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CBSA & CITT Launch Investigation/Inquiry into Dumping and Subsidization of Silicon Metal

Posted February 27, 2017

The Canada Border Services Agency last week launched an investigation into whether or not certain silicon metal originating in or exported from Brazil, Kazakhstan, Laos, Malaysia, Norway, Russia and Thailand is being unfairly dumped in Canada.

Concurrently, the CBSA will also be investigating allegations of illegal government subsidies being provided to producers of the subject goods originating in or exported from Brazil, Kazakhstan, Malaysia, Norway and Thailand.

The investigations follow a complaint filed by Québec Silicon LP (a joint venture between two U.S. corporations, Globe Specialty Metal and Dow Corning) and pertain to more than 97% of all imports of silicon metal into Canada that last year totaled $49 million.

Usually classified under Harmonized System classification number 2804.69.00.00, the goods under investigation are silicon metal containing at least 96.00% but less than 99.99% silicon by weight, and silicon metal containing between 89.00% and 96.00% silicon by weight that contains aluminum greater than 0.20% by weight, of all forms and sizes.

Although commonly referred to as metal, silicon exhibits characteristics of both metals and non-metals. High-purity chemical and metallurgical grade silicon metal in question is used by the chemical industry in the production of silicone compounds (the main raw material for a large number of industrial and consumer products) and by aluminum manufacturers to improve the useful properties of aluminum, as well as in the manufacture of silicon wafers used in photovoltaic solar cells and electronic semiconductors.

Quebec Silicon alleges that as a result of aggressive price undercutting from various countries, they face lost revenue and market share, resulting in reduced production and employment. In this regard, the Canadian International Trade Tribunal has also initiated an inquiry to determine whether the subject imports are causing material harm to the Canadian industry and will issue a preliminary decision by April 21, 2017.

It should be noted that following a similar complaint several years ago, the subject goods originating in or exported from China were found to have been dumped and subsidized. Subsequent to the imposition of punitive duties ranging up to 235%, the value of Chinese imports of silicon metal dropped from $30.7 million in 2013 to just $3.3 million last year.