05-19361. Final Results of Countervailing Duty New Shipper Review: Certain Softwood Lumber Products From Canada

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

On May 3, 2005, the Department of Commerce (the Department) published in the Federal Register the preliminary results of the new shipper review of Seed Timber Co. Ltd. (Seed Timber) under the countervailing duty (CVD) order on certain softwood lumber products from Canada. See Certain Softwood Lumber Products from Canada: Preliminary Results of Countervailing Duty New Shipper Review, 70 FR 22848 (May 3, 2005) (Preliminary Results).

Based on our analysis of comments received in this review, the Department has not revised the net subsidy rate for Seed Timber, the only producer/exporter of subject merchandise covered by this review. For further discussion of our analysis of the comments received for these final results, see the September 22, 2005, Issues and Decision Memorandum from Barbara E. Tillman, Acting Deputy Assistant Secretary for Import Administration, to Joseph A. Spetrini, Acting Assistant Secretary for Import Administration, concerning the Final Results of Countervailing Duty New Shipper Review: Certain Softwood Lumber Products from Canada. (New Shipper Decision Memorandum). The final net subsidy rate for Seed Timber is listed below in “Final Results of Review.”

EFFECTIVE DATE:

September 28, 2005.

FOR FURTHER INFORMATION CONTACT:

Kristen Johnson, AD/CVD Operations, Office 3, Import Administration, U.S. Department of Commerce, Room 4014, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: [phone].

SUPPLEMENTARY INFORMATION:

Background

On June 30, 2004, we initiated a new shipper review for Seed Timber covering the review period January 1, 2003, through December 31, 2003 (POR). See Certain Softwood Lumber Products From Canada: Notice of Initiation of Antidumping Duty New Shipper Review for the Period May 1, 2003, through April 30, 2004, and Notice of Initiation of Countervailing Duty New Shipper Review for the Period January 1, 2003, Through December 31, 2003, 69 FR 41229 (July 8, 2004).¹ On May 3, 2005, the preliminary results of Seed Timber's new shipper review were published in the Federal Register . See Preliminary Results, 70 FR 22848. Interested parties submitted case briefs to the Department on June 2, 2005.²

In accordance with 19 CFR 351.214(a), this new shipper review covers only the exporter or producer for which a review was specifically requested. Accordingly, this new shipper review only covers subject merchandise exported and produced by Seed Timber.

Scope of Order

The products covered by this order are softwood lumber, flooring and siding (softwood lumber products). Softwood lumber products include all products classified under subheadings 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 www.ia.ita.doc.gov/​frn,, 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 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 U.S. 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,³ 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:

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 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 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 4421.90.98.40;

7. Properly classified complete door frames;

8. Properly classified complete window frames;

9. Properly classified furniture.

In addition, this scope language was further clarified to 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.⁴ The presumption of non-subject status can, however, be rebutted by evidence demonstrating that the merchandise was substantially transformed in Canada.

Analysis of Comments Received

All issues raised in the case briefs submitted by interested parties to this new shipper review are addressed in the New Shipper Decision Memorandum, which is hereby adopted by this notice. A list of the issues contained in that decision memorandum is attached to this notice as Appendix I. Parties can find a complete discussion of the issues raised in this review and the corresponding recommendations in that public memorandum, which is on file in the Central Records Unit (CRU), room B-099 of the Main Commerce Building. In addition, a complete copy of the New Shipper Decision Memorandum can be accessed directly on the World Wide Web at http://ia.ita.doc.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 section 751(a)(2)(B)(i) of the Tariff Act of 1930, as amended (the Act), we have determined an individual rate for Seed Timber. We determine the total net countervailable subsidy rate to be:

Producer/Exporter	Net Subsidy Rate
Seed Timber Co. Ltd.	2.22 percent ad valorem

In accordance with 19 CFR 356.8(a), we will issue appropriate assessment instructions directly to CBP on or after 41 days following the publication of the final results of this review, to liquidate shipments of the subject merchandise produced or exported by Seed Timber entered, or withdrawn from warehouse, for consumption from January 1, 2003, through December 31, 2003, at 2.22 percent ad valorem of the f.o.b. invoice price.

We will also instruct CBP to collect cash deposits of estimated countervailing duties at 2.22 percent ad valorem of the f.o.b. invoice price on all shipments of the subject merchandise from Seed Timber entered, or withdrawn from warehouse, for consumption on or after the date of publication of the final results of this new shipper review. This cash deposit requirement will remain in effect until publication of the final results of the second administrative review of the countervailing duty order on certain softwood lumber products from Canada.⁵

Return or Destruction of Proprietary Information

This notice serves as a reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of return/destruction of APO material or conversion to judicial protective order is hereby requested. Failure to comply is a violation of the APO.

This review and notice is issued and published in accordance with sections 751(a) and 777(i)(1) of the Act.

Dated: September 22, 2005.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

APPENDIX I - Issues and Decision Memorandum

I. Analysis of Programs

A. Program Determined to Be Countervailable

1. British Columbia's Provincial Stumpage Program

B. Programs Determined to Be Not Used

1. Non-Stumpage Programs of the Government of British Columbia

a. Grants, Loans, and Loan Guarantees Provided from Forest Renewal BC

b. Payments Associated with Tenure Reclamation

c. Land-Base Investment Program

d. Forestry Innovation Investment Program

e. Allowances for Harvesting Beetle-Infested Timber

f. Tax Breaks for Timber Harvesters on Private Timber Land

2. Non-Stumpage Programs of the Federal Government of Canada

a. Non-Repayable Grants and Conditionally Repayable Contributions from the Department of Western Economic Diversification

b. Workers Assistance Packages

c. Softwood Marketing Subsidies

d. Litigation Related Payments to Lumber Trade Associations

II.Total Ad Valorem Rate

III. Analysis of Comments

Comment 1: U.S. Log Data

Comment 2: Lower-Grade Cedar

Comment 3: Pond Values

Comment 4: Domestic Log Prices

Comment 5: Cross-Border U.S. Log Price Benchmarks

Comment 6: Net Benefit Calculation

Footnotes

1.  Seed Timber's antidumping new shipper review was subsequently rescinded as a result of the company's withdrawal of its request for a review (69 FR 54766, September 10, 2004).

2.  Case briefs were submitted on behalf of the Coalition of Fair Lumber Imports Executive Committee (the petitioners), the Government of Canada, and the Government of British Columbia.

3.  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.

4.  See scope clarification message 3034202, dated February 3, 2003, to CBP, concerning treatment of U.S.-origin lumber on file in the Department's Central Records Unit, room B-099.

5.  The Department has extended the time limit for completion of the final results of the second administrative review until December 4, 2005. See Notice of Extension of Time Limit for Final Results of Countervailing Duty Administrative Review: Certain Softwood Lumber from Canada, 70 FR 51751 (August 31, 2005).