Preliminary Finding: Wheat Gluten Dumping

Summary#

• The Canada Border Services Agency (CBSA) made a preliminary finding on December 23, 2020 that some imported wheat gluten may be being sold in Canada at unfairly low prices (a preliminary determination of “dumping”).
• As a result, provisional duties can be charged while a full injury inquiry by the Canadian International Trade Tribunal (CITT) proceeds.

What it does#

• Finds that certain wheat gluten imported from Australia, Austria, Belgium, France, Germany and Lithuania may be dumped into the Canadian market.
• Covers goods usually classified under tariff numbers 1109.00.10.00 and 1109.00.20.00.
• Starts a provisional-duty period beginning December 23, 2020: provisional duty must be paid on subject goods released from CBSA custody during this period. The duty charged will not exceed the estimated dumping margin.
• The Customs Act rules apply to how those provisional duties are accounted for and paid; interest can apply if duties are not paid on time.
• The Canadian International Trade Tribunal will hold a full inquiry into whether the dumping has caused injury and will issue a final order or finding no later than 120 days after it receives notice of the CBSA’s preliminary determination.
• The CBSA will publish its Statement of Reasons within 15 days of the decision and make it available on its website.

Who's affected#

• Importers and customs brokers who bring wheat gluten into Canada under the listed tariff numbers.
• Exporters and sellers of wheat gluten in the listed countries (Australia, Austria, Belgium, France, Germany, Lithuania).
• Canadian businesses that use wheat gluten (for example, bakeries, food processors and food ingredient suppliers) may face higher costs or delays if provisional duties or future measures affect supply or price.
• The domestic wheat gluten industry and trade lawyers or consultants involved in the upcoming CITT inquiry.
• It is unclear from the notice how large the duties might be, or exactly which specific products or brands will be most affected beyond the tariff numbers and product description.

Why it matters#

• Provisional duties can raise the immediate cost of importing the covered wheat gluten. That can increase costs for food manufacturers and possibly affect prices for end products.
• Importers may need to post cash or security at the border to release goods, which affects cash flow and logistics.
• The full CITT inquiry could result in final anti-dumping duties. If imposed, those would be longer-term and could change supply patterns, sourcing decisions, and prices in the Canadian market.
• The process is still ongoing: this is a preliminary step, not a final ruling.