[Federal Register Volume 73, Number 75 (Thursday, April 17, 2008)]
[Rules and Regulations]
[Pages 20782-20785]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-8095]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

DEPARTMENT OF THE TREASURY

19 CFR Parts 12, 113 and 163

[CBP Dec. 08-10; USCBP-2006-0108]
RIN 1505-AB73


Entry of Softwood Lumber Products From Canada

AGENCIES: U.S. Customs and Border Protection, Department of Homeland 
Security; Department of the Treasury.

ACTION: Final rule.

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SUMMARY: This document adopts as a final rule, with changes, the 
interim rule amending title 19 of the Code of Federal Regulations (19 
CFR) that was published in the Federal Register (71 FR 61399) on 
October 18, 2006 as Customs and Border Protection (CBP) Dec. 06-25. The 
interim rule amended the CBP regulations by prescribing the collection 
of certain entry summary information for purposes of monitoring and 
enforcing the Softwood Lumber Agreement (SLA 2006) between the 
Governments of Canada and the United States, entered into on September 
12, 2006. In an effort to better enable CBP to accurately and timely 
fulfill its data collection and reporting obligations

[[Page 20783]]

under the SLA 2006, this document identifies an additional entry code 
option that designates softwood lumber products that are specifically 
identified as exempt from SLA 2006 export measures pursuant to Annex 1A 
of the Agreement, notwithstanding the fact that the exempt goods are 
classifiable in residual Harmonized Tariff Schedule of the United 
States provisions that are listed as covered by the SLA 2006. This 
document also amends the list of required entry records set forth in 
the Appendix to part 163 of title 19 of the Code of Federal Regulations 
(19 CFR part 163) to reflect the recordkeeping requirements prescribed 
in CBP Dec. 06-25. Lastly, this document conforms the bond provisions 
applicable to certain imports of Canadian softwood lumber to reflect 
the softwood lumber provisions set forth in Sec.  12.140 of title 19 of 
the Code of Federal Regulations.

DATES: Effective Date: April 17, 2008.

FOR FURTHER INFORMATION CONTACT: Millie Gleason, Office of 
International Trade, Tel: (202) 863-6557.

SUPPLEMENTARY INFORMATION: 

Background

    On September 12, 2006, the Governments of the United States and 
Canada (the ``Parties'') signed a bilateral Softwood Lumber Agreement 
(``SLA 2006'') concerning trade in softwood lumber products.
    On October 18, 2006, Customs and Border Protection (CBP) published 
in the Federal Register (71 FR 61399), as CBP Dec. 06-25, an interim 
rule amending Sec.  12.140 of title 19 of the Code of Federal 
Regulations (19 CFR 12.140) to reflect the terms of the SLA 2006 by 
prescribing special entry requirements applicable to shipments of 
softwood lumber products from Canada. The interim amendments required 
importers to enter a letter code representing the softwood lumber 
product's Canadian Region of Origin in the data entry field entitled 
``Country of Origin'' located on the CBP Form 7501. Importers were also 
required to enter a Canadian-issued 8-digit export permit number 
preceded by a letter code designating either: (1) The date of shipment; 
(2) a Canadian Region whose exports of softwood lumber products are 
exempt from the export measures contained in the SLA 2006; or (3) a 
company listed in Annex 10 of the SLA 2006 as exempt from the 
Agreement's export measures. Importers of softwood lumber products from 
the Maritimes were required to provide CBP with the original paper 
Certificate of Origin issued by the Maritime Lumber Bureau with the 
paper entry summary documentation. CBP Dec. 06-25 also amended, on an 
interim basis, the ``List of Records Required for the Entry of 
Merchandise'' set forth in the Appendix to part 163 of title 19 of the 
CFR (19 CFR part 163) to reflect the entry document requirements 
mandated by the SLA 2006.
    Comments were solicited on the interim rule.

Discussion of Comments

    Three comments were received in response to the solicitation of 
comments in CBP Dec. 06-25. One comment was retracted by the commenter. 
A description of the comments received, together with CBP's analyses, 
is set forth below.
    Comment: One commenter offered support for the requirement set 
forth in CBP Dec. 06-25 that an original Certificate of Origin from the 
Maritime Lumber Bureau must accompany each entry of softwood lumber 
into the United States and requested that this requirement be retained 
in the final rule.
    CBP Response: This entry requirement is retained in the final rule.
    Comment: One commenter suggested that CBP adopt two additional 
data-input requirements for imports of Canadian softwood lumber 
products. The commenter recommended that CBP require importers to 
disclose the ``Export Price'' of the merchandise within the meaning of 
Article XXI.25 of the SLA 2006. As defined in the agreement, the Export 
Price is the taxable value for purposes of calculating SLA 2006 export 
fees that Canada is obligated to collect. The commenter also suggests 
that CBP require importers of all Canadian softwood lumber products to 
declare the merchandise's ``Date of Shipment'' within the meaning of 
Article XXI.16 of the SLA 2006. The commenter asserts that this date is 
important because, depending on volumes shipped during specific periods 
(as determined by Date of Shipment), shipments from the Maritimes, the 
Territories, or by companies listed as excluded from export measures in 
the SLA 2006, can be subject to export measures notwithstanding 
normally applicable exemptions. The commenter notes that, under the 
terms of the interim rule, CBP is collecting Date of Shipment data 
regarding imports of most Canadian softwood lumber, but not on lumber 
produced in the Maritime Provinces, the Territories, or by excluded 
Canadian lumber producers.
    CBP Response: Pursuant to Article XV.B of the SLA 2006, the U.S. is 
obligated to provide Canada with the appraised value, as defined by 
CBP, for each entry of softwood lumber products filed during the 
preceding month. The U.S. does not collect export prices; exporters of 
softwood lumber to the U.S provide that data to Canada.
    The commenter correctly notes that CBP collects Date of Shipment 
data for all imports of softwood lumber covered by the SLA 2006, except 
for entries of softwood lumber that claim an exemption from the 
Agreement's export measures. Although CBP does not require Date of 
Shipment data for imports claiming exemption from SLA 2006 export 
measures, CBP collects the export date for these imports and uses that 
date to assess the Date of Shipment and, consequently, whether an 
exempt status remains valid for a given month.
    Other Comments: Additional comments were received after the close 
of the comment period proposing unilateral enforcement of the Softwood 
Lumber Agreement and the collection of additional information in order 
to determine if the correct amount of tax is actually collected by 
Canadian authorities.
    CBP Response: Such proposals exceed the scope of CBP authority and 
the requirements of the Softwood Lumber Agreement and consequently are 
not adopted in this document.

Conclusion

    After review of the comments and further consideration, CBP has 
decided to adopt as final the interim rule published in the Federal 
Register (71 FR 61399) on October 18, 2006, as CBP Dec. 06-25, with the 
additional modifications set forth below.
    As noted above, CBP Dec. 06-25 identifies a series of letter codes 
that are to be used as prefixes for the export permit numbers entered 
on the CBP Form 7501. These codes designate either an exclusion from 
export measures based on a product's Region of Origin, or a company's 
exempt-status, or the date of shipment as defined in Article XXI.16 of 
the SLA 2006. These codes enable the United States to fulfill its 
information collection and exchange obligations under Article XV of the 
Agreement by being able to assess monthly volumes attributable to 
specific Regions and excluded companies. This document clarifies CBP 
Dec. 06-25 by providing importers with an additional entry code option, 
``P88888888'', which is used to designate entries of softwood lumber 
products that are specifically identified as exempt from SLA 2006 
export measures pursuant to Annex 1A of the Agreement, notwithstanding 
the fact that the exempt goods are classifiable in residual Harmonized

[[Page 20784]]

Tariff Schedule of the United States provisions that are otherwise 
listed as covered by the SLA 2006.
    In addition, Sec.  12.140(b) and (c) are amended to clarify that 
all entries of softwood lumber products must be submitted to CBP in an 
electronic format, except for entries of softwood lumber products whose 
region of origin is the Maritimes, which must be submitted to CBP in 
paper.
    The ``List of Records Required for the Entry of Merchandise'' set 
forth in the Appendix to part 163 of title 19 of the CFR (19 CFR part 
163) is also amended by this document to clarify that, in addition to 
the Certificate of Origin issued by Canada's Maritime Lumber Bureau, 
the Canadian-issued Export Permit is a required entry document as per 
the SLA 2006 and 19 CFR 12.140(d).
    Lastly, this document conforms the bond provisions applicable to 
certain imports of Canadian softwood lumber, set forth in 19 CFR 
113.62(k), to reflect the new organizational structure of the softwood 
lumber provisions set forth in 19 CFR 12.140. To that end, Sec.  
113.62(k) is amended by removing the reference to paragraph (a) within 
Sec.  12.140, and the existing time period of 20 days within which a 
principal must establish to the satisfaction of CBP that the applicable 
export permit has been issued by the Government of Canada is changed to 
10 days to reflect the fact that, pursuant to the SLA 2006, the export 
permit number must be submitted to CBP at the time of entry summary.

Inapplicability of Notice and Delayed Effective Date Requirements

    Pursuant to 5 U.S.C. 553(a)(1), public notice and a delayed 
effective date are inapplicable to this regulation because it involves 
a foreign affairs function of the United States.

Executive Order 12866

    Because this rule involves a foreign affairs function of the United 
States, it is not subject to Executive Order 12866 and has not been 
reviewed by the Office of Management and Budget.

Regulatory Flexibility Act

    Because no notice of proposed rulemaking is required for this rule, 
the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) 
do not apply.

Paperwork Reduction Act

    The collection of information referenced in this regulation, CBP 
Form 7501, has been previously reviewed and approved by the Office of 
Management and Budget in accordance with the requirements of the 
Paperwork Reduction Act (44 U.S.C. 3507) under OMB-assigned control 
number 1651-0022.

Signing Authority

    This document is being issued in accordance with 19 CFR 0.1(a)(1).

List of Subjects

19 CFR Part 12

    Bonds, Customs duties and inspection, Entry of merchandise, 
Imports, Prohibited merchandise, Reporting and recordkeeping 
requirements, Restricted merchandise.

19 CFR Part 113

    Bonds, Customs duties and inspection, Imports, Reporting and 
recordkeeping requirements, Surety bonds.

19 CFR Part 163

    Customs duties and inspection, Reporting and recordkeeping 
requirements.

Amendment to the Regulations

0
For the reasons stated above, parts 12, 113 and 163 of title 19 of the 
Code of Federal Regulations are amended as set forth below.

PART 12--SPECIAL CLASSES OF MERCHANDISE

0
1. The authority citation for part 12 continues to read in part as 
follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1202 (General Note 3(i), 
Harmonized Tariff Schedule of the United States (HTSUS)), 1624;
* * * * *


0
2. Section 12.140 is revised to read as follows:


Sec.  12.140  Entry of softwood lumber products from Canada.

    The requirements set forth in this section are applicable for as 
long as the Softwood Lumber Agreement (SLA 2006), entered into on 
September 12, 2006, by the Governments of the United States and Canada, 
remains in effect.
    (a) Definitions. The following definitions apply for purposes of 
this section:
    (1) British Columbia Coast. ``British Columbia Coast'' means the 
Coastal Forest Regions as defined by the existing Forest Regions and 
Districts Regulation, B.C. Reg. 123/2003.
    (2) British Columbia Interior. ``British Columbia Interior'' means 
the Northern Interior Forest Region and the Southern Interior Forest 
Region as defined by the existing Forest Regions and Districts 
Regulation, B.C. Reg. 123/2003.
    (3) Date of shipment. ``Date of shipment'' means, in the case of 
products exported by rail, the date when the railcar that contains the 
products is assembled to form part of a train for export; otherwise, 
the date when the products are loaded aboard a conveyance for export. 
If a shipment is transshipped through a Canadian reload center or other 
inventory location, the date of shipment is the date the merchandise 
leaves the reload center or other inventory location for final shipment 
to the United States.
    (4) Maritimes. ``Maritimes'' means New Brunswick, Canada; Nova 
Scotia, Canada; Prince Edward Island, Canada; and Newfoundland and 
Labrador, Canada.
    (5) Region. ``Region'' means British Columbia Coast or British 
Columbia Interior as defined in paragraphs (a)(1) and (2) of this 
section; Alberta, Canada; Manitoba, Canada; Maritimes, Canada; 
Northwest Territories, Canada; Nunavut Territory, Canada; Ontario, 
Canada; Saskatchewan, Canada; Quebec, Canada; or Yukon Territory, 
Canada.
    (6) Region of Origin. ``Region of Origin'' means the Region where 
the facility at which the softwood lumber product was first produced 
into such a product is located, regardless of whether that product was 
further processed (for example, by planing or kiln drying) or was 
transformed from one softwood lumber product into another such product 
(for example, a remanufactured product) in another Region, with the 
following exceptions:
    (i) The Region of Origin of softwood lumber products first produced 
in the Maritime Provinces from logs originating in a non-Maritime 
Region will be the Region, as defined above, where the logs originated; 
and
    (ii) The Region of Origin of softwood lumber products first 
produced in the Yukon, Northwest Territories or Nunavut (the 
`Territories') from logs originating outside the Territories will be 
the Region where the logs originated.
    (7) SLA 2006. ``SLA 2006'' or ``SLA'' means the Softwood Lumber 
Agreement entered into between the Governments of Canada and the United 
States on September 12, 2006.
    (8) Softwood lumber products. ``Softwood lumber products'' mean 
those products described as covered by the SLA 2006 in Annex 1A of the 
Agreement.
    (b) Reporting requirements. In the case of softwood lumber products 
from Canada listed in Annex 1A of the SLA 2006 as covered by the scope 
of the Agreement, the following information must be included on the 
electronic entry summary documentation (CBP Form 7501) for each entry 
(except for entries of softwood lumber products whose

[[Page 20785]]

Region of Origin is the Maritimes, in which case entry summary 
documentation must be submitted in paper as set forth in paragraph (c) 
of this section):
    (1) Region of Origin. The letter code representing a softwood 
lumber product's Canadian Region of Origin, as posted on the 
Administrative Message Board in the Automated Commercial System. (For 
example, the letter code ``XD'' designates softwood lumber products 
whose Region of Origin is British Columbia Coast. The letter code 
``XE'' designates softwood lumber products whose Region of Origin is 
British Columbia Interior.)
    (2) Export Permit Number--(i) Export Permit Number issued by Canada 
at time of filing entry summary documentation. The 8-digit Canadian-
issued Export Permit Number, preceded by one of the following letter 
codes:
    (A) The letter code assigned to represent the date of shipment 
(i.e., ``A'' represents January, ``B'' represents February, ``C'' 
represents March, etc.), except for those softwood lumber products 
produced by a company listed in Annex 10 of the SLA 2006 or whose 
Region of Origin is the Maritimes, Yukon, Northwest Territories or 
Nunavut;
    (B) The letter code ``X'', which designates a company listed in 
Annex 10 of the SLA 2006; or
    (C) The letter code assigned to represent the Maritimes (code M); 
Yukon (code Y); Northwest Territories (code W); or Nunavut (code N), 
for softwood lumber products originating in these regions.
    (ii) No Export Permit Number required due to softwood lumber 
product's exempt status. Where an Export Permit Number is not required 
because the imported softwood lumber product is specifically identified 
as exempt from SLA 2006 export measures pursuant to Annex 1A of the 
Agreement, notwithstanding the fact that the exempt goods are 
classifiable in residual Harmonized Tariff Schedule of the United 
States provisions otherwise listed as covered by the SLA 2006, the 
alpha-numeric code ``P88888888'' must be used in the Export Permit 
Number data entry field on the CBP Form 7501.
    (c) Original Maritime Certificate of Origin. Where a softwood 
lumber product's Region of Origin is the Maritimes, the original paper 
copy of the Certificate of Origin issued by the Maritime Lumber Bureau 
must be submitted to CBP and the entry summary documentation for each 
such entry must be in paper and not electronic. The Certificate of 
Origin must specifically state that the corresponding CBP entries are 
for softwood lumber products first produced in the Maritimes from logs 
originating in the Maritimes or State of Maine.
    (d) Recordkeeping. Importers must retain copies of export permits, 
certificates of origin, and any other substantiating documentation 
issued by the Canadian Government pursuant to the recordkeeping 
requirements set forth in part 163 of title 19 to the CFR.

PART 113--CUSTOMS BONDS

0
3. The general authority citation for part 113 continues to read as 
follows:

    Authority: 6 U.S.C. 101, et seq.; 19 U.S.C. 66, 1623, 1624.
* * * * *


Sec.  113.62  [Amended]

0
4. In Sec.  113.62, paragraph (k) is amended by:
0
a. Removing the term ``Sec.  12.140(a)'' and adding in its place the 
term ``Sec.  12.140'';
0
b. Removing the number ``20'' and adding in its place the number 
``10''; and
0
c. Removing the word ``Customs'' and adding in its place the term 
``CBP''.

PART 163--RECORDKEEPING

0
5. The authority citation for part 163 continues to read as follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1484, 1508, 1509, 1510, 
1624.


0
6. The Appendix to part 163 is amended by removing the listing for 
Sec.  12.140(c) and adding in its place Sec.  12.140(b) and (c) under 
section IV to read as follows:

Appendix to Part 163--Interim (a)(1)(A) List

* * * * *
    IV. * * *


Sec.  12.140(b) and (c)  Canadian-issued Export Permit, Certificate of 
Origin issued by Canada's Maritime Lumber Bureau.

* * * * *

W. Ralph Basham,
Commissioner, U.S. Customs and Border Protection.
    Approved: April 10, 2008.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. E8-8095 Filed 4-16-08; 8:45 am]
BILLING CODE 9111-14-P