02-18043. Notice of Initiation of Expedited Reviews of the Countervailing Duty Order: Certain Softwood Lumber Products From Canada

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of Initiation of Expedited Reviews.

SUMMARY:

On May 22, 2002, the Department of Commerce (the Department) published in the Federal Register its amended final affirmative countervailing duty determination and countervailing duty order covering softwood lumber products (subject merchandise) from Canada (67 FR 36068), as corrected (67 FR 37775, May 30, 2002).

Included with the amended final affirmative determination and countervailing duty order was an announcement that we would be accepting applications for company-specific expedited reviews. The purpose of such reviews is the calculation of company-specific cash deposit rates. By this notice, the Department is initiating expedited reviews of companies that submitted timely and complete applications pursuant to our announcement.

EFFECTIVE DATE:

July 17, 2002.

FOR FURTHER INFORMATION CONTACT:

Carrie Farley at [phone] or Gayle Longest at [phone], 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 (2002).

Background

On May 22, 2002, the Department published the countervailing duty order on softwood lumber from Canada. See 67 FR 36070. In that Federal Register notice, we indicated that individual exporters of subject merchandise could request expedited reviews for the purpose of establishing individual cash deposit rates. We stated that we had posted, on the IA website, an electronic application form and requested that all applicants submit their review requests in electronic format. All such requests were to be filed with the Department by June 21, 2002.

In response, the Department received a total of 100 timely requests for expedited review. A total of 73 of these requests contained all of the information requested by the Department and are therefore timely and complete. By this notice, the Department is initiating reviews of the exporters that filed timely and complete requests for expedited review (see listing below).

For those requests that were timely but incomplete, we are providing each applicant with one, and only one, opportunity to file an amended request for expedited review. We will notify these applicants of the deficiencies in their submissions. The amended requests must be received by the Department within two weeks of the date of the Department's notification. We intend to initiate expedited reviews of companies that properly and timely resubmit their applications.

Conduct of Reviews

The concept of expedited reviews in countervailing duty proceedings is very recent; it arose in the context of the Uruguay Round multilateral trade negotiations. Although section 751(a) of the Act provides clear authority for the conduct of such reviews, the Department has not yet had an opportunity to conduct one, either in a proceeding such as this in which the investigation was conducted on an aggregate basis, or in a proceeding in which the investigation was conducted on a company-specific basis. In addition, because aggregate cases are rare, the Department has not yet promulgated regulations governing expedited reviews in such cases. Consequently, we find ourselves in the position of having few guideposts in developing an approach to these reviews that strikes an appropriate balance between our dual mandates of (1) calculating company-specific rates and (2) conducting the reviews on an expedited basis.

In a normal countervailing duty administrative review, the Department examines no more than a handful of respondents. Expedited reviews of potentially 100 lumber exporters, accounting for approximately 50 percent of Canadian softwood lumber exports to the United States, present the Department with an enormous challenge. Although ideally we would conduct full-scale reviews—and, in fact, could do so for an extremely limited number of companies—it is simply not possible, as a practical matter, for the Department to conduct such reviews of 100 companies on an expedited basis. Given our statutory obligations, an undertaking of that magnitude would put an unmanageable strain on the Department's resources. For this reason, the Department recognized at the outset that it could only fulfill its dual mandates of company-specific rates and expeditious processing by developing streamlined methodologies and procedures for these reviews.

In fact, many of the interested parties who have contacted us regarding our approach to these reviews fully understand that we must develop streamlined methodologies and procedures. They have recommended a variety of means to accomplish our twin objectives. Even petitioners, while generally objecting to these reviews, suggested that, were the Department to conduct these reviews, it would need to categorize applicants into various groups based on their respective circumstances. Our approach, as fully set forth below, incorporates many of the suggestions of the interested parties and attempts to protect the equities on all sides.

We begin by discussing how we arrived at our approach. As mentioned above, our approach should provide a practicable balance between our twin objectives of (1) assigning companies individualized rates and (2) conducting the reviews in an expeditious manner.

In addressing the first of these objectives, we note that these reviews cover the same period as the investigation, and are intended solely to provide individual cash deposit rates. Accordingly, we will, to the extent possible, track the methodology used in the investigation. Consequently, we considered measuring the company-specific stumpage benefit by applying the investigation methodology strictly, only substituting company data for aggregate data. Under this approach, we would not revisit issues addressed in the investigation such as the selection of the benchmarks and the allowable adjustments.

Even with this simplification, the investigation methodology applied to a company-specific analysis would still require extensive data collection and an examination of complex issues that did not arise under the aggregate methodology used in the investigation. Consideration of these issues in the context of expedited reviews would jeopardize the fulfillment of our second mandate—to conduct the reviews in an expeditious manner. We therefore consider it to be appropriate to conduct company-specific analyses of stumpage programs only on the portion of Crown timber that was harvested by the exporter under tenure contracts. Following the investigation methodology, this calculation can be done in a relatively straightforward and expeditious manner.

For Crown timber acquired from other sources and for lumber from all sources (except from the United States, the Maritime Provinces, and excluded Canadian companies), we considered the suggestion made by several parties to use the more streamlined exclusion methodology. Under that methodology, the benefit is calculated by multiplying the volume of Crown logs (except those from the exporter's tenure) and lumber (except from the sources listed above) used as inputs by the province-specific stumpage benefit calculated in the investigation. We noted that the advantages of the exclusion methodology, as compared with the full investigation methodology, are that it involves significantly less data collection and requires a less complicated, and less time-consuming, analysis. This allows us to satisfy our second mandate of conducting the reviews expeditiously.

We also considered an additional factor: the degree to which the company utilized inputs from the United States, the Maritime provinces, and Canadian private lands. These sources are easily identifiable, and the Department has already determined that these sources do not give rise to subsidies. For companies that primarily utilize inputs from these sources, because the exclusion methodology is based on the average Province-wide stumpage benefit, the calculated company-specific benefit would not vary significantly whether we utilize the exclusion methodology or do an additional analysis of the companies' own tenures.

Based on the above considerations, and with a view to accommodating as many of the concerns expressed by the parties as possible, we have devised an approach which involves separating the reviews into two groups. The first group includes: (a) Companies that obtain the majority of their wood (over 50 percent of their inputs) from the United States, the Maritime Provinces, Canadian private lands, and/or Canadian companies excluded from the order, and (b) companies that source less than a majority of their wood from these sources and do not have tenure. The second group is comprised of companies that source less than a majority of their wood from these sources and have acquired Crown timber through their own tenure contracts.

For the first group, we will calculate company-specific rates based on the exclusion methodology used in the investigation. That is, we will multiply the quantity of Crown logs and the total quantity of lumber inputs by the province-specific stumpage benefit, i.e., the average per-unit price differential between the calculated adjusted stumpage fee for the relevant province and the appropriate benchmark for that province, to obtain the company-specific stumpage benefit. We will not, however, attribute a benefit to lumber acquired from the Maritime Provinces and accompanied by the appropriate certification, from the United States, or from one of the excluded mills. We will divide the total company benefit by the appropriate value of the company's sales to determine the subsidy rate from stumpage and add any benefit from other programs for each company in the first group.

For the second group, we will follow the exclusion methodology as described above with respect to purchases of Crown logs from all sources other than the companies' own tenures, and for purchases of lumber. For logs obtained from a company's own tenure, however, we will follow the investigation methodology, using company-specific data instead of aggregate data to the extent possible. In light of the expedited nature of this process, however, we will not revisit the issues already addressed in the investigation, such as the selection of the benchmark or the types of allowable adjustments. We will request from each company in this group the total amount of Crown timber harvested under its own tenure contract, the fees paid according to species, and the costs incurred in harvesting and maintaining the tenure. To derive a per-unit benefit, we will then compare the per-unit acquisition cost to the benchmark used in the investigation. We will multiply that dollar amount by the quantity of Crown timber harvested by the company to calculate the benefit to the company derived from its own tenure. This benefit will be combined with the benefit, calculated in accordance with the methodology described for group one, for all wood inputs from other sources. To derive the company-specific rate, the resulting total will be divided by the appropriate amount of the company's total sales and combined with the benefit from other programs.

This two-track, streamlined approach will enable us to review the maximum number of companies in the shortest possible time. We expect to issue the final results of review for companies in group one in September, with preliminary results issued by the end of July. We expect to complete the analysis for companies in group two within six to nine months, with preliminary results in November.

We invite comments on our approach and will consider alternative methodologies proposed by interested parties. Parties that file such comments should (1) describe each proposal in detail and (2) explain how it represents a practicable approach that strikes an appropriate balance between the calculation of individualized rates and expeditiousness. All interested parties should submit comments within 10 days of the publication of this notice in the Federal Register. Comments should be addressed to Import Administration's Central Records Unit at Room 1870, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230. All submissions should be made in accordance with the filing requirements outlined in section 351.303 of the Department's Regulations, which are available on the Internet at www.ia.ita.doc.gov.

Initiation

At this time, we are initiating expedited reviews of the following companies:

Alexandre Côté Ltée.

American Bayridge Corporation

Apollo Forest Products Ltd.

Aspen Planers Ltd.

Blanchette & Blanchette Inc.

Boccam Inc.

Bois Daaquam Inc.

Bois Omega Ltée

Byrnexo Inc.

Cambie Cedar Products Ltd.

Canadian Forest Products Ltd

Cando Contracting Ltd.

City Lumber Sales & Services Limited

Commonwealth Plywood Co. Ltd.

Davron Forest Products Ltd.

Domtar Inc.

Downie Timber Ltd.

Dunkley Lumber Ltd.

E. Tremblay et fils Ltée

Federated Co-operatives Limited

Francois Giguère Inc.

Fraser Pacific Forest Products Inc

Frontier Mills Inc.

Goodfellow Inc.

Gorman Bros. Lumber Ltd.

Greenwood Forest Products (1983) Ltd.

Haida Forest Products Ltd.

Herridge Sawmills Ltd.

Interbois, Inc.

J. A. Fontaine et fils Inc.

Jackpine Engineered Wood Products Inc.

Jackpine Forest Products Ltd.

Jointfor (3207021 Canada Inc.)

Kalesnikoff Lumber Co. Ltd.

Kenora Forest Products Ltd.

Kootenay Innovative Wood Ltd.

Landmark Truss & Lumber Inc

Les Bois d'Oeuvre Beaudoin & Gauthier Inc.

Les Bois S&P Grondin Inc.

Les Industries P.F. Inc.

Les Moulures Jacomau 2000, Inc.

Les Produits Forestiers Dube Inc

Liskeard Lumber Limited

Lonestar Lumber Inc.

Lulumco Inc.

Maibec Industries, Inc.

Materiaux Blanchet Inc.

Meunier Lumber Company Ltd.

MF Bernard Inc.

Mid America Lumber

Mill & Timber Products Ltd.

North Enderby Timber Ltd.

Olav Haavaldsrud Timber Company Limited

R. Fryer Forest Products Limited

Richard Lutes Cedar, Inc.

Riverside Forest Products Limited

Scierie Lapointe & Roy Ltee.

Scierie Nord-Sud Inc.

Scierie West-Brome Inc.

Séchoirs de Beauce Inc.

Selkirk Specialty Wood Ltd.

Slocan Forest Products Ltd.

Tembec Inc.

Terminal Forest Products Ltd.

Tolko Industries Ltd.

Treeline Wood Products Ltd.

Tyee Timber Products Ltd.

Uphill Wood Supply Inc.

Usine Sartigan Inc.

West Bay Forest Products & Manufacturing Ltd.

West Fraser Mills Ltd.

West Can Rail Ltd.

Western Commercial Millwork Inc.

This notice is in accordance with section 751(a) of the Tariff Act of 1930.

Dated: July 11, 2002.

Faryar Shirzad,

Assistant Secretary for Import Administration.