[Federal Register Volume 69, Number 113 (Monday, June 14, 2004)]
[Notices]
[Pages 33235-33255]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-13073]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-838]


Notice of Preliminary Results of Antidumping Duty Administrative 
Review and Postponement of Final Results: Certain Softwood Lumber 
Products From Canada

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

ACTION: Notice of preliminary results of antidumping duty 
administrative review.

-----------------------------------------------------------------------

EFFECTIVE DATE: June 14, 2004.

FOR FURTHER INFORMATION CONTACT: Constance Handley or James Kemp, 
Office 5, AD/CVD Enforcement, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
0631 or (202) 482-5346, respectively.

SUMMARY: The Department of Commerce is conducting an administrative 
review of the antidumping duty order on Certain Softwood Lumber 
Products from Canada for the period May 22, 2002, to April 30, 2003 
(the POR). We preliminarily determine that sales of subject merchandise 
by Abitibi-Consolidated Company of Canada (Abitibi), Buchanan Lumber 
Sales Inc. (Buchanan), Canfor Corporation (Canfor), Slocan Forest 
Products Ltd. (Slocan), Tembec Inc. (Tembec), Tolko Industries Ltd. 
(Tolko), West Fraser Mills Ltd. (West Fraser), and Weyerhaeuser Company 
(Weyerhaeuser), have been made below normal value (NV). In addition, 
based on the preliminary results for these respondents selected for 
individual review, we have preliminarily determined a weighted-average 
margin for those companies that requested, but were not selected for, 
individual review. If these preliminary results are adopted in our 
final results, we will instruct U.S. Customs and Border Protection 
(CBP) to assess antidumping duties on appropriate entries based on the 
difference between the export price (EP) and constructed export price 
(CEP), and the NV. Interested parties are invited to comment on these 
preliminary results.

SUPPLEMENTARY INFORMATION:

Background

    On May 1, 2003, the Department of Commerce (the Department) 
published a notice of opportunity to request the first administrative 
review of this order. See Antidumping or Countervailing Duty Order, 
Finding, or Suspended Investigation; Opportunity to Request 
Administrative Review, 68 FR 23281 (May 1, 2003). On May 30, 2003, in 
accordance with 19 CFR 351.213(b), the petitioner \1\ requested a 
review of producers/exporters of certain softwood lumber products. 
Also, between May 7, and June 2, 2003, Canadian producers requested a 
review on their own behalf or had a review of their company requested 
by a U.S. importer.
---------------------------------------------------------------------------

    \1\ The petitioner in this case is the Coalition for Fair Lumber 
Imports Executive Committee. We note that during the review, 
submissions have been made interchangeably by the petitioner itself 
and by the Coalition for Fair Lumber Imports, a domestic interested 
party. For ease of reference, we will use the term ``petitioner'' to 
refer to submissions by either, although we recognize that the 
Coalition for Fair Lumber Imports is not the actual petitioner.
---------------------------------------------------------------------------

    On July 1, 2003, the Department published a notice of initiation of 
administrative review of the antidumping duty order on certain softwood 
lumber products from Canada, covering the period May 22, 2002, through 
April 30, 2003. See Notice of Initiation of Antidumping Duty 
Administrative Review, 68 FR 39059 (July 1, 2003).
    The Department received requests for review from more than 400 
companies. Accordingly, on July 9, 2003, in advance of issuing 
antidumping questionnaires, the Department issued a letter to the 
largest 25 producers of softwood lumber from Canada, as identified in a 
survey of Canada's top 30 softwood lumber producers by volume in 
2002.\2\ This letter requested export and production volume information 
from each company, including all affiliates. Companies were required to 
submit their responses to the Department by July 16, 2003. In addition, 
we received comments from interested parties on the respondent 
selection process, which included proposed methodologies.
---------------------------------------------------------------------------

    \2\ See Canada's Top 30 Softwood Lumber Producers: 2002'', a 
survey by R.E. Taylor & Associates of Canada. The information in 
this survey was summarized in Appendix 1 to the Memorandum from 
Keith Nickerson and Amber Musser, International Trade Compliance 
Analysts, to Holly Kuga, Acting Deputy Assistant Secretary, 
regarding Selection of Respondents (August 1, 2003). The largest 25 
producers on this survey included one company which was not included 
in the initiation notice in this administrative review. Therefore, 
the letters requesting export information were sent to only 24 
companies.
---------------------------------------------------------------------------

    Upon consideration of the information received with respect to 
respondent selection, on August 1, 2003, the Department selected as 
mandatory respondents the eight largest exporters/producers of subject 
merchandise during the POR: Abitibi, Buchanan, Canfor, Slocan, Tembec, 
Tolko, West Fraser, and Weyerhaeuser. See Memorandum from Keith 
Nickerson and Amber Musser, International Trade Compliance Analysts, to 
Holly Kuga, Acting Deputy Assistant Secretary, regarding Selection of 
Respondents (August 1, 2003). See also Selection of Respondents section 
below.
    On this same date, August 1, 2003, the Department issued Section A 
of the antidumping duty questionnaire to the selected respondents. 
Sections B and C of the questionnaire were issued on September 5, 2003; 
\3\ Sections D and E were issued on September 22, 2003.\4\ 
Subsequently, the respondents submitted their initial responses to the 
antidumping questionnaire from September through December of 2003. 
After analyzing these responses, we issued supplemental questionnaires 
to the respondents to clarify or correct the

[[Page 33236]]

initial questionnaire responses. We received timely responses to these 
questionnaires.
---------------------------------------------------------------------------

    \3\ We note that we limited the reporting requirements in this 
review to sales of dimension lumber of all species, (including sales 
of finger-jointed dimension lumber) and sales of all decking 
products. We also excluded sales of treated lumber. See Memorandum 
from Amber Musser, International Trade Compliance Analyst, to Gary 
Taverman, Director, regarding Reporting Requirements for Sections B 
and C of the Questionnaire (September 5, 2003).
    \4\ Section A of the questionnaire requests general information 
concerning a company's corporate structure and business practices, 
the merchandise under review that it sells, and the manner in which 
it sells that merchandise in all of its markets. Section B requests 
a complete listing of all home-market sales, or, if the home-market 
is not viable, of sales in the most appropriate third-country 
market. Section C requests a complete listing of U.S. sales. Section 
D requests information on the cost of production of the foreign like 
product and the constructed value of the merchandise under review. 
Section E requests information on the cost of further manufacture or 
assembly performed in the United States.
---------------------------------------------------------------------------

    Due to the unexpected emergency closure of the main Commerce 
building on Tuesday, June 1, 2004, the Department has tolled the 
deadline for these preliminary results by one day to June 2, 2004.

Postponement of Final Results

    Section 351.213(h)(1) of the regulations requires the Department to 
issue the final results of an administrative review within 120 days 
after the date on which notice of the preliminary results is published 
in the Federal Register. However, if the Department determines that it 
is not practicable to complete the review within the aforementioned 
specified time limit, section 351.213(h)(2) allows the Department to 
extend the 120-day period to 180 days.
    Pursuant to section 751(a)(3)(A) of the Tariff Act of 1930, as 
amended, and section 351.213(h)(2) of the regulations, the Department 
has determined that it is not practicable to complete the final results 
of this administrative review within 120 days from the date of 
publication of these preliminary results. The Department must address 
complex issues unique to this first administrative review of the 
antidumping duty order on lumber from Canada. The complicating factors 
include the use of value-based cost allocations and the treatment of 
sales made on a random-lengths basis.\5\ Therefore, the Department is 
extending the deadline for completion of the final results of the 
administrative review of the antidumping duty order on certain softwood 
lumber products from Canada by 60 days. The final results of the review 
will now be due no later than 180 days from the date of publication of 
these preliminary results.
---------------------------------------------------------------------------

    \5\ For the purposes of this review, we are defining a random-
length sale as any sale which contains multiple lengths, for which a 
blended (i.e., average) price has been reported.
---------------------------------------------------------------------------

Scope of the 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 under 
review is dispositive.
    Softwood lumber products excluded from the scope:
     Trusses and truss kits, properly classified under HTSUS 
4418.90;
     I-joist beams;
     Assembled box spring frames;
     Pallets and pallet kits, properly classified under HTSUS 
4415.20;
     Garage doors;
     Edge-glued wood, properly classified under HTSUS 
4421.90.97.40 (formerly HTSUS 4421.90.98.40).
     Properly classified complete door frames.
     Properly classified complete window frames;
     Properly classified furniture.
    Softwood lumber products excluded from the scope only if they meet 
certain requirements:
     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 4421.90.97.40 (formerly HTSUS 4421.90.98.40).
     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.
     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.
     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.
     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.
     Softwood lumber products contained in single family home 
packages or kits,\6\ regardless of tariff classification, are excluded 
from the scope of the orders if the following criteria are met:
---------------------------------------------------------------------------

    \6\ To ensure administrability, we clarified the language of 
this exclusion 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.
---------------------------------------------------------------------------

    (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, subfloor, sheathing, 
beams, posts, connectors and if included in 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;

[[Page 33237]]

    (D) The whole package must be imported under a single consolidated 
entry when permitted by CBP, whether or not on a single or multiple 
trucks, rail cars or other vehicles, which shall be on the same day 
except when the home is over 2,000 square feet;
    (E) The following documentation must be included with the entry 
documents:
     A copy of the appropriate home design, plan, or blueprint 
matching the entry;
     A purchase contract from a retailer of home kits or 
packages signed by a customer not affiliated with the importer;
     A listing of inventory of all parts of the package or kit 
being entered that conforms to the home design package being entered;
     In the case of multiple shipments on the same contract, 
all items listed immediately above which are included in the present 
shipment shall be identified as well.
    We have determined that the excluded products listed above are 
outside the scope of this order provided the specified conditions are 
met. 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 4418.90.40.90, 
4421.90.70.40, and 4421.90.98.40. Due to changes in the 2002 HTSUS 
whereby subheading 4418.90.40.90 and 4421.90.98.40 were changed to 
4418.90.45.90 and 4421.90.97.40, respectively, we are adding these 
subheadings as well.
    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.\7\ The 
presumption of non-subject status can, however, be rebutted by evidence 
demonstrating that the merchandise was substantially transformed in 
Canada.
---------------------------------------------------------------------------

    \7\ See the scope clarification message (3034202), dated 
February 3, 2003, to CBP, regarding treatment of U.S.-origin lumber 
on file in the Central Records Unit, Room B-099 of the main Commerce 
Building.
---------------------------------------------------------------------------

Selection of Respondents

    Section 777A(c)(1) of the Act directs the Department to calculate 
individual dumping margins for each known exporter and producer of the 
subject merchandise. However, section 777A(c)(2) of the Act gives the 
Department discretion, when faced with a large number of exporters/
producers, to limit its examination to a reasonable number of such 
companies if it is not practicable to examine all companies. Where it 
is not practicable to examine all known producers/exporters of subject 
merchandise, this provision permits the Department to review either: 
(1) a sample of exporters, producers, or types of products that is 
statistically valid based on the information available at the time of 
selection, or (2) exporters and producers accounting for the largest 
volume of the subject merchandise that can reasonably be examined.
    After consideration of the complexities expected to arise in this 
proceeding (including the various companies' operations relating to a 
wide range of products, sales processes, locations, and cost factors; 
and the number of outstanding issues that remain unresolved from the 
investigation such as possible product matching issues and the 
calculation of value-based cost), as well as the resources available to 
the Department, we determined that it was not practicable in this 
review to examine all known exporters/producers of subject merchandise. 
We found that given our resources, we would be able to review the eight 
exporters/producers with the greatest export volume, as identified 
above. For a more detailed discussion of respondent selection in this 
review, see Memorandum from Keith Nickerson and Amber Musser, 
International Trade Compliance Analysts, to Holly Kuga, Acting Deputy 
Assistant Secretary, regarding Selection of Respondents (August 1, 
2003). Following the issuance of this Memorandum, we received written 
requests from five companies to be included as voluntary respondents in 
this review.\8\ On August 20, 2003, the Department notified each of the 
companies requesting voluntary respondent status that the Department 
would not be able to review voluntary respondents unless one of the 
mandatory respondents failed to answer the antidumping questionnaire or 
additional resources became available.
---------------------------------------------------------------------------

    \8\ In this proceeding, we received five written requests to be 
accepted as a voluntary respondent as listed in chronological order: 
Lignum Ltd. (May 30, 2003, this request was contained in its request 
for administrative review; it reiterated this request on July 16, 
2003, and August 1, 2003), Weldwood of Canada Limited (July 30, 
2003), J.D. Irving, Limited (August 6, 2003), Welco Lumber 
Corporation (August 6, 2003), and Dunkley Lumber (August 11, 2003).
---------------------------------------------------------------------------

    The Department received timely responses to the antidumping 
questionnaire from three of the companies requesting to be included as 
voluntary respondents: Lignum Ltd., J.D. Irving, Limited, and Weldwood 
of Canada Limited. On December 8, 2003, the Department issued a letter 
to each of these companies stating that, as indicated in the August 20, 
2003, letters, because none of the mandatory respondents failed to 
respond, the Department would not be able to examine any voluntary 
respondents.

Collapsing Determinations

    The Department's regulations provide for the treatment of 
affiliated producers as a single entity where: (1) those producers have 
production facilities for similar or identical products that would not 
require substantial retooling of either facility in order to 
restructure manufacturing priorities, and (2) the Department concludes 
that there is a significant potential for the manipulation of price or 
production.\9\ In identifying a significant potential for the 
manipulation of price or production, the Department may consider such 
factors as: (i) The level of common ownership; (ii) the extent to which 
managerial employees or board members of one firm sit on the board of 
directors of an affiliated firm; and (iii) whether operations are 
intertwined, such as through the sharing of sales information, 
involvement in production and pricing decisions, the sharing of 
facilities or employees, or significant transactions between the 
affiliated producers.\10\ These factors are illustrative, and not 
exhaustive.
---------------------------------------------------------------------------

    \9\ See 19 CFR 351.401(f)(1).
    \10\ See 19 CFR 351.401(f)(2).
---------------------------------------------------------------------------

    In this review, we determined that Canfor was to be collapsed with 
affiliate Skeena Cellulose (Skeena) on the date its agreement with 
Skeena went into effect. See Memorandum from Amber Musser, 
International Trade Compliance Analyst, to Holly Kuga, Acting Deputy 
Assistant Secretary, regarding Collapsing of Respondent Canfor 
Corporation with Skeena Cellulose (December 30, 2003). In addition, 
respondents reported the sales of certain affiliated companies. 
Specifically, in its questionnaire response, Abitibi reported the sales 
of subject merchandise produced by its affiliates Produits

[[Page 33238]]

Forestiers Petit Paris, Inc., Produits Forestiers La Tuque, Inc., and 
Societe en Commandite Scierie Opticiwan. Buchanan reported the sales of 
its affiliates Atikokan Forest Products Ltd., Long Lake Forest Products 
Inc., Nakina Forest Products Limited, Buchanan Distribution Inc., 
Buchanan Forest Products Ltd., Great West Timber Ltd., Dubreuil Forest 
Products Ltd., Northern Sawmills Inc., McKenzie Forest Products Inc., 
and Solid Wood Products Inc. Canfor reported the sales of its 
affiliates Lakeland Mills Ltd. and The Pas Lumber Company Ltd. Tembec 
reported the sales of its affiliates Les Industries Davidson, Inc., 
Marks Lumber Ltd., Temrex Limited Partnership, and Excel Forest 
Products in its questionnaire response. Tolko reported the sales of its 
affiliates Gilbert Smith Forest Products Ltd. and Pinnacle Wood 
Products Ltd. West Fraser reported the sales of its affiliates West 
Fraser Forest Products Inc. (WFFP) and Seehta Forest Products Ltd. in 
its questionnaire response. Weyerhaeuser reported the sales of its 
affiliate Weyerhaeuser Saskatchewan Ltd. in its questionnaire response. 
Upon review of the questionnaire responses, we determined that these 
affiliates were properly collapsed with the respective respondent 
companies for the purposes of this review.
    The Department also excused individual respondents from reporting 
the sales of specific merchandise or sales by certain affiliates during 
this review. These specific reporting exemptions were granted to the 
companies because the sales were determined to be a relatively small 
percentage of total U.S. sales, burdensome to the company to report and 
for the Department to review, and would not materially affect the 
results of this review. See Memorandum from Keith Nickerson and Amber 
Musser, International Trade Compliance Analysts, to Gary Taverman, 
Director, regarding Individual Reporting Exemption Requests of Certain 
Respondent Companies (October 7, 2003).

Treatment of Sales Made on a Random-Lengths Basis

    All of the respondents made a portion of their sales during the POR 
on a random-length (also referred to as a mixed-tally) basis. 
Information on the record indicates that the respondents negotiate a 
single per-unit price for the whole tally with the customer, but that 
they take the composition of lengths in the tally into account when 
quoting this price. The price on the invoice is the blended (i.e. 
average) price for the tally. Therefore, the line-item price on the 
invoice to the customer does not reflect the value of the particular 
product, but rather the average value of the combination of products.
    Sections 772(a) and (b) and 773(a)(1)(B)(i) of the Act direct the 
Department to use the price at which the product was sold in 
determining EP, CEP, and NV. In this case, the price at which the 
products were sold is the total amount on the invoice. The respondents' 
choice to divide that price evenly over all products on the invoice 
represents an arbitrary allocation which is not reflective of the 
underlying value of the individual products within the tally. However, 
with the exception of West Fraser, the respondents do not keep track of 
any underlying single-length prices in such a way that they can 
``deconstruct'' or reallocate the prices on the invoice to more 
properly reflect the relative differences in the market value of each 
unique product that were taken into account in determining the total 
invoice price.
    For all companies except West Fraser, for purposes of these 
preliminary results, we reallocated the total invoice price of sales 
made on a random-lengths basis, where possible, using the average 
relative values of company-specific, market-specific single-length 
sales sold within a two-week period (i.e. one week on either side) of 
the tally whose price is being reallocated. If no such sales were 
found, we looked in a four-week period (i.e. two weeks on either side 
of the sale). We note that a single-length-sale match must be available 
for each line item in the tally in order to perform a reallocation 
based on relative price. If there were not single-length sales for all 
items in the tally within a four-week period, we continued to use the 
reported price as neutral facts available, pursuant to section 
776(a)(1) of the Act. For West Fraser, we used the reported length-
specific prices from its sales system. For further discussion of this 
issue, see Memorandum from Constance Handley, Program Manager, to 
Jeffrey May, Deputy Assistant Secretary, regarding Treatment of Sales 
Made on a Random-Lengths Basis for Determining Export Price, 
Constructed Export Price and Normal Value (June 2, 2004).

Fair Value Comparisons

    We compared the EP or the CEP, as applicable, to the NV, as 
described in the Export Price and Constructed Export Price and Normal 
Value sections of this notice. We first attempted to compare 
contemporaneous sales in the U.S. and comparison markets of products 
that were identical with respect to the following characteristics: 
product type, species, grade group, grade, dryness, thickness, width, 
length, surface, trim and processing type. Where we were unable to 
compare sales of identical merchandise, we compared products sold in 
the United States with the most similar merchandise sold in the 
comparison markets based on the characteristics of grade, dryness, 
thickness, width, length, surface, trim and processing type, in this 
order of priority. Where there were no appropriate comparison-market 
sales of comparable merchandise, we compared the merchandise sold in 
the United States to constructed value (CV), in accordance with section 
773(a)(4) of the Act. We generally relied on the date of invoice as the 
date of sale. Consistent with the Department's practice, where the 
invoice was issued after the date of shipment, we relied on the date of 
shipment as the date of sale.

Export Price and Constructed Export Price

    In accordance with section 772 of the Act, we calculated either an 
EP or a CEP, depending on the nature of each sale. Section 772(a) of 
the Act defines EP as the price at which the subject merchandise is 
first sold before the date of importation by the exporter or producer 
outside the United States to an unaffiliated purchaser in the United 
States, or to an unaffiliated purchaser for exportation to the United 
States.
    Section 772(b) of the Act defines CEP as the price at which the 
subject merchandise is first sold in the United States before or after 
the date of importation, by or for the account of the producer or 
exporter of the merchandise, or by a seller affiliated with the 
producer or exporter, to an unaffiliated purchaser, as adjusted under 
sections 772(c) and (d) of the Act.
    For all respondents, we calculated EP and CEP, as appropriate, 
based on prices charged to the first unaffiliated customer in the 
United States. We found that all of the respondents made a number of EP 
sales during the POR. These sales are properly classified as EP sales 
because they were made outside the United States by the exporter or 
producer to unaffiliated customers in the United States prior to the 
date of importation.
    We also found that each respondent made CEP sales during the POR. 
Some of these sales involved softwood lumber sold from U.S. reload or 
through vendor-managed inventory (VMI) locations. Because such sales 
were made by the respondent after the date of importation, the sales 
are properly classified as CEP sales. In addition, both West Fraser and 
Weyerhaeuser made

[[Page 33239]]

sales to the United States through U.S. subsidiaries.
    On September 9, 2003, the Department published a request for public 
comments on the appropriateness of deducting section 201 duties and 
countervailing duties (CVD) from export price and constructed export 
price in antidumping duty margin calculations (68 FR 53104). Because 
this issue is relevant to this review, on February 10, 2004, the 
petitioner requested that the Department collect information from the 
respondents regarding the CVD deposits made by the individual companies 
during the POR. We did so on February 19, 2004. Each of the companies 
responded to this request on February 26, 2004. As the Department is 
currently analyzing the comments received on this subject in response 
to its published request for public comments, no adjustment has been 
made to EP or CEP for the purpose of these preliminary results.
    We made company-specific adjustments as follows:
(A) Abitibi
    Abitibi made both EP and CEP transactions. We calculated an EP for 
sales where the merchandise was sold directly by Abitibi to the first 
unaffiliated purchaser in the United States prior to importation, and 
CEP was not otherwise warranted based on the facts of the record. We 
calculated a CEP for sales made by Abitibi to the U.S. customer through 
VMI or reload centers after importation into the United States. EP and 
CEP sales were based on the packed, delivered, ex-mill, FOB reload 
center prices, as applicable.
    We made deductions from the starting price for movement expenses in 
accordance with section 772(c)(2)(A) of the Act. These include internal 
freight incurred in transporting merchandise to reload and VMI centers, 
as well as freight to the U.S. customer, warehousing, brokerage and 
handling, and inland insurance. We also deducted any billing 
adjustments, discounts and rebates.
    In accordance with section 772(d)(1) of the Act, for CEP sales, we 
deducted from the starting price those selling expenses that were 
incurred in selling the subject merchandise in the United States, 
including direct selling expenses (e.g., credit expenses) and imputed 
inventory carrying costs. In addition, we made adjustments to the 
starting price based upon our findings at verification. Abitibi did not 
report any other indirect selling expenses incurred in the United 
States. In accordance with section 772(d)(3) of the Act, we deducted an 
amount of profit allocated to the expenses deducted under sections 
772(d)(1) and (2) of the Act. Finally, we made additional corrections 
to the U.S. sales data based upon our findings at verification. See 
Memorandum from Amber Musser and Vicki Schepker regarding Abitibi's 
Analysis for the Preliminary Results (June 2, 2004) (Abitibi's 
Preliminary Calculation Memorandum).
(B) Buchanan
    Buchanan made both EP and CEP transactions during the POR. We 
calculated an EP for sales where the merchandise was sold directly by 
Buchanan to the first unaffiliated purchaser in the United States prior 
to importation, and CEP was not otherwise warranted based on the facts 
of the record. We calculated a CEP for sales made by Buchanan to the 
U.S. customer through reload centers after importation into the United 
States. EP and CEP sales were based on the packed, delivered, ex-mill, 
FOB mill, and FOB reload center prices, as applicable.
    We made deductions from the starting price for movement expenses in 
accordance with section 772(c)(2)(A) of the Act. These include freight 
incurred in transporting merchandise to reload centers, freight to the 
U.S. customer, warehousing, brokerage, and a movement variance. We also 
deducted any discounts from the starting price, and added any billing 
adjustments and other miscellaneous charges/credits.
    In accordance with section 772(d)(1) of the Act, for CEP sales, we 
deducted from the starting price those selling expenses that were 
incurred in selling the subject merchandise in the United States, 
including direct selling expenses, (e.g., credit expenses) and imputed 
inventory carrying costs. In accordance with section 772(d)(3) of the 
Act, we deducted an amount of profit allocated to the expenses deducted 
under sections 772(d)(1) and (2) of the Act. Finally, we made 
additional corrections to the U.S. sales data based upon our findings 
at verification. See Memorandum from Erin Begnal and Marin Weaver 
regarding Buchanan's Analysis for the Preliminary Results (June 2, 
2004) (Buchanan's Preliminary Calculation Memorandum).
(C) Canfor
    Canfor made both EP and CEP transactions. We calculated an EP for 
sales where the merchandise was sold directly by Canfor to the first 
unaffiliated purchaser in the United States prior to importation, and 
CEP was not otherwise warranted based on the facts of the record. We 
calculated a CEP for sales made by Canfor to the U.S. customer through 
VMI or reload centers after importation into the United States. EP and 
CEP sales were based on the packed, delivered, ex-mill, FOB mill, and 
FOB reload center prices, as applicable.
    From its sales locations in the United States and Canada, Canfor 
made sales of Canfor-produced merchandise that had been commingled with 
lumber from other producers. Canfor provided a weighting factor to 
determine the quantity of Canfor-produced Canadian merchandise for all 
sales. We are using the weighting factors to estimate the volume of 
Canfor-produced merchandise included in each sale.
    In some cases, the other producers knew or had reason to know that 
the merchandise purchased by Canfor was destined for the United States. 
For example, Canfor occasionally purchased merchandise from another 
producer and had the producer arrange freight from the producer's mill 
in Canada to the customer in the United States. We did not include such 
sales in our margin calculations. In other situations, Canfor purchased 
merchandise and the producer shipped it to U.S. reload centers, VMI 
locations, or to Canfor USA (CUSA) where it was commingled with lumber 
produced by Canfor. While the producer had knowledge that these sales 
were destined for the United States, Canfor was unable to link the 
purchases of lumber with a specific sale to the unaffiliated customer. 
Therefore, Canfor developed the weighting factor to determine, based on 
inventory location and control-number and the percentage of lumber at 
the specific inventory location and control-number, the percentage of 
lumber at the inventory location that was produced by Canfor. We are 
multiplying the weighting factor by the quantity of lumber in each sale 
to estimate the volume of Canfor-produced merchandise in each sale in 
the U.S. and home market and to eliminate the estimated non-Canfor 
produced merchandise.
    We made deductions from the starting price for movement expenses in 
accordance with section 772(c)(2)(A) of the Act. These include freight 
incurred in transporting merchandise to reload centers or VMI 
locations, as well as freight to U.S. customer, warehousing, brokerage 
and handling, and miscellaneous movement charges. We also deducted any 
discounts and rebates from the starting price.
    In addition to these adjustments, for CEP sales, in accordance with 
section 772(d)(1) of the Act, we adjusted the starting price by the 
amount of direct

[[Page 33240]]

selling expenses and revenues (e.g., credit expenses and interest 
revenue). We further reduced the starting price by the amount of 
indirect selling expenses incurred in the United States. Finally, in 
accordance with section 772(d)(3) of the Act, we deducted an amount of 
profit allocated to the expenses deducted under sections 772(d)(1) and 
(2) of the Act. Finally, we made additional corrections to the U.S. 
sales data based upon our findings at verification. See Memorandum from 
Vicki Schepker and Amber Musser regarding Canfor's Analysis for the 
Preliminary Results (June 2, 2004) (Canfor's Preliminary Calculation 
Memorandum).
(D) Slocan
    Slocan made both EP and CEP transactions. We calculated an EP for 
sales where the merchandise was sold directly by Slocan to the first 
unaffiliated purchaser in the United States prior to importation, and 
CEP was not otherwise warranted based on the facts of the record. We 
calculated a CEP for sales made by Slocan to the U.S. customer through 
VMI or reload centers after importation into the United States. EP and 
CEP sales were based on the packed, delivered, ex-mill, and FOB reload 
center prices, as applicable.
    We made deductions from the starting price for movement expenses in 
accordance with section 772(c)(2)(A) of the Act. These include domestic 
freight incurred in transporting merchandise to reload centers and to 
VMI customers, as well as freight to the U.S. customer, warehousing, 
U.S. brokerage and handling. We also deducted from the starting price 
any discounts and rebates.
    In accordance with section 772(d)(1) of the Act, for CEP sales, we 
deducted from the starting price those selling expenses that were 
incurred in selling the subject merchandise in the United States, 
including direct selling expenses (e.g., credit expenses, packing 
costs, commissions) and inventory carrying costs. Slocan did not report 
any other indirect selling expenses incurred in the United States. In 
accordance with section 772(d)(3) of the Act, we deducted an amount of 
profit allocated to the expenses deducted under sections 772(d)(1) and 
(2) of the Act. Finally, we made additional corrections to the U.S. 
sales data based upon our findings at verification. See Memorandum from 
Monica Gallardo and Martin Claessens regarding Slocan's Analysis for 
the Preliminary Results (June 2, 2004) (Slocan's Preliminary 
Calculation Memorandum).
(E) Tembec
    Tembec made both EP and CEP transactions during the POR. We 
calculated an EP for sales where the merchandise was sold directly by 
Tembec to the first unaffiliated purchaser in the United States prior 
to importation. We calculated a CEP for sales made by Tembec to the 
U.S. customer through U.S. reload facilities or through VMI facilities. 
EP and CEP sales were based on the packed, delivered, FOB mill, FOB 
reload/VMI center and FOB destination prices, as applicable.
    We made deductions from the starting price for movement expenses in 
accordance with section 772(c)(2)(A) of the Act. These include inland 
freight incurred in transporting merchandise to Canadian reload centers 
and Canadian warehousing expenses, as well as freight to the U.S. 
customer or reload facility, U.S. warehousing expenses, and U.S. 
brokerage. We also deducted from the starting price any discounts and 
rebates.
    In accordance with section 772(d)(1) of the Act, for CEP sales, we 
deducted from the starting price those selling expenses that were 
incurred in selling the subject merchandise in the United States, 
including direct selling expenses (e.g., credit expenses) and indirect 
selling expenses. Finally, in accordance with section 772(d)(3) of the 
Act, we deducted an amount of profit allocated to the expenses deducted 
under sections 772(d)(1) and (2) of the Act. Finally, we made 
additional corrections to the U.S. sales data based upon our findings 
at verification. See Memorandum from Christopher Welty and David Layton 
regarding Tembec's Analysis for the Preliminary Results (June 2, 2004) 
(Tembec's Preliminary Calculation Memorandum).
(F) Tolko
    Tolko made both EP and CEP transactions. We calculated an EP for 
sales where the merchandise was sold directly by Tolko to the first 
unaffiliated purchaser in the United States prior to importation, and 
CEP was not otherwise warranted based on the facts of the record. We 
calculated a CEP for sales made by Tolko to the U.S. customer through 
VMI or reload centers after importation into the United States. EP and 
CEP sales were based on the packed, delivered, ex-mill, FOB mill, and 
FOB reload center prices, as applicable.
    We made deductions from the starting price for movement expenses in 
accordance with section 772(c)(2)(A) of the Act. These include freight 
incurred in transporting merchandise to reload centers or VMI 
locations, as well as freight to the U.S. customer, warehousing, 
brokerage and handling, and miscellaneous movement charges. We also 
deducted any discounts and rebates from the starting price.
    In accordance with section 772(d)(1) of the Act, for CEP sales, we 
deducted from the starting price those selling expenses that were 
incurred in selling the subject merchandise in the United States, 
including direct selling expenses (e.g., credit expenses, warranty 
expenses, and commissions) and imputed inventory carrying costs. 
Finally, in accordance with section 772(d)(3) of the Act, we deducted 
an amount of profit allocated to the expenses deducted under sections 
772(d)(1) and (2) of the Act. Finally, we made additional corrections 
to the U.S. sales data based upon our findings at verification. See 
Memorandum from Keith Nickerson and James Kemp regarding Tolko's 
Analysis for the Preliminary Results (June 2, 2004) (Tolko's 
Preliminary Calculation Memorandum).
(G) West Fraser
    West Fraser made both EP and CEP transactions. We calculated an EP 
for sales where the merchandise was sold directly by West Fraser to the 
first unaffiliated purchaser in the United States prior to importation, 
and CEP was not otherwise warranted based on the facts of the record. 
We calculated a CEP for sales made by WFFP to the U.S. customer through 
VMI or reload centers after importation into the United States. EP and 
CEP sales were based on the packed, delivered, ex-mill, and FOB reload 
center prices, as applicable.
    We made deductions from the starting price for movement expenses in 
accordance with section 772(c)(2)(A) of the Act. These include internal 
freight incurred in transporting merchandise to reload centers and to 
VMI customers, freight to the U.S. customer, warehousing, U.S. and 
Canadian brokerage, and inland insurance. We also deducted any 
discounts and rebates from the starting price.
    In accordance with section 772(d)(1) of the Act, for CEP sales, we 
deducted from the starting price those selling expenses that were 
incurred in selling the subject merchandise in the United States, 
including direct selling expenses, (e.g., credit expenses) and imputed 
inventory carrying costs. Finally, in accordance with section 772(d)(3) 
of the Act, we deducted an amount of profit allocated to the expenses 
deducted under sections 772(d)(1) and (2) of the Act. Finally, we made 
additional corrections to the U.S.

[[Page 33241]]

sales data based upon our findings at verification. See Memorandum from 
Salim Bhabhrawala and Keith Nickerson regarding West Fraser's Analysis 
for the Preliminary Results (June 2, 2004) (West Fraser's Preliminary 
Calculation Memorandum).
(H) Weyerhaeuser
    Weyerhaeuser made both EP and CEP transactions. We calculated an EP 
for sales where the merchandise was sold directly by Weyerhaeuser to 
the first unaffiliated purchaser in the United States prior to 
importation, and CEP was not otherwise warranted based on the facts of 
the record. We calculated a CEP for sales made by Weyerhaeuser to the 
U.S. customer through reload centers, VMIs, and Weyerhaeuser's 
affiliated reseller Weyerhaeuser Building Materials (WBM) after 
importation into the United States. EP and CEP sales were based on the 
packed, delivered, or FOB prices.
    From its sales locations in the United States and Canada, 
Weyerhaeuser made sales of merchandise which had been commingled with 
that of other producers. Weyerhaeuser provided a weighting factor to 
determine the quantity of Weyerhaeuser-produced Canadian merchandise 
for these sales. We are multiplying the weighting factor by the 
quantity of lumber in each U.S. and home market sale to estimate the 
volume of Weyerhaeuser-produced merchandise in each transaction and to 
eliminate the estimated non-Weyerhaeuser-produced merchandise from our 
margin calculation.
    In some cases, the other producers knew or had reason to know that 
the merchandise purchased by Weyerhaeuser was destined for the United 
States. For example, Weyerhaeuser routinely purchased merchandise and 
arranged freight from the producer's mill in Canada to the customer in 
the United States. We did not include such sales in our margin 
calculations. In other situations, Weyerhaeuser purchased merchandise 
and shipped it to U.S. warehouses where it was commingled with lumber 
produced by Weyerhaeuser. While the producer had knowledge that these 
sales were destined for the United States, Weyerhaeuser was unable to 
link the purchases with the specific sale to the unaffiliated customer. 
Therefore, Weyerhaeuser developed a second weighting factor to 
determine the quantity of the sale for which the third-party producer 
did not know, or have reason to know, that the merchandise was destined 
for the United States. We are multiplying the weighting factor by the 
quantity of lumber in each U.S. sale to estimate the volume of 
merchandise for which the producer did not have knowledge of 
destination in each transaction. We included this quantity in our 
margin calculation and excluded the estimated volume for which the 
producer did have knowledge of U.S. destination.
    We made deductions from the starting price for movement expenses in 
accordance with section 772(c)(2)(A) of the Act. These include freight 
to U.S. and Canadian warehouses or reload centers, warehousing expense 
in Canada and the United States, brokerage and handling, and freight to 
the final customer. We also deducted from the starting price any 
discounts, billing adjustments, and rebates.
    In accordance with section 772(d)(1) of the Act, for CEP sales, we 
deducted from the starting price those selling expenses that were 
incurred in selling the subject merchandise in the United States, 
including indirect selling expenses and direct selling expenses (e.g., 
credit expenses). Additionally, in accordance with section 772(d)(3) of 
the Act, we deducted an amount for CEP profit. Finally, we made 
additional corrections to the U.S. sales data based upon our findings 
at verification. See Memorandum from James Kemp and Salim Bhabhrawala 
regarding Weyerhaeuser's Analysis for the Preliminary Results (June 2, 
2004) (Weyerhaeuser's Preliminary Calculation Memorandum).

Normal Value

A. Selection of Comparison Markets

    Section 773(a)(1) of the Act directs that NV be based on the price 
at which the foreign like product is sold in the home market, provided 
that the merchandise is sold in sufficient quantities (or value, if 
quantity is inappropriate) and that there is no particular market 
situation that prevents a proper comparison with the EP or CEP. The 
statute contemplates that quantities (or value) will normally be 
considered insufficient if they are less than five percent of the 
aggregate quantity (or value) of sales of the subject merchandise to 
the United States. We found that all eight respondents had viable home 
markets for lumber.
    To derive NV, we made the adjustments detailed in the Calculation 
of Normal Value Based on Home-Market Prices and Calculation of Normal 
Value Based on Constructed Value, sections below.

B. Cost of Production Analysis

    Because the Department found in the Less Than Fair Value (LTFV) 
Investigation that six of the respondents made sales in the home market 
at prices below the cost of producing the subject merchandise and 
excluded such sales from NV, the Department determined that there were 
reasonable grounds to believe or suspect that softwood lumber sales 
were made in Canada at prices below the cost of production (COP) in 
this administrative review for these respondents. See section 
773(b)(2)(A)(ii) of the Act. As a result, the Department has initiated 
a COP inquiry for these six respondents.
    For Buchanan and Tolko, petitioner filed sales below cost 
allegations on December 22, 2003. Based on these allegations and in 
accordance with section 773(b)(2)(A)(i) of the Act, we found reasonable 
grounds to believe or suspect that Buchanan and Tolko made softwood 
lumber sales in Canada at prices below the COP in this administrative 
review. See Memorandum from Keith Nickerson and Erin Begnal, 
International Trade Compliance Analysts, to Gary Taverman, Director, 
regarding Allegation of Sales Below Cost of Production for Buchanan and 
Tolko (January 12, 2004). As a result, the Department has initiated a 
COP inquiry to determine whether Buchanan and Tolko made home-market 
sales at prices below their respective COPs during the POR within the 
meaning of section 773(b) of the Act.
1. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated a 
weighted-average COP based on the sum of the cost of materials and 
fabrication for the foreign like product, plus amounts for general and 
administrative (G&A) expenses, selling expenses, packing expenses and 
interest expenses.
2. Cost Methodology
    In a letter dated August 1, 2003, we solicited comments on certain 
threshold sales and cost questions from the parties. In response, the 
parties submitted their comments and rebuttals on August 8, 2003, and 
August 20, 2003, respectively. The threshold cost questions were 
primarily concerned with issues surrounding the use of a value-based 
cost allocation for lumber products in the context of an antidumping 
duty analysis. After considering the comments from all parties, we 
preliminarily decided on a method to follow for our section D 
questionnaire, issued on September 22, 2003. We solicited information 
from the respondents that allows for a value-based cost allocation 
methodology for wood and sawmill costs (i.e., those costs

[[Page 33242]]

presumed to be joint costs), including by-product revenue. We allowed 
for the value allocation to cover species, grade, and dimension (i.e., 
thickness, width and length). In our section D questionnaire, we 
requested that parties establish on the record the appropriateness of 
applying a value-based allocation to these physical characteristics. 
For production costs that are separately identifiable to specific 
products (e.g., drying or planing costs), we directed parties to 
allocate such costs only to the associated products using an 
appropriate allocation basis (e.g., MBF). In allocating wood and 
sawmill costs (including by-product revenue) based on value, costs 
associated with a particular group of co-products were to be allocated 
only to those products (i.e., wood costs of a particular species should 
only be allocated to that species).
    The issue of which prices (home market, U.S., or world-wide) to 
look to for the value allocation is of particular importance in a 
price-based antidumping analysis. After careful consideration, we 
directed the parties to use weighted-average world-wide prices in 
deriving the net realizable values (NRV) used for the allocation. We 
used world-wide prices to ensure that all products common to the joint 
production process, not just those sold in a particular market, are 
allocated their fair share of the total joint costs.
    Finally, we directed the parties to perform the value allocation on 
the mill/facility level, using the company-wide weighted-average world-
wide NRV for the specific products produced at the mill, along with the 
mill-specific production quantities.
    During our analysis of the respondents' submissions, we noted that 
the presence of sales made on a random-length basis in our NRV data 
potentially distorts the value-based allocation. While the respondents 
have argued for a full value-based allocation, in part, to derive a 
difference-in-merchandise adjustment for dimensional differences, the 
presence of a significant number of random-length-tally sales masks any 
actual price differences between various lengths of lumber. In response 
to the problem of random-length sales, in our supplemental 
questionnaires dated February 2, 2004, and in subsequent telephone 
conversations documented in a follow-up Memorandum to the File, dated 
February 13, 2004, we requested that the respondents break out the 
random-length-tally sales separately from length-specific sales and to 
develop a two-tiered allocation method. See Memorandum from Michael 
Harrison to the File Regarding Tally Sales (February 13, 2004). First, 
we directed the respondents to perform the price-based cost allocation 
(including the random-length-tally sales) without regard to length. 
Second, we directed them to allocate the resulting product costs into 
length-specific costs. In performing the second step, we set out a 
hierarchy when looking for surrogate sales as allocation factors: (1) 
Length-specific sales of the identical product; (2) length-specific 
sales of products that are identical to the product except for width; 
and (3) length-specific sales of products identical to the product 
except for NLGA grade equivalent. For purposes of these preliminary 
results, we have used the programs and calculations provided by 
respondents except in the case of West Fraser. For West Fraser, this 
step was not necessary due to their ability to provide length-specific 
sales data. See Treatment of Sales Made on a Random-Lengths Basis 
section above. In addition, we excluded the price of purchased and 
resold lumber from our calculation of the respondent's per unit product 
costs.\11\
---------------------------------------------------------------------------

    \11\ We note that the vast majority of purchased lumber was 
excluded from our sales analyses as the producer had knowledge that 
the product was for export to the United States.
---------------------------------------------------------------------------

3. Individual Company Adjustments
    We relied on the COP data submitted by each respondent in its cost 
questionnaire response, except in specific instances where based on our 
review of the submissions and our verification findings, we believe 
that an adjustment is required, as discussed below:
(A) Abitibi
    1. We adjusted the byproduct revenue offset associated with the 
sale of wood chips to affiliates to reflect a market price in a given 
province.
    2. We made the following adjustments to Abitibi's G&A expense rate:
    (a) We excluded a miscellaneous revenue amount that they received 
for certain reimbursed legal fees related to the lumber dispute; and,
    (b) We recalculated SG&A expenses on a non-consolidated basis.
    3. We made the following adjustments to Abitibi's financial expense 
rate:
    (a) We recalculated Abitibi's interest expense rate as the 
percentage of net interest expense over cost of sales, based on the 
consolidated financial statements of the respondent's parent company; 
and,
    (b) We excluded the gain from discontinued operations from the 
calculation of interest expense, as this is not related to financial 
expenses but rather is the sale of a manufacturing entity.
    4. We changed the methodology for computing the cost of input 
material produced by Abitibi's sawmills and sent internally to its 
further processing mills.
    5. We reversed cost adjustments related to machine stress rated 
(MSR) products.
    See Memorandum from Nancy Decker to Neal Halper regarding Abitibi's 
Cost of Production and Constructed Value Calculation Adjustments for 
the Preliminary Results (June 2, 2004).
(B) Buchanan
    No adjustments were necessary.
(C) Canfor
    1. We revised the financial expense rate to disallow Lakeland's 
negative interest expense.
    2. We revised the G&A rate to disallow Canfor's gain on the sale of 
land, a non-depreciable asset.
    3. We set negative net realizable sales values to zero and kept 
them in the value allocation program.
    See Memorandum from Heidi Schriefer to Neal Halper regarding 
Canfor's, Lakeland's and The Pas' Cost of Production and Constructed 
Value Calculation Adjustments for the Preliminary Results (June 2, 
2004).
(D) Slocan
    1. We included the species-specific stumpage adjustment in the 
control number-specific cost of manufacturing.
    2. We recalculated Slocan's G&A rate using the unconsolidated 
company-wide G&A rates of the lumber-producing entities.
    3. For purposes of the value-allocation program, we set negative 
production quantities to a value of one.
    See Memorandum from Peter Scholl to Neal Halper regarding Slocan's 
Cost of Production and Constructed Value Calculation Adjustments for 
the Preliminary Results (June 2, 2004).
(E) Tembec
    1. We recalculated Tembec's G&A rate using the unconsolidated 
company-wide G&A rates of the lumber-producing entities.
    2. We recalculated Tembec's financial expense rate by including all 
foreign exchange gains and losses.
    3. We excluded from the value allocation of sawmill and wood costs 
a facility that sells but does not produce lumber.
    4. We adjusted the byproduct revenue offset associated with the 
sale of wood chips to affiliates to reflect a market price in a given 
province.
    See Memorandum from Shiekh Hannan to Neal Halper regarding

[[Page 33243]]

Tembec's Cost of Production and Constructed Value Calculation 
Adjustments for the Preliminary Results (June 2, 2004).
(F) Tolko
    1. We adjusted Tolko's total G&A expenses to include G&A 
depreciation and to exclude income related to the recovery of bad 
debts, royalty income and interest income. We adjusted the cost of 
goods sold used as the denominator of Tolko's G&A expense ratio to 
exclude G&A depreciation and non-lumber packing costs. In addition, we 
added the results of Gilbert Smith to the overall G&A rate calculation.
    2. We adjusted the cost of goods sold used as the denominator of 
Tolko's financial expense ratio to exclude G&A depreciation and non-
lumber packing costs. In addition, we added the results of Gilbert 
Smith to the overall interest expense rate calculation.
    See Memorandum from Robert Greger to Neal Halper regarding Tolko's 
Cost of Production and Constructed Value Calculation Adjustments for 
the Preliminary Results (June 2, 2004).
(G) West Fraser
    1. We disallowed West Fraser's start-up adjustment at the Chasm 
sawmill, because it appears that the mill reached commercial production 
levels prior to the POR.
    2. We adjusted West Fraser's interest expense ratio calculation to 
include the additional foreign exchange losses and to exclude interest 
income from long-term sources from the numerator of the calculation. 
Additionally, we adjusted the denominator of the interest expense ratio 
calculation to exclude packing expenses and G&A related depreciation 
expenses.
    3. We adjusted the byproduct revenue offset associated with the 
sale of wood chips to affiliates to reflect a market price in a given 
province.
    4. We revised West Fraser's G&A expense rate to include 
depreciation expense related to G&A operations for two of its mills.
    See Memorandum from Michael Harrison to Neal Halper regarding West 
Fraser's Cost of Production and Constructed Value Calculation 
Adjustments for the Preliminary Results (June 2, 2004).
(H) Weyerhaeuser
    1. We adjusted wood costs to reflect a value allocation for the 
logs for the POR.
    2. We re-allocated energy and common plant overhead costs among 
major processes within the sawmill.
    3. For BC Coastal, we excluded from wood cost going forward into 
the sawmills miscellaneous revenue and expenses and non-operating 
income and expense items that did not relate to wood costs.
    See Memorandum from Taija Slaughter to Neal Halper regarding 
Weyerhaeuser's Cost of Production and Constructed Value Calculation 
Adjustments for the Preliminary Results (June 2, 2004).
4. Test of Home-Market Sales Prices
    We compared the adjusted weighted-average COP for each respondent 
to its home-market sales of the foreign like product, as required under 
section 773(b) of the Act, to determine whether these sales had been 
made at prices below the COP within an extended period of time (i.e., a 
period of one year) in substantial quantities and whether such prices 
were sufficient to permit the recovery of all costs within a reasonable 
period of time. On a model-specific basis, we compared the revised COP 
to the home-market prices, less any applicable movement charges, export 
taxes, discounts and rebates.
5. Results of the COP Test
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of a respondent's sales of a given product were at prices less 
than the COP, we did not disregard any below-cost sales of that product 
because we determined that the below-cost sales were not made in 
substantial quantities. Where 20 percent or more of a respondent's 
sales of a given product during the POR were at prices less than the 
COP, we determined such sales to have been made in substantial 
quantities within an extended period of time in accordance with section 
773(b)(2)(B) of the Act. Because we compared prices to the POR average 
COP, we also determined that such sales were not made at prices which 
would permit recovery of all costs within a reasonable period of time, 
in accordance with section 773(b)(2)(D) of the Act. Therefore, we 
disregarded the below-cost sales.
    For all respondents, we found that more than 20 percent of the 
home-market sales of certain softwood lumber products within an 
extended period of time were made at prices less than the COP. Further, 
the prices did not provide for the recovery of costs within a 
reasonable period of time. We therefore disregarded the below-cost 
sales and used the remaining sales as the basis for determining normal 
value, in accordance with section 773(b)(1) of the Act.
    For those U.S. sales of softwood lumber for which there were no 
useable home-market sales in the ordinary course of trade, we compared 
EPs or CEPs to the CV in accordance with section 773(a)(4) of the Act. 
See Calculation of Normal Value Based on Constructed Value section 
below.

C. Calculation of Normal Value Based on Home-Market Prices

    We determined price-based NVs for each company as follows. For all 
respondents, we made adjustments for differences in packing in 
accordance with sections 773(a)(6)(A) and 773(a)(6)(B)(i) of the Act, 
and we deducted movement expenses consistent with section 
773(a)(6)(B)(ii) of the Act. In addition, where applicable, we made 
adjustments for differences in cost attributable to differences in 
physical characteristics of the merchandise pursuant to section 
773(a)(6)(C)(ii) of the Act, as well as for differences in 
circumstances of sale (COS) in accordance with section 
773(a)(6)(C)(iii) of the Act and section 351.410 of the Department's 
regulations. We also made adjustments, in accordance with section 
351.410(e) of the Department's regulations, for indirect selling 
expenses incurred on comparison-market or U.S. sales where commissions 
were granted on sales in one market but not in the other (the 
``commission offset''). Specifically, where commissions were granted in 
the U.S. market but not in the comparison market, we made a downward 
adjustment to NV for the lesser of (1) the amount of the commission 
paid in the U.S. market, or (2) the amount of indirect selling expenses 
incurred in the comparison market. If commissions were granted in the 
comparison market but not in the U.S. market, we made an upward 
adjustment to NV following the same methodology. Company-specific 
adjustments are described below.
(A) Abitibi
    We based home-market prices on the packed prices to unaffiliated 
purchasers in Canada. We adjusted the starting price for foreign inland 
freight, warehousing expenses, insurance, discounts, rebates, and 
billing adjustments. For comparisons made to EP sales, we made COS 
adjustments by deducting direct selling expenses incurred for home-
market sales (e.g., credit and advertising expenses) and adding U.S. 
direct selling expenses (e.g., credit expenses). For comparisons made 
to CEP sales, we deducted home-market direct selling expenses but did 
not add U.S. direct selling expenses. In addition, we made adjustments 
to the home-

[[Page 33244]]

market prices based upon our findings at verification. See Abitibi's 
Preliminary Calculation Memorandum.
(B) Buchanan
    We based home-market prices on the packed prices to unaffiliated 
purchasers in Canada. We adjusted the starting price by the amount of 
billing adjustments, early payment discounts, and movement expenses 
including inland freight, warehousing, miscellaneous movement charges, 
and a movement variance. For comparisons made to EP sales, we made COS 
adjustments by deducting direct selling expenses incurred for home-
market sales (e.g., credit expenses) and adding U.S. direct selling 
expenses (e.g., credit expenses). For comparisons made to CEP sales, we 
deducted home-market direct selling expenses but did not add U.S. 
direct selling expenses. In addition, we made adjustments to the home-
market prices based upon our findings at verification. See Buchanan's 
Preliminary Calculation Memorandum.
(C) Canfor
    Canfor commingled self-produced with purchased lumber in home-
market sales in the same manner as it did in U.S. sales, as described 
in the previous section. We used Canfor's weighting factor to determine 
the percentage of lumber in the commingled sales that was supplied by 
other producers. We did not include these quantities when calculating 
the weight-averaged home-market prices for comparison to EP or CEP.
    We based home-market prices on the packed prices to unaffiliated 
purchasers in Canada. We adjusted the starting price by the amount of 
billing adjustments, early payment discounts, rebates, interest 
revenue, and movement expenses (including inland freight, warehousing, 
and miscellaneous movement charges). For comparisons made to EP sales, 
we made COS adjustments by deducting direct selling expenses incurred 
for home-market sales (e.g., credit and warranty expenses) and adding 
U.S. direct selling expenses (e.g., credit, advertising, and warranty 
expenses). For comparisons made to CEP sales, we deducted home-market 
direct selling expenses and revenue but did not add U.S. direct selling 
expenses. In addition, we made adjustments to the home-market prices 
based upon our findings at verification. See Canfor's Preliminary 
Calculation Memorandum.
(D) Slocan
    We based home-market prices on the packed prices to unaffiliated 
purchasers in Canada. We adjusted the starting price by the amount of 
billing adjustments, early payment discounts, rebates, inland freight 
to warehouse, inland freight to customer, and freight rebates. For 
comparisons made to EP sales, we made COS adjustments by deducting 
direct selling expenses incurred for home-market sales and adding U.S. 
direct selling expenses (e.g., credit expenses) and adding direct 
selling expenses. For comparisons made to CEP sales, we deducted home-
market direct selling expenses but did not add U.S. direct selling 
expenses. In addition, we made adjustments to the home-market prices 
based upon our findings at verification. See Slocan's Preliminary 
Calculation Memorandum.
(E) Tembec
    We based home-market prices on the packed prices to unaffiliated 
purchasers in Canada. We adjusted the starting price for billing 
adjustments, early payment discounts, rebates, interest revenue, 
freight from the mill to the reload center or VMI, reload center 
expenses and freight to the final customer. For comparisons made to EP 
sales, we made COS adjustments by deducting direct selling expenses for 
home-market sales (e.g., credit expenses) and adding U.S. direct 
selling expenses (e.g., credit expenses). For comparisons made to CEP 
sales, we deducted home-market direct selling expenses but did not add 
U.S. direct selling expenses. In addition, we made adjustments to the 
home-market prices based upon our findings at verification. See 
Tembec's Preliminary Calculation Memorandum.
(F) Tolko
    We based home-market prices on the packed prices to unaffiliated 
purchasers in Canada. We adjusted the starting price by the amount of 
billing adjustments, early payment discounts, interest revenue, and 
movement expenses including inland freight, warehousing, and 
miscellaneous movement charges. For comparisons made to EP sales, we 
made COS adjustments by deducting direct selling expenses incurred for 
home-market sales (e.g., credit and warranty expenses) and adding U.S. 
direct selling expenses (e.g., credit and warranty expenses). For 
comparisons made to CEP sales, we deducted home-market direct selling 
expenses but did not add U.S. direct selling expenses. In addition, we 
made adjustments to the home-market prices based upon our findings at 
verification. See Tolko's Preliminary Calculation Memorandum.
(G) West Fraser
    We based home-market prices on the packed prices to unaffiliated 
purchasers in Canada. We adjusted the starting price for billing 
adjustments, early payment discounts, inland freight to the warehouse, 
warehousing expenses, special handling charges, inland freight to 
customers, freight rebates, and fuel surcharges.
    For comparisons made to EP sales, we made COS adjustments by 
deducting direct selling expenses incurred for home-market sales and 
adding U.S. direct selling expenses (e.g., credit expenses). For 
comparisons made to CEP sales, we deducted home-market direct selling 
expenses but did not add U.S. direct selling expenses. In addition, we 
made adjustments to the home-market prices based upon our findings at 
verification. See West Fraser's Preliminary Calculation Memorandum.
(H) Weyerhaeuser
    Weyerhaeuser commingled self-produced with purchased lumber in 
home-market sales in the same manner as it did in U.S. sales, as 
described in the previous section. We used Weyerhaeuser's weighting 
factor to determine the percentage of lumber in the commingled sales 
that was supplied by other producers. We did not include these 
quantities when calculating the weight-averaged home-market prices for 
comparison to EP or CEP.
    We based home-market prices on the packed prices to unaffiliated 
purchasers in Canada. We adjusted the starting price for discounts, 
rebates, billing adjustments, freight to the warehouse/reload center, 
warehousing expenses, freight to the final customer, and direct selling 
expenses including minor remanufacturing performed at Softwood Lumber 
Business (SWL) reloads and WBM locations. For comparisons made to EP 
sales, we made COS adjustments by deducting direct selling expenses 
incurred for home-market sales (e.g., credit expenses) and adding U.S. 
direct selling expenses (e.g., credit expenses). For comparisons made 
to CEP sales, we deducted home-market direct selling expenses but did 
not add U.S. direct selling expenses. In addition, we made adjustments 
to the home-market prices based upon our findings at verification. See 
Weyerhaeuser's Preliminary Calculation Memorandum.

D. Calculation of Normal Value Based on Constructed Value

    Section 773(a)(4) of the Act provides that where NV cannot be based 
on comparison-market sales, NV may be based on CV. Accordingly, for 
those

[[Page 33245]]

models of softwood lumber products for which we could not determine the 
NV based on comparison-market sales, either because there were no 
useable sales of a comparable product or all sales of the comparable 
products failed the COP test, we based NV on the CV.
    Section 773(e) of the Act provides that the CV shall be based on 
the sum of the cost of materials and fabrication for the imported 
merchandise, plus amounts for SG&A expenses, profit, and U.S. packing 
costs. For each respondent, we calculated the cost of materials and 
fabrication based on the methodology described in the Cost of 
Production Analysis section, above. We based SG&A and profit for each 
respondent on the actual amounts incurred and realized by the 
respondents in connection with the production and sale of the foreign 
like product in the ordinary course of trade for consumption in the 
comparison market, in accordance with section 773(e)(2)(A) of the Act. 
We used U.S. packing costs as described in the Export Price section, 
above.
    We made adjustments to CV for differences in COS in accordance with 
section 773(a)(8) of the Act and 19 CFR 351.410. For comparisons to EP, 
we made COS adjustments by deducting direct selling expenses incurred 
on home-market sales from, and adding U.S. direct selling expenses to, 
CV. For comparisons to CEP, we made COS adjustments by deducting from 
CV direct selling expenses incurred on home-market sales.

E. Level of Trade/CEP Offset

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales in the comparison market at 
the same level of trade (LOT) as the EP or CEP transaction. The NV LOT 
is that of the starting-price sales in the comparison market or, when 
NV is based on CV, that of the sales from which we derive SG&A expenses 
and profit. For EP, the U.S. LOT is also the level of the starting-
price sale, which is usually from exporter to importer. For CEP, it is 
the level of the constructed sale from the exporter to the importer.
    To determine whether NV sales are at a different LOT than EP or 
CEP, we examine stages in the marketing process and selling functions 
along the chain of distribution between the producer and the 
unaffiliated customer. If the comparison-market sales are at a 
different LOT, and the difference affects price comparability, as 
manifested in a pattern of consistent price differences between the 
sales on which NV is based and comparison-market sales at the LOT of 
the export transaction, we make an LOT adjustment under section 
773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV level is 
more remote from the factory than the CEP level and there is no basis 
for determining whether the difference in the levels between NV and CEP 
affects price comparability, we adjust NV under section 773(a)(7)(B) of 
the Act (the CEP offset provision). See Notice of Final Determination 
of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel 
Plate From South Africa, 62 FR 61731 (November 19, 1997).
    In implementing these principles in this review, we obtained 
information from each respondent about the marketing stages involved in 
the reported U.S. and comparison-market sales, including a description 
of the selling activities performed by the respondents for each channel 
of distribution. In identifying LOTs for EP and comparison-market 
sales, we considered the selling functions reflected in the starting 
price before any adjustments. For CEP sales, we considered only the 
selling activities reflected in the price after the deduction of 
expenses and profit under section 772(d) of the Act. We expect that, if 
claimed LOTs are the same, the functions and activities of the seller 
should be similar. Conversely, if a party claims that LOTs are 
different for different groups of sales, the functions and activities 
of the seller should be dissimilar.
    In this review, we determined the following, with respect to the 
LOT and CEP offset, for each respondent:
(A) Abitibi
    Abitibi reported three channels of distribution in the home market. 
The first channel of distribution (channel 1) included direct sales 
from Canadian mills or reload centers to customers. The second channel 
of distribution (channel 3) consisted of VMI/consignment sales made to 
large retailers, distributors, building materials manufacturers and 
other large lumber producers. The third channel of distribution 
(channel 4) consisted of e-commerce sales. We compared selling 
functions in each of these three channels of distribution and found 
that the sales process, freight services and inventory maintenance 
activities were similar. Accordingly, we preliminarily determine that 
home-market sales in these three channels of distribution constitute a 
single LOT.
    In the U.S. market, Abitibi had both EP and CEP sales. Abitibi 
reported EP sales to end-users and distributors through two channels of 
distribution. These two EP channels of distribution are direct sales 
from Canadian mills or reload centers to customers (channel 1), and 
VMI/consignment sales made to large retailers, distributors, building 
materials manufacturers and other large lumber producers (channel 2). 
There are no e-commerce sales in the U.S. market (channel 3). Because 
the sales process, freight services and inventory maintenance were 
similar, we preliminarily determine that EP sales in these two active 
channels of distribution during the review constitute a single LOT, 
which is identical to the home-market LOT.
    With respect to CEP sales, Abitibi reported these sales through two 
channels of distribution. The first (channel 2) included direct sales 
from U.S. reload centers to customers. The second (channel 3) consisted 
of VMI/consignment sales made to large retailers, distributors, 
building materials manufacturers and other large lumber producers. The 
selling functions related to freight arrangements and inventory 
maintenance for these two channels of distribution were not 
significantly different and, therefore, we determined there is only one 
CEP LOT.
    In determining whether separate LOTs exist between U.S. CEP sales 
and home-market sales, we examined the selling functions in the 
distribution chains and customer categories reported in both markets. 
In our analysis of LOTs for CEP sales, we consider only the selling 
activities reflected in the price after the deduction of expenses and 
profit under section 772(d) of the Act.
    Abitibi's sales to end-users and distributors in the home-market 
and in the U.S. market do not involve significantly different selling 
functions. Abitibi's Canadian-based services for CEP sales were similar 
to the single home-market LOT with respect to sales process and 
warehouse/inventory maintenance. Because we found the LOT for CEP sales 
to be similar to the home-market LOT, we made no LOT adjustment or CEP 
offset. See section 773(a)(7)(A) of the Act.
    (B) Buchanan
    Buchanan reported multiple channels of distribution in the home 
market, with six categories of unaffiliated customers. Buchanan made 
sales to customers in Canada via the affiliated sales agent, Buchanan 
Lumber Sales, Inc. (BLS), direct from the mill, through a reload yard, 
or it made use of resellers in certain instances. We compared selling 
functions in each of these channels of distribution and found that the 
sales process and freight services were similar. Accordingly, we 
preliminarily determine that home-market sales in

[[Page 33246]]

these channels of distribution constitute a single LOT.
    In the U.S. market, Buchanan had both EP and CEP sales. Buchanan 
reported EP sales to end-users and distributors, via the affiliated 
sales agent BLS, through multiple channels of distribution, including 
mill-direct sales, sales that traveled through reload facilities, and 
sales made via resellers. These EP channels of distribution do not 
significantly differ from the channels of distribution in the home 
market. Because the sales process and freight services were similar, we 
preliminarily determine that EP sales in these six channels of 
distribution constitute a single LOT, which is identical to the home-
market LOT.
    With respect to CEP sales, Buchanan reported those sales that 
traveled through a U.S. reload yard. In determining whether separate 
LOTs exist between U.S. CEP sales and home-market sales, we examined 
the selling functions in the distribution chains and customer 
categories reported in both markets. In our analysis of LOTs for CEP 
sales, we consider only the selling activities reflected in the price 
after the deduction of expenses and profit under section 772(d) of the 
Act.
    Buchanan's sales in the home and U.S. markets do not involve 
significantly different selling functions. Buchanan's Canadian-based 
services for its CEP sales were similar to the single home-market LOT 
with respect to sales process and freight arrangements. Because we 
found the LOT for CEP sales to be similar to the home-market LOT, we 
made no LOT adjustment or CEP offset. See section 773(a)(7)(A) of the 
Act.
(C) Canfor
    Canfor reported three channels of distribution in the home 
market,\12\ with seven customer categories. The first channel of 
distribution (channel 1) includes sales where merchandise was shipped 
directly from one of Canfor's sawmills to a Canadian customer. The 
second channel of distribution (channel 2) consists of sales made 
through reload centers or remanufacturing operations, where merchandise 
was shipped from the primary mill through one or more lumber-handling 
and inventory yards and/or secondary manufacturing facilities before 
delivery to the end customer. Finally, the third channel of 
distribution (channel 3) includes sales made pursuant to VMI programs.
---------------------------------------------------------------------------

    \12\ We note that, in its August 29, 2003, section A response, 
Canfor described three channels of distribution. However, Canfor 
reported sales through reload centers and sales through 
remanufacturing facilities as separate channels of distribution in 
its October 20, 2003, section B and C response, thereby reporting 
four channels of distribution.
---------------------------------------------------------------------------

    We compared the selling functions in these three channels of 
distribution and found that they differed only slightly in that certain 
services were provided for VMI customers that were not provided to 
other channels including: Product brochures, inventory management, 
education on environmental issues, and in-store training. Also, office 
wholesalers (wholesalers that do not hold inventory), one of Canfor's 
customer categories, only purchased lumber through channel 1. In 
addition, home centers requested custom packing, wrapping, and bar 
coding. With respect to the sales process, freight and delivery 
services, warranty services, custom-packing services, providing 
technical information, inspecting quality claims, and participating in 
trade shows, the sales to all customer categories in all channels were 
similar in all respects. Accordingly, we preliminarily determine that 
home-market sales in these three channels of distribution constitute a 
single LOT.
    In the U.S. market, Canfor had both EP and CEP sales. Canfor 
reported EP through all three channels of distribution. These three EP 
channels of distribution do not significantly differ from the channels 
of distribution in the home market. Accordingly, we preliminarily 
determine that EP sales in these three channels of distribution 
constitute a single LOT that is identical to the home-market LOT.
    With respect to CEP sales, Canfor reported that these sales were 
made through channels 2 (U.S. reload facilities) and 3 (VMI customers). 
The selling functions performed for these two channels of distribution 
were not significantly different in terms of freight arrangements, 
inventory management and warranty services; therefore, we determined 
there is only one CEP LOT.
    Canfor's sales in the home and U.S. markets do not involve 
significantly different selling functions. Canfor's Canadian-based 
services for its CEP sales were similar to the single home-market LOT 
with respect to sales process and inventory management. Because we 
found the LOT for CEP sales to be similar to the home-market LOT, we 
made no LOT adjustment or CEP offset. See section 773(a)(7)(A) of the 
Act.
(D) Slocan
    Slocan reported two channels of distribution in the home market. 
The first channel (channel 1) is comprised of direct sales and 
shipments to customers, and represents the large majority of sales. The 
second (channel 2) consisted of sales through reload centers. We 
compared the selling functions in the two channels of distribution and 
found that Slocan's sales process was identical across both channels. 
In addition, freight services and inventory maintenance activities were 
similar. Accordingly, we preliminarily determine that home-market sales 
in these two channels of distribution constitute a single LOT.
    In the U.S. market, Slocan had both EP and CEP sales. Slocan 
reported EP sales through two channels of distribution: (1) Direct 
sales to customers; and (2) settlements of futures contracts. The 
first, coded channel 1, included direct sales and shipments to 
customers. All other EP sales were ex-pit settlements of SPF lumber 
futures positions on the Chicago Mercantile Exchange (CME), i.e., sales 
settled outside the pit of the CME. Slocan treats the CME like a 
customer. These sales, coded as channel 4, effectively use the same 
channel of distribution as channel 1 once the sale is arranged. 
Although the sales process for channel 4 differs somewhat from that of 
other EP sales and home-market sales, the selling functions and 
channels of distribution for both channel 1 and channel 4 are similar 
in that they are minimal. Therefore, we preliminarily determine that EP 
sales in the U.S. market constitute a single LOT.
    On this basis, it appears that the LOT of Slocan's home-market 
sales do not involve significantly different selling functions than the 
LOT of the company's EP sales, and that the distinctions do not 
constitute a difference in LOT between the two markets.
    Slocan's CEP sales were reported in two channels of distribution: 
(1) Sales through reload operations; and (2) sales through VMI 
programs. The first, coded as channel 2, consisted of sales shipped 
from reload centers in the United States operated by unaffiliated 
parties. Unlike home-market and EP sales, the shipment instruction 
would go to the reload center rather than the mill. All channel 2 sales 
were reported as CEP sales. Slocan also reported some VMI sales, coded 
as channel 3, in which inventory was stored by the customer, although 
Slocan held title to the merchandise until it was sold. Slocan's 
Canada-based services for its CEP sales include order taking, issuing 
invoices to purchasers, and shipment instructions and inventory 
management for channel 2 sales. With respect to channel 3 sales, 
Slocan's involvement included the collection of weekly invoices of 
withdrawals from inventory and

[[Page 33247]]

keeping track of inventory levels. Slocan did not report any indirect 
selling expenses related to economic activity in the United States, 
other than imputed inventory carrying costs for either of these 
channels. Given the similarity of selling functions between these two 
channels of distribution, we concluded, preliminarily, that they 
constituted a single LOT.
    In determining whether separate LOTs existed between U.S. CEP sales 
and home-market sales, we examined the selling functions for the chains 
of distribution and customer categories reported in the home market and 
the United States. In determining LOTs for CEP sales, we considered 
only the selling activities reflected in the price after the deduction 
of expenses and profit under section 772(d) of the Act.
    We found the CEP LOT to be similar to home-market LOT. Both were 
similar with respect to sales process and warehouse/inventory 
maintenance. Therefore, where possible, we matched CEP sales to NV 
based on home-market sales and made no LOT adjustment or CEP offset. 
See section 773(a)(7)(A) of the Act.
(E) Tembec
    In Tembec's narrative response on its channels of distribution and 
in its sales databases, Tembec originally reported four channels of 
distribution applicable to both markets.\13\ Tembec originally reported 
these four channels of trade based on customer categories. Channel 1 
sales were distributed through office wholesalers who purchased the 
lumber generally on an FOB mill basis, and shipped it to a final 
customer, of whom Tembec had no knowledge. Channel 2 sales included 
sales made to stocking wholesale distributors which were normally 
shipped to the customer's facility. Channel 3 sales involved direct 
sales to building material/retail dealers. Channel 4 sales involved 
material for the further manufacture of finished or semi-finished 
products by remanufacturers.
---------------------------------------------------------------------------

    \13\ See Tembec Section A Response, August 29, 2003, at page A-
12.
---------------------------------------------------------------------------

    The Department issued supplemental questions on Tembec's original 
presentation of four channels of distribution. In its narrative 
responses for home-market and U.S. sales, and in its supplemental 
narrative response on channels of distribution, Tembec revised its 
analysis and reported two channels of distribution in each market.\14\ 
The first channel of distribution (channel 1) included direct sales to 
customers which included sales to wholesalers who took title to--but 
not physical possession of--the lumber and resold it to end-users. The 
second channel of distribution (channel 2) consisted of sales which 
were shipped through a reload center en route to the customer. We found 
that the two channels of distribution were similar with respect to both 
the sales process and freight services. Accordingly, we preliminarily 
determine that home-market sales in these two channels of distribution 
constitute a single LOT.
---------------------------------------------------------------------------

    \14\ See Tembec Section B and C Responses, October 20, 2003, at 
pages B-12 and C-12, and Tembec Supplemental Response, November 5, 
2003. We note that in the actual sale databases Tembec continues to 
report four channel classifications.
---------------------------------------------------------------------------

    In the U.S. market, Tembec had both EP and CEP sales. Tembec 
reported EP sales to end-users and distributors through the same two 
channels of distribution reported for home-market sales. These two 
channels of distribution as they apply to EP sales do not differ from 
the two channels of distribution in the home market. Because the sales 
process, freight services and inventory maintenance were similar, we 
preliminarily determine that EP sales in these two channels of 
distribution constitute a single LOT which is identical to the home-
market LOT.
    With respect to CEP sales, the Department has determined that 
Tembec made these sales through one channel of distribution, which 
consisted of U.S. sales that either pass through a U.S. reload center 
en route to the customer, or go to a VMI. In determining whether 
separate LOTs exist between U.S. CEP sales and home-market sales, we 
examined the selling functions reported for different distribution 
chains and customer categories in the home market and the United 
States.
    Tembec's sales to end-users and distributors in the home market and 
in the U.S. market do not involve significantly different selling 
functions. Tembec's Canadian-based services for CEP sales were similar 
to the single home-market LOT with respect to sales process and freight 
arrangements. Tembec normally provides transportation to the customer. 
Tembec provided the same services for VMI sales. Because we found the 
LOT for CEP sales to be similar to the home-market LOT, we made no LOT 
adjustment or CEP offset. See section 773(a)(7)(A) of the Act.
(F) Tolko
    Tolko reported three channels of distribution in the home market. 
The first channel of distribution (channel 1) included direct sales 
made by Tolko's North American Lumber sales, Brokerage, and Tolko 
Distribution Sales (TDS) units from Tolko's Canadian mill production 
and may have been shipped either directly or through a reload center to 
customers. The second channel of distribution (channel 2) consisted of 
sales made by Tolko's Brokerage and TDS sales units from inventory 
locations that contain softwood lumber produced by Tolko and various 
suppliers. The third channel of distribution (channel 3) consisted of 
sales made through its North American Lumber sales unit on a customer 
collect basis. We compared sales process in each of the three channels 
of distribution and found that, although the first two channels had 
similar freight services and inventory maintenance whereas the third 
channel sales were purchases made on an f.o.b. mill basis, the selling 
functions were similar for each channel in that they were minimal and 
the difference in freight alone does not merit a separate LOT. 
Accordingly, we preliminarily determine that home-market sales in these 
three channels of distribution constitute a single LOT.
    In the U.S. market, Tolko had both EP and CEP sales. Tolko reported 
EP sales to U.S. customers through one channel of distribution. Similar 
to the home market, the first channel of distribution (channel 1) 
included direct sales made by Tolko's North American Lumber sales, 
Brokerage, and TDS units from Tolko's Canadian mill production and may 
be shipped either directly or through a reload center to customers.
    With respect to CEP sales, Tolko reported these sales through two 
channels of distribution. The first (channel 2) included sales by 
Tolko's North American Lumber and Brokerage sales units from U.S. 
inventory reload centers to customers. The second (channel 3) consisted 
of sales made to U.S. companies pursuant to VMI contracts. The selling 
functions related to freight arrangements and inventory maintenance for 
these two channels of distribution were not significantly different 
and, therefore, we determined there is only one CEP LOT. In determining 
whether separate LOTs exist between U.S. CEP sales and home-market 
sales, we examined the selling functions in the distribution chains and 
customer categories reported in both markets.
    Tolko's sales in the home and U.S. markets do not involve 
significantly different selling functions. Tolko's Canadian-based 
services for its CEP sales were similar to the single home-market LOT 
with respect to sales process and inventory management.

[[Page 33248]]

Because we found the LOT for CEP sales to be similar to the home-market 
LOT, we made no LOT adjustment or CEP offset. See section 773(a)(7)(A) 
of the Act.
(G) West Fraser
    West Fraser reported three channels of distribution in the home 
market, with ten customer categories, of which only eight were used 
during the POR. The first channel of distribution (channel 1) included 
sales made directly to end-users and distributors from a mill or origin 
reload. The second channel of distribution (channel 2) consisted of 
sales made to end-users and distributors through unaffiliated inventory 
location. The third channel of distribution (channel 3) consisted of 
sales made to end-users and distributors through VMI programs. We 
compared these three channels of distribution and found that, while 
selling functions differed slightly with respect to the arrangement of 
freight and delivery for origin reload centers in channel 3, and the 
payment of commissions for channel 2 and 3 sales, all three channels 
were similar with respect to sales process, packing, freight services, 
inventory services, warranty services, and early payment discount 
services. Accordingly, we found that home-market sales in these three 
channels of distribution constitute a single LOT.
    In the U.S. market, West Fraser had both EP and CEP sales. West 
Fraser reported EP sales to end-users and distributors through four 
channels of distribution and ten customer categories, of which only 
eight were used during the POR. The first two EP channels of 
distribution did not differ from the first two channels of distribution 
within the home market, except with respect to paper processing 
services in connection with brokerage and handling.
    With respect to CEP sales, West Fraser's channel of distribution 
(channel 3) included sales to end-users and distributors through West 
Fraser's subsidiary, WFFP. The company WFFP is incorporated in the 
United States and was specifically created to act as the importer of 
record and hold title to lumber sold in the United States. It has no 
facilities or employees in the United States. These sales were made 
from unaffiliated destination reload centers in the United States by 
sales people located in Canada. In determining whether separate LOTs 
actually existed between CEP sales and home-market sales, we examined 
the selling functions in the different distribution chains and customer 
categories reported in the home market and the United States.
    West Fraser's Canadian-based services for its CEP sales include 
order-taking, invoicing and inventory management. West Fraser's 
Canadian sales agents occasionally arrange for reload center excess 
storage and freight from U.S. destination reload centers to 
unaffiliated end users. Any services occurring in the United States are 
provided by the unaffiliated reload centers, which are paid a fee by 
West Fraser. These expenses have been deducted from the CEP starting 
price as movement expenses.
    West Fraser's sales to end-users and distributors in the home 
market and the importers in the U.S. market do not involve 
significantly different selling functions. The CEP LOT was similar to 
the single home-market LOT with respect to sales process, and inventory 
maintenance. We found the LOT for CEP sales similar to the home-market 
LOT. Therefore, we made no LOT adjustment or CEP offset. See section 
773(a)(7)(A) of the Act.
(H) Weyerhaeuser
    Weyerhaeuser reported six channels of distribution in the home 
market, with seven customer categories.\15\ The channels of 
distribution are (1) mill-direct sales; (2) VMI sales; (3) mill-direct 
sales made through WBM; (4) sales made out of inventory by WBM; (5) 
sales invoiced from Canadian reloads; and (6) sales from B.C. Coastal 
Group's (BCC) processing mills. To determine whether separate levels of 
trade exist in the home market, we examined the selling functions, the 
chain of distribution, and the customer categories reported in the home 
market.
---------------------------------------------------------------------------

    \15\ Weyerhaeuser also reported a customer category for employee 
sales in the home market. However, we removed these sales from the 
margin calculation and LOT analysis.
---------------------------------------------------------------------------

    For each of its channels of distribution, Weyerhaeuser's selling 
functions included invoicing, freight arrangement, quality claims, 
marketing and promotional activities, market information, advanced 
shipping notices, and order status information. For each channel, 
except WBM sales from inventory, Weyerhaeuser offered certification of 
adherence to sustainable forestry initiatives. Weyerhaeuser's sales 
made out of inventory by WBM appear to involve substantially more 
selling functions, and to be made at a different point in the chain of 
distribution than mill-direct sales. WBM functions as a distributor for 
BCC and SWL and operates as a reseller. WBM operates a number of 
customer service centers (CSC) throughout Canada where it provides 
local sales offices and just-in-time inventory locations for customers. 
Generally, BCC and SWL make the sale to WBM, after which the 
merchandise is sold to the final customer by WBM's local sales force. 
Freight must be arranged to the WBM inventory location and then to the 
final customer. CSCs will also engage in minor further manufacturing to 
fill a customer order, if the desired product is not in inventory. WBM 
also sells from inventory through its trading group locations (TGs). 
The TGs maintain some sales offices of their own and have sales 
personnel at some CSCs.
    WBM also sells on a mill-direct basis. Although double-invoicing 
(i.e., the mill invoices WBM and WBM invoices the final customer) is 
involved, there is no need to maintain local just-in-time inventory or 
arrange freight twice. Therefore, we do not consider mill-direct sales 
made through WBM to be at a separate LOT from mill-direct sales made by 
SWL and BCC. Additionally, we compared sales invoiced from Canadian 
reloads (channel 5) and sales made from BCC's processing mills (channel 
6) to the mill direct sales and found that the selling activities did 
not differ to the degree necessary to warrant separate LOTs.
    Sales made through VMI arrangements also appear to involve 
significantly more selling activities than mill-direct sales. SWL has a 
designated sales team responsible for VMI sales which works with the 
customers to develop a sales volume plan, manages the flow of products 
and replenishing process, and aligns the sales volume plan with 
Weyerhaeuser's production plans. It also offers extra services such as 
bar coding, cut-in-two, half packing and precision end trimming.
    We analyzed Weyerhaeuser's seven customer categories in relation to 
the channels of distribution and application of selling functions. Each 
channel services multiple customer categories with channels 1, 2, and 4 
serving at least five customer categories. We found there were not 
significant differences in the application of selling functions by 
customer and instead the activities depended on the channel of 
distribution. Therefore, customer category is not a useful indicator of 
LOT for Weyerhaeuser's home market sales.
    Because both VMI and WBM inventory sales involve significantly more 
selling functions than the mill-direct sales, we consider them to be at 
a more advanced LOT for purposes of the preliminary results. While the 
selling activities for VMI and WBM inventory sales are not identical, 
the principal selling activity for both is just-in-time inventory 
maintenance. Thus,

[[Page 33249]]

we consider them to be at the same LOT. Accordingly, we find that there 
are two LOTs in the home market, mill-direct (HM1) (encompassing 
channels 1, 3, 5, and 6) and VMI and WBM sales out of inventory (HM2) 
(encompassing channels 2 and 4).
    Weyerhaeuser reported seven channels of distribution in the U.S. 
market, with eight customer categories. The channels of distribution 
are (1) mill-direct sales; (2) VMI sales; (3) WBM direct sales; (4) WBM 
U.S. inventory sales; (5) SWL sales through U.S. reloads; (6) sales 
invoiced from Canadian reloads; and (7) sales from BCC's processing 
mills. In determining whether separate LOTs existed between U.S. and 
home market sales, we examined the selling functions, the chain of 
distribution, and customer categories reported in the U.S. market.
    With regard to the mill-direct sales to the United States, 
Weyerhaeuser has the same selling activities as it does for mill-direct 
sales in Canada. Likewise, we consider sales invoiced from Canadian 
reloads (channel 6) and sales made from BCC processing mills (channel 
7) to be at the same LOT as the direct sales. Therefore, where 
possible, we matched the U.S. mill-direct sales (U.S.1) (encompassing 
channels 1, 3, 6, and 7) to the Canadian mill-direct sales (HM1). The 
other channels consist of CEP sales as addressed below.
    Weyerhaeuser's Canadian selling functions for VMI sales to the 
United States include the same selling functions performed for home 
market VMI sales, as described above. Although the VMI warehouses are 
located in the United States, most, if not all, of the associated 
selling functions appear to be performed in Canada. Therefore, even 
after the deduction of U.S. expenses and profit we find that the U.S. 
VMI sales (U.S.2) are made at the same LOT as home market VMI sales 
(HM2), and we have matched them accordingly.
    SWL's sales through U.S. reloads also appear to have most of their 
selling functions occurring in Canada. While Weyerhaeuser states that 
it maintains just-in-time inventory for its U.S. customers at these 
reloads, it does not maintain local sales offices, and the sales do not 
involve a reseller. Therefore, these sales do not appear to be at a 
different point in the chain of distribution than mill-direct sales in 
Canada. In addition, SWL does not appear to offer the same services 
from its U.S. reloads that it offers its VMI customers. Therefore, for 
purposes of the preliminary results, we consider SWL's sales through 
U.S. reloads to be at the same LOT as its mill-direct sales (U.S.1 and 
HM1), and we have matched them accordingly.
    With regard to WBM's U.S. inventory sales, significant selling 
activities occur in the United States, such as maintaining local sales 
offices and just-in-time inventory, and arranging freight to the final 
customer. The selling functions occurring in Canada are the same 
selling functions performed for mill-direct sales. Therefore, after the 
deduction of U.S. expenses and profit, we find that WBM's U.S. 
inventory sales are at the same LOT as mill-direct sales (U.S.1 and 
HM1), and we have matched them accordingly.
    As was the case with Canadian sales, each U.S. channel of 
distribution services multiple customer categories. Channels 1-5 have 
buyers from at least five customer categories. The other three channels 
have two to four customer categories each but also realized 
significantly fewer sales during the POR. We found there were not 
significant differences in the application of selling functions by 
customer and instead the activities depended on the channel of 
distribution. Therefore, customer category is not a useful indicator of 
LOT for Weyerhaeuser's U.S. sales.
    Because we found a pattern of consistent price differences between 
LOTs, where we matched across LOTs, we made an LOT adjustment under 
section 773(a)(7)(A) of the Act.

Currency Conversion

    We made currency conversions into U.S. dollars in accordance with 
section 773A of the Act, based on exchange rates in effect on the date 
of the U.S. sale, as certified by the Federal Reserve Bank.

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
following weighted-average margins exist for the period May 22, 2002, 
through April 30, 2003:

------------------------------------------------------------------------
                                                            Weighted-
                        Producer                          average margin
                                                           (percentage)
------------------------------------------------------------------------
Abitibi................................................             2.97
(and its affiliates Produits Forestiers Petit Paris
 Inc., Produits Forestiers La Tuque Inc., and Societe
 En Commandite Scierie Opticwan)
Buchanan...............................................             4.80
(and its affiliates Atikokan Forest Products Ltd., Long
 Lake Forest Products Inc., Nakina Forest Products
 Limited \16\, Buchanan Distribution Inc., Buchanan
 Forest Products Ltd., Great West Timber Ltd., Dubreuil
 Forest Products Ltd., Northern Sawmills Inc., McKenzie
 Forest Products Inc., Buchanan Northern Hardwoods
 Inc., Northern Wood, and Solid Wood Products Inc.)
Canfor*................................................             2.06
(and its affiliates Lakeland Mills Ltd., The Pas Lumber
 Company Ltd., Howe Sound Pulp and Paper Limited
 Partnership, and Skeena Cellulose)
Slocan.................................................             1.64
Tembec.................................................            10.21
(and its affiliates Marks Lumber Ltd., Excel Forest
 Products, Les Industries Davidson Inc., Produits
 Forestiers Temrex Limited Partnership \17\)
Tolko..................................................             3.68
(and its affiliates Gilbert Smith Forest Products Ltd.
 Compwood Products Ltd., and Pinnacle Wood Products
 Ltd.)
West Fraser............................................             1.08
(and its affiliates West Fraser Forest Products Inc.,
 and Seehta Forest Products Ltd.)
Weyerhaeuser...........................................             8.38
(and its affiliates Weyerhaeuser Saskatchewan Ltd., and
 Monterra Lumber Mills Limited \18\)
Review-Specific Average Rate Applicable to the
 Following Companies:

[[Page 33250]]

 
    2 by 4 Lumber Sales Ltd.
    440 Services Ltd.
    582912 B.C. Ltd. (DBA Paragon Wood Products, Lumby)
    A.J. Forest Products Ltd.
    A.L. Stuckless & Sons Limited
    Abitibi-LP Engineered Wood, Inc.
    Age Cedar Products
    Alberta Spruce Industries Ltd.
    Allmac Lumber Sales Ltd.
    Alpa Lumber Mills Inc.
    American Bayridge Corporation
    Apex Forest Products Inc.
    Apollo Forest Products Ltd.
    Aquila Cedar Products Ltd.
    Arbutus Manufacturing Ltd.
    Armand Duhamel et fils Inc.
    Ashley Colter (1961) Limited
    Aspen Planers Ltd.
    Atco Lumber Ltd.
    AWL Forest Products
    Bakerview Forest Products Inc.
    Barrett Lumber Company Limited
    Barrette-Chapais Ltee
    Beaubois Coaticook Inc.
    Blanchette et Blanchette Inc.
    Bloomfield Lumber Limited
    Bois Cobodex (1995) Inc.
    Bois Daaquam Inc.
    Bois d'oeuvre Cedrico Inc.
    Bois Neos Inc.
    Bois Omega Ltee
    Bois Rocam Inc.
    Boisaco Inc.
    Boucher Forest Products Ltd.
    Bowater Canadian Forest Products Incorporated
    Bridgeside Higa Forest industries Ltd.
    Brittania Lumber Company Limited
    Brouwer Excavating Ltd.
    Brunswick Valley Lumber Inc.
    Buchanan Lumber
    Burrows Lumber Inc.
    BW Creative Wood
    Byrnexco Inc.
    C.E. Harrison & Sons Ltd.
    Caledon Log Homes (FEWO)
    Caledonia Forest Products Ltd.
    Cambie Cedar Products Ltd.
    Canadian Forest Products Ltd.
    Canadian Lumber Company Ltd.
    Cando Contracting Ltd.
    Canex International Lumber Sales Ltd.
    Canwel Distribution Ltd.
    Canyon Lumber Company Ltd.
    Cardinal Lumber Manufacturing & Sales Inc
    Carrier Forest Products Ltd.
    Carrier Lumber Ltd.
    Carson Lake Lumber
    Cedarland Forest Products Ltd.
    Central Cedar
    Centurion Lumber Manufacturing (1983) Ltd.
    Chaleur Sawmills
    Cheminis Lumber Inc.
    Cheslatta Forest Products Ltd.
    Chisholm's (Roslin) Ltd.
    Choicewood Products Inc.
    City Lumber Sales & Services Ltd.
    Clair Industrial Development Corp. Ltd. (Waska)
    Clareco Industries Ltd
    Claude Forget Inc.
    Clearwood Industries Ltd.
    Coast Clear Wood Ltd.
    Colonial Fence Mfg. Ltd.

[[Page 33251]]

 
    Comeau Lumber Ltd.
    Commonwealth Plywood Co. Ltd.
    Cooper Creek Cedar Ltd.
    Cooperative Forestiere Laterriere
    Cottle's Island Lumber Co. Ltd.
    Coventry Forest Products Ltd.
    Cowichan Lumber Ltd
    Crystal Forest Industries Ltd.
    Curley's Cedar Post & Rail
    Cushman Lumber Co. Inc.
    D.S. McFall Holding Ltd.
    Dakeryn Industries Ltd.
    Delco Forest Products Ltd.
    Delta Cedar Products Ltd.
    Devlin Timber Company (1992) Limited
    Devon Lumber Co. Ltd.
    Doman Forest Products Limited
    Doman Industries Limited
    Doman Western Lumber Ltd.
    Domexport Inc.
    Domtar Inc.
    Downie Timber Ltd.
    Duluth Timber Company
    Dunkley Lumber Ltd.
    E. Tremblay et fils Ltee
    E.R. Probyn Export Ltd.
    Eacan Timber Canada Ltd.
    Eacan Timber Limited
    Eacan Timber USA Ltd.
    East Fraser Fiber Co. Ltd.
    Eastwood Forest Products Inc.
    Edwin Blaikie Lumber Ltd.
    Elmira Wood Products Limited
    Elmsdale Lumber Company Limited
    Evergreen Empire Mills Incorporated
    EW Marketing
    F.L. Bodogh Lumber Co. Ltd.
    Falcon Lumber Limited
    Faulkener Wood Specialities Ltd.
    Fawcett Lumber
    Federated Co-operative Limited
    Finmac Lumber Limited
    Fontaine Inc (dba J.A. Fontaine et fils Incorporee)
    Fraser Inc.
    Fraser Pacific Forest Products Inc.
    Fraser Pacific Lumber Company
    Fraser Pulp Chips Ltd.
    Fraserview Cedar Products Ltd
    Frontier Mills Inc.
    Georgetown Timber Limited
    Georgian Bay Forest Products Ltd.
    Gestofor Inc.
    Gogama Forest Products
    Goldwood Industries Ltd.
    Goodfellow Inc.
    Gorman Bros. Lumber Ltd.
    Great Lakes MSR Lumber Ltd.
    Greenwood Forest Products (1983) Ltd.
    Groupe Cedrico Inc.
    H.A. Fawcett & Son Limited
    H.J. Crabbe & Sons Ltd.
    Haida Forest Products Ltd.
    Hainesville Sawmill Ltd.
    Harry Freeman & Son Ltd.
    Hefler Forest Products Ltd.
    Hi-Knoll Cedar Inc.
    Hilmoe Forest Products Ltd.
    Hoeg Bros. Lumber Ltd.
    Holdright Lumber Products Ltd.
    Hudson Mitchell & Sons Lumber Inc.
    Hughes Lumber Specialities Inc.
    Hyak Speciality Wood

[[Page 33252]]

 
    Industrial Wood Specialities
    Industries Maibec Inc.
    Industries Perron inc.
    Interior Joinery Ltd.
    International Forest Products Limited (Interfor)
    Isidore Roy Limited
    J.A. Turner & Sons (1987) Limited
    J.D. Irving, Limited
    Jackpine Engineered Wood Products Inc.
    Jackpine Forest Products Ltd.
    Jamestown Lumber Company Limited
    Jasco Forest Products Ltd.
    Jointfor (3207021) Canada, Inc.
    Julimar Lumber Co. Limited
    Kenora Forest Products Limited
    Kent Trusses Ltd.
    Kenwood Lumber Ltd.
    Kispiox Forest Products
    Kruger, Inc.
    Lakeburn Lumber Limited
    Landmark Structural Lumber
    Landmark Truss & Lumber Inc.
    Langevin Forest Products, Inc.
    Langley Timber Company Ltd.
    Lawson Lumber Company Ltd.
    Lecours Lumber Company
    Ledwidge Lumber Co. Ltd
    Leggett & Platt
    LeggettWood
    Les Bois d'Oeuvre Beaudoin & Gautheir Inc.
    Les Bois Lemelin Inc.
    Les Bois S&P Grondin inc.
    Les Produits Forestiers D.G. Ltee
    Les Produits Forestiers Dube Inc.
    Les Produits Forestiers F.B.M. Inc.
    Les Produits Forestiers Maxibois Inc.
    Les Produits Forestiers Miradas Inc.
    Les Produits Forestiers Portbec Ltee
    Les Scieries du Lac St Jean Inc.
    Leslie Forest Products Ltd.
    Lignum Ltd.
    Lindsay Lumber Ltd.
    Liskeard Lumber Ltd.
    Littles Lumber Ltd.
    Lonestar Lumber Inc.
    LP Canada Ltd.
    LP Engineered Wood Products Ltd.
    Lulumco Inc.
    Lyle Forest Products Ltd.
    M&G Higgins Lumber Ltd.
    M.F. Bernard Inc.
    M.L. Wilkins & Son Ltd.
    MacTara Limited
    Manitou Forest Products Ltd.
    Maple Creek Saw Mills Inc.
    Marcel Lauzon Inc.
    Marwood Ltd.
    Materiaux Blanchette Inc.
    Max Meilleur & Fils Ltee
    McCorquindale Holdings Ltd.
    McNutt Lumber Company Ltd.
    Mercury Manufacturing Inc.
    Meunier Lumber Company Ltd.
    Mid America Lumber
    Midland Transport Limited
    Midway Lumber Mills Ltd.
    Mill & Timber Products Ltd.
    Millar Western Forest Products Ltd.
    Millco Wood Products Ltd.
    Mobilier Rustique (Beauce) Inc.
    Monterra Lumber Mills Limited
    Mountain View Specialty Products & Reload Inc.

[[Page 33253]]

 
    Murray A. Reeves Forestry Limited
    N.F. Douglas Lumber Limited
    Nechako Lumber Co. Ltd.
    Newcastle Lumber Co. Inc.
    Nexfor Inc.
    Nicholson and Cates Limited
    Nickel Lake Lumber
    Norbord Industries Inc.
    North American Forest Products Ltd.
    North Enderby Timber Ltd.
    North Mitchell Lumber Co. Ltd.
    North Shore Timber Ltd.
    North Star Wholesale Lumber Ltd.
    Northchip Ltd.
    Northland Forest Products
    Olav Haavaldsrud Timber Company
    Olympic Industries Inc.
    Optibois Inc. 692
    P.A. Lumber & Planing Mill
    Pacific Lumber Remanufacturing Inc.
    Pacific Northern Rail Contractors Corp.
    Pacific Western Woodworks Ltd.
    Pallan Timber Products (2000) Ltd.
    Palliser Lumber Sales Ltd.
    Pan West Wood Products Ltd.
    Paragon Ventures Ltd. (DBA Paragon Wood Products,
     Grindrod)
    Parallel Wood Products Ltd.
    Pastway Planing Limited
    Pat Power Forest Products Corp.
    Paul Vallee Inc.
    Peak Forest Products Ltd.
    Peter Thomson & Sons Inc.
    Phoenix Forest Products Inc.
    Pope & Talbot Inc.
    Porcupine Wood Products Ltd.
    Portelance Lumber Capreol Ltd.
    Power Wood Corp.
    Precibois Inc. 692
    Preparabois Inc.
    Prime Lumber Limited
    Pro Lumber Inc.
    Produits Forestiers Labrieville
    R. Fryer Forest Products Ltd.
    Raintree Lumber Specialties Ltd.
    Ramco Lumber Ltd.
    Redtree Cedar Products Ltd.
    Redwood Value Add Products Inc.
    Ridgewood Forest Products Ltd.
    Rielly Industrial Lumber, Inc.
    Riverside Forest Products Ltd.
    Rojac Cedar Products Inc.
    Rojac Enterprises Inc.
    Rouck Bros. Sawmill Ltd.
    Russell White Lumber Limited
    Sauder Industries Limited
    Sawn Wood Products
    Scierie Adrien Arseneault Ltee
    Scierie Beauchesne et Dube Inc
    Scierie Gaston Morin Inc.
    Scierie La Patrie, Inc.
    Scierie Landrienne Inc.
    Scierie Lapointe & Roy Ltee
    Scierie Leduc
    Scierie Nord-Sud Inc.
    Scierie West Brome Inc.
    Scott Lumber Ltd.
    Selkirk Speciality Wood Ltd.
    Shawood Lumber Inc.

[[Page 33254]]

 
    Sigurdson Bros. Logging Co. Ltd.                     ...............
    Sinclar Enterprises Ltd.*                            ...............
    Skana Forest Products Ltd.                           ...............
    South River Planing Mills Inc.                       ...............
    South-East Forest Products Ltd.                      ...............
    Spray Lake Sawmills (1980) Ltd.                      ...............
    Spruce Forest Products Ltd.                          ...............
    Spruce Products Limited                              ...............
    St. Anthony Lathing Mills Ltd.                       ...............
    St. Jean Lumber (1984) Ltd.                          ...............
    Stuart Lake Lumber Co. Ltd.                          ...............
    Sunbury Cedar Sales Ltd.                             ...............
    SWP Industries Inc.                                  ...............
    Sylvanex Lumber Products Inc.                        ...............
    T.P. Downey & Sons Ltd.                              ...............
    Tarpin Lumber Incorporated                           ...............
    Teeda Corp                                           ...............
    Terminal Forest Products Ltd.                        ...............
    TimberWorld Forest Products Inc.                     ...............
    T'loh Forest Products Limited Partnership            ...............
    Treeline Wood Products Ltd.                          ...............
    Triad Forest Products Ltd.                           ...............
    Twin Rivers Cedar Products Ltd.                      ...............
    Tyee Timber Products Ltd.                            ...............
    United Wood Frames Inc.                              ...............
    Usine Sartigan Inc.                                  ...............
    Vancouver Specialty Cedar Products Ltd.              ...............
    Vanderhoof Specialty Wood Products                   ...............
    Vandermeer Forest Products (Canada) Ltd.             ...............
    Vanderwell Contractors (1971) Ltd.                   ...............
    Vanport Canada Co.                                   ...............
    Vernon Kiln & Millwork Ltd.                          ...............
    Visscher Lumber Inc.                                 ...............
    W.C. Edwards Lumber                                  ...............
    W.I. Woodtone Industries Inc.                        ...............
    Welco Lumber Corporation                             ...............
    Weldwood of Canada Limited                           ...............
    Wentworth Lumber Ltd.                                ...............
    Wernham Forest Products                              ...............
    West Bay Forest Products & Manufacturing Ltd.        ...............
    West Can Rail Ltd.                                   ...............
    West Chilcotin Forest Products Ltd.                  ...............
    West Hastings Lumber Products                        ...............
    Western Commercial Millwork Inc.                     ...............
    Westmark Products Ltd.                               ...............
    Weston Forest Corp.                                  ...............
    West-Wood Industries Ltd.                            ...............
    White Spruce Forest Products Ltd.                    ...............
    Wilkerson Forest Products Ltd.                       ...............
    Williams Brothers Limited                            ...............
    Winnipeg Forest Products, Inc                        ...............
    Woodko Enterprises Ltd
    Woodland Forest Products Ltd.                        ...............
    Woodline Forest Products Ltd.                        ...............
    Woodtone Industries, Inc.                            ...............
    Wynndel Box & Lumber Co. Ltd.......................            3.98
------------------------------------------------------------------------
* We note that, during the POR, Sinclar Enterprises Ltd. (Sinclar) acted
  as an affiliated reseller for Lakeland, an affiliate of Canfor. In
  this review, we reviewed the sales of Canfor and its affiliates;
  therefore, Canfor's weighted-average margin applies to all sales
  produced by any member of the Canfor Group and sold by Sinclar. As
  Sinclar also separately requested a review, any sales produced by
  another manufacturer and sold by Sinclar will receive the ``Review-
  Specific All Others'' rate.
\16\ We note that Nakina Forest Products Limited is a division of Long
  Lake Forest Products, Inc, an affiliate of Buchanan Lumber Sales.
\17\ We note that Produits Forestiers Temrex Limited Partnership is the
  same entity as the company Produits Forestiers Temrex Usine St.
  Alphonse, Inc. included in the initiation notice. See Notice of
  Initiation of Antidumping Duty Administrative Review, 68 FR 39059
  (July 1, 2003).
\18\ Based on the Final Results of the Changed Circumstances Review,
  Monterra shall receive Weyerhaeuser's weighted-average margin until
  December 23, 2002; thereafter the company will be subject to the
  review-specific average rate. See Notice of Final Results of
  Antidumping Duty Changed Circumstances Review, 68 FR 54891 (September
  19, 2003).


[[Page 33255]]

Disclosure and Opportunity To Submit Data Analyses

    The Department will disclose calculations performed in accordance 
with 19 CFR 351.224(b). In addition, the Department is offering 
interested parties the opportunity to submit data analyses related to: 
(1) The appropriateness of continuing to use length as a matching 
characteristic; (2) the use of length in the value-based cost 
calculation; and (3) the treatment of sales made on a random-length 
basis in price-to-price comparisons. All data analyses must be based 
solely on data already on the record and should contain the following:
    1. A complete SAS program which starts with the database actually 
submitted by the respondent. The program should be submitted in both 
hard copy and electronic format.
    2. A detailed narrative response which discusses each element of 
the output and its significance.
    3. An explanation as to how the results of the analysis can be 
meaningfully used by the Department in resolving the aforementioned 
issues.
    The submissions of data analyses as indicated above are due ten 
days after the publication of this notice. Comments on the data 
analyses may be made in the case briefs; however, no further data 
analysis programs will be considered. Data analyses submissions which 
do not contain all the requested information will be rejected and will 
not be considered for the final.

Public Hearing

    An interested party may request a hearing within 30 days of 
publication of these preliminary results. See 19 CFR 351.310(c). Any 
hearing, if requested, will be held 44 days after the date of 
publication, or the first working day thereafter. Interested parties 
may submit case briefs and/or written comments no later than 30 days 
after the date of publication of these preliminary results. Rebuttal 
briefs and rebuttals to written comments, limited to issues raised in 
such briefs or comments, may be filed no later than 37 days after the 
date of publication. Parties who submit arguments are requested to 
submit with the argument (1) a statement of the issue, (2) a brief 
summary of the argument, and (3) a table of authorities. Further, the 
parties submitting written comments should provide the Department with 
an additional copy of the public version of any such comments on 
diskette. The Department will issue the final results of this 
administrative review, which will include the results of its analysis 
of issues raised in any such comments, within 120 days of publication 
of these preliminary results.

Assessment

    Upon completion of this administrative review, pursuant to 19 CFR 
351.212(b), the Department will calculate an assessment rate on all 
appropriate entries. We will calculate importer-specific duty 
assessment rates on the basis of the ratio of the total amount of 
antidumping duties calculated for the examined sales to the total 
entered value of the examined sales for that importer. For the 
companies requesting a review, but not selected for examination and 
calculation of individual rates, we will calculate a weighted-average 
assessment rate based on all importer-specific assessment rates 
excluding any which are de minimis or margins determined entirely on 
adverse facts available. Where the assessment rate is above de minimis, 
we will instruct CBP to assess duties on all entries of subject 
merchandise by that importer.

Cash Deposit Requirements

    The following deposit rates will be effective upon publication of 
the final results of this administrative review for all shipments of 
Certain Softwood Lumber Products From Canada entered, or withdrawn from 
warehouse, for consumption on or after the publication date, as 
provided by section 751(a)(1) of the Act: (1) The cash deposit rate 
listed above for each specific company will be the rate established in 
the final results of this review, except if a rate is less than 0.5 
percent, and therefore de minimis, the cash deposit will be zero; (2) 
for the non-selected companies we will calculate a weighted-average 
cash deposit rate based on all the company-specific cash deposit rates, 
excluding de minimis margins or margins determined entirely on adverse 
facts available; (3) for previously reviewed or investigated companies 
not participating in this review, the cash deposit rate will continue 
to be the company-specific rate published for the most recent period; 
(4) if the exporter is not a firm covered in this review, a prior 
review, or the less-than-fair-value (LTFV) investigation, but the 
manufacturer is, the cash deposit rate will be the rate established for 
the most recent period for the manufacturer of the merchandise; and (5) 
if neither the exporter nor the manufacturer is a firm covered in this 
or any previous review conducted by the Department, the cash deposit 
rate will be 8.43 percent, the ``All Others'' rate established in the 
LTFV investigation. At this time the Department is considering 
instructing CBP to apply the cash deposit rate to the sum of the 
entered value, countervailing duties and antidumping duties when these 
items are deducted in determining entered value. These cash deposit 
requirements, when imposed, shall remain in effect until publication of 
the final results of the next administrative review.
    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f) to file a certificate regarding 
the reimbursement of antidumping duties prior to liquidation of the 
relevant entities during this review period. Failure to comply with 
this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This determination is issued and published in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: June 2, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-13073 Filed 6-10-04; 8:45 am]
BILLING CODE 3510-DS-P