Contributing Lawyers


Cyndee Todgham Cherniak

United States

Susan Kohn Ross


Andrew Hudson

Canadian Wheat Board Gets Its Illegally Collected AD/CVD Duties Back from the USA

On October 20, 2008, the United States Court of International Trade (CIT)issued a landmark opinion in favour of the Canadian Wheat Board. - see following decision -

The U.S. CIT has ordered the Department of Commerce (DOC) to return antidumping and countervailing duties it collected on Canadian hard red spring wheat between August 2003 and February 2006.

The U.S. DOC originally incorrectly deemed Canadian wheat to be unfairly subsidized and imposed countervailing duties at a rate of 14.15 %.  The United States International Trade Commission (ITC) had determined that the U.S. wheat industry was suffering material injury.

The Canadian Wheat Board appealed the ITC decison to a NAFTA Chapter 19 Binational Panel.  The NAFTA Panel determined that the material injury determination was not in accordance with U.S. law and the antidumping and countervailing duty order was vacated.  The United States did not refund the duties collected since the AD/CVD order.

The Canadian Wheat Board filed a case with the CIT for the monies to be returned.  The CIT agreed that the monies should be returned.

“The purpose of collecting anti-dumping and countervailing duties is to level the playing field so that producers can compete fairly in the marketplace,” Judge Richard Eaton wrote in his decision. “That purpose would not be advanced by allowing the United States to keep (the wheat board's) deposits when it has been conclusively established that the domestic industry has suffered no material injury from the subject imports.”

This CIT opinion means that cash deposits collected by the U.S. government, including money gathered before the tariffs were declared unfair must be returned to the Canadian Wheat Board.

This is an important decision in light of Canada's softwood lumber and other trade disputes.  The duties are refunded because the NAFTA Panel process is a judicial review of the ITC decision and, when the ITC decision was invalidated, the collection of the duties became improper and the keeping of the duties could not be supported.  This is a reasonable decision - the U.S. DOC and ITC cannot make aggressively protectionist AD/CVD decisions against its trading partners in order to collect revenues.  If a country or an exporter is not engaged in unfair trade practices, they should not be required to add to the United States revenue base and be put at a competitive disadvantage in the U.S marketplace.

It is important to note that this result was possible under the NAFTA Chapter 19 rules.  Countries other than Mexico and Canada can acheive similar results only if they file judicial reviews in the Untied States to challenge incorrect DOC and ITC decisions.  A similar result may not have been possible under the WTO dispute settlement rules as cuurently drafted.

For more information, please contact Cyndee Todgham Cherniak (416-307-4168).

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