69 FR 10985, March 9, 2004
DEPARTMENT OF COMMERCE
International Trade Administration
[C-122-839]
Final Results and Partial Rescission of Countervailing Duty Expedited
Reviews: Certain Softwood Lumber Products From Canada
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of final results and partial rescission of countervailing
duty expedited reviews.
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SUMMARY: On November 24, 2003, the Department of Commerce (the
Department) published the preliminary results of the expedited reviews
of 16 Group 2 companies and rescinded the reviews of five companies.
See Preliminary Results and Partial Rescission of Countervailing Duty
Expedited Reviews: Certain Softwood Lumber Products from Canada, 68 FR
65879 (November 24, 2003) (Preliminary Results). We are now issuing the
final results of review of 14 companies and rescinding the reviews of
two additional companies. Based on our analysis of the comments
received on the Preliminary Results, we have made changes to the
estimated net subsidy rates determined in the Preliminary Results. For
information on estimated net subsidies, see the ``Final Results of
Reviews'' section of this notice.
EFFECTIVE DATE: March 9, 2004.
FOR FURTHER INFORMATION CONTACT: Stephanie Moore or Cindy Lai Robinson,
Office of AD/CVD Enforcement VI, Group II, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW., Washington, DC 20230; telephone:
(202) 482-3692 or (202) 482-3797.
SUPPLEMENTARY INFORMATION:
Background
On November 24, 2003, the Department published the preliminary
results of review of 16 Group 2 companies and rescinded the review of
five companies. See Preliminary Results, 68 FR 65879 (November 24,
2003). Since the publication of the Preliminary Results, the Department
has received timely requests to rescind the expedited review for R.
Fryer Forest Products Ltd., and Federated Co-operatives Ltd.
We provided interested parties an opportunity to comment on the
Preliminary Results. We received comments filed on behalf of the
Ontario Forest Industries Association, the Ontario Lumber Manufacturers
Association, Aspen Planers Ltd., Downie Timber Ltd., Gorman Bros.
Lumber Ltd., Haida Forest Products Ltd., Kenora Forest Products Ltd.
(Kenora), Liskeard Lumber Limited, Mill & Timber Products Ltd., North
Enderby Timber Ltd., Olav Haavaldsrud Timber Company Limited, Selkirk
Specialty Wood Ltd., Tembec Inc., and Tyee Timber Products Ltd. (the
B&H Group) and from the Coalition for Fair Lumber Imports Executive
Committee (petitioner). We also received comments filed on behalf of
the Gouvernement du Quebec (GOQ). In addition, we received rebuttal
comments from Canadian Forest Products, Ltd. (Canfor) and Terminal
Forest Products (Terminal), the Government of Canada (GOC), and the B&H
Group. We also received ministerial error allegations from Federated
Co-operatives Ltd. (Federated) and Kenora.
Companies Addressed in These Final Results
This notice includes the final results of review for 14 of the 16
companies examined in the Preliminary Results. The following 11
companies from Group 2, Round 1 are included:
Cambie Cedar Products Ltd.;
Canadian Forest Products Ltd.;
Commonwealth Plywood Co. Ltd.;
E. Tremblay et fils ltee;
Greenwood Forest Products Ltd.;
Kalesnikoff Lumber Co. Ltd.;
Kenora Forest Products Ltd.;
Lakeland Mills Ltd.;
Lulumco Inc.;
Terminal Forest Products Ltd.;
The Pas Lumber Company Ltd.
These final results also include the final results of review of the
following three Group 2, Round 2 companies:
Shawood Lumber Inc.;
St. Jean Lumber (1984) Ltd.;
Wynndel Box & Lumber Co. Ltd.
In addition, the expedited reviews of the following two Round 1
companies included in the Preliminary Results, were rescinded:
Federated Co-operatives Ltd.;
R. Fryer Forest Products Ltd.
These final results also include the rescission of the expedited
review of five additional companies:
Kootenay Innovate Wood Inc. (Group 1, Round 1);
Lukwa Mills Ltd. (Group 2, Round 2);
South East Forest Products Ltd. (Group 2, Round 2);
Teal Cedar Products Ltd. (Group 2, Round 2);
West Fraser Mills Ltd. (Group 1, Round 2).
[[Page 10986]]
Scope of the Reviews
The products covered by this order are softwood lumber, 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 moldings 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
customs purposes, the written description of the merchandise subject to
this order is dispositive.
As specifically stated in the Issues and Decision Memorandum
accompanying the Notice of Final Determination of Sales at Less Than
Fair Value: Certain Softwood Lumber Products from Canada, 67 FR 15539
(April 2, 2002) (see comment 53, item D, page 116, and comment 57, item
B-7, page 126), available at http://www.enforcement.trade.gov, drilled and notched
lumber and angle cut lumber are covered by the scope of this order.
The following softwood lumber products are excluded from the scope
of this order provided they meet the specified requirements detailed
below:
(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 heading 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 this
order if the following conditions are met: (1) The processing occurring
in Canada is limited to kiln-drying, planing to create smooth-to-size
board, and sanding, and (2) if the importer establishes to the
satisfaction of the United States Customs and Border Protection (CBP)
that the lumber is of U.S. origin.
(6) Softwood lumber products contained in single family home
packages or kits,\1\ regardless of tariff classification, are excluded
from the scope of this order if the importer certifies to items 6 A, B,
C, D, and requirement 6 E is met:
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\1\ To ensure administrability, we clarified the language of
exclusion number 6 to require an importer certification and to
permit single or multiple entries on multiple days as well as
instructing importers to retain and make available for inspection
specific documentation in support of each entry.
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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, sub floor, sheathing,
beams, posts, connectors, and if included in the 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. Softwood lumber products entered as part of a single family home
package or kit, whether in a single entry or multiple entries on
multiple days, will be used solely for the construction of the single
family home specified by the home design matching the entry.
E. For each entry, the following documentation must be retained by
the importer and made available to the CBP upon request:
i. A copy of the appropriate home design, plan, or blueprint
matching the entry;
ii. A purchase contract from a retailer of home kits or packages
signed by a customer not affiliated with the importer;
iii. A listing of inventory of all parts of the package or kit
being entered that conforms to the home design package being entered;
iv. In the case of multiple shipments on the same contract, all
items listed in E(iii) which are included in the present shipment shall
be identified as well.
Lumber products that the CBP 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 order
and may be classified under HTSUS subheadings 4418.90.45.90 ,
4421.90.70.40, and 4421.90.97.40.
Finally, as clarified throughout the course of the investigation,
the following products, previously identified as Group A, remain
outside the scope of this order. They are:
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.
[[Page 10987]]
In addition, this scope language has been further clarified to now
specify that all softwood lumber products entered from Canada claiming
non-subject status based on U.S. country of origin will be treated as
non-subject U.S.-origin merchandise under the countervailing duty
order, provided that these softwood lumber products meet the following
condition: upon entry, the importer, exporter, Canadian processor and/
or original U.S. producer establish to CBP's satisfaction that the
softwood lumber entered and documented as U.S.-origin softwood lumber
was first produced in the United States as a lumber product satisfying
the physical parameters of the softwood lumber scope.\2\ The
presumption of non-subject status can, however, be rebutted by evidence
demonstrating that the merchandise was substantially transformed in
Canada.
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\2\ See the scope clarification message (3034202),
dated February 3, 2003, to the CBP, regarding treatment of U.S.
origin lumber on file in the Central Records Unit, Room B-099 of the
main Commerce Building.
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Methodology
Stumpage Programs
These final results include companies that source less than a
majority of their wood (less than 50 percent of their inputs) from the
United States, the Maritime Provinces, Canadian private lands, and/or
Canadian companies excluded from the order, and have acquired Crown
timber through their own tenure contracts. We included in our subsidy
calculations only harvested softwood sawlogs processed by the firm's
sawmills. We calculated company-specific benefit rates as follows: for
logs harvested under a company's own tenure, we first calculated, on a
species-specific basis, an average unit benefit from ``Crown land
harvesting.'' We divided the stumpage fees each company paid by the
total quantity harvested from Crown land to obtain the stumpage price.
The resulting unit stumpage price was adjusted by the company-specific
unit tenure costs to derive an adjusted stumpage price for each
species.\3\ The adjusted species-specific stumpage price then was
compared to the appropriate benchmark for that province to determine
the species-specific per-unit benefit, which was multiplied by the
harvest volume \4\ for each species to obtain the total species-
specific benefit. Species-specific benefits were summed up to derive
the total benefit from Crown land harvesting. For all wood inputs (logs
and lumber) acquired from other subsidized sources, we applied the same
methodology used in Group1: we calculated the benefit by multiplying
the quantity purchased by the province-specific stumpage benefit amount
calculated in the underlying investigation (i.e., the average per-unit
differential between the calculated adjusted stumpage fee for the
relevant province and the appropriate benchmark for that province).
Also see Notice of Final Affirmative Countervailing Duty Determination
and Final Negative Critical Circumstances Determination: Certain
Softwood Lumber Products From Canada, 67 FR 15545 (April 2, 2002)
(Final Determination), and Issues and Decision Memorandum: Final
Results of the Countervailing Duty Investigation of Certain Softwood
Lumber Products from Canada (Investigation Decision Memo).
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\3\ These cost adjustments were limited to those granted in the
underlying investigation.
\4\ Certain companies reported that certain harvested softwood
sawlogs were not used in lumber production. These were excluded from
our calculations.
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We then divided the combined stumpage benefit resulting from
harvesting under a company's own tenure and from purchases of logs and
lumber through other subsidized sources by the appropriate value of the
company's sales (scope and non-scope softwood lumber products, net of
resales, and softwood lumber by-products) to determine the company's
estimated subsidy rate from stumpage and then added any benefit from
other programs to obtain the net subsidy rate for the company.
As indicated in the Notice of Initiation of Expedited Reviews of
the Countervailing Duty Order: Certain Softwood Lumber Products From
Canada, 67 FR 46955 (July 17, 2002), we have not attributed a benefit
to (1) logs or lumber acquired from the Maritime Provinces, (2) logs or
lumber of U.S. origin, (3) lumber produced by companies excluded in the
investigation, and (4) logs from Canadian private land. Furthermore, as
already stated, we are not including logs which the companies claim to
have acquired and resold without any processing in our subsidy rate
calculations. In addition, we are also not including in our
calculations of company-specific subsidy rates lumber purchased and
resold without any further manufacturing.
Other Programs
In the underlying investigation, the Department determined that the
province of British Columbia provided countervailable benefits under
the Forest Renewal program and the Job Protection program, while the
province of Quebec provided countervailable benefits under the Private
Forest Development Program (PFDP). In addition, the Department examined
loans issued by Investment Quebec, lending under Article 28 of the
Society for the Industrial Development of Quebec (SDI), and loans
issued by the Society for the Recuperation and Development of Quebec
Forests (Rexfor). Based upon our decision in the underlying
investigation, the Department requested information from companies
regarding the use of these programs.
Kalesnikoff was the only company that reported using one such
program, the Forest Renewal program. However, Kalesnikoff reported that
it did not receive any grants or loans under this program during the
POR; rather it acted as a delivery agent for silviculture and resource
inventory activities. Kalesnikoff was reimbursed for non-profit
activities on behalf of the Forest Renewal Program for the
administration and overhead costs incurred in delivering this program
to the Province. On this basis, we find that Kalesnikoff did not
receive countervailable benefits under this program. No other company
reported using any of the British Columbia or Quebec programs during
the POR.
Analysis of Comments Received
Issues raised by interested parties in comments submitted in
response to the Preliminary Results are addressed in the ``Issues and
Decision Memorandum: Final Results of Expedited Review of 16 Group 2
Companies,'' dated concurrently with this notice, which is hereby
adopted by this notice. A list of the issues which interested 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. The
Decision Memorandum is on file in the Central Records Unit 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.
Final Results of Review
In accordance with 19 CFR 351.221(b)(4)(i), we calculated an
individual subsidy rate for each producer/exporter subject to these
expedited reviews. For the period April 1, 2000 to March 31, 2001, we
[[Page 10988]]
determine the net subsidy to be as follows:
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Net
subsidy
Net subsidies--producer/exporter rate
percent
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Cambie Cedar Products Ltd.................................... 14.59
Canadian Forest Products Ltd................................. 12.24
Commonwealth Plywood Co. Ltd................................. 2.89
E. Tremblay et fils ltee..................................... 6.36
Greenwood Forest Products Ltd................................ 7.95
Kalesnikoff Lumber Co. Ltd................................... 12.10
Kenora Forest Products Ltd................................... 7.39
Lakeland Mills Ltd........................................... 8.85
Lulumco Inc.................................................. 13.74
Terminal Forest Products Ltd................................. 10.00
The Pas Lumber Company Ltd................................... 7.45
Shawood Lumber Inc........................................... 5.46
St. Jean Lumber (1984) Ltd................................... 33.27
Wynndel Box & Lumber Co. Ltd................................. 12.89
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The Department will instruct the CBP to collect cash deposits of
estimated countervailing duties in the amounts indicated above of the
f.o.b. invoice price on all shipments of the subject merchandise
produced by the reviewed companies, entered, or withdrawn from
warehouse, for consumption on or after the date of publication of the
final results of these reviews.
These results of expedited reviews cover only those companies that
we have specifically identified. We will address in the final results
of the expedited reviews, the issue of the adjustment of the cash
deposit rate for all other non-reviewed companies subject to the
country-wide rate to account for the benefit and the sales values of
the companies that have received company-specific rates.
These expedited reviews and notice are issued and published in
accordance with sections 751(a)(1) and 777(i)(1) of the Act (19 U.S.C.
1675(a)(1) and 19 U.S.C. 1677(i)(1)).
Dated: March 2, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
Appendix I
List of Comments and Issues in the Decision Memorandum
List of Comments
1. Use of Cross-Border Benchmarks
2. Correction of Kenora's Ministerial Errors
3. Canadian Forest Products, Ltd. (Canfor) Merger
4. Unprocessed Sales
5. Cash Deposit Rates
6. Verification
7. Lumber versus Log Inputs
8. Recalculated Country-Wide Rate
9. Countervailable Benefits of Certain Non-Stumpage Programs in Quebec
[FR Doc. 04-5281 Filed 3-8-04; 8:45 am]