E6-5498. Countervailing Duty Investigation of Certain Softwood Lumber Products From Canada: Notice of NAFTA Panel Decision

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

On November 22, 2005, the Department of Commerce (“Department”) issued its Fifth Remand Determination In the Matter of Certain Softwood Lumber from Canada: Final Affirmative Countervailing Duty Determination, Secretariat File No. USA-CDA-2002-1904-03 NAFTA Binational Panel Review (“Fifth Remand Determination”). On March 17, 2006, a North American Free Trade Agreement (“NAFTA”) Panel upheld the Department's Fifth Remand Determination. See Decision of the Panel on Fifth Remand, In the Matter of Certain Softwood Lumber from Canada: Final Affirmative Countervailing Duty Determination, Secretariat File No. USA-CDA-2002-1904-03 NAFTA Binational Panel Review, March 17, 2006 (“Panel Decision on Fifth Remand”). Subsequently, the NAFTA Panel directed the NAFTA Secretariat to issue a Notice of Final Panel Action on March 28, 2006.

Consistent with the decision of the United States Court of Appeals for the Federal Circuit (“Federal Circuit”) in Timken Co. v. United States, 893 F.2d 337 (Fed. Cir. 1990)(“Timken”), the Department is notifying the public that the Panel Decision on Fifth Remand and the Notice of Final Panel Action issued by the NAFTA Secretariat are not “in harmony” with the Department's original results.

EFFECTIVE DATE:

April 7, 2006.

FOR FURTHER INFORMATION CONTACT:

James Terpstra, AD/CVD Operations, Office 3, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: [phone].

SUPPLEMENTARY INFORMATION:

Background

On April 2, 2002, the Department published a notice of final determination in the countervailing duty investigation on certain softwood lumber products from Canada. 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 accompanying Issues and Decision Memorandum: Final Results of the Countervailing Duty Investigation of Certain Softwood Lumber Products from Canada (March 21, 2002). The Final Determination was subsequently amended. See Notice of Amended Final Affirmative Countervailing Duty Determination and Notice of Countervailing Duty Order: Certain Softwood Lumber Products From Canada, 67 FR 36070 (May 22, 2002). Respondent parties subsequently challenged the Department's final determination before the United States-Canada Binational Panel, pursuant to Article 1904 of NAFTA. The parties briefed and argued the case before the Panel, and on August 13, 2003, the Panel issued its decision, affirming in part and remanding in part the Department's determination. See Decision of the Panel, In the Matter of Certain Softwood Lumber from Canada: Final Affirmative Countervailing Duty Determination, Secretariat File No. USA-CDA-2002-1904-03 NAFTA Binational Panel Review, August 13, 2003. On January 12, 2004, the Department issued its first remand determination continuing to find that Canadian softwood lumber was subsidized but at a country-wide rate of 13.23 percent ad valorem. See Remand Determination In the Matter of Certain Softwood Lumber from Canada: Final Affirmative Countervailing Duty Determination, Secretariat File No. USA-CDA-2002-1904-03 NAFTA Binational Panel Review, January 12, 2004. On June 7, 2004, the Panel issued its decision on remand, affirming in part and remanding in part the Department's determination. See Decision of the Panel, In the Matter of Certain Softwood Lumber from Canada: Final Affirmative Countervailing Duty Determination, Secretariat File No. USA-CDA-2002-1904-03 NAFTA Binational Panel Review, June 7, 2004. On July 30, 2004, the Department issued its second remand determination continuing to find that Canadian lumber is subsidized but at a country-wide rate of 7.82 percent ad valorem. See Second Remand Determination In the Matter of Certain Softwood Lumber from Canada: Final Affirmative Countervailing Duty Determination, Secretariat File No. USA-CDA-2002-1904-03 NAFTA Binational Panel Review, July 30, 2004 (Second Remand Determination). On December 1, 2004, the Panel issued its decision on second remand, affirming in part and remanding in part the Department's determination. See Decision of the Panel on Second Remand, In the Matter of Certain Softwood Lumber from Canada: Final Affirmative Countervailing Duty Determination, Secretariat File No. USA-CDA-2002-1904-03 NAFTA Binational Panel Review, December 1, 2004. On January 24, 2005, the Department issued its third remand determination continuing to find that Canadian lumber is subsidized but at a country-wide rate of 1.88 percent ad valorem. See Third Remand Determination In the Matter of Certain Softwood Lumber from Canada: Final Affirmative Countervailing Duty Determination, Secretariat File No. USA-CDA-2002-1904-03 NAFTA Binational Panel Review, January 24, 2005 (Third Remand Determination). On May 23, 2005, the Panel issued its decision on third remand, affirming in part and remanding in part the Department's determination. See Decision of the Panel on Third Remand, In the Matter of Certain Softwood Lumber from Canada: Final Affirmative Countervailing Duty Determination, Secretariat File No. USA-CDA-2002-1904-03 NAFTA Binational Panel Review, May 23, 2005. On July 7, 2005, the Department issued its fourth remand determination again continuing to find that Canadian lumber is subsidized but at a country-wide rate of 1.21 percent ad valorem. See Fourth Remand Determination In the Matter of Certain Softwood Lumber from Canada: Final Affirmative Countervailing Duty Determination, Secretariat File No. USA-CDA-2002-1904-03 NAFTA Binational Panel Review, July 7, 2005. On October 5, 2005, the Panel issued its decision on fourth remand, affirming in part and remanding in part the Department's determination. See Decision of the Panel on Fourth Remand, In the Matter of Certain Softwood Lumber from Canada: Final Affirmative Countervailing Duty Determination, Secretariat File No. USA-CDA-2002-1904-03 NAFTA Binational Panel Review, October 5, 2005. The Panel directed the Department to use the figure of C$4.34 in determining the profit earned by sellers of logs in the Province of Quebec for the purpose of developing a log-based benchmark price. The Department continued to object to the Panel's decision, but, on November 22, 2005, filed its Fifth Remand Determination in compliance with the Panel's directions, finding a country-wide subsidy rate of 0.80 percent which is de minimis. By decision on March 17, 2006, the Panel affirmed the Fifth Remand Determination and subsequently directed the NAFTA Secretariat to issue a Notice of Final Panel Action on March 28, 2006.

Timken Notice

In its decision in Timken, the Federal Circuit held that, pursuant to 19 U.S.C. § 1516a(c)(1) and 1516a(e), the Department must publish notice of decision of the Court of International Trade which is “not in harmony” with the Department's results. See Timken, 893 F.2d at 340. Because NAFTA panels step into the shoes of the courts they are replacing, they must apply the law of the national court that would otherwise review the administrative determination. Therefore, we are publishing notice that the NAFTA Panel's March 28, 2006, Notice of Final Panel Action and its Panel Decision on Fifth Remand, decision are “not in harmony” with the Final Determination. Publication of this notice fulfills the obligation imposed upon the Department by the decision in Timken. In addition, this notice will serve to suspend liquidation of entries of subject merchandise entered, or withdrawn from warehouse, for consumption on or after April 7, 2006, i.e., 10 days from the issuance of the Notice of Final Action, at the current cash deposit rate.

Dated: April 6, 2006.

David M. Spooner,

Assistant Secretary for Import Administration.