Final Results, Reinstatement, Partial Rescission of Countervailing Duty Expedited Reviews, and Company Exclusions: Certain Softwood Lumber Products From Canada

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Final results, reinstatement, partial rescission of countervailing duty expedited reviews, and company exclusions: certain softwood lumber products from Canada.

SUMMARY:

On May 8, 2003, the Department of Commerce (the Department) published in the Federal Register its preliminary results of 28 expedited reviews of the countervailing duty order on certain softwood lumber products from Canada for the period April 1, 2000 through March 31, 2001. See Preliminary Results and Partial Rescission of Countervailing Duty Expedited Reviews: Certain Softwood Lumber Products from Canada, 68 FR 24717 (May 8, 2003).

Based on our analysis of comments on the Preliminary Results and verification of the questionnaire responses, we have made changes to the estimated net subsidy rates determined in the Preliminary Results. In addition, one company, Goldwood Industries Ltd. (Goldwood), whose expedited review was rescinded in the Preliminary Results, is being reinstated and has received a net subsidy rate in these final results. Further, we are rescinding the expedited review of Westcan Rail Ltd. (Westcan). For information regarding the reinstatement and rescission of the expedited review of individual companies in these final results, refer to the “Partial Rescission” and “Reinstatement” sections of this notice.

In addition, we are excluding three companies from the countervailing duty order. In accordance with these final results of reviews, we will instruct the U.S. Customs and Border Protection (CBP) to refund all collected cash deposits and waive future cash deposits requirements for each of the excluded companies, as detailed in the “Final Results of Reviews” section of this notice. We also intend to instruct the CBP to collect cash deposits for each reviewed company that was not excluded from the order as detailed in the “Final Results of Reviews” section of this notice.

EFFECTIVE DATE:

March 9, 2004.

FOR FURTHER INFORMATION CONTACT:

Margaret Ward, 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) 482-4161.

SUPPLEMENTARY INFORMATION:

Background

On May 8, 2003, the Department of Commerce (the Department) published in the Federal Register the Preliminary Results and Partial Rescission of Countervailing Duty Expedited Reviews: Certain Softwood Lumber Products From Canada, 68 FR 24717 (Preliminary Results) covering 28 respondents. In addition, we rescinded the expedited reviews of 12 respondents. Immediately following the issuance of the Preliminary Results, Cando Contracting Ltd. (Cando), Goldwood Industries Ltd. (Goldwood), Williamsburg Wood and Garden (Williamsburg), and Power Wood Corp. (Power Wood) submitted comments on the Preliminary Results. On May 28, 2003, petitioners responded to Cando's submission.

On June 5 and 6, 2003, petitioners submitted pre-verification comments regarding certain companies verified during this segment of the proceeding. From June 9, through June 20, 2003, the Department verified the information provided by five respondents: Boccam, Inc. (Boccam), Indian River Lumber (Indian River), Les Sceries Jocelyn Lavoie Ltd. (Lavoie), Sechoirs de Beauce, Inc. (Sechoirs de Beauce), and Westcan Rail Ltd. (Westcan). On July 21, 2003, the Department issued verification reports for Boccam, Indian River, Lavoie, Sechoirs de Beauce, and Westcan.

On July 23, 2003, the Department extended the due date for the case briefs for Round 1 and Round 2 companies. On August 14, 2003, petitioners and the Ontario Forest Association (OFIA) and the Ontario Lumber Manufacturers Association (OLMA) filed case briefs. On August 18, 2003, the Department extended the due date for the submission of rebuttal briefs. On August 20, 2003, Westcan and Hudson Mitchell & Sons (HMS) submitted rebuttal briefs. On August 25, 2003, Sechoirs de Beauce, the Government of Canada (GOC), and the OFIA/OLMA filed rebuttal briefs. In addition, American Bayridge Corporation, Aspen Planers Ltd., Downie Timber Ltd., Federated Co-operatives Limited, Gorman Bros. Lumber Ltd., Haida Forest Products Ltd., Kenora Forest Products Ltd., Liskeard Lumber Limited, Mid America Lumber, Mill & Timber Products Ltd., North Enderby Timber Ltd., R. Fryer Forest Products Limited, Selkirk Specialty Wood Ltd., and Tembec Inc. (collectively, the Lumber Companies Group) filed rebuttal briefs on August 25, 2003.

Reinstatement of Expedited Review

In the Preliminary Results, we rescinded the expedited review of Goldwood. See the “Partial Rescission” section of the Preliminary Results. However, our examination of the comments submitted by Goldwood has resulted in reinstatement of this firm in these final results due to a ministerial error made in the Preliminary Results. For information regarding the ministerial error and the reinstatement of the review of the company, see Comment 8 of the “Issues and Decisions Memorandum: Final Results of Expedited Review of Companies Covered by the May 8, 2003 Notice of Preliminary Results and Partial Rescission of Countervailing Duty Expedited Reviews” (Decision Memorandum), which is dated concurrently with and hereby adopted by this notice.

Partial Rescission of Expedited Review

Our examination of the information submitted by Westcan at verification indicates that this company performed no processing or manufacturing with respect to the subject merchandise it exported to the United States during the period of review (POR), but rather the company resold softwood lumber processed/manufactured by other companies. Moreover, Westcan did not provide the required information from the producers of subject merchandise for the Department to determine that the purchased softwood lumber is non-subsidized. Therefore, we are rescinding the expedited review of Westcan. For more information, see Comment 6 of the Decision Memorandum.

Exclusion From Countervailing Duty Order

As discussed above, based on these final results, we have excluded three companies from the countervailing duty order. These companies are: Boccam Inc., Indian River Lumber, and Sechoirs de Beauce Inc. For more information, see the “Final Results of Reviews” section of this notice.

Companies Addressed in These Final Results

This notice includes the final results of review for the following 13 Group 1 companies in Round 1:

Alexandre Cote Ltee.;

Boccam Inc.;

Byrnexco Inc.;

Davron Forest Products Ltd.;

Fraser Pacific Forest Products Inc.;

Frontier Mills Inc.;

Haida Forest Products Ltd.;

Landmark Truss & Lumber Inc.;

Les Bois S&P Grondin Inc.;

Les Industries P.F. Inc.;

Sechoirs de Beauce Inc.;

Tyee Timber Products Ltd.;

West Bay Forest Products and Manufacturing Ltd.

This notice also includes the final results of review for the following 15 Group 1 companies in Round 2:

Central Cedar Ltd.;

Forstex Industries Inc.;

Goldwood Industries Ltd.;

Hudson Mitchell & Sons Lumber Inc.;

Indian River Lumber;

Les Scieries Jocelyn Lavoie Inc.;

Leslie Forest Products Ltd.;

Lyle Forest Products Ltd.;

Power Wood Corp.;

Precision Moulding Products;

Ram Co. Lumber Ltd.;

Rielly Industrial Lumber Inc.;

Sylvanex Lumber Products Inc.;

United Wood Frames Inc.;

Williamsburg Woods & Garden.

Further, we are rescinding the review on the following company in Round 1: Westcan Rail Ltd.

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.ia.ita.doc.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 CBP's 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 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 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.

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. 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

Issues raised by interested parties in comments submitted in response to the Preliminary Results are addressed in the Decision Memorandum. As noted in the Decision Memorandum, we are addressing in these final results those issues that are related to the 28 companies included in this notice. A list of the issues which interested parties have raised, and to which we have responded, all of which are included 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 http://www.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 19 CFR 351.221(b)(4)(i), we calculated an individual subsidy rate for each producer subject to these expedited reviews. For the period April 1, 2000, to March 31, 2001, we determine the net subsidy to be as follows:

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.

Because the rates for Boccam Inc., Indian River Lumber, and Sechoirs de Beauce Inc. are less than one percent ad valorem, which is de minimis, we determine that these companies are excluded from the countervailing duty order. We will instruct the CBP to refund all cash deposits of estimated countervailing duties collected on all shipments of the subject merchandise produced and exported by these companies. In addition, we will instruct the CBP to waive cash deposit requirements of estimated countervailing duties on all shipments of the subject merchandise produced and exported by these three 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)).

I. Summary and Background

II. Methodology

A. Stumpage Programs

B. Other Programs

III. Analysis of Comments

Comment 1: Adjustment of Country-Wide Rate to Account for Individual Cash Deposit Rates

Comment 2: Whether the Same Stumpage Benefit Should Apply to Logs and Lumber

Comment 3: The Number of Companies Verified During the Expedited Review Process

Comment 4: Inclusion of Certain Non-Scope Items in the Denominator of the Subsidy Calculations

Comment 5: Decision to Rescind the Expedited Review of Cando

Comment 6: Whether to Rescind the Expedited Review of Westcan on the Grounds That it Is a Pure Reseller of Railroad Ties

Comment 7: Power Wood's Benefit Calculation

Comment 8: Goldwood's Benefit Calculation

Comment 9: Williamsburg's Benefit Calculation

Comment 10: Derivation of Boccam's Sales Denominator

Comment 11: Derivation of Sechoirs de Beauce's Sales Denominator

Comment 12: Lavoie's Cord to Cubic Meter Conversion Factor

IV. Total Ad Valorem Rates

V. Recommendation