[Federal Register Volume 71, Number 112 (Monday, June 12, 2006)]
[Notices]
[Pages 33964-33988]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-5222]



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Part VI





Department of Commerce





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International Trade Administration



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

  Federal Register / Vol. 71, No. 112 / Monday, June 12, 2006 / 
Notices  

[[Page 33964]]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-838]


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

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

EFFECTIVE DATE: June 12, 2006.

FOR FURTHER INFORMATION CONTACT: Constance Handley or David Layton, AD/
CVD Operations, Office 1, 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) 482-0371, respectively.

SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on certain softwood 
lumber products from Canada for the period May 1, 2004, to April 30, 
2005 (the POR). We preliminarily determine that sales of subject 
merchandise made by Blanchette & Blanchette Inc. (Blanchette), 
International Forest Products Ltd. (Interfor), Rene Bernard Inc. (Rene 
Bernard), Tembec Inc. (Tembec), Tolko Industries Ltd. (Tolko), West 
Fraser Mills Ltd. (West Fraser), Western Forest Products Inc. (WFP) and 
Weyerhaeuser Company Limited \1\ (Weyerhaeuser) have been made below 
normal value. 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 for which a 
review was requested, but that 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. Furthermore, twenty-eight companies have 
reported no shipments during the period of review. If we determine that 
the companies did not ship subject merchandise to the United States 
during the POR, we will rescind the review for these companies for the 
final results. Finally, requests for review of the antidumping order 
for thirty-two companies were withdrawn. Because the withdrawal 
requests were timely and there were no other requests for review of the 
companies, we are rescinding the review for these companies. See 19 CFR 
351.213(d)(1). Interested parties are invited to comment on these 
preliminary results and partial rescission.
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    \1\ Weyerhaeuser Company is the parent of Weyerhaeuser Company 
Limited. The Department has used the term ``Weyerhaeuser Company'' 
interchangeably to refer to both entities. However, Weyerhaeuser 
Company Limited is the respondent in this administrative review.

SUPPLEMENTARY INFORMATION:

Background

    On May 2, 2005, the Department published a notice of opportunity to 
request an administrative review of this order. See Notice of 
Opportunity to Request Administrative Review Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation, 70 FR 
22631 (May 2, 2005). On May 31, 2005, in accordance with section 751(a) 
of the Tariff Act of 1930, as amended (the Act) and 19 CFR 351.213(b), 
the Coalition for Fair Lumber Imports (the Coalition), a domestic 
interested party in this case, requested a review of producers/
exporters of certain softwood lumber products. Also, between May 3, and 
May 31, 2005, certain Canadian producers/exporters requested a review 
on their own behalf or had a review of their company requested by a 
U.S. importer.
    On June 30, 2005, the Department published a notice of initiation 
of administrative review of the antidumping duty order on certain 
softwood lumber products from Canada, covering the POR. See Notice of 
Initiation of Antidumping an Countervailing Duty Administrative 
Reviews, 70 FR 37749 (June 30, 2005) (Initiation Notice).\2\
    The Department received requests for review from more than 450 
companies. Accordingly, in July 2005, in advance of issuing antidumping 
questionnaires, the Department issued to all companies for which an 
administrative review had been requested, a letter requesting total 
production and quantity of subject merchandise exported to the United 
States during the POR.\3\ Companies were required to submit their 
responses to the Department by July 27, 2005.\4\ In addition, we 
received comments from interested parties on the respondent selection 
process, which included proposed methodologies.
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    \2\ This notice was amended. See Notice of Initiation of 
Antidumping and Countervailing Duty Administrative Reviews, 70 FR 
61601 (0ctober 25, 2005).
    \3\ See Memo from Saliha Loucif, International Trade Compliance 
Analyst, to the File regarding Quantity Letter Mailed to Interested 
Parties on July 11, 2005 (July 25, 2005) (Quantity Request).
    \4\ This deadline was subsequently extended to August 3, 2005. 
See Memo from David Neubacher, International Trade Compliance 
Analyst, to the File regarding Extension for Request for Information 
in Third Administrative Review of Certain Softwood Lumber Products 
from Canada (July 19, 2005).
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    Upon consideration of the information received with respect to 
respondent selection, on November 23, 2005, the Department selected the 
following eight respondents using a probability-proportional-to-size 
(PPS) sampling methodology: Blanchette, Interfor, Rene Bernard, Tembec, 
Tolko, West Fraser, WFP, and Weyerhaeuser.\5\ See Memorandum from David 
Layton, David Neubacker, and Shane Subler, International Trade 
Compliance Analysts to Stephen J. Claeys, Deputy Assistant Secretary, 
Regarding Selection of Respondents (December 15, 2005) (Respondent 
Selection Memorandum). See also Selection of Respondents section below.
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    \5\ We note that the Department inadvertently omitted Pacific 
Coast Timber Inc. from the sampling database. Pacific Coast Timber 
Inc. submitted its information to the Department and, therefore, has 
been included on the list of companies receiving the review-specific 
rate for this review.
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    On November 23, 2005, the Department issued sections A, B, C, D, 
and E of the antidumping questionnaire to the selected respondents. The 
respondents submitted their initial responses to the antidumping 
questionnaire from December 2005 through February 2006. After analyzing 
these responses, we issued supplemental questionnaires to the 
respondents to clarify or correct the initial questionnaire responses. 
We received timely responses to these questionnaires.

Partial Rescission and Preliminary Rescission of Administrative Review

    On July 8, 2005, the Coalition withdrew its request for 
administrative reviews of the antidumping duty order with respect to 
Lawsons Lumber Company Ltd. and Pacific Lumber Company. On September 
13, 2005, Millco Forest Products withdrew its request for an 
administrative review of Skagit Industries Ltd. On September 19, 2005, 
Fred Tebb & Sons, Inc. withdrew its request for an administrative 
review of S&R Sawmills Ltd. On August 15 and September 26, 2005, 
Patrick Lumber Company withdrew its request for administrative reviews 
of CDS Lumber Products Ltd. and Maher Forest Products Ltd. On September 
27, 2005, Alexandre Cote Ltee., Clotures Rustiques L.G. Inc., Les Bois 
K-7 Lumber Inc., and Les Produits Forestiers Dube (Dube Forest 
Products) withdrew

[[Page 33965]]

their requests for administrative reviews of the antidumping duty 
order. On September 28, 2005, Armand Duhamel & Fils Inc., Boscus Canada 
Inc., Byrnexco Inc., Careau Bois Inc., Fletcher Lumber, Fontaine Inc. 
(dba J.A. Fontaine et Fils Incorporee) and its affiliates, including 
Bois Fontaine Inc., Gestion Natanis Inc., and Les Placements Jean-Paul 
Fontaine Ltee), Les Bois Lac Frontiere Inc., Les Scieries J. Lavoie 
Inc., Maibec Industries, Materiaux Blanchet Inc., Max Meilleur et Fils 
Ltee., Optibois Inc., Precibois Inc., Preparabois Inc., Produits 
Forestiers Berscifor Inc., Rembos Inc., Scierie West Brome Inc., Tall 
Tree Lumber Co., and Usine Sartigan Inc. withdrew their requests for 
administrative reviews. Because the withdrawal requests were timely 
filed, i.e., within 90 days of publication of the Initiation Notice, 
and because there were no other requests for review of the above-
mentioned companies, we are rescinding the review with respect these 
companies in accordance with 19 CFR 351.231(d)(1).
    Pursuant to 19 CFR 351.231(d)(3), the Department will rescind an 
administrative review with respect to a particular exporter or producer 
if it concludes that during the period of review there were ``no 
entries, exports, or sales of the subject merchandise.'' Accordingly, 
the Department requires that there be entries during the POR upon which 
to assess antidumping duties, to conduct an administrative review. 
Barrett Lumber Company Limited, Cascadia Forest Products Ltd., 
Cattermole Timber, Chipman Sawmill Inc., Cooper Creek Cedar Ltd., Doman 
Industries Limited, Doman-Western Lumber Ltd., Eacan Timber USA Ltd., 
Kispiox Forest Products Ltd., Les Bois Indifor Lumber Inc., Oregon 
Canadian Forest Products, Rojac Cedar Products Inc.,\6\ Saran Cedar, 
Scierie St-Elzear Inc., Vanderhoof Specialty Wood Products Inc., 
Western Forest Products Limited, WFP Forest Products Limited, and WFP 
Western Lumber Ltd. reported that they had no entries of subject 
merchandise during the POR. Furthermore, we confirmed with the 
following companies that they also had no entries of subject 
merchandise during the POR: Atco Lumber, Ltd., Barry Maedel Woods & 
Timber, Interpac Log & Lumber Ltd., Krystal Klear Marketing Inc., Lamco 
Forest Products, Spruce Forest Products Ltd., Suncoast Lumber & 
Milling, Timber Ridge Forest Products Inc., Velcan Forest Products 
Inc., and Westex Timber Mills, Ltd.\7\
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    \6\ Counsel for Rojac Cedar Products Inc. and Rojac Enterprises 
Inc. informed the Department that the quantity information reported 
for both companies was inadvertently switched. During the POR, Rojac 
Enterprise Inc. had shipments and Rojac Cedar Products Inc. had no 
shipments. Therefore, based on the updated information, we have 
decided to preliminarily rescind the administrative review for Rojac 
Cedar Products Inc. See Letter from Howrey to the Department 
regarding the Third Administrative Review of Softwood Lumber from 
Canada (March 27, 2006). Rojac Enterprises Inc. is included on the 
list of companies receiving the review-specific rate for this 
review.
    \7\ See Memo from Saliha Loucif, David Neubacher, and David 
Layton, International Trade Compliance Analysts, to the File 
regarding Companies claiming no shipments of subject merchandise 
during the period of review (POR) in response to the Department's 
July 11, 2005 request for information letter (August 23, 2005) and 
Memo from David Neubacher, International Trade Compliance Analyst, 
to the File regarding Phone conversation with Barry Maedel Woods & 
Timber regarding the Department's July 11, 2005 request for 
information letter (July 13, 2005).
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    The Department did not receive responses from T.F. Specialty 
Sawmill (T.F. Specialty) and Apex Forest Product, Inc. (Apex). However, 
both initial quantity request letters were returned to the Department 
with notes by the carrier that Apex was not located at the address 
given and T.F. Specialty was no longer in business.\8\ Moreover, each 
company's telephone number was disconnected and the Department did not 
have any means to contact T.F. Specialty or Apex,\9\ Therefore, the 
Department examined the CBP data to confirm whether these companies 
shipped subject merchandise during the POR. The Department confirmed 
that the CBP data showed no entries of subject merchandise to the 
United States from these companies during the POR.
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    \8\ See Memo from David Neubacher, International Trade 
Compliance Analyst, to the File regarding Phone conversation with 
Apex Forest Products, Inc. and T.F. Specialty Sawmill regarding the 
Department's July 11, 2005 request for information letter (August 
11, 2005).
    \9\ See id.
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    Therefore, in accordance with 19 CFR 351.213(d)(3), we are 
preliminarily rescinding the administrative review with respect to all 
of the above companies because we preliminarily find that they had no 
shipments and, with respect to T.F. Specialty and Apex, we were unable 
to locate the companies and believe them no longer to be in business.
    The Department notes that respondents' certified questionnaire 
responses and statements are its primary sources of information in 
antidumping proceedings while data from CBP may either corroborate or 
contradict a respondents ' reported data. We are still examining 
statements in regards to no shipments by the following companies. Deep 
Cove Forest Products, E. Tremblay et File Ltee, Newcastle Lumber Co., 
Inc., and Slocan Forest Products Ltd. If the CBP data confirms each 
company's no shipment claims, we will issue an ``intent to rescind'' 
notice after the preliminary review results.

Postponement of Final Results

    Section 751(a)(3)(A) of the Act, requires the Department to 
complete the final results of an administrative review within 120 days 
after the data on which the preliminary results are published. However, 
if it is not practicable to complete the review within this time 
period, section 751(a)(3)(A) of the Act allows the Department to extend 
the time limit for the final results to 180 days from the data of 
publication of the preliminary results.
    We determine that it is not practicable to compete the final 
results of this review within the original time limit. The Department 
must address a number of significant and complex issues (e.g., use of 
adverse facts available and successor-in-interest) prior to the 
issuance of the final results. 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 form Canada. The final results of the review will not be due 
no later than 180 days from the date of publication of these 
preliminary results.

Scope of the Order

    The products covered by this order are softwood lumber, flooring 
and siding (softwood lumber products). Softwood lumber products include 
all products classified under subheadings 4407.1000, 4409.1010, 
4409.1090, and 4409.1020, respectively, of the Harmonized Tariff 
Schedule of the United States (HTSUS), and any softwood lumber, 
flooring and siding described below. These softwood lumber products 
include:
    (1) Coniferous wood, sawn or chipped lengthwise, sliced or peeled, 
whether or not planed, sanded or finger-jointed, of a thickness 
exceeding six millimeters;
    (2) Coniferous wood siding (including strips and friezes for 
parquet flooring, not assembled) continuously shaped (tongued, grooved, 
rabbeted, chamfered, v-jointed, beaded, molded, rounded or the like) 
along any of its edges or faces, whether or not planed, sanded or 
finger-jointed;
    (3) Other coniferous wood (including strips and friezes for parquet 
flooring, not assembled) continuously shaped (tongued, grooved, 
rabbeted, chamfered, v-jointed, beaded, molded, rounded or the like) 
along any of its edges or faces (other than wood mouldings and wood

[[Page 33966]]

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 
U.S. Customs purposes, the written description of the merchandise 
subject to this order is dispositive.
    As specifically stated in the Issues and Decision Memorandum 
accompanying the Notice of Final Determination of Sales at Less Than 
Fair Value: Certain Softwood Lumber Products from Canada, 67 FR 15539 
(April 2, 2002) (see comment 53, item D, page 116, and comment 57, item 
B-7, page 126), available at www.ia.ita.doc.gov/frn, drilled and 
notched lumber and angle cut lumber are covered by the scope of this 
order.
    The following softwood lumber products are excluded from the scope 
of this order provided they meet the specified requirements detailed 
below:
    (1) Stringers (pallet components used for runners): if they have at 
least two notches on the side, positioned at equal distance from the 
center, to properly accommodate forklift blades, properly classified 
under HTSUS 4421.90.97.40.
    (2) Box-spring frame kits: if they contain the following wooden 
pieces--two side rails, two end (or top) rails and varying numbers of 
slats. The side rails and the end rails should be radius-cut at both 
ends. The kits should be individually packaged, they should contain the 
exact number of wooden components needed to make a particular box 
spring frame, with no further processing required. None of the 
components exceeds 1'' in actual thickness or 83'' in length.
    (3) Radius-cut box-spring-frame components, not exceeding 1'' in 
actual thickness or 83'' in length, ready for assembly without further 
processing. The radius cuts must be present on both ends of the boards 
and must be substantial cuts so as to completely round one corner.
    (4) Fence pickets requiring no further processing and properly 
classified under HTSUS 4421.90.70, 1'' or less in actual thickness, up 
to 8'' wide, 6' or less in length, and have finials or decorative 
cuttings that clearly identify them as fence pickets. In the case of 
dog-eared fence pickets, the corners of the boards should be cut off so 
as to remove pieces of wood in the shape of isosceles right angle 
triangles with sides measuring \3/4\ inch or more.
    (5) U.S. origin lumber shipped to Canada for minor processing and 
imported into the United States, is excluded from the scope of this 
order if the following conditions are met: (1) The processing occurring 
in Canada is limited to kiln-drying, planing to create smooth-to-size 
board, and sanding, and (2) if the importer establishes to the 
satisfaction of CBP that the lumber is of U.S. origin.
    (6) Softwood lumber products contained in single family home 
packages or kits,\10\ regardless of tariff classification, are excluded 
from the scope of this order if the importer certifies to items 6 A, B, 
C, D, and requirement 6 E is met:
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    \10\ To ensure administrability, we clarified the language of 
exclusion number 6 to require an importer certification and to 
permit single or multiple entries on multiple days as well as 
instructing importers to retain and make available for inspection 
specific documentation in support of each entry.
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    A. The imported home package or kit constitutes a full package of 
the number of wooden pieces specified in the plan, design or blueprint 
necessary to produce a home of at least 700 square feet produced to a 
specified plan, design or blueprint;
    B. The package or kit must contain all necessary internal and 
external doors and windows, nails, screws, glue, sub floor, sheathing, 
beams, posts, connectors, and if included in the purchase contract, 
decking, trim, drywall and roof shingles specified in the plan, design 
or blueprint;
    C. Prior to importation, the package or kit must be sold to a 
retailer of complete home packages or kits pursuant to a valid purchase 
contract referencing the particular home design plan or blueprint, and 
signed by a customer not affiliated with the importer;
    D. Softwood lumber products entered as part of a single family home 
package or kit, whether in a single entry or multiple entries on 
multiple days, will be used solely for the construction of the single 
family home specified by the home design matching the entry.
    E. For each entry, the following documentation must be retained by 
the importer and made available to CBP upon request:
    i. A copy of the appropriate home design, plan, or blueprint 
matching the entry;
    ii. A purchase contract from a retailer of home kits or packages 
signed by a customer not affiliated with the importer;
    iii. A listing of inventory of all parts of the package or kit 
being entered that conforms to the home design package being entered;
    iv. In the case of multiple shipments on the same contract, all 
items listed in E(iii) which are included in the present shipment shall 
be identified as well.
    Lumber products that CBP may classify as stringers, radius cut box-
spring-frame components, and fence pickets, not conforming to the above 
requirements, as well as truss components, pallet components, and door 
and window frame parts, are covered under the scope of this order and 
may be classified under HTSUS subheadings 4418.90.45.90, 4421.90.70.40, 
and 4421.90.97.40.
    Finally, as clarified throughout the course of the investigation, 
the following products, previously identified as Group A, remain 
outside the scope of this order. They are:
    1. Trusses and truss kits, properly classified under HTSUS 4418.90;
    2. I-joist beams;
    3. Assembled box spring frames;
    4. Pallets and pallet kits, properly classified under HTSUS 
4415.20;
    5. Garage doors;
    6. Edge-glued wood, properly classified under HTSUS 4421.90.97.40;
    7. Properly classified complete door frames;
    8. Properly classified complete window frames; and
    9. Properly classified furniture.
    In addition, this scope language was further clarified to specify 
that all softwood lumber products entered from Canada claiming non-
subject status based on U.S. country or 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.\11\ The 
presumption of non-subject status can, however, be rebutted by evidence 
demonstrating that the merchandise was substantially transformed in 
Canada.
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    \11\ See the scope clarification message (3034202), 
dated February 3, 2003, to CBP, regarding treatment of U.S. origin 
lumber on file in Room B-099 of the Central Records Unit (CRU) of 
the Main Commerce Building.
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    On March 3, 2006, the Department issued a scope ruling that any 
product entering under HTSUS 4409.10.05 which is continually shaped 
along its end and/or side edges which otherwise

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conforms to the written definition of the scope is within the scope of 
the order.\12\
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    \12\ See Memorandum from Constance Handley, Program Manager, to 
Stephen J. Claeys, Deputy Assistant Secretary regarding Scope 
Request by the Petitioner Regarding Entries Made Under HTSUS 
4409.10.05, dated March 3, 2006.
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Use of Adverse Facts Available

    Section 776(a) of the Act, provides that, if an interested party 
(A) withholds information requested by the Department, (B) fails to 
provide such information by the deadline, or in the form or manner 
requested, (C) significantly impedes a proceeding, or (D) provides 
information that cannot be verified, the Department shall use facts 
otherwise available in reaching the applicable determination.
    Pursuant to sections 776(a)(2)(A) and (B) of the Act, we 
preliminarily find that Tembec withheld species-specific stumpage 
information specifically requested by the Department in its March 7, 
2006 and April 28, 2006 supplemental section D questionnaires. 
Therefore, the Department is preliminarily using facts otherwise 
available to adjust Tembec's wood costs pursuant to section 776(a) of 
the Act.
    Pursuant to sections 776(a)(2)(A) and (C) of the Act, we 
preliminarily find that Chasyn Wood Technologies, Cowichan Lumber Ltd., 
Forwood Forest Products Inc., Hyak Specialty Wood Products Ltd., Jasco 
Forest Products, Noble Custom Cut Ltd., North American Hardwoods Ltd., 
North of 50, Scierie A&M St-Pierre Inc., South-East Forest Products 
Ltd., Spruce Products, Triad Forest Products, Ltd., Westmark Products 
Ltd., Woodko Enterprises Ltd., and Woodtone Industries Inc. withheld 
information specifically requested by the Department in its Quantity 
Request letter. Additionally, by not responding to the quantity 
request, the companies significantly impeded the proceeding. Therefore, 
the Department has preliminarily determined to base the companies' 
dumping margins on the facts otherwise available pursuant to section 
776(a) of the Act.
    In selecting from among the facts otherwise available, section 
776(b) of the Act authorizes the Department to use an adverse inference 
if the Department finds that an interested party ``failed to cooperate 
by not acting to the best of its ability to comply with a request for 
information.'' The Court of Appeals for the Federal Circuit (Federal 
Circuit) has held that the statutory mandate that a respondent act to 
the ``best of its ability'' requires the respondent to do the maximum 
it is able to do. See, e.g., Nippon Steel Corp. v. United States, 377 
F.3d 1373, 1382 (Fed. Cir. 2003).
    In Tembec's case, the Department's two supplemental section D 
questionnaires each requested that Tembec report species-specific wood 
costs. Tembec instead reported species-specific wood costs for only two 
of the provinces from which it obtains wood, Ontario and Quebec. For 
the remaining province, British Columbia, Tembec claimed that it could 
not report species-specific wood costs. However, Tembec stated in its 
January 27, 2006 section D response at pages D-4 and D-5, 
``{t{time} hat harvest areas in British Columbia are identified on 
forest cover maps and that these maps generally identify the species 
mix, the age, and the height of the candidate stands. A timber survey 
is then conducted to ensure that the stand actually is comprised of the 
target species and to ensure that quality and volume needs are met. 
When needs are met, a formal timber cruise is completed. Using detailed 
measuring techniques, stands are surveyed for the purpose of 
determining gross and net volumes, species mix, age, height and piece 
size.'' Tembec continued to state that ``{t{time} hese surveys are then 
entered into a computerized information management system so that more 
detailed harvest planning may commence.'' Based on these statements, we 
preliminarily conclude that Tembec could have provided the stumpage 
costs by species, using the details in these surveys and the stumpage 
fees actually paid for each stand.
    Moreover, other respondents did provide the requested information, 
under the same circumstances described by Tembec, for all provinces, 
and did so in this review, in the prior review, and in the 
investigation. For example, Tolko stated in its January 30, 2006 
section D response at page D-24, ``{t{time} hat for the sawmills that 
processed multiple species Tolko has allocated stumpage cost to the 
various species processed based on relative appraisal values.'' Also, 
West Fraser stated in its January 27, 2006 section D response at page 
D-23, ``{t{time} hat based on an analysis of the stumpage fees assessed 
on each cutting permit during the POR, it has computed a species-
specific adjustment to its average stumpage cost per cubic meter for 
each applicable sawmill.''
    Both Tolko and West Fraser relied on the appraisal values and 
cutting permit data, which are prepared in conjunction with the timber 
survey that is performed before harvesting, to determine species-
specific wood costs. Because Tembec prepared such surveys and uses them 
in conducting its business, the Department finds that Tembec had the 
capability to report species-specific wood costs for all provinces and 
that Tembec did not provide such information in the form or manner 
requested.
    In the case of the companies not responding to the quantity 
request, the Department finds that those companies failed to respond to 
the Department's requests. The Department specifically requested in its 
July 11, 2005, letter to all companies named in the initiation that 
they report their quantity of subject merchandise entered into the 
United States during the POR. In the same letter, the Department stated 
that, absent a response, ``the Department may use information that is 
adverse to your interest in conducting its analysis.'' \13\ The 
Department confirmed that all of the above companies received the 
letter and also contacted the companies directly to request the 
information. However, as stated on the record, the companies failed to 
respond and we preliminarily find that they have withheld information 
that the Department specifically requested.\14\
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    \13\ See Quantity Request at Attachment 1, page 3.
    \14\ See, e.g., Memo from Saliha Loucif, David Neubacher, and 
David Layton, International Trade Compliance Analysts, to the File 
retarding companies that did not respond to the Department's July 
11, 2005 request for information letter (August 16, 2005), Memo from 
David Neubacher, International Trade Compliance Analyst, to the File 
regarding Phone conversation with Westmark Products Ltd. regarding 
the Department;s July 11, 2005 request for information letter 
(August 17, 2005), and Memo from Saliha Loucif, David Neubacher, and 
David Layton, International Trade Compliance Analysts, to the File 
regarding Companies that did not respond to the Department's July 
11, 2005 request for information letter (November 21, 2005).
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    The Department finds that all of the above companies could have 
responded to the Department's requests for information, but did not do 
so. Accordingly, the Department finds that these companies failed to 
cooperate to the best of their ability in complying with the 
Department's requests for information. Consequently, in selecting from 
among the facts otherwise available, the Department is making an 
inference that is adverse to the interests of the above companies due 
to their refusal to cooperate to the best of their ability. See section 
776(b) of the Act.
    Section 776(b) of the Act authorizes the Department to use as 
adverse facts available (AFA) information derived from (1) the 
petition, (2) a final determination in the investigation under this 
title, (3) any previous review under section 751 or determination under 
section 753, or (4) any other information on the record.
    Pursuant to section 776(b)(4) of the Act, we have selected AFA for 
Tembec using information the company has

[[Page 33968]]

placed on the record. To account for all log species in British 
Columbia for which Tembec only reported average stumpage cost, we have 
increased the British Columbia wood costs by the difference between the 
average per-unit stumpage for the highest stumpage cost species and the 
average per-unit stumpage costs for all species in Ontario and Quebec.
    The Department's practice, when selecting an AFA rate for companies 
that did not provide any usable or reliable information is to select 
from among the possible sources of information, a margin that is 
sufficiently adverse ``as to effectuate the statutory purposes of the 
adverse facts available rule to induce respondents to provide the 
Department with complete and accurate information in a timely manner.'' 
See, e.g., Notice of Final Determination of Sales at Less Than Fair 
Value: Static Random Access Memory Semiconductors from Taiwan, 63 FR 
8909, 8932 (February 23, 1998). The Department's practice also ensures 
``that the party does not obtain a more favorable result by failing to 
cooperate than if it had cooperated fully.'' See Statement of 
Administrative Action Accompanying the Uruguay Round Agreements Act, 
H.R. Rep. No. 103-316, at 870 (1994) (SAA), see also Notice of Final 
Determination of Sales at Less than Fair Value: Certain Frozen and 
Canned Warmwater Shrimp from Brazil, 69 FR 76910 (December 23, 2004); 
see also D&L Supply Co. v. United States, 113 F. 3d 1220, 1223 (Fed. 
Cir. 1997).
    In order to ensure that the margin is sufficiently adverse so as to 
induce cooperation, we have preliminarily assigned a rate of 37.64 
percent to those companies that did not provide quantity data in 
response to the Department's request. This is the rate alleged in the 
petition, as adjusted at the initiation of the LTFV investigation.\15\ 
The Department finds that this rate is sufficiently high to effectuate 
the purpose of the adverse facts available rule (i.e., we find that 
this rate is high enough to encourage participation in future segments 
of this proceeding in accordance with section 776(b) of the Act).
---------------------------------------------------------------------------

    \15\ See Notice of Initiation of Antidumping Duty Investigation: 
Certain Softwood Lumber Products From Canada, 66 FR 21328 (April 30, 
2001) (Initiation of Certain Softwood Lumber Products).
---------------------------------------------------------------------------

    Section 776(c) of the Act provides that, where the Department 
selects from among the facts otherwise available and relies on 
``secondary information,'' the Department shall, to the extent 
practicable, corroborate that information from independent sources 
reasonably at the Department's disposal. Secondary information is 
described in the SAA as ``information derived from the petition that 
gave rise to the investigation or review, the final determination 
concerning the subject merchandise, or any previous review under 
section 751 concerning the subject merchandise.'' See SAA at 870. The 
SAA states that ``corroborate'' means to determine that the information 
used has probative value. As explained in Tapered Roller Bearings and 
Parts Thereof, Finished and Unfinished, from Japan, and Tapered Roller 
Bearings Four Inches or Less in Outside Diameter, and Components 
Thereof, from Japan: Preliminary Results of Antidumping Duty 
Administrative Reviews and Partial Termination of Administrative 
Review, 61 FR 57391, 57392 (November 6, 1996) (TRBs), in order to 
corroborate secondary information the Department will examine, to the 
extent practicable, the reliability and relevance of the information 
used. The SAA also states that independent sources used to corroborate 
such evidence may include, for example, published price lists, official 
import statistics and customs data, and information obtained from 
interested parties during the particular investigation. See 19 CFR 
351.308(d) and SAA at 870.
    With respect to corroboration, however, the Department will 
consider information reasonably at its disposal as to whether there are 
circumstances that would render a margin inappropriate. Where 
circumstances indicate that the selected margin is not appropriate as 
AFA, the Department may disregard the margin and determine an 
appropriate margin. See, e.g., Fresh Cut Flowers from Mexico; Final 
Results of Antidumping Duty Administrative Review, 61 FR 6812, 6814 
(February 22, 1996) (where the Department disregarded the highest 
margin as AFA because the margin was based on another company's 
uncharacteristic business expense resulting in an unusually high 
margin). Therefore, we examined whether any information on the record 
would discredit the selected rate as reasonable facts available.
    The petition rate of 37.64 percent was based on a comparison of 
price to constructed value (CV) using actual market prices referenced 
from Random Lengths \16\ and price quotes from Canadian producers. 
Because the above data used to calculate CV in the petition was derived 
from publicly available Canadian domestic industry data and proprietary 
data from the members of the Coalition adjusted for known differences, 
the Department believes that this information is reliable and deemed it 
adequate and reasonable for the purposes of initiating an 
investigation.
---------------------------------------------------------------------------

    \16\ Random Lengths is a weekly newsletter that is received by 
subscribers in the United States, Canada, and 41 other countries. 
The publication reports prices and examines issues affecting markets 
for the North American softwood lumber industry.
---------------------------------------------------------------------------

    Because the companies did not submit information to the Department 
or participate in a previous segment of this proceeding, we do not have 
such information to consider in determining whether the petition rate 
is relevant to each of them. To determine whether the margin is 
reliable and relevant in this administrative review, we examined the 
transaction-specific rates of all respondents in this administrative 
review compared to the rate of 37.64 percent and found that it was 
reliable and relevant for use in this administrative review. For the 
company-specific information used to corroborate this rate, see 
Memorandum from Constance Handley, Program Manager, to the File 
regarding Research for Corroboration for the Preliminary Results in the 
2004-2005 Antidumping Duty Administrative Review of Certain Softwood 
Lumber Products from Canada (May 31, 2006). We find the 37.64 percent 
margin to be probative because it does not appear to be aberrational 
when compared to the respondents' transaction-specific rates and no 
information has been presented to call into question the relevance of 
that information.
    Therefore, we have determined that the 37.64 percent margin is 
appropriate as AFA and are assigning it to Chasyn Wood Technologies, 
Cowichan Lumber Ltd., Forwood Forest Products Inc., Hyak Specialty Wood 
Products Ltd., Jasco Forest Products, Noble Custom Cut Ltd., North 
American Hardwoods Ltd., North of 50, Scierie A&M St-Pierre Inc., 
South-East Forest Products Ltd., Spruce Products, Triad Forest 
Products, Ltd., Westmark Products Ltd., Woodko Enterprises Ltd., and 
Woodtone Industries Inc.

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 the 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 exporters/

[[Page 33969]]

producers 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.
    Responses to the Department's information request were received 
July 18 through September 29, 2005. After consideration of the data 
submitted, and the complexities unique to this proceeding, 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. Accordingly, we limited the number of mandatory 
respondents to eight and, as explained in our Respondent Selection 
Memorandum, based our selection of mandatory respondents on a PPS 
sampling methodology. We received written requests from three companies 
to be included as voluntary respondents in this review.\17\ We were not 
able to accommodate these requests due to resource constraints and 
preliminarily determine, pursuant to section 782(a)(2), that an 
individual review of these companies would be unduly burdensome and 
inhibit the timely completion of this administrative review.
---------------------------------------------------------------------------

    \17\ These companies were the Abitibi Group (November 30, 2005), 
Canfor Corporation (November 30, 2005) and Pope & Talbot (July 15, 
2005).
---------------------------------------------------------------------------

Successor-in-Interest

    In submissions to the Department dated December 21, 2005, and March 
30, 2006, Tolko advised the Department that Tolko acquired a 
controlling interest in Riverside Forest Products Ltd. (Riverside) on 
October 26, 2004, and Tolko acquired the remaining Riverside shares by 
February 2, 2005.\18\ On January 1, 2006, Riverside ceased to exist as 
a separate corporate entity. The post-acquisition Tolko assumed all 
softwood lumber, flooring and siding industry operations formerly held 
by Riverside, in addition to continuing its own operations.
---------------------------------------------------------------------------

    \18\ See Tolko's supplemental questionnaire response 
(Questionnaire Response) dated March 30, 2006, Securities Register 
at Exhibit 5.
---------------------------------------------------------------------------

    In antidumping duty successor-in-interest determinations, the 
Department typically examines several factors including, but not 
limited to, changes in: (1) Management; (2) production facilities; (3) 
supplier relationships; and (4) customer base. See Brass Sheet and 
Strip from Canada: Notice of Final Results of Antidumping 
Administrative Review, 57 FR 20460, 20462 (May 13, 1992) (Canada 
Brass). While no single factor or combination of factors will 
necessarily be dispositive, the Department generally will consider the 
new company to be the successor to the predecessor company if the 
resulting operations are essentially the same as those of the 
predecessor company. See, e.g., Industrial Phosphoric Acid from Israel: 
Final Results of Changed Circumstances Review, 59 FR 6944, 6945 
(February 14, 1994), and Canada Brass, 57 FR 20462. Thus, if the record 
evidence demonstrates that, with respect to the production and sale of 
the subject merchandise, the new company operates as the same business 
entity as the predecessor company, the Department may assign the new 
company the cash deposit rate of its predecessor. See, e.g., Fresh and 
Chilled Atlantic Salmon from Norway: Final Results of Changed 
Circumstances Antidumping Duty Administrative Review, 64 FR 9979, 9980 
(March 1, 1999).
    Based on our review of the Questionnaire Response, we preliminarily 
determine that the post-acquisition Tolko is the successor-in-interest 
to both the pre-acquisition Tolko and Riverside. As a result of the 
acquisition, significant components of both pre-acquisition Tolko's and 
Riverside's production facilities, supplier relationships, and customer 
base were incorporated into the post-acquisition Tolko.
    Following the acquisition, Tolko's management structure was revised 
to incorporate former Riverside managers. By March 2005, pre-
acquisition Riverside's Executive Vice-President became the Executive 
Vice-President of post-acquisition Tolko.\19\ A small number of senior 
plant and site managers with the pre-acquisition Riverside held 
managerial posts in the post-acquisition Tolko.\20\ Thus, managers of 
both companies held management positions in the post-acquisition Tolko.
---------------------------------------------------------------------------

    \19\ See id. at Exhibit 10.
    \20\ See id. at Exhibit 9.
---------------------------------------------------------------------------

    The transfer of Riverside's fixed assets to Tolko resulted in a 
dramatic increase in Tolko's production capacity. Prior to the 
acquisition, Tolko had five sawmills and Riverside had five sawmills. 
Following the acquisition, Tolko operated the combined ten 
sawmills.\21\ Moreover, prior to the acquisition, Tolko produced only 
small quantities of stud grade lumber. Because three of Riverside's 
lumber mills specialized in stud grade lumber, the acquisition of 
Riverside enabled Tolko to significantly diversify and increase its 
production capabilities.\22\ Moreover, Tolko reports that, due to the 
established reputation of Riverside studs, Tolko continues to sell 
certain stud products under the Riverside name and logo.\23\ Thus, the 
post-acquisition Tolko produced a much larger quantity of and a wider 
range of products than were produced by either Tolko or Riverside 
before the acquisition.\24\
---------------------------------------------------------------------------

    \21\ See id. at page 8.
    \22\ See Tolko's second supplemental questionnaire response, 
(Second Supplemental Questionnaire Response), dated May 8, 2006, at 
page 2.
    \23\ See id. at page 5.
    \24\ Id. at Exhibits 11 and 12.
---------------------------------------------------------------------------

    Further, the acquisition of Riverside allowed Tolko to 
significantly increase its customer base. In addition to Tolko's own 
customers, former Riverside customers purchase from the post-
acquisition Tolko.\25\ Likewise, many suppliers that previously 
serviced Riverside continued to supply the post-acquisition Tolko.\26\ 
Thus, the post-acquisition Tolko9 noticeably increased the number of 
customers to whom it sells, and its list of suppliers became more 
diversified.
---------------------------------------------------------------------------

    \25\ Id. at page 9.
    \26\ Id. at page 10 and Exhibits 14 and 15. See also Second 
Supplemental Questionnaire Response at page 5-7.
---------------------------------------------------------------------------

    When as the result of a acquisition, the post-acquisition entity 
contains significant elements of both companies involved in the 
acquisition, we consider the post-acquisition entity to be a successor-
in-interest to both of the pre-acquisition companies. The post-
acquisition Tolko's production facilities, supplier relationships, 
customer base and sales facilities combine important elements of both 
the pre-acquisition Tolko and Riverside. Consequently, we preliminarily 
determine that the post-acquisition Tolko is the successor in interest 
to both the pre-acquisition Tolko and Riverside.
    Because the post-acquisition Tolko operated for six months of the 
POR, we are basing the cash deposit rate for Tolko on the antidumping 
rate calculated for the post-acquisition Tolko.

Collapsing Determinations

    The Department's regulations provide that affiliated producers will 
be treated 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

[[Page 33970]]

significant potential for the manipulation of price or production.\27\ 
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.\28\ These 
factors are illustrative, and not exhaustive.
---------------------------------------------------------------------------

    \27\ See 19 CFR 351.401(f)(1).
    \28\ See 19 CFR 351.401(f)(2).
---------------------------------------------------------------------------

    In their questionnaire responses, respondents reported the sales of 
certain affiliated companies. Blanchette reported the sales of its 
affiliate, Barrette-Chapais Ltee. Interfor reported sales from its 
affiliates BW Creative Wood Industries Ltd. and Sauder Industries 
Limited. Tembec reported the sales of Les Industries Davidson, Inc.\29\ 
as well as Tembec affiliates Marks Lumber Ltd., Temrex Limited 
Partnership, and 791615 Ontario Limited (Excel Forest Products). Tolko 
was excused from reporting the sales of Gilbert Smith Forest Products, 
Ltd. (Gilbert Smith), although it continues to be collapsed with 
Tolko\30\ West Fraser reported the sales of its affiliates West Fraser 
Forest Products Inc. and Seehta Forest Products Ltd. WFP reported sales 
by WFP Lumber Sales Ltd., its wholly-owned subsidiary that is 
responsible for sales of all lumber produced by WFP's sawmill 
divisions. Prior to July 27, 2004, WFP operated as Doman Industries 
Limited (Doman) and its subsidiary companies. The Department determined 
that WFP is the successor-in-interest to Doman.\31\ Therefore, WFP also 
reported all POR sales by Doman prior to July 27, 2004. Weyerhaeuser 
reported the sales of its affiliate Weyerhaeuser Saskatchewan Ltd. Upon 
review of the questionnaire responses, we determined that the 
affiliates discussed above were properly collapsed with the respective 
respondent companies for the purposes of this review.
---------------------------------------------------------------------------

    \29\ Tembec purchased the shares of Davidson on November 5, 
2001, and as of December 27, 2003, Davidson became a division of 
Tembec. The Davidson Division's financial results have been fully 
incorporated in Tembec's financial statements for the entire POR. 
Therefore, we are no longer listing Davidson separately as part of 
the Tembec Group.
    \30\ See Memorandum from Saliha Loucif, International Trade 
Compliance Analyst, through Constance Handley, Program Manager, to 
Susan Kuhbach, Director, regarding Individual Reporting Exemption 
Requests of Certain Respondent Companies (January 31, 2006).
    \31\ See Notice of Final Results of Antidumping Duty Changed 
Circumstances Review: Certain Softwood Lumber Products from Canada, 
70 FR 48673, dated August 19, 2005.
---------------------------------------------------------------------------

    Rene Bernard reported sales of subject merchandise produced or 
further processed by its affiliates Iren[eacute]e Grondin &Fils 
Lt[eacute]e. (Grondin) and Les Sechoirs a Bois Rene Bernard Ltee. 
(Sechoirs). Rene Bernard also reported sales by two affiliated 
companies, Bois Bohemia Inc. (BB), and Bermorg LLC (Bermorg) which 
involved lumber which BB and Bermorg purchased from unaffiliated 
suppliers and then further processed. We have preliminarily determined 
that Rene Bernard, BB, and Bermorg are the producers of the lumber that 
they process and sell.\32\ Therefore, we have also collapsed Rene 
Bernard, BB and Bermorg for these Preliminary Results.\33\
---------------------------------------------------------------------------

    \32\ See Memorandum from David Layton, International Trade 
Analyst, to Susan Kuhbach, Director, regarding Whether to Collapse 
Ren[eacute] Bernard Inc. with Certain Affiliated Parties (April 11, 
2006).
    \33\ See id.
---------------------------------------------------------------------------

    The Department 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.\34\
---------------------------------------------------------------------------

    \34\ See Memorandum from Saliha Loucif, International Trade 
Compliance Analyst, through Constance Handley, Program Manager, to 
Susan Kuhbach, Director, regarding Individual Reporting Exemption 
Requests of Certain Respondent Companies (January 31, 2006).
---------------------------------------------------------------------------

Treatment of Sales Made on a Random-Length Basis

    Most of the respondents made a portion of their sales during the 
POR on a random-length \35\ (also referred to as a mixed-tally) basis. 
The industry practice is to negotiate a single per-unit price for the 
whole tally with the customer, but to take the composition of lengths 
in the tally into account when quoting this price. The price of 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.
---------------------------------------------------------------------------

    \35\ 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.
---------------------------------------------------------------------------

    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 export price (EP), constructed export price (CEP), and 
normal value (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 Blanchette and 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 Blanchette and 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 made 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 used 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. Blanchette only reported single-length sales. For West Fraser, we 
used the reported length-specific prices. This methodology was fully 
described in detail during the first administrative review and applied 
in the second administrative review. See Notice of Final Results of 
Antidumping Duty Administrative Review and Notice of Final Results of 
Antidumping Duty Changed Circumstances Review: Certain Softwood Lumber 
Products from Canada, 69 FR 75921 (December 20, 2004) and accompanying 
Issues and Decision Memorandum at comment 5.

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

[[Page 33971]]

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 further processing, in this 
order of priority. Consistent with prior segments of this proceeding, 
we did not match across product type, species or grade group. 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, except Interfor, made CEP sales 
during the POR. Some of these sales involved softwood lumber sold from 
U.S. reload centers 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, West Fraser, and Weyerhaeuser made sales to the United States 
through U.S. affiliates.
    We made company-specific adjustments as follows:

(A) Blanchette

    Blanchette made both EP and CEP transactions. We calculated EP for 
sales where the merchandise was sold directly by Blanchette 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 CEP for sales made by Blanchette to the U.S. customer 
through a U.S. reload center after importation into the United States. 
EP and CEP were based on ex-mill prices, ex-reload prices, delivered 
prices, and prices based on customer-specific sale terms, as 
applicable.
    In accordance with section 772(c)(2)(A) of the Act, we reduced the 
starting price to account for movement expenses. These reductions 
included the freight expenses incurred in transporting the merchandise 
from the mill to the U.S. customer, brokerage expenses, and warehousing 
expenses. We also adjusted the starting price to account for billing 
adjustments, rebates, and early payment discounts.
    In accordance with section 772(d)(1) of the Act, for CEP sales, we 
deducted from the starting price the selling expenses incurred in 
selling the subject merchandise in the United States, including direct 
selling expenses (i.e., credit expenses), and imputed inventory 
carrying costs 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. 
See Memorandum from Saliha Loucif, International Trade Compliance 
Analyst, to the File regarding Blanchette's Analysis for the 
Preliminary Results (May 31, 2006) (Blanchette's Preliminary 
Calculation Memorandum).

(B) Interfor

    Interfor made only EP transactions during the POR. We calculated an 
EP for sales where the merchandise was sold directly by Interfor to the 
first unaffiliated purchaser in the United States prior to importation. 
EP sales were based on the packed, delivered, ex-mill, and free-on-
board (FOB) 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 
to the U.S. customer and brokerage and handling. We also adjusted the 
starting price to account for billing adjustments, rebates, and early 
payment discounts. See Memorandum from Salim Bhabhrawala, International 
Trade Compliance Analyst, to the File regarding Interfor's Analysis for 
the Preliminary Results (May 31, 2006) (Interfor's Preliminary 
Calculation Memorandum).

(C) Rene Bernard

    Rene Bernard made both EP and CEP transactions during the POR. We 
calculated an EP for sales where the merchandise was sold directly by 
Rene Bernard to the first unaffiliated purchaser in the United States 
prior to importation. We calculated a CEP for sales made by Rene 
Bernard to the U.S. customer through intermediate inventory locations. 
EP and CEP were based on the packed, delivered and FOB mill 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 Canadian transit points, 
loading fees and freight to the U.S. customer or intermediate inventory 
locations. We also deducted from the starting price any discounts and 
added any billing adjustments. 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. 
See Memorandum from David Layton, International Trade Compliance 
Analyst, to the File, regarding Rene Bernard's Analysis for the 
Preliminary Results (May 31, 2006) (Rene Bernard's Preliminary 
Calculation Memorandum).

(D) 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.

[[Page 33972]]

customer through U.S. reload facilities or through VMI facilities. EP 
and CEP 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 freight 
incurred in transporting merchandise to Canadian reload centers and 
Canadian reload expenses (``warehousing expenses''), as well as freight 
to the U.S. customer or reload facility and U.S. reload expenses. We 
also adjusted the starting price to account for billing adjustments, 
rebates, and discounts. 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 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. See Memorandum from David Layton 
and Saliha Loucif, International Trade Compliance Analysts, to the 
File, regarding Tembec's Analysis for the Preliminary Results (May 31, 
2006) (Tembec's Preliminary Calculation Memorandum).

(E) Tolko

    Tolko made both EP and CEP transactions. We calculated 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 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 
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 
adjusted the starting price to account for billing adjustments, 
rebates, and discounts.
    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 imputed inventory carrying costs. Finally, in accordance 
with section 772(d)(3) of the Act, we deducted an amount for profit 
allocated to the expenses deducted under sections 772(d)(1) and (2) of 
the Act. See Memorandum from Yasmin Bordas, International Trade 
Compliance Analyst, to the File, regarding Tolko's Analysis for the 
Preliminary Results (May 31, 2006) (Tolko's Preliminary Calculation 
Memorandum).

(F) 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 West Fraser Forest Products Inc. 
to the U.S. customer through VMI or reload centers after importation 
into the United States. EP and CEP 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 freight 
incurred in transporting merchandise to reload centers and to VMI 
customers, freight to the U.S. customer, warehousing, and U.S. and 
Canadian brokerage. We also adjusted the starting price to account for 
billing adjustments, rebates, and early payment discounts.
    In accordance with section 772(d)(1) of the Act, for CEP sales, we 
also 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. See Memorandum 
from David Neubacher, International Trade Compliance Analyst, to the 
File, regarding West Fraser's Analysis for the Preliminary Results (May 
31, 2006) (West Fraser's Preliminary Calculation Memorandum).

(G) WFP

    WFP made both EP and CEP transactions. We calculated an EP for 
sales in which the merchandise was sold directly by WFP to the first 
unaffiliated purchaser in the United States prior to importation, and 
in which CEP was not otherwise warranted based on the facts of the 
record. We calculated a CEP for sales made by WFP to the U.S. customer 
through reload centers after importation into the United States, for 
sales made after importation through VMI locations, and for sales made 
after importation through a U.S. agent. EP and CEP were based on ex-
mill prices, ex-VMI/reload prices, delivered prices, and prices based 
on customer-specific sale terms, as applicable.
    In accordance with section 772(c)(2)(A) of the Act, we reduced the 
starting price to account for movement expenses. These included the 
freight expenses incurred in transporting merchandise to reload 
centers, freight to the U.S. customer, brokerage expenses, insurance 
expenses, warehousing expenses, and a freight variance adjustment. We 
also adjusted the starting price to account for billing adjustments and 
early payment discounts.
    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 (i.e., warranty expenses and credit 
expenses), indirect selling expenses incurred in the United States, 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. See Memorandum 
from Shane Subler, International Trade Compliance Analyst, to the File 
regarding WFP's Analysis for the Preliminary Results, dated May 31, 
2006 (WFP's Preliminary Results 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 carriers. VMIs and Weyerhaeuser's 
affiliated reseller Weyerhaeuser Building Materials (WBM) after 
importation into the United States. EP and CEP 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

[[Page 33973]]

producers. Weyerhaeuser provided a weighting factor to determine the 
quantity of Weyerhaeuser-produced Canadian merchandise for these sales. 
We are multiplying the weighing 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, 
except as described below where the other producer had knowledge that 
the merchandise was destined for the United States.
    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. 
To address this, Weyerhaeuser developed a second weighting factor to 
determine the quantity of the sales 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, advertising, repacking). 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. See 
Memorandum from Constance Handley, Program Manager, to the File, 
regarding Weyerhaeuser's Analysis for the Preliminary Results (May 31, 
2006) (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 Act 
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

    In the most recently completed segment of the proceeding at the 
time the questionnaire was sent (i.e., the first administrative 
review), the Department found that four \36\ of the respondents made 
sales in the home-market at prices below the cost of producing the 
merchandise and excluded such sales from the calculation of NV. 
Therefore, 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 four respondents. See section 773(b)(2)(A)(ii) of the Act. As 
a result, the Department initiated a COP inquiry for these four 
respondents.
---------------------------------------------------------------------------

    \36\ The four companies are Tembec, Tolko, West Fraser, and 
Weyerhaeuser.
---------------------------------------------------------------------------

    The Coalition made an allegation of sales below the COP with 
respect to Blanchette (February 1, 2006), Interfor (January 31, 2006), 
Rene Bernard (February 10, 2006, and WFP (February 3, 2006). We found 
that the Coalition's allegation provided the Department with a 
reasonable basis to believe or suspect that sales in the home-market 
have been made at prices below the COP by these companies. Accordingly, 
we initiated an investigation to determine whether their home-market 
sales of certain softwood lumber products were made at prices below the 
COP during the POR. See Memorandum from Salim Bhabhrawala, David 
Layton, Saliha Loucif, and Shane Subler, International Trade Compliance 
Analysts, to Susan Kuhbach, Director, Office 1, regarding Allegation of 
Sales Below the Cost of Production by Blanchette & Blanchette, 
International Forest Products Ltd., Rene Bernard Inc., and WFP 
(February 24, 2006).
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 our section D questionnaire, we solicited information from the 
respondents that allows for a value-based cost allocation methodology 
for wood and sawmill costs (i.e., those costs 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). 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-products 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).
    Further, 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

[[Page 33974]]

with the mill-specific production quantities.
    Consistent with our methodology in the first and second 
administrative reviews, we requested that the respondents break out the 
random-length sales separately from length-specific sales and to 
develop a two-tiered allocation method. 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 Blanchette and West Fraser. For Blanchette and 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.\37\
---------------------------------------------------------------------------

    \37\ 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.
    For the calculation of general and administrative (G&A) expenses 
for all companies, we did not include the legal fees which were paid 
directly by the company to its legal counsel and consultants associated 
with the AD and CVD proceedings or fees paid to associations used in 
the defense of the same proceedings.
    In accordance with section 773(f)(1) of the Act, for companies that 
had inter-divisional byproduct transactions where the transfer price 
was significantly higher than an arm's-length market price, we adjusted 
the transfer price to the market price. For companies that had 
byproduct transactions with affiliates where the transfer price was 
higher than the market price, we adjusted the transfer price to the 
market price in accordance with section 773(f)(2) of the Act.
(A) Blanchette
    (1) We adjusted the denominator of the Blanchette Group's G&A and 
financial expense ratio calculations to exclude certain reclassified 
expenses and packing expense, and to include certain by-product 
revenues.
    See Memorandum from Margaret M. Pusey, Accountant, to Neal M. 
Halper, Director, Office of Accounting, regarding Blanchette's Cost of 
Production and Constructed Value Calculation Adjustments for the 
Preliminary Results (May 31, 2006).
(B) Interfor
    (1) We increased Interfor's cost of manufacturing under section 
773(f)(2) of the Act (i.e., the transactions disregarded rule) for 
helicopter logging services purchased from an affiliated party at less 
than market value.
    (2) Interfor reported its G&A expense ratio based on financial 
statements which were prepared for tax purposes. We recalculated 
Interfor's G&A expense ratio based on its worksheet which ties to the 
audited financial statements for fiscal year 2004.
    (3) Interfor used multiple NRV allocations to value certain intra-
company lumber transfers. We adjusted the reported cost methodology by 
utilizing a single NRV approach.
    See Memorandum from Joseph Welton, Accountant, to Neal M. Halper, 
Director, Office of Accounting, regarding Interfor's Cost of Production 
and Constructed Value Calculation Adjustments for the Preliminary 
Results (May 31, 2006).
(C) Rene Bernard
    (1) Rene Bernard submitted two cost databases. Cost database A was 
on a collapsed basis, with purchased semi-finished lumber costs 
allocated based on the average purchase price. Cost database B was on a 
collapsed basis, with purchased semi-finished lumber costs allocated 
based on NRV. For the preliminary results, we used Rene Bernard's cost 
data base A to calculate the COP and CV.
    (2) Because Rene Bernard reported net financing income, we included 
zero financing costs.
    See Memorandum from Ji Young Oh, Accountant, to Neal M. Halper, 
Director, Office of Accounting, regarding Rene Bernard's Cost of 
Production and Constructed Value Calculation Adjustments for the 
Preliminary Results (May 31, 2006).
(D) Tembec
    (1) We adjusted Tembec's reported wood costs to include species 
specific stumpage costs for its British Columbia mills.
    (2) Because Tembec reported net financing income, we included zero 
financing costs.
    See Memorandum from Trinette L. Ruffin, Accountant, to Neal M. 
Halper, Director, Office of Accounting, regarding Tembee's Cost of 
Production and Constructed Value Calculation Adjustments for the 
Preliminary Results (May 31, 2006).
(E) Tolko
    (1) We value allocated Tolko's and Riverside's mill costs based on 
the reported six months of net realizable sales values for both 
companies combined.
    (2) We increased the Riverside entity's reported wood costs to 
reflect arm's length prices of logs purchased from affiliated parties 
in accordance with section 773(f)(2) of the Act.
    See Memorandum from Nancy M. Decker, Accountant, to Neal M. Halper, 
Director Office of Accounting, regarding Tolko's Cost of Production and 
Constructed Value Calculation Adjustments for the Preliminary Results 
(May 31, 2006).
(F) West Fraser
    (1) Because West Fraser reported net financing income, we included 
zero financing costs.
    See Memorandum from Christopher J. Zimpo, Accountant, to Neal M. 
Halper, Director, Office of Accounting, regarding West Fraser's Cost of 
Production and Constructed Value Calculation Adjustments for the 
Preliminary Results (May 31, 2006).
(G) WFP
    (1) We increased WFP's reported wood costs to include certain 
contract arbitration expenses.
    (2) We revised the value of certain purchased lumber used by re-
manufacturing facilities.
    (3) We increased one of WFP's re-manufacturing facility's 
conversion costs to include an unreconciled difference.
    (4) We decreased certain sawmills' by-product revenue to reflect 
arm's length prices of sawdust sold to affiliated parties in accordance 
with section 773(f)(2) of the Act.
    (5) WFP's reported G&A expense and financial expense ratios were 
calculated based on the five month period ending

[[Page 33975]]

December 31, 2004. This period coincided with WFP's emergence from 
bankruptcy. We revised the G&A expense and financial expense ratios 
based on the 12-month period ending December 31, 2004.
    See Memorandum from Mark J. Todd, Accountant, to Neal M. Halper, 
Director, Office of Accounting, regarding WFP Products' Cost of 
Production and Constructed Value Calculation Adjustments for the 
Preliminary Results (May 31, 2006).
(H) Weyerhaeuser
    (1) We made no adjustments to Weyerhaeuser's reported information 
See Memorandum from J. Laurens van Houten, Accountant, to Neal Halper, 
Director, Office of Accounting, regarding Weyerhaeuser's Cost of 
Production and Constructed Value Calculation Adjustments for the 
Preliminary Results (May 31, 2006).
    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 were 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 19 CFR 351.410. We also made 
adjustments, in accordance with section 351.410(e), 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) Blanchette
    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 and movement expenses, including net inland 
freight, warehousing, brokerage, and handling expenses. For comparisons 
made to EP sales, we made COS adjustments by deducting direct selling 
expenses incurred for home-market sales (i.e., credit expenses and 
commissions) and adding U.S. direct selling expenses (i.e., credit 
expenses and commissions). For comparisons made to CEP sales, we 
deducted home-market direct selling expenses. See Blanchette's 
Preliminary Calculation Memorandum.
(B) Interfor
    We based home-market prices on the packed prices to unaffiliated 
purchasers in Canada. We adjusted the starting price for inland 
freight, brokerage, 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 
expenses) and adding U.S. direct selling expenses (e.g., credit 
expenses). See Interfor's Preliminary Calculation Memorandum.
(C) Rene Bernard
    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, freight from the mill to 
intermediate inventory locations or 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. See Rene 
Bernard's Preliminary Calculation Memorandum.
(D) 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, 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. See Tembec's Preliminary Calculation 
Memorandum.
(E) 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 and movement expenses, including inland freight, 
warehousing, and miscellaneous movement charges.

[[Page 33976]]

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. See Tolko's Preliminary 
Calculation Memorandum.
(F) West Fraser
    We based home-market prices on the packed prices to unaffiliated 
purchasers in Canada. We adjusted the starting price for early payment 
discounts, inland freight to the warehouse, and inland freight to 
customers. 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. See West Fraser's Preliminary Calculation Memorandum.
(G) WFP
    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, net inland freight to the reload 
center, warehousing expenses, net inland freight to the final customer, 
and a freight variance adjustment. For comparisons made to EP sales, we 
made COS adjustments by deducting direct selling expenses incurred for 
home-market sales (i.e., credit expenses and warranty expenses) and 
adding U.S. direct selling expenses (i.e., credit expenses and warranty 
expenses). For comparisons made to CEP sales, we deducted home-market 
direct selling expenses. See WFP's Preliminary Results Calculation 
Memorandum.
(H) Weyerhaeuser
    Weyerhaeuser commingled self-produced lumber 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 
comparision 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. See 
Weyerhaeuser's Preliminary Results 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 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 expenses 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 comparision 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 a 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) Blanchette
    Blanchette reported two channels of distribution in the home-
market. The

[[Page 33977]]

first channel of distribution (channel 1) consists of direct sales of 
subject merchandise shipped from the mill to the customer. The second 
channel (channel 4) consists of sales which a customer picked-up from 
the mill. After comparing the sales processes of these two channels of 
distribution, we found that they are similar with regard to the general 
sales process, which comprises customer identification and 
communication, negotiation with the customer, arranging of freight or 
customer pick up, invoicing and collection, claim processing, and 
inventory maintenance. Accordingly, we preliminarily determine that 
home-market sales in these two channels of distribution constitute a 
single LOT.
    In the U.S. market, Blanchette reported both EP and CEP sales. 
Blanchette reported EP sales to U.S. customers through two channels of 
distribution. Similar to the home-market, the first channel (channel 1) 
consists of direct sales of subject merchandise shipped from the mill 
to the customer. The second channel (channel 3) consists of sales of 
subject merchandise that are shipped to Quebec by truck, loaded onto 
rail cars and then shipped to the customer. Because the sales processes 
in these two channels of distributions are similar with regard to the 
general sales process, which comprises customer identification and 
communication, negotiation with the customer, arranging freight or 
customer pick-up, invoicing and collection, claim processing, and 
inventory maintenance, we preliminarily determine that there is a 
single EP LOT and that this EP LOT is identical to the home-market LOT.
    Blanchette reported CEP sales through one channel of distribution 
(channel 2) consisting of sales of subject merchandise shipped through 
a U.S. reload center en route to U.S. customers. Because the sales 
processes in this channel of distribution are similar, with regard to 
the general sales process, which comprises customer identification and 
communication, negotiating with the customer, arranging of freight and 
customer pick up, invoicing and collection, claim processing, and 
inventory maintenance, we preliminarily determine that CEP sales 
constitute a single 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 the CEP LOT, we consider only the selling activities 
reflected in the price after the deduction of expenses and profit under 
section 772(d) of the Act.
    Blanchette's Canadian-based services for its CEP sales were similar 
to the single home-market LOT with respect to sales process and 
inventory management. We are finding CEP sales to be at the same LOT as 
the home market sales, and, therefore, we are making no LOT adjustments 
or CEP offset. See section 773(a)(7)(A) of the Act.
(B) Interfor
    Interfor reported a single channel of distribution in the home-
market. This channel of distribution (channel 1) included direct sales 
made by Interfor's Canadian mills to customers. Accordingly, we 
preliminarily determine that home-market sales in this channel of 
distribution constitute a single LOT.
    In the U.S. market, Interfor had only EP sales. Interfor reported 
EP sales to U.S. customers through one channel of distribution. Similar 
to the home-market, this channel included direct sales made by 
Interfor's Canadian mills to customers. Because the sales processes in 
this channel of distribution were similar, we preliminarily determine 
that there is a single EP LOT and it is identical to the home-market 
LOT. See section 773(a)(7)(A) of the Act.
(C) Rene Bernard
    Rene Bernard reported two channels of distribution in the home-
market. The first channel of distribution (Channel 1) included direct 
sales made by Rene Bernard and BB which were shipped directly to 
customers. The second channel of distribution (Channel 2) consisted of 
sales made through intermediate inventory locations. We compared the 
sales process in each channel of distribution and found that the 
selling functions were similar for each channel. Accordingly, we 
preliminarily determine that home-market sales in these channels of 
distribution constitute a single LOT.
    Rene Bernard reported the same two channels of distribution in the 
U.S. market that it reported in the home-market. Rene Bernard reported 
EP sales to U.S. customers through channel 1. This channel included 
direct sales made by Rene Bernard Inc. and Bermorg. We determined that 
there was only one EP LOT. Because the sales processes in this channel 
of distribution were the same as those in the single home-market LOT, 
we preliminarily determine that the single EP LOT is identical to the 
home-market LOT.
    With respect to CEP sales, Rene Bernard reported all of these sales 
through a single channel of distribution (channel 2). Channel 2 
included all sales by Rene Bernard Inc. made through intermediate 
inventory locations. We preliminary determine that 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 the CEP LOT, we consider only the selling activities 
reflected in the price after the deduction of expenses and profit under 
section 772(d) of the Act.
    Rene Bernard's Canadian-based services for its CEP sales were 
similar to the services provided in the single home-market LOT with 
respect to sales process and inventory management. We are finding CEP 
sales to be at the same LOT as the home-market sales, and, therefore, 
we are making no LOT adjustment or CEP offset. See section 773(a)(7)(A) 
of the Act.
(D) Tembec
    Tembec reported four channels of distribution applicable to both 
markets. The first channel of distribution (channel 1) included direct 
sales from the mill 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. The third channel of distribution (channel 3) 
consisted of sales made through VMIs located in Canada or the United 
States. The fourth (channel 4) consisted of sales where the customer 
picked-up the merchandise.
    We found that the first three home-market channels of distribution 
were similar with respect to both the sales process and freight 
services. While channel 4 sales did not receive freight arrangement, 
channel 4 was the same as the other channels in terms of sales process. 
We do not consider arrangement of freight alone to rise to the level of 
a separate LOT. Accordingly, we preliminarily determine that home-
market sales in these four channels of distribution constitute a single 
LOT.
    In the U.S. market, Tembec had both EP and CEP sales. Tembec 
reported EP sales to end-users and distributors through channels 1, 2, 
and 4. These three channels of distribution as they apply to EP sales, 
do not differ from the three channels of distribution in the home-
market. Because the sales process, freight services (for channels 1 and 
2) and inventory maintenance were similar, we preliminarily determine 
that EP sales in these three channels of

[[Page 33978]]

distribution constitute a single LOT and that this EP LOT is identical 
to the home-market LOT.
    With respect to CEP sales, Tembec reported that these sales were 
made through two channels of distribution (2 and 3), and consisted of 
U.S. sales that either pass through a U.S. reload center en route to 
the customer, or go to a VMI. The selling functions related to freight 
and delivery for these two channels of distribution were not 
significantly different and, therefore, we preliminary determine 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 the CEP LOT, we consider only the selling activities 
reflected in the price after the deduction of expenses and profit under 
section 772(d) of the Act.
    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. We are finding CEP sales to be at the same LOT as the 
home market sales, and, therefore, we are making no LOT adjustment or 
CEP offset. See section 773(a)(7)(A) of the ACT.
(E) Tolko
    Tolko reported three channels of distribution in the home-market. 
The first channel for distribution (channel 1) included direct sales 
made by Tolko's TMS North American Lumber Sales, Riverside Mill Sales, 
Riverside Vancouver Sales, and Tolko Brokerage divisions 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 principally by Tolko 
Brokerage, Tolko Export Sales, and Riverside Vancouver Sales from 
inventory locations. The third channel of distribution (channel 3) 
consisted of sales made pursuant to a vendor-management inventory (VMI) 
agreement. We compared the sales process in each channel of 
distribution and found that the selling functions were similar for each 
channel. Accordingly, we preliminarily determine that home-market sales 
in these 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, this distribution channel (channel 1) included 
direct sales made by Tolko's TMS North American Lumber Sales, Riverside 
Mill Sales, Riverside Vancouver Sales, and Tolko Brokerage divisions 
from Tolko's Canadian mill production and may have been shipped either 
directly or through a reload center to customers. Because the sales 
processes in this channel of distribution were similar, we 
preliminarily determine that there is a single EP LOT and it is 
identical to the home-market LOT.
    With respect to CEP sales, Tolko reported these sales through two 
channels of distribution. The first (channel 2) included sales by Tolko 
Brokerage, Tolko Export Sales, and Riverside Vancouver Sales divisions 
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, including freight arrangements and order 
processing, for these two channels of distribution were not 
significantly different and, therefore, we preliminary determine there 
is only one CEP LOT.
    In determining whether separate LOTs exist between U.S. DEP 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 the CEP LOT, we consider only the selling activities 
reflected in the price after the deduction of expenses and profit under 
section 772(d) of the Act.
    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. We are finding CEP sales to be at the same LOT as the home 
market sales, and, therefore, we are making no LOT adjustment or CEP 
offset. See section 773(a)(7)(A) of the Act.
(F) West Fraser
    West Fraser reported four channels of distribution in the home-
market. The first channel of distribution (channel 1) included sales 
made directly to customers from a mill or origin reload.\38\ The second 
channel of distribution (channel 2) consisted of sales made to 
customers through VMI arrangements. The third channel of distribution 
(channel 3) consisted of sales made to customers from inventory stored 
at one of two unaffiliated reloads. The fourth channel of distribution 
(channel 4) consisted of sales made to customers from inventory that 
was intended for sale to third countries and was stored at one of two 
unaffiliated reloads. We compared these four 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 2 and the office handling sales in channel 3, all four 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 four 
channels of distribution constitute a single LOT.
---------------------------------------------------------------------------

    \38\ Lumber shipped to an origin reload is only unloaded and 
transferred to another mode of transportation (e.g., truck to rail). 
The reload center does not inventory the lumber.
---------------------------------------------------------------------------

    In the U.S. market, West Fraser had both EP and CEP sales. For EP 
sales, West Fraser reported two channels of distribution. One channel 
of distribution (channel 1) included sales made directly to customers 
from a mill or origin reload. The second channel of distribution 
(channel 3) was to customers through two unaffiliated reloads. Both 
channels of distribution for EP sales do not differ from the first and 
third channels of distribution within the home-market, except with 
respect to paper processing services in connection with brokerage and 
handling. Therefore, as both the above home and U.S. market channels of 
distribution are comparable in terms of selling functions, delivery and 
customer categories, we preliminary determine there is a single EP LOT 
and it is identical to the single home-market LOT.
    With respect to CEP sales, West Fraser had two channels of 
distribution (channel 2 and 4). Both channels of distribution included 
sales to customers through West Fraser's U.S. subsidiary, West Fraser 
Forest Products Inc. The second channel of distribution (channel 2) 
does not differ from the second channel of distribution within the 
home-market, except with respect to paper processing services in 
connection with brokerage and handling. For the fourth channel of 
distribution (channel 4), sales were made from unaffiliated destination 
reload centers in the United States by sales people located in Canada.
    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 the CEP LOT, we consider only the selling activities 
reflected in the price after the deduction of expenses and profit under 
section 772(d) of the Act.

[[Page 33979]]

    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 customers in the and its CEP sales in the 
U.S. market do not involve significantly different selling functions. 
We are finding CEP sales to be at the same LOT as the home market 
sales, and, therefore, we are making no LOT adjustment or CEP offset. 
See section 773(a)(7)(A) of the Act.
(G) WFP
    WFP reported two channels of distribution and six customer 
categories in the home-market. The first channel of distribution, 
Channel 1, consists of sales from a mill directly to distributing 
wholesalers, wholesalers, remanufacturers, retailers, exporters, and 
employees. The second channel of distribution, Channel 2, comprises 
sales from a Canadian inventory location to the same customers as 
Channel 1 except for employees sales. Although WFP provides the 
additional service of maintaining inventory at select locations for 
customers in Channel 2, we find that the two channels are similar with 
respect to the overall sales process, negotiations with the customer, 
order processing, sales support and administration, freight services, 
invoicing, packing, and the granting of early payment discounts. 
Accordingly, we preliminary determine that this is a single EP LOT and 
it is the same as the home market LOT.
    In the U.S. market, WFP made both EP and CEP sales. WFP reported EP 
sales to four customer categories (distributing wholesalers, 
wholesalers, remanufacturers, and retailers) through a single channel 
of distribution--mill direct sales (Channel 1). We find that the U.S. 
market EP channel is similar to the single home-market LOT with respect 
to the overall sales process, negotiations with the customer, order 
processing, sales support and administration, freight services, 
invoicing, packing, and granting of early payment discounts. Therefore, 
we preliminarily determine that home-market sales and EP sales are at 
an identical LOT.
    WFP reported CEP sales through three of its reported channels of 
distribution: Channels 2, 3, and 4. Channel 2 CEP sales consist of all 
sales made through inventory locations in the United States to 
distributing wholesalers, wholesalers, remanufacturers, and retailers. 
Channel 3 sales are CEP sales through VMI locations to distributing 
wholesalers. Channel 4 sales are agent sales to retailers, distributing 
wholesalers, and wholesalers.
    In determining whether separate LOT's exist between 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 the CEP LOT, we consider only the selling activities 
reflected in the price after the deduction of expenses and profit under 
section 772(d) of the Act.
    We find that WFP's CEP sales through Channels 2 and 3 are similar 
to the home-market LOT with respect to the overall sales process, 
negotiations with the customer, order processing, sales support and 
administration, freight services, invoicing, packing, and the granting 
of early payment discounts. Therefore, we preliminarily determine that 
CEP sales through Channels 2 and 3 constitute a single LOT that is 
identical to the single home-market LOT. Because all selling functions 
performed for CEP sales through Channels 2 and 3 are similar to the 
selling functions of the home-market LOT, we are making no LOT 
adjustment or CEP offset for CEP sales through Channels 2 or 3. See 
section 773(a)(7)(A) of the Act.
    For CEP sales through Channel 4, however, WFP's agent solicits 
orders from customers, negotiates prices with the customer, makes 
arrangements for transportation to the customer, and provides post-sale 
support to the customer. WFP pays the agent a flat monthly fee in 
exchange for these services. For the other three CEP channels, WFP 
handles these selling functions internally. Therefore, we preliminarily 
determine that CEP sales through Channel 4 constitute a separate U.S. 
LOT that is separate from the home-market LOT. We also find that this 
U.S. LOT is at a less advanced marketing stage than the home-market LOT 
because it involves fewer selling functions. Because there is only one 
LOT in the home-market, the data do not allow for a level of trade 
adjustment. Therefore, we are preliminarily granting a CEP offset to 
WFP's Channel 4 CEP sales. See section 773(a)(7)(B) of the Act.
(H) Weyerhaeuser
    Weyerhaeuser reported seven channels of distribution in the home-
market, with seven customer categories. 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) SWL and B.C. 
Costal Group's (BCC) sales through Canadian reloads; (6) BCC's sales 
through processing facilities; and (7) WBM cross dock sales.\39\ To 
determine whether separate LOTs exist in the home-market, we examined 
the selling functions, the chain of distribution, and the customer 
categories reported in the home-market.
---------------------------------------------------------------------------

    \39\ Even though there are only seven channels of distribution 
in the home-market, Weyerhaeuser designated cross dock sales as 
channel eight in the questionnaire response and accompanying 
database.
---------------------------------------------------------------------------

    For each of its channels of distribution, Weyerhaeuser's selling 
functions included invoicing, freight arrangement, product training, 
marketing and promotional activities, advanced shipping notices, and 
order status information. Weyerhaeuser's sales made out of inventory by 
WBM (channel 4) 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 for unaffiliated parties. WBM operates a number 
of customer service centers (CSC) throughout Canada where it provides 
local sales offices and just-in-time inventory (JIT) service for its 
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 on a mill-direct basis (channel 3) but does not 
provide the JIT service for such transactions. Therefore we so 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. Our analysis of cross dock sales (channel 7) 
indicates that they are most similar to WBM's warehouse sales. The 
specialized nature of these sales

[[Page 33980]]

requires additional services that direct sales do not. Like WBM 
warehouse sales, cross dock merchandise is usually part of a JIT order 
and is shipped from a mill to an inventory location. Even though the 
merchandise may not be commingled or unpacked, it often enters the 
warehouse and requires additional services for two freight segments and 
loading and unloading. Therefore, we consider cross dock sales to be at 
the same LOT as WBM warehouse sales.
    Sales made through VMI arrangements (channel 2) 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 customer categories in relation to the 
channels of distribution and application of selling functions. Each 
channel services multiple customer categories with channels 1, 2, 3, 4, 
5 and 7 serving at least six customer categories. We found that there 
were not significant differences in the application of selling 
functions by customer and instead the activities depend on the channel 
of distribution. Therefore, customer category is not a useful indicator 
of LOT for Weyerhaeuser's home-market sales.
    Because VMI, WBM inventory, and WBM cross dock 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, WBM 
inventory, and cross dock sales are not identical, the principal 
selling activity for all three is JIT inventory maintenance. Thus, 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, WBM sales out of inventory, and cross 
dock sales (HM2) (encompassing channels 2, 4, and 7).
    Weyerhaeuser reported eight 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) WMB direct sales; (4) 
WMB U.S. inventory sales; (5) SWL sales through U.S. reloads; (6) SWL 
and BCC sales through Canadian reloads; (7) sales from BCC's processing 
facilities; and (8) WMB cross dock sales. 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 (channel 
1 and 3), 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 (channel 2) include the similar selling functions 
performed for home-market VMI sales, as described above, except that 
the sales are managed by SWL Western in the United States. As a result, 
the selling functions, with the exception of arranging freight to the 
VMI locations, are performed in the United States. Therefore, after the 
deduction of U.S. expenses and profit, we find that the U.S. VMI sales 
(U.S.1) are made at the same LOT as home-market direct sales (HM1), and 
we have matched them accordingly in the margin program.
    SWL's sales through U.S. reloads (channel 5) also appear to have 
selling functions performed in Canada and the United States. While 
Weyerhaeuser states that it maintains JIT inventory for its U.S. 
customers at these reloads, many of the selling functions are managed 
by SWL Western in the United States. After the deduction of U.S. 
expenses and profit, these sales do not appear to be at a different 
point in the chain of distribution than mill-direct sales in Canada. 
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 (channel 4) significant 
selling activities occur in the United States, such as maintaining 
local seals offices and JIT, and arranging freight to the final 
customer. The selling functions performed 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 WMB'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. We found that cross dock 
sales (channel 8) were most similar to WBM warehouse sales and, as 
such, designated them at the same LOT (i.e., U.S.1.)
    As was the case with Canadian sales, each U.S. channel of 
distribution services multiple customer categories. Weyerhaeuser 
reports that channels 1-6 and 8 have potential buyers from at least 
five customers categories. Channel seven has two customer categories 
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 1, 2004, 
through April 30, 2005:

------------------------------------------------------------------------
                                                             Weighted-
                        Producer                          average margin
                                                           (percentage)
------------------------------------------------------------------------
Blanchette (and its affiliate Barrette-Chapais Ltee.)...            1.25
Interfor................................................            6.46
Rene Bernard (and its affiliates Irenee Grondin & Fils              8.62
 Lt[egrave]e., Les S[egrave]choirs [aacute] Bois Rene
 Bernard Lt[egrave]e., Bois Bohemia Inc., and Bermorg
 LLC)...................................................

[[Page 33981]]

 
Tembec (and its affiliates Tembec Industries Inc., Marks            1.85
 Lumber Ltd., 791615 Ontario Limited (Excel Forest
 Products), Produits Forestiers Temrex Limited
 Partnership)...........................................
Tolko (and its affiliates Tolko Marketing & Sales Ltd.              0.90
 and Gilbert Smith Forest Products Ltd.)................
West Fraser (and its affiliates West Fraser Forest                  1.47
 Products Inc. and Seehta Forest Products Ltd.).........
WFP (and its affiliate WFP Lumber Sales Limited)........            7.33
Weyerhaeuser (and its affiliate Weyerhaeuser                        2.38
 Saskatchewan Ltd.).....................................
Review-Specific Average Rate Applicable to the Following
 Companies:
    465016 BC Ltd.
    582912 BC Ltd. (dba Paragon Wood Products Lumby).
    Abitibi-Consolidated Company of Canada.
    Abitibi-Consolidated Inc.
    Abitibi-LP Engineered Wood Inc.
    AJ Forest Products Ltd.
    Alberta Spruce Industries Ltd.
    Allmac Lumber Sales Ltd.
    Allmar International.
    Alpa Lumber Mills Inc.
    Alpine Forest Trading Inc.
    American Bayridge Corporation.
    Andersen Pacific Forest Products Ltd.\40\
    Apollo Forest Products Ltd.
    Aquila Cedar Products Ltd.
    Arbec Forest Products Inc.
    Arbutus Manufacturing Limited.
    Aspen Planers Ltd.
    Atikokan Forest Products Ltd.
    Atlantic Warehousing Ltd.
    Atlas Lumber Alberta Ltd.
    AWO Forest Products.
    B&L Forest Products Ltd.
    B.B. Pallets Inc.
    Bakerview Forest Products Inc.
    Bardeaux et Cedres St-Honore Inc.
    Bathurst Lumber.
    Bathurst Lumber, Division of UPM Kymmene Miramichi.
    Beaubois Coaticook Inc.
    Bel Air Forest Products Inc.
    Bel Air Lumber Mills, Inc.
    Blackville Lumber Inc.
    Blackville Lumber Inc., Division of UPM Miramichi.
    Bois Bonsai.
    Bois Cobodex (1995) Inc.
    Bois De l'est FB Inc.
    Bois D'oeuvre Cedrico Inc. (Cedrico Lumber Inc.).
    Bois Granval G.d.s. Inc.
    Bois Kheops Inc.
    Bois Marsoui G.d.s. Inc.
    Bois Neos Inc.
    Bois Nor Que Wood Inc.
    Bois Omega Ltee.
    Boisaco Inc.
    Bonnyman & Byers Limited.
    Boucher Bros. Lumber Ltd.
    Bowater Canadian Forest Products Incorporated.
    Bowater Incorporated.
    Bridgeside Forest Industries Ltd. (Bridgeside Higa
     Forest Industries, Ltd.).
    Brink Forest Products Ltd.
    Brittania Lumber Company Limited.
    Brown & Rutherford Co. Ltd.
    Brunswick Valley Lumber Inc.
    Buchanan Distribution Inc.
    Buchanan Forest Products Ltd.
    Buchanan Lumber.
    Buchanan Lumber Sales Inc.
    Buchanan Northern Hardwoods, Inc.
    Busque & Laflamme Inc.
    C & C Lath Mill Ltd.
    C. Ernest Harrison & Sons Ltd.
    C.E. Harrison & Sons Limited.
    Caledonia Forest Products Ltd.
    Cambie Cedar Products Ltd.

[[Page 33982]]

 
    Canadian Forest Products Ltd.
    Canadian Lumber Company Ltd.
    Canadian Overseas Log & Lumber, Ltd.
    Canfor Corporation.
    Canfor Uneeda/Uneeda Wood Products.
    Canwel Building Materials Ltd.
    Canyon Lumber Company Ltd.
    Cardinal Lumber Manufacturing & Sales Inc.
    Carrier & Begin Inc.
    Carrier Forest products Ltd.\41\
    Carrier Lumber Ltd.
    Carson Lake Lumber Limited.
    Cedartone Specialties Ltd.
    Central Cedar, Ltd.
    Centurion Lumber Manufacturing (1983) Ltd.
    Chaleur Sawmills Associates.
    Cheslatta Forest Products Ltd.
    Choicewood Products Inc.
    City Lumber Sales & Services Limited.
    Clair Industrial Development Corp. Ltd.
    Clermond Hamel Ltee.
    Coast Clear Wood Ltd
    Colonial Fence Mfg. Ltd.
    Comeau Lumber Limited.
    Commonwealth Plywood Co. Ltd.
    Cottles Island Lumber Co. Ltd.
    Crystal Forest Industries Ltd.
    Cushman Lumber Company Ltd.
    Daaquam Lumber Inc. (aka Bois Daaquam Inc.).
    Dakeryn Industries Ltd.
    Davron Forest Products Ltd.
    Deep Cove Forest Products.
    Delco Forest Products Ltd.
    Delta Cedar Products.
    Deniso Lebel Inc.
    Devon Lumber Co. Ltd.
    Domexport, Inc.
    Domino Forest Products Inc.
    Domtar Inc.
    Downie Timber Ltd.
    Dubreuil Forest Products Limited.
    Dunkley Lumber Ltd.
    E. Tremblay et Fils Ltee.
    Eacan Timber Canada Ltd.
    Eacan Timber Ltd.
    East Fraser Fiber Co., Ltd.
    Eastwood Forest Products Inc.
    Ed Bobocel Lumber 1993 Ltd.
    Edwin Blaikie Lumber Ltd.
    Elmira Wood Products Limited.
    Elmsdale Lumber Co., Ltd.
    ER Probyn Export Ltd.
    Errington Cedar Products Ltd.
    F W Taylor Lumber Company.
    F.L. Bodogh Lumber Co. Ltd.
    Falcon Lumber Limited.
    Faulkener Wood Specialties.
    Fawcett Quality Lumber Products.
    Federated Co-operatives Limited.
    Fenclo Ltee.
    Finmac Lumber Limited.
    Forest Products Northwest Inc.
    Forex Log & Lumber, Ltd.
    Fort St. James Forest Products Ltd.
    Forwest Wood Specialties Inc.
    FPS Canada Inc.
    Fraser Pacific Forest Products Inc.
    Fraser Pacific Lumber Company.
    Fraser Papers Inc.
    Fraser Plaster Rock.
    Fraser Pulp Chips Ltd.

[[Page 33983]]

 
    Fraser Timber Limited.
    Frasierview Cedar Products Ltd.
    Fraserwood Industries Ltd.
    G.A. Grier (1991) Inc.
    G.A.G. Sales, Inc.
    G.D.S. Valoribois Inc.
    G.L. Sawmill Ltd.
    Galloway Lumber Co., Ltd.
    Gerard Crete & Fils Inc.
    Gestofor, Inc.
    Goldwood Industries Ltd.
    Goodfellow Inc.
    Gordon Buchanan Enterprises Ltd.
    Gorman Bros. Lumber Ltd.
    Great Lakes MSR Lumber Ltd.
    Great West Timber Limited.
    Greenwood Forest Products (1983) Ltd.
    H.A. Fawcett & Son Limited.
    H.J. Crabbe & Sons Ltd.
    H.S. Bartram (1984) Ltd.
    Haida Forest Products Ltd.
    Hainesville Sawmill Ltd.
    Halo Sawmill Limited Partnership.
    Halo Sawmills.
    Hanson's Sawmill.
    Harry Freeman & Son Limited.
    Hefler Forest Products Ltd.
    Herridge Trucking & Sawmilling Ltd.
    Hilmoe Forest Products, Ltd.
    Holdright Lumber Products Ltd.
    Howe Sound Forest Products (2005) Ltd.
    Hudson Mitchell & Sons Lumber Inc.
    Hughes Lumber Specialties Inc.
    Hy Mark Wood Products Inc.
    Industries G.D.S. Inc.
    Industries P.F. Inc.
    Industries Perron Inc.
    Ivor Forest Products Ltd.
    J&G Log and Lumber Ltd.
    J&G Log Works Ltd.
    J.A. Turner & Sons (1987) Limited.
    J.D. Irving, Limited.
    J.H. Huscroft Ltd.
    Jackpine Engineered Wood Products.
    Jackpine Forest Products Ltd.
    Jackpine Group of Companies.
    Jamestown Lumber Company Ltd.
    Jeffrey Hanson.
    John W. Jamer Ltd.
    JR Remanufacturing.
    Kalesnikoff Lumber Co. Ltd.
    Kebois Limited (dba Kebois Limitee).
    Kebois Ltee.
    Kenora Forest Products Ltd.
    Kenwood Lumber Ltd.
    Kitwanga Lumber Company.
    Kootenay Innovative Wood.
    KP Wood Ltd.
    Kruger, Inc.
    L&M Lumber Ltd.
    La Crete Sawmills Ltd.
    Lakeland Mills Ltd.
    Landmark Truss & Lumber Inc.
    Langevin Forest Products, Inc.
    Lattes Waska Laths Inc.
    Lecours Lumber Co. Limited.
    Ledwidge Lumber Co., Ltd.
    Leggett & Platt (B.C.) Ltd.
    Leggett & Platt Canada Co.
    Leggett & Platt Ltd.
    Leggett & Platt, Inc.

[[Page 33984]]

 
    Leggettwood.
    Leonard Ellen Canada (1991) Inc.
    Les Bois D'oeuvre Beaudoin & Gauthier.
    Les Bois S&P Grondin Inc. (aka Les Bois Grondin
     Inc.).
    Les Chantiers Chibougamau Ltee.
    Les Produits Forestiers D.G. Ltee.
    Les Produits Forestiers Fbm Inc.
    Les Produits Forestiers Miradas Inc.
    Les Scieries du Lac St-jean Inc.
    Leslie Forest Products Ltd.
    Ligni Bel Ltd.
    Lignum Ltd.
    Lindsay Lumber Ltd.
    Liskeard Lumber Limited.
    Long Lake Forest Products Inc.
    Long Lake Forest Products Inc. (Nakina Division).
    Lousiana Pacific Corporation.
    Lulumco Inc.
    Lumberplus Industries Inc.
    Lyle Forest Products Ltd.
    M & G Higgins Lumber Ltd.
    M.L. Wilkins & Son Ltd.
    Mactara Limited.
    Mainland Sawmill.
    Mainland Sawmill (Division of Terminal Forest
     Products).
    Manitou Forest Products Ltd.
    Manning Diversified Forest Products Ltd.
    Maple Creek Saw Mills Inc.
    Marcel Lauzon Inc.
    Marine Way Industries Inc.
    Marwood Ltd.
    Mckenzie Forest Products Inc.
    MDFP Sales.
    MF Bernard Inc.
    Mid America Lumber.
    Mid Valley Lumber Specialties Ltd.
    Midway Lumber Mills Ltd.
    Mill & Timber Products Ltd.
    Millar Western Forest Products Ltd.
    Millco Wood Products Ltd.
    Miramichi Lumber Products.
    Mirax Lumber Products Ltd.
    Mobilier Rustique (Beauce) Inc.
    Monterra Lumber Mills Limited.
    Mountain View Specialties.
    Mountain View Specialties Products Inc.
    N.F. Douglas Lumber Ltd.
    Nechako Lumber Co., Ltd.
    Newcastle Lumber Co. Inc.
    Nexfor Inc.
    Nicholson and Cates Limited.
    Nickel Lake Lumber.
    Norbord Industries Inc.
    Norsask Forest Products Inc.
    North American Forest Products Ltd.
    North Enderby Distribution Ltd.
    North Enderby Timber Ltd.
    North Mitchell Lumber Company Ltd.
    North Star Wholesale Lumber.
    North Star Wholesale Lumber Ltd.
    Northern Sawmills, Inc.
    Northland Forest Products Ltd.
    Northwest Specialty Lumber.
    Olav Haavaldsrud Timber Company Limited.
    Olympic Industries Inc.
    P. Proulx Forest Products Inc. (aka Proulx, Proulx
     Forest Products Inc. and Produits Forestiers P.
     Proulx Inc).\42\
    Pacific Coast Timber Inc.
    Pacific Lumber Remanufacturing Inc.
    Pacific Specialty Wood Products Ltd. (Clearwood
     Industries Ltd.).
    Pallan Timber Products (2000) Ltd.
    Pallan Timber Products Ltd.

[[Page 33985]]

 
    Palliser Lumber Sales Ltd.
    Parallel Wood Products, Ltd.
    Pat Power Forest Products Corporation.
    Patrick Lumber Company.
    Paul Vallee Inc.
    Peak Forest Products, Ltd.
    Pharlap Forest Products Inc.
    Phoenix Forest Products Inc.
    Pope & Talbot Inc.
    Pope & Talbot Ltd.
    Porcupine Wood Products Ltd.
    Port Moody Timber Ltd.
    Portbec Forest Products Ltd.
    Power Wood Corp.
    Pro Lumber Inc.
    Produits Forest La Tuque Inc.
    Produits Forestiers Petit Paris Inc.
    Produits Forestiers Saguenay Inc.
    Promobois G.D.S. Inc.
    Prudential Forest Products Limited.
    Quadra Wood Products Ltd.
    R. Fryer Forest Products Limited.
    Raintree Lumber Specialties Ltd.
    Ratcliff Forest Products Inc.
    Redtree Cedar Products Ltd.
    Redwood Value Added Products Inc.
    Ridge Cedar Ltd.
    Ridgetimber Trading Inc.
    Ridgewood Forest Products Limited.
    Rielly Industrial Lumber Inc.
    Riverside Forest Products Ltd.
    Riverside Marketing and Sales.
    Rojac Enterprises Inc.
    Roland Boulanger & Cie Ltee.
    Russell White Lumber Limited.
    Sauder Industries Limited.
    Sauder Industries Ltd.--Cowichan Division.
    Sawarne Lumber Co. Ltd.
    Scierie Adrien Arseneault Ltee.
    Scierie Alexandre Lemay & Fils Inc.
    Scierie Chaleur.
    Scierie Dion et Fils Inc.
    Scierie Duhamel Sawmill Inc.
    Scierie Gallichan.
    Scierie Gauthier Ltee.
    Scierie La Patrie, Inc.
    Scierie Landrienne, Inc.
    Scierie Lapointe & Roy Ltee.
    Scierie Leduc, Division of Stadaconia Inc.
    Scierie Norbois Inc.
    Scierie Nor-Sud (North-South Sawmill Inc.).
    Scierie Tech.
    Scieries du Lac St. Jean Inc.
    Seed Timber Co. Ltd.
    Selkirk Specialty Wood Ltd.
    Sexton Lumber Co. Limited.
    Seycove Forest Products Limited.
    Seymour Creek Cedar Products Ltd.
    Shawood Lumber Inc.
    Sigurdson Bros. Logging Company Ltd.\43\
    Silvermere Forest Products Inc.
    Sinclar Enterprises Ltd.
    Skana Forest Products Ltd.
    Slocan Forest Products Ltd.
    Societe En Commandite Scierie Opticiwan.
    Solid Wood Products Inc.
    South Beach Trading Inc.
    Spray Lake Sawmills Ltd.
    Spruceland Millworks (Alberta).
    Spruceland Millworks Inc.
    St. Anthony Lathing Ltd.

[[Page 33986]]

 
    Stuart Lake Lumber Co. Ltd.
    Stuart Lake Marketing Corporation.\44\
    Sunbury Cedar Sales.
    Sundance Forest Industries Ltd.
    Swiftwood Forest Products Limited.
    Sylvanex Lumber Products Inc.
    T.P. Downey & Sons Ltd.
    Taiga Forest Products.\45\
    Taylor Lumber Company Ltd.
    Teal Cedar Products Ltd.
    Teal-Jones Group.
    Teeda Corp.
    Terminal Forest Products Ltd.
    Terminal Forest Products (Terminal Sawmill
     Division).
    The Pas Lumber Co. Ltd.
    The Teal Jones Group--Stag Timber Division.\46\
    TimberWest Forest Corp.\47\
    Timberworld Forest Products Inc.
    T'loh Forest Products Limited Partnership.
    Top Quality Lumber Ltd.
    Trans-Pacific Trading Ltd.
    Treeline Wood Products Ltd.
    Twin Rivers Cedar Products Ltd.
    Tyee Timber Products Ltd.
    Uniforet Inc.\48\
    Uniforet Scierie-Pate Inc.
    Uphill Wood Supply Inc.
    UPM Miramichi.
    UPM-Kymmene Miramichi Inc.
    Vancouver Specialty Cedar Products Ltd.
    Vandermeer Forest Products (Canada) Ltd.
    Vanderwell Contractors (1971) Ltd.
    Vanport Canada, Co.
    Vernon Kiln & Millwork Ltd.
    Visscher Lumber Inc.
    W.I. Woodtone Industries Inc.
    Wakefield Cedar Products Ltd.
    Welco Lumber Corporation.
    Weldwood of Canada Ltd.
    Wentworth Lumber Ltd.
    West Bay Forest Products and Manufacturing Ltd.
    West Chilcotin Forest Products Ltd.
    Weston Forest Corp.
    Westshore Specialties Ltd.
    West-Wood Industries Ltd.
    Wilfrid Paquet & Fils Ltee.
    Williams Brothers Ltd.
    Winnipeg Forest Products, Inc.
    Winton Global Ltd.
    Woodline Forest Products Ltd.
    Woodwise Lumber Limited.
    Wynndel Box & Lumber Co., Ltd.......................            3.47
Adverse Facts Available Rate Applicable to the Following
 Companies:
    Chasyn Wood Technologies.
    Cowichan Lumber Ltd.
    Forwood Forest Products Inc.
    Hyak Specialty Wood Products Ltd.
    Jasco Forest Products.
    Noble Custom Cut Ltd.
    North American Hardwoods Ltd.
    North of 50.
    Scierie A&M St-Pierre Inc.
    South-East Forest Products Ltd.
    Spruce Products.
    Triad Forest Products, Ltd.
    Westmark Products Ltd.
    Woodko Enterprises Ltd.
    Woodtone Industries Inc.............................           37.64
------------------------------------------------------------------------


[[Page 33987]]

    Please note that the names of the companies are listed above 
exactly as they will be included in instructions to CBP. Any alternate 
names, spellings, affiliated companies or divisions will not be 
considered or included in any instructions to CBP unless they are 
brought to the attention of the Department in a case brief. There will 
be no exceptions.
---------------------------------------------------------------------------

    \40\ The name was incorrectly identified as Andersen Pacific 
Forest Ltd. in the Initiation Notice. We have corrected the name as 
per the original request. See Letter from Kaye Scholer to the 
Department regarding Certain Softwood Lumber Products from Canada; 
Third Administrative Review Antidumping Order (May 27, 2005). We 
will also remove Andersen Pacific Forest Products from the list of 
companies as the address provided by Fred Tebb & Sons, Inc. for this 
company matched Andersen Pacific Forest Products Ltd. We believe the 
name to be a misspelling of Andersen. See Letter from Betts 
Patterson Mines to the Department regarding Request for an 
Administrative Review (May 26, 2005).
    \41\ The company provided a correction to the name as it 
appeared in the Initiation Notice (Carrier Forest Products). See 
Letter from Kaye Scholer to the Department regarding Certain 
Softwood Lumber Products from Canada; Third Administrative Review 
Antidumping Order (August 3, 2005).
    \42\ The company notified the Department that it is also known 
by the above names. We have amended its name since the Initiation 
Notice (P. Proulx Forest Products Inc.). See Letter from Arent Fox 
to the Department regarding Clarification of P. Proulx Forest 
Products Inc.'s Names (October 18, 2005).
    \43\ The company notified the Department that its correct name 
is Sigurdson Bros. Logging Company Ltd. We have amended its name 
since the Initiation Notice (Sigurdson Brothers Logging Co. Ltd.). 
See Letter from Kaye Scholer to the Department regarding Certain 
Softwood Lumber Products from Canada; Third Administrative Review 
Antidumping Order (August 3, 2005).
    \44\ The company notified the Department that its correct name 
is Stuart Lake Marketing Corporation. We have amended its name since 
the Initiation Notice (Stuart Lake Marketing Co. Ltd.). See Letter 
from Kaye Scholer to the Department regarding Certain Softwood 
Lumber Products from Canada; Third Administrative Review Antidumping 
Order (August 3, 2005).
    \45\ As per Elmira Forest Products' request, we are adding its 
parent company's name, Taiga Forest Products to the list of covered 
companies. See Letter from Constance Handley, Program Manager, to 
Taiga Forest Products (Elmira Wood Products) regarding the Second 
and Third Antidumping Administrative Reviews of Certain Softwood 
Lumber Products from Canada (January 12, 2006).
    \46\ Stag Timber was inadvertently listed twice in the 
Initiation Notice. Stag Timber was included in the Teal Jones Group 
quantity request submission and, therefore, Stag Timber was removed 
from the list of companies. See Letter from Kaye Scholer to the 
Department regarding Certain Softwood Lumber Products from Canada; 
Third Administrative Review Antidumping Order (August 3, 2005).
    \47\ The company notified the Department that TFL Forest Ltd. 
and TimberWest Forest Company should be considered variants of 
TimberWest Forest Corp. See Letter from Kaye Scholer to the 
Department regarding Certain Softwood Lumber Products from Canada; 
Third Administrative Review Antidumping Order (August 3, 2005).
    \48\ On October 13, 2005, we found that Produits Forestries 
Arbec Inc. (Arbec Forest Products Inc.) was the successor-in-
interest to Uniforet Inc. See Notice of Final Results of Antidumping 
Duty Changed Circumstances Review: Certain Softwood Lumber Products 
from Canada. 70 FR 59721 (October 13, 2005).
---------------------------------------------------------------------------

Disclosure

    The Department will disclose calculations performed in accordance 
with 19 CFR 351.224(b).

Public Hearing

    An interested party may request a hearing within 90 days of 
publication of these preliminary results. See 19 CFR 351.310(c). Any 
hearing, if requested, will be held 114 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 90 days 
after the date of publication of these preliminary results. See 19 CFR 
351.309(ii). Rebuttal briefs and rebuttals to written comments, limited 
to issues raised in such briefs or comments, may be filed no later than 
97 days after the date of publication. See 19 CFR 351.309(d). 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 
180 days of publication of these preliminary results.

Assessment

    Upon completion of the administrative review, the Department shall 
determine, and CBP shall assess, antidumping duties on all appropriate 
entries.
    Pursuant to 19 CFR 351.212(b)(1), for all sales made by respondents 
for which they have reported the importer of record and the entered 
value of the U.S. sales, we have calculated importer-specific 
assessment rates based on the ratio of the total amount of antidumping 
duties calculated for the examined sales to the total entered value of 
those sales.
    For the U.S. sales that respondents have estimated the entered 
value, we have estimated the entered value. We have done this instead 
of our normal practice of calculating per unit duties, because the 
respondents have been excused from reporting certain U.S. sales. While 
not reported, these sales are subject to duties and the only basis for 
assessing duties is to apply an ad valorem rate. To determine whether 
the duty assessment rates were de minimis, in accordance with the 
requirement set forth in 19 CFR 351.106(c)(2), we calculated importer-
specific ad valorem ratios based on the estimated entered value. Where 
the assessment rate is above de minimis, we will instruct CBP to assess 
duties on all entries of subject merchandise by that importer. Pursuant 
to 19 CFR 351.106(c)(2), we will instruct CBP to liquidate without 
regard to antidumping duties any entries for which the assessment rate 
is de minimis (i.e., less than 0.50 percent).
    For the companies requesting a review, but not selected for 
examination and calculation of individual rates, the Department has:
    (a) calculated a simple average margin for each stratum. In the 
average for the first stratum (which included Interfor, Tembec, Tolko, 
West Fraser, WFP and Weyerhaeuser), the margins from West Fraser and 
Weyerhaeuser were counted twice to reflect that these two companies 
were selected twice.
    (b) combined the averages of the two strata, weighting them by the 
share of exports accounted for by producers/exporters in the stratum.
    The Department followed the same methodology to calculate the 
review-specific cash deposit rate by using each selected respondent's 
margin.
    The Department will issue appraisement instructions directly to 
CBP.

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 there de minimis, the cash deposit will be zero; (2) 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; (3) 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 (4) 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 11.54, the 
``All Others'' rate calculated in the Department's recent determination

[[Page 33988]]

under section 129 of the Uruguay Round Agreement Act. See Notice of 
Determination Under Section 129 of the Uruguay Round Agreements Act: 
Antidumping Measures on Certain Softwood Lumber Products from Canada, 
70 FR 22636 (May 2, 2005). 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: May 31, 2006.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. 06-5222 Filed 6-9-06; 8:45 am]
BILLING CODE 3510-05-M