[Federal Register: April 2, 2002 (Volume 67, Number 63)]
[Page 15545-15548]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[C-122-839]
Notice of Final Affirmative Countervailing Duty Determination and
Final Negative Critical Circumstances Determination: Certain Softwood
Lumber Products From Canada
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of final affirmative countervailing duty determination
and final negative critical circumstances determination.
-----------------------------------------------------------------------
SUMMARY: On August 17, 2001, the Department of Commerce (the
Department) published in the Federal Register its preliminary
affirmative determination in the countervailing duty investigation of
softwood lumber products (subject merchandise) from Canada for the
period April 1, 2000, through March 31, 2001 (66 FR 43186).
The net subsidy rate in the final determination differs from that
of the preliminary determination. The revised final net subsidy rate is
listed below in the ``Suspension of Liquidation'' section of this
notice.
EFFECTIVE DATE: April 2, 2002.
FOR FURTHER INFORMATION CONTACT: Eric B. Greynolds at (202) 482-6071 or
Stephanie Moore (202) 482-3692, Office of AD/CVD Enforcement VI, Import
Administration, International Trade Administration, U.S. Department of
Commerce, Room 4012, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230.
SUPPLEMENTARY INFORMATION:
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (the Act) by the
Uruguay Round Agreements Act (URAA). In addition, unless otherwise
indicated, all citations to the Department's regulations are to the
regulations codified at 19 CFR Part 351 (2000).
Background
On August 17, 2001, the Department published the preliminary
determination of its investigation of softwood lumber products from
Canada. See Notice of Preliminary Affirmative Countervailing Duty
Determination, Preliminary Affirmative Critical Circumstances
Determination, and Alignment of Final Countervailing Duty Determination
with Final Antidumping Duty Determination: Certain Softwood Lumber
Products from Canada, 66 FR 43186 (August 17, 2001) (Preliminary
Determination). This investigation covers the period April 1, 2000,
through March 31, 2001.
We invited interested parties to comment on the Preliminary
Determination. We received both case briefs and rebuttal briefs from
interested parties. Public hearings were held on March 6 and March 19,
2002. All issues raised in the case and rebuttal briefs by parties to
this investigation are addressed in the ``Issues and Decision
Memorandum'' (Decision Memorandum) dated March 21, 2002, which is
hereby adopted by this notice.
Scope of Investigation
The products covered by this investigation are softwood lumber,
[[Page 15546]]
flooring and siding (softwood lumber products). Softwood lumber
products include all products classified under headings 4407.1000,
4409.1010, 4409.1090, and 4409.1020, respectively, of the Harmonized
Tariff Schedule of the United States (HTSUS), and any softwood lumber,
flooring and siding described below. These softwood lumber products
include:
(1) Coniferous wood, sawn or chipped lengthwise, sliced or peeled,
whether or not planed, sanded or finger-jointed, of a thickness
exceeding six millimeters;
(2) Coniferous wood siding (including strips and friezes for
parquet flooring, not assembled) continuously shaped (tongued, grooved,
rabbeted, chamfered, V-jointed, beaded, molded, rounded or the like)
along any of its edges or faces, whether or not planed, sanded or
finger-jointed;
(3) Other coniferous wood (including strips and friezes for parquet
flooring, not assembled) continuously shaped (tongued, grooved,
rabbeted, chamfered, V-jointed, beaded, molded, rounded or the like)
along any of its edges or faces (other than wood mouldings and wood
dowel rods) whether or not planed, sanded or finger-jointed; and
(4) Coniferous wood flooring (including strips and friezes for
parquet flooring, not assembled) continuously shaped (tongued, grooved,
rabbeted, chamfered, V-jointed, beaded, molded, rounded or the like)
along any of its edges or faces, whether or not planed, sanded or
finger-jointed.
Although the HTSUS subheadings are provided for convenience and
U.S. Customs purposes, the written description of the merchandise under
investigation is dispositive. Preliminary scope exclusions and
clarifications were published in three separate Federal Register
notices.
Final Scope Exclusions
On February 11, 2002, we published an amendment to the preliminary
antidumping (AD) determination which modified the list of products
excluded from the scope of the AD and CVD softwood lumber
investigations. See Notice of Amendment to Preliminary Determination of
Sales at Less Than Fair Value: Certain Softwood Lumber Products from
Canada; Amendment to Preliminary Affirmative Countervailing Duty
Determination, Preliminary Affirmative Critical Circumstances
Determination, and Alignment of Final Countervailing Duty Determination
with Final Antidumping Determination: Certain Softwood Lumber Products
from Canada, 67 FR 6230, 6231 (February 11, 2002) (Amended
Preliminary). In our review of the comments received throughout the
course of these proceedings, we found that the definitions for some of
the excluded products required further clarification and/or
elaboration. Based on our analysis of the comments received, we have
modified the list of excluded products as follows: \1\
---------------------------------------------------------------------------
\1\ A group of products that were excluded from the scope as
classified was listed in the preliminary determinations as Group A.
This list remains applicable as we determined, through our review of
the petition and factual information submitted, and consultations
with the parties, that the products were outside the scope of the
investigations.
Group A. Softwood lumber products excluded from the scope:
1. Trusses and truss kits, properly classified under HTSUS
4418.90.
2. I-Joist beams.
3. Assembled box spring frames.
4. Pallets and pallet kits, properly classified under HTSUS
4415.20.
5. Garage doors.
6. Edge-glued wood, properly classified under HTSUS item
4421.90.98.40.
7. Properly classified complete door frames.
8. Properly classified complete window frames.
9. Properly classified furniture.
---------------------------------------------------------------------------
Softwood lumber products excluded from the scope only if they meet
certain requirements:
1. Stringers (pallet components used for runners): if they have at
least two notches on the side, positioned at equal distance from the
center, to properly accommodate forklift blades, properly classified
under HTSUS 4421.90.98.40.
2. Box-spring frame kits: if they contain the following wooden
pieces--two side rails, two end (or top) rails and varying numbers of
slats. The side rails and the end rails should be radius-cut at both
ends. The kits should be individually packaged, they should contain the
exact number of wooden components needed to make a particular box
spring frame, with no further processing required. None of the
components exceeds 1" in actual thickness or 83" in length.
3. Radius-cut box-spring-frame components, not exceeding 1" in
actual thickness or 83" in length, ready for assembly without further
processing. The radius cuts must be present on both ends of the boards
and must be substantial cuts so as to completely round one corner.
4. Fence pickets requiring no further processing and properly
classified under HTSUS 4421.90.70, 1" or less in actual thickness, up
to 8" wide, 6' or less in length, and have finials or decorative
cuttings that clearly identify them as fence pickets. In the case of
dog-eared fence pickets, the corners of the boards should be cut off so
as to remove pieces of wood in the shape of isosceles right angle
triangles with sides measuring \3/4\ inch or more.
5. U.S. origin lumber shipped to Canada for minor processing and
imported into the United States, is excluded from the scope of the
investigations if the following conditions are met: (a) the processing
occurring in Canada is limited to kiln-drying, planing to create
smooth-to-size board, and sanding, and (b) if the importer establishes
to Customs' satisfaction that the lumber is of U. S. origin.
6. Softwood lumber products contained in single family home
packages or kits, regardless of tariff classification, are excluded
from the scope of the orders if the following criteria are met:
A. The imported home package or kit constitutes a full package of
the number of wooden pieces specified in the plan, design or blueprint
necessary to produce a home of at least 700 square feet produced to a
specified plan, design or blueprint;
B. The package or kit must contain all necessary internal and
external doors and windows, nails, screws, glue, subfloor, sheathing,
beams, posts, connectors and if included in purchase contract decking,
trim, drywall and roof shingles specified in the plan, design or
blueprint;
C. Prior to importation, the package or kit must be sold to a
retailer of complete home packages or kits pursuant to a valid purchase
contract referencing the particular home design plan or blueprint, and
signed by a customer not affiliated with the importer;
D. The whole package must be imported under a single consolidated
entry when permitted by the U.S. Customs Service, whether or not on a
single or multiple trucks, rail cars or other vehicles, which shall be
on the same day except when the home is over 2,000 square feet;
E. the following documentation must be included with the entry
documents:
1. A copy of the appropriate home design, plan, or blueprint
matching the entry;
2. A purchase contract from a retailer of home kits or packages
signed by a customer not affiliated with the importer;
3. A listing of inventory of all parts of the package or kit being
entered that conforms to the home design package being entered;
4. In the case of multiple shipments on the same contract, all
items listed in E(3) which are included in the present shipment shall
be identified as well.
We have determined that the excluded products listed above are
outside the scope of these investigations provided the specified
conditions are
[[Page 15547]]
met. See Section C (Scope Issues) and Section D (Scope Exclusion
Analysis) of the March 21, 2002, Issues and Decision Memorandum for the
Antidumping Duty Investigation of Certain Softwood Lumber Products From
Canada for further discussion. Lumber products that Customs may
classify as stringers, radius cut box-spring-frame components, and
fence pickets, not conforming to the above requirements, as well as
truss components, pallet components, and door and window frame parts,
are covered under the scope of this investigation and may be classified
under HTSUS subheadings 4418.90.40.90, 4421.90.70.40, and
4421.90.98.40. On January 24, 2002, Customs informed the Department of
certain changes in the 2002 HTSUS affecting these products.
Specifically, subheading 4418.90.40.90 and 4421.90.98.40 were changed
to 4418.90.45.90 and 4421.90.97.40, respectively. Therefore, we are
adding these subheadings as well.
Exclusion of Maritime Products
On July 27, 2001, we amended our Initiation Notice, to exempt
certain softwood lumber products from the Provinces of New Brunswick,
Nova Scotia, Prince Edward Island, and Newfoundland (the Maritime
Provinces) from this investigation. This exemption does not apply to
softwood lumber products produced in the Maritime Provinces from Crown
timber harvested in any other Province. See Amendment to the Notice of
Initiation of Countervailing Duty Investigation: Certain Softwood
Lumber Products from Canada, 66 FR 40228 (August 2, 2001).
Company Exclusions
Based upon our review of exclusion requests received prior to the
Preliminary Determination, the Department preliminarily excluded
Frontier Lumber from the investigation. Since the Preliminary
Determination, the deadline was extended and we received exclusion
requests directly from companies and through the Government of Canada
(GOC). By memorandum of February 20, 2002, the Department announced
that we found it practicable to consider only 30 of the more than 300
company-specific requests for exclusion. We sent supplemental
questionnaires to the selected companies and conducted verification of
each of the company responses received.
Based upon the verified information on the record, the following
companies have been granted company exclusions: Armand Duhamel et fils
Inc., Bardeaux et Cedres, Beaubois Coaticook Inc., Busque & Laflamme
Inc., Carrier & Begin Inc., Clermond Hamel, J.D. Irving, Ltd., Les
Produits. Forestiers. D.G., Ltee, Marcel Lauzon Inc., Mobilier
Rustique, Paul Vallee Inc., Rene Bernard, Inc., Roland Boulanger &
Cite., Ltee, Scierie Alexandre Lemay, Scierie La Patrie, Inc., Scierie
Tech, Inc., Wilfrid Paquet et fils, Ltee, B. Luken Logging Ltd.,
Frontier Lumber, and Sault Forest Products Ltd.
For further discussion of this issue, see the Decision Memorandum.
Period of Investigation
The period of investigation (POI) for which we are measuring
subsidies is April 1, 2000, through March 31, 2001, which is the most
recently completed fiscal year of the GOC.
Negative Critical Circumstances
In the Preliminary Determination, the Department determined that
critical circumstances exist with respect to imports of softwood lumber
from Canada, pursuant to section 703(e) of the Act and section 351.206
of the regulations. Based on further investigation, the Department is
not finding critical circumstances in this final determination. For
further discussion on this issue, see the Decision Memorandum.
Verification
As provided in section 782(i) of the Act, we conducted verification
of the government responses from January 13, 2002 through February 5,
2002. We also conducted verification of the responses of companies
seeking exclusion from February 27 through March 6, 2002. We used
standard verification procedures, including meeting with government and
company officials and examining relevant accounting records and
original source documents provided by the respondents. Our verification
results are outlined in detail in the public versions of the
verification reports, which are on file in the Central Records Unit of
the Department of Commerce (Room B-099).
Analysis of Comments Received
A list of issues which parties have raised and to which we have
responded, all of which are in the Decision Memorandum, is attached to
this notice as Appendix I. Parties can find a complete discussion of
all issues raised in this investigation and the corresponding
recommendations in this public memorandum which is on file in room B-
099 of the Main Commerce Building. In addition, a complete version of
the Decision Memorandum can be accessed directly on the World Wide Web
at https://enforcement.trade.gov, under the heading ``Federal Register
Notices.'' The paper copy and electronic version of the Decision
Memorandum are identical in content.
Suspension of Liquidation
In accordance with sections 705(c)(1)(B)(i)(II) and 777A(e)(2)(B)
of the Act, we have calculated a single country-wide subsidy rate to be
applied to all producers and exporters of the subject merchandise from
Canada. This rate is summarized below:
------------------------------------------------------------------------
Producer/exporter Net subsidy rate
------------------------------------------------------------------------
All Producers/Exporters................... 19.34 Ad Valorem.
------------------------------------------------------------------------
In accordance with the preliminary affirmative determination of
critical circumstances, we instructed the U.S. Customs Service to
suspend liquidation of all entries of the subject merchandise from
Canada, which were entered or withdrawn from warehouse, on or after May
19, 2001, which is 90 days prior to August 17, 2001, the date of
publication of the Preliminary Determination in the Federal Register.
In accordance with section 703(d) of the Act, we instructed the U.S.
Customs Service to discontinue the suspension of liquidation for
merchandise entered, or withdrawn from warehouse, for consumption on or
after December 15, 2001. Because we do not find critical circumstances
in this final determination, we will instruct U.S. Customs to terminate
suspension of liquidation, and release any cash deposits or bonds, on
imports during the 90 day period prior to the date of publication of
the Preliminary Determination.
We will reinstate suspension of liquidation under section 706(a) of
the Act for all entries if the International Trade Commission (ITC)
issues a final affirmative injury determination and will require a cash
deposit of estimated countervailing duties for such entries of
merchandise in the amounts indicated above. If the ITC determines that
material injury, or threat of material injury, does not exist, this
proceeding will be terminated and all estimated duties deposited or
securities posted as a result of the suspension of liquidation will be
refunded or canceled.
As indicated above, the Department exempted certain softwood lumber
products from the Maritime Provinces from this investigation. This
exemption, however, does not apply to softwood lumber products produced
in the Maritime Provinces from Crown timber harvested in any other
province. Additionally, as explained above in the
[[Page 15548]]
``Exclusions'' section of the notice, we are excluding the following
companies: Armand Duhamel et fils Inc., Bardeaux et Cedres, Beaubois
Coaticook Inc., Busque & Laflamme Inc., Carrier & Begin Inc., Clermond
Hamel, J.D. Irving, Ltd., Les Produits. Forestiers. D.G., Ltee, Marcel
Lauzon Inc., Mobilier Rustique, Paul Vallee Inc., Rene Bernard, Inc.,
Roland Boulanger & Cite., Ltee, Scierie Alexandre Lemay, Scierie La
Patrie, Inc., Scierie Tech, Inc., Wilfrid Paquet et fils, Ltee, B.
Luken Logging Ltd., Frontier Lumber, and Sault Forest Products Ltd.
Therefore, we are directing the U.S. Customs Service to exempt from the
suspension of liquidation only entries of softwood lumber products from
Canada which are accompanied by an original Certificate of Origin
issued by the Maritime Lumber Bureau (MLB), and those of the excluded
companies listed above. The MLB certificate will specifically state
that the corresponding entries cover softwood lumber products produced
in the Maritime Provinces from logs originating in Nova Scotia, New
Brunswick, Prince Edward Island, Newfoundland and the state of Maine.
ITC Notification
In accordance with section 705(d) of the Act, we will notify the
ITC of our determination. In addition, we are making available to the
ITC all non-privileged and non-proprietary information related to this
investigation. We will allow the ITC access to all privileged and
business proprietary information in our files, provided that the ITC
confirms that it will not disclose such information, either publicly or
under an administrative protective order (APO), without the written
consent of the Assistant Secretary for Import Administration.
If the ITC determines that material injury, or threat of material
injury, does not exist, this proceeding will be terminated. If however,
the ITC determines that such injury does exist, we will issue a
countervailing duty order.
Return or Destruction of Proprietary Information
In the event that the ITC issues a final negative injury
determination, this notice will serve as the only reminder to parties
subject to APO of their responsibility concerning the destruction of
proprietary information disclosed under APO in accordance with 19 CFR
351.305(a)(3). Failure to comply is a violation of the APO.
This determination is published pursuant to sections 705(d) and
777(i) of the Act.
Dated: March 21, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.
Appendix I--Issues and Decision Memorandum
A. Summary
B. Methodology and Background
I. Scope of Investigation
II. Company Exclusions
III. Period of Investigation
IV. Critical Circumstances
V. Subsidies Valuation Information
A. Aggregation
B. Allocation Period
C. Benchmarks for Loans and Discount Rate
D. Recurring and Non-recurring Benefits
E. Subsidy Rate Calculation
F. Upstream Subsidies
VI. Numerator Issues
VII. Denominator Issues
C. Analysis of Programs
I. Provincial Stumpage Programs Determined to Confer Subsidies
A. Financial Contribution
B. Benefit
C. Specificity
D. Conversion Factor
E. Description of Provincial Stumpage Programs
1. Province of Quebec
2. Province of British Columbia
3. Province of Ontario
4. Province of Alberta
5. Province of Manitoba
6. Province of Saskatchewan
F. Country-Wide Rate for Stumpage
II. Other Programs Determined to Confer Subsidies
A. Programs Administered by the Government of Canada
1. Non-Payable Grants and Conditionally Repayable Contributions
from the Department of Western Economic Diversification
2. Federal Economic Development Initiative in Northern Ontario
(FedNor)
B. Programs Administered by the Province of British Columbia
1. Forest Renewal B.C.
2. Job Protection Commission
C. Programs Administered by the Province of Quebec
1. Private Forest Development Program
III. Programs Determined to be Not Countervailable
A. Funds for Job Creation by the Province of Quebec
B. Sales Tax Exemption for Seedlings by the Province of Ontario
C. Forest Resources Improvement Program
IV. Programs Determined Not to Confer a Benefit
A. Export Assistance Under the Societe de Developpement
Industrial du Quebec (SDI)/Investissement Quebec
B. Assistance under Article 7 of the SDI
C. Assistance from the Societe de Recupertioon d-Exploitation et
de Developpement Forestiers du Quebec (Rexfor)
V. Other Programs
A. Tembec Redemption of Preferred Stock Held by SDI
B. Subsidies to Skeena Cellulose Inc.
VI. Programs Determined Not to be Used
A. Canadian Forest Service Industry, Trade and Economics Program
B. Loan Guarantees to Attract New Mills from the Province of
Alberta
VII. Program Which Has Been Terminated
A. Export Support Loan Program from the Province of Ontario
VIII.Programs Which We Did Not Investigate
A. Subsidies Provided by Canada's Export Development Corporation
B. Timber Damage Compensation in Alberta
D. Total Ad Valorem Rate
E. Analysis of Comments
Comment 1: Adjust Provincial Stumpage Rates for U.S. Procurement
Costs
Comment 2: Tenure Security Rights are Countervailable
Comment 3: Forest Renewal B.C. and Job Protection Commission Being
Terminated
Comment 4: Clerical Errors in Forest Renewal B.C. Subsidy
Calculation
Comment 5: The Private Forest Development Program is not Specific
under the Act
Comment 6: Loan Guarantees from Investissement Quebec are Not Export
Subsidies
Comment 7: Job Protection Commission is Not Countervailable
Comment 8: The Industry, Trade and Economics Program is Not
Countervailable
[FR Doc. 02-7849 Filed 4-1-02; 8:45 am]
BILLING CODE 3510-DS-P