[Federal Register Volume 68, Number 211 (Friday, October 31, 2003)]
[Notices]
[Pages 62055-62058]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-27495]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-122-839]


Certain Softwood Lumber Products From Canada: Preliminary Results 
of New Shipper Countervailing Duty Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of preliminary results of countervailing duty new 
shipper review.

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SUMMARY: The Department of Commerce (the Department) is conducting a 
new shipper review of Scierie La Pointe & Roy Ltee. (La Pointe & Roy) 
under the countervailing duty order on certain softwood lumber products 
from Canada for the period January 1, 2002, through December 31, 2002. 
If the final results remain the same as the preliminary results of this 
new shipper review, we will instruct the U.S. Customs and Border 
Protection (CBP) to assess countervailing duties as detailed in the 
``Preliminary Results of New Shipper Review'' section of this notice. 
Interested parties are invited to comment on the preliminary results of 
this new shipper review. (See the ``Public Comment'' section of this 
notice).

EFFECTIVE DATE: October 31, 2003.

FOR FURTHER INFORMATION CONTACT: Eric B. Greynolds or Meg Ward, AD/CVD 
Enforcement, Office VI, Group II, Import Administration, U.S. 
Department of Commerce, Room 4012, 14th Street and Constitution Avenue, 
NW., Washington, DC 20230; telephone (202) 482-2786.

SUPPLEMENTARY INFORMATION:

Background

    On May 22, 2002, the Department published in the Federal Register 
the countervailing duty order on certain softwood lumber products from 
Canada. See Notice of Amended Final Affirmative Countervailing Duty 
Determination and Countervailing Duty Order: Certain Softwood Products 
From Canada, 67 FR 36070 (May 22, 2002). On November 26, 2002, we 
received a request for a new shipper review from La Pointe & Roy, the 
respondent company in the proceeding. On December 31, 2002, we 
initiated a new shipper review covering the period January 1, 2002, 
through December 31, 2002. See Certain Softwood Products From Canada: 
Notice of Initiation of Antidumping Duty New Shipper Review for the 
Period May 22, 2002, Through October 31, 2002; Notice of Initiation of 
Countervailing Duty New Shipper Review for the Period January 1, 2002, 
Through December 31, 2002; and Rescission of Countervailing Duty 
Expedited Review, 68 FR 1030 (January 8, 2003).
    On February 24, 2003, we issued a questionnaire to La Pointe & Roy. 
On May 28, 2003, we extended the period for the completion of the 
preliminary results pursuant to section 751(a)(2)(B)(iv) of the Tariff 
Act of 1930, as amended (the Act). See Certain Softwood Lumber Products 
From Canada: Notice of Extension of Time Limit for the Preliminary 
Results of Countervailing Duty New Shipper Review, 68 FR 33921 (June 6, 
2003). On April 4, 2003, La Pointe & Roy submitted its questionnaire 
response. On September 5, 2003, the Department issued a questionnaire 
to the Government of Canada (GOC) and the Government of Quebec (GOQ). 
On September 22, 2003, the GOC and GOQ submitted a combined 
questionnaire response.
    In accordance with 19 CFR 351.214(a), this new shipper review 
covers only those producers or exporters for which a review was 
specifically requested. Accordingly, this new shipper review covers 
subject merchandise produced and exported by La Pointe & Roy.

Scope of Review

    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

[[Page 62056]]

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 
satisfaction 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:

    \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.
    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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Analysis of Programs

I. Program Preliminarily Determined To Be Countervailable

A. Private Forest Development Program (PFDP)
    In the underlying investigation, the Department found the PFDP to 
be countervailable. See ``Program Administered by the Province of 
Quebec,'' in the March 21, 2002, Issues and Decision Memorandum that 
accompanied the 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) (Lumber Final). Specifically, in the underlying investigation, 
the Department determined that the PFDP provides silviculture support 
to private

[[Page 62057]]

woodlot owners through payments, either made directly to forest 
engineers or via reimbursement to the woodlot owner, for silviculture 
treatments executed on private land. Thus, we found that payments under 
the PFDP constitute a financial contribution under section 771(5)(D)(i) 
of the Act and that the benefit conferred under the PFDP is equal to 
the grant of funds provided during the review period. We further found 
in the underlying investigation that because the PFDP is limited to 
private woodlot owners, the assistance is specific under section 
771(5A)(D) of the Act.
    In its April 4, 2003, questionnaire response, La Pointe & Roy 
reported that it received assistance from an agency known as the Agence 
de Mise en Valeur de la Foret Privee de L'Estrie (AMFE) during calendar 
year 2002, the period of review (POR). Specifically, AMFE arranged for 
a company called the A.F.A. Des Appalaches Inc. (AFA) to perform 
silviculture work on a private woodlot held by La Pointe & Roy. La 
Pointe & Roy paid AFA for a portion of the work while AMFE directly 
compensated AFA for the remaining amount. La Pointe & Roy received 
similar assistance from the Agence de Mise en Valuer des Foret Privees 
de Chaudiere (AMFC) in 1999. In its questionnaire response, La Pointe & 
Roy stated that it did not know whether AMFE paid for the work 
performed by AFA with assistance from the GOQ-run PFDP. It stated the 
same with respect to the assistance received from AMFC.
    According to the GOQ, AMFE and AMFC are two of 17 private regional 
agencies established in 1996 for the protection and development of 
private forest land in Quebec. Specifically, these agencies promote 
private forest development by providing information, education, and 
reimbursement to private woodlot owners for silviculture work. Each 
regional agency has a board of directors comprised of representatives 
from the municipality concerned, forest producer groups, holders of 
wood processing plant permits, and the GOQ's Ministry of Natural 
Resources (MRN). The agencies are funded by the MRN, via the PFDP, as 
well as by fees the MRN collects from holders of wood processing plant 
permits. Silviculture reimbursements made by the regional agencies 
cover a maximum of 80 percent of the cost of the silviculture work 
performed by or on behalf of the private woodlot owners. Private 
woodlot owners receiving the assistance are responsible for funding the 
difference.
    La Pointe & Roy received assistance from AMFE and AMFC. We 
preliminarily determine that the PFDP assistance is countervailable. 
While the GOQ states that AMFE and AMFC are private organizations with 
no governmental ties, this does not appear to be the case. We note that 
all of the funding for these organizations is either provided by the 
MRN/GOQ or is provided by means of government-mandated private 
contributions and, as such, AMFE and AMFC appear to be government 
authorities. Consequently, we preliminarily find the existence of a 
subsidy in the form of a government financial contribution within the 
meaning of section 771(5)(B)(i) of the Act (direct transfer of funds). 
To the extent that AMFE and AMFC are non-governmental, however, we 
preliminarily find the existence of a subsidy in the form of a 
government ``payment to a funding mechanism to provide a financial 
contribution'' or government action that ``entrusts or directs'' a 
financial contribution within the meaning of section 771(5)(B)(iii) of 
the Act. Further, we preliminarily determine that the assistance 
received by La Pointe & Roy conferred a benefit in the form of a grant. 
Finally, we continue to find that this program is specific under 
section 771(5A)(D) of the Act, because assistance under this program is 
limited to private woodlot owners.
    In accordance with 19 CFR 351.524(b)(2), we have allocated all of 
the grants provided under the PFDP to the year of receipt because the 
total amounts approved under the program are less than 0.5 percent of 
the company's total sales of softwood lumber products in the year of 
receipt, net of resales. Using this methodology, the net subsidy rate 
attributable to La Pointe & Roy under the PFDP is 0.08 percent ad 
valorem.

II. Programs Preliminarily Determined To Be Not Used

A. Provincial Stumpage Program
    In the underlying investigation, the Department determined that the 
stumpage fees paid to harvest and cut Crown timber by softwood lumber 
producers, which are set by the provincial governments, conferred a 
countervailable benefit on the production and exportation of the 
subject merchandise. See ``Provincial Stumpage Programs Determined To 
Confer Subsidies,'' in the March 21, 2002, Issues and Decision 
Memorandum that accompanied the Lumber Final. In this new shipper 
review, La Pointe & Roy stated that it acquired all of its logs, its 
sole input, from private lands. Because La Pointe & Roy has stated that 
it did not utilize any inputs from the Crown during the POR, we 
preliminarily determine that it did not use the program.
B. Export Assistance Under the Societe de Developpement Industrial du 
Quebec (SDI)/Investissement Quebec(IQ)
    La Pointe & Roy stated in its questionnaire response that it did 
not apply for, use or benefit from SDI/IQ during the POR, therefore, we 
preliminarily determine that it did not use the program. In the 
underlying investigation, the Department determined that the export 
assistance under SDI/IQ established, in part, to facilitate export 
activities, did not confer a countervailable benefit on the exportation 
of subject merchandise, given that the interest rates paid under this 
program were equal to or higher than the interest rates charged on 
comparable commercial loans at the time of the investigation. See 
``Programs Determined Not to Confer a Benefit,'' in the March 21, 2002, 
Issues and Decision Memorandum that accompanied the Lumber Final. As no 
benefit was conferred during the POI, a final determination of this 
program's countervailability was not made. We are not further examining 
this program in the instant review because La Pointe & Roy did not use 
it.
C. Assistance Under Articles 7 and 28 of the SDI
    La Pointe & Roy stated in its questionnaire response that it did 
not apply for, use or benefit from loans, loan guarantees or grants 
issued under Articles 7 and 28 of the SDI during the POR, therefore, we 
preliminarily determine that it did not use the program. In the 
underlying investigation, the Department determined that no benefit was 
provided by loans issued under Article 7 and 28 of the SDI because the 
interest rates charged under this program were equal to or higher than 
the interest rates charged on comparable commercial loans at the time 
of the investigation. See ``Programs Determined Not to Confer a 
Benefit,'' in the March 21, 2002, Issues and Decision Memorandum that 
accompanied the Lumber Final. As no benefit was conferred during the 
POI, a final determination of this program's countervailability was not 
made. We are not further examining this program in the instant review 
because La Pointe & Roy did not use it.

[[Page 62058]]

D. Assistance from the Societe de Recuperation d'Exploitation et de 
Developpement Forestiers du Quebec (Rexfor)
    La Pointe & Roy stated in its questionnaire response that it did 
not apply for, use or benefit from loans or loan guarantees from Rexfor 
during the POR, therefore, we preliminarily determine that it did not 
use the program. In the underlying investigation, the Department 
determined that no benefit was provided by loans issued under Rexfor 
because the interest rates charged under this program were equal to or 
higher than the interest rates charged on comparable commercial loans 
at the time of the investigation. See ``Programs Determined Not to 
Confer a Benefit,'' in the March 21, 2002, Issues and Decision 
Memorandum that accompanied the Lumber Final. As no benefit was 
conferred during the POI, a final determination of this program's 
countervailability was not made. We are not further examining this 
program in the instant review because La Pointe & Roy did not use it.

Preliminary Results of New Shipper Review

    In accordance with section 751(a)(2)(B)(i) of the Act, we have 
determined an individual rate for the manufacturer of the subject 
merchandise participating in this new shipper review. We preliminarily 
determine the total estimated net countervailable subsidy rate to be:

------------------------------------------------------------------------
             Producer/Exporter                    Net subsidy rate
------------------------------------------------------------------------
Scierie La Pointe & Roy Ltee..............  0.08 percent ad valorem
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    As provided for in the Act and 19 CFR 351.106(c)(1) of the 
Department's regulations, any rate less than 0.5 percent ad valorem in 
a new shipper review is de minimis. Accordingly, if the final results 
of this new shipper review remain the same as the preliminary results, 
no countervailing duties will be assessed. The Department will instruct 
CBP to liquidate without regard to countervailing duties, shipments of 
the subject merchandise (e.g., certain softwood lumber from Canada) 
produced and exported by La Pointe & Roy entered, or withdrawn from 
warehouse, for consumption on or after May 22, 2002 and on or before 
December 31, 2002. Also, the cash deposit rates will be set at zero for 
this company. The Department will issue appropriate appraisement 
instructions directly to the CBP within 15 days of publication of the 
final results of this review.

Public Comment

    Pursuant to 19 CFR 351.224(b), the Department will disclose to 
parties to the proceeding any calculations performed in connection with 
these preliminary results within five days after the date of 
publication of this notice. Pursuant to 19 CFR 351.309, interested 
parties may submit written comments in response to these preliminary 
results. Case briefs must be submitted within 30 days after the date of 
publication of this notice, and rebuttal briefs, limited to arguments 
raised in case briefs, must be submitted no later than five days after 
the time limit for filing case briefs. Parties who submit argument in 
this proceeding are requested to submit with the argument: (1) a 
statement of the issue, and (2) a brief summary of the argument. Case 
and rebuttal briefs must be served on interested parties in accordance 
with 19 CFR 351.303(f).
    Also, pursuant to 19 CFR 351.310, within 30 days of the date of 
publication of this notice, interested parties may request a public 
hearing on arguments to be raised in the case and rebuttal briefs. 
Unless the Secretary specifies otherwise, the hearing, if requested, 
will be held two days after the date of submission of rebuttal briefs, 
that is, thirty-seven days after the date of publication of these 
preliminary results.
    Representatives of parties to the proceeding may request disclosure 
of proprietary information under administrative protective order no 
later than 10 days after the representative's client or employer 
becomes a party to the proceeding, but in no event later than the date 
the case briefs, under 19 CFR 351.309(c)(ii), are due. The Department 
will publish the final results of this administrative review, including 
the results of its analysis of issues raised in any case or rebuttal 
brief or at a hearing.
    This administrative review and notice are issued and published in 
accordance with section 751(a)(1) and 777(i)(1) of the Act (19 U.S.C. 
1675(a)(1) and 19 U.S.C. 1677f(1)).

    Dated: October 24, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 03-27495 Filed 10-30-03; 8:45 am]
BILLING CODE 3510-DS-P