Special Import Measures Act

D14-1-9 Information Pertaining to the Acceptance, Enforcement, and Renewal of Undertakings in Dumping and Subsidy Investigations

D15 series (Contains the results of CITT's findings related to SIMA cases)

D17-1-0 Accounting for Imported Goods and Payment of Duties Regulations

D17-1-1 Documentation Requirements for Commercial Shipments

D17-1-5 Release of Commercial Goods

D17-1-10 Coding of Customs Accounting Documents

D17-1-19 Interest Rate for Customs Purposes Regulations