[Federal Register Volume 82, Number 125 (Friday, June 30, 2017)]
[Notices]
[Pages 29833-29836]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-13794]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-857]


Certain Softwood Lumber Products From Canada: Preliminary 
Affirmative Determination of Sales at Less Than Fair Value

AGENCY: Enforcement and Compliance, International Trade Administration, 
Department of Commerce.

SUMMARY: The Department of Commerce (the Department) preliminarily 
determines that certain softwood lumber products (softwood lumber) from 
Canada is being, or is likely to be, sold in the United States at less 
than fair value (LTFV). The period of investigation (POI) is October 1, 
2015, through September 30, 2016.

DATES: Effective June 30, 2017.

FOR FURTHER INFORMATION CONTACT: Stephen Bailey or Thomas Martin, AD/
CVD Operations, Office IV, Enforcement and Compliance, International 
Trade Administration, U.S. Department of Commerce, 1401 Constitution 
Avenue NW., Washington, DC 20230; telephone: (202) 482-0193 or (202) 
482-3936, respectively.

SUPPLEMENTARY INFORMATION:

Background

    This preliminary determination is made in accordance with section 
733(b) of the Tariff Act of 1930, as amended (the Act). The Department 
published the notice of initiation of this investigation on December 
22, 2016.\1\ On April 14, 2017, the Department postponed the 
preliminary determination of this investigation and the revised 
deadline is now June 23, 2017.\2\ On April 13, 2017, the Department 
preliminarily determined that critical circumstances exist.\3\ For a 
complete description of the events that followed the initiation of this 
investigation, see the Preliminary

[[Page 29834]]

Decision Memorandum.\4\ A list of topics included in the Preliminary 
Decision Memorandum is included as Appendix II to this notice. The 
Preliminary Decision Memorandum is a public document and is on file 
electronically via Enforcement and Compliance's Antidumping and 
Countervailing Duty Centralized Electronic Service System (ACCESS). 
ACCESS is available to registered users at https://access.trade.gov, 
and to all parties in the Central Records Unit, Room B8024 of the main 
Department of Commerce building. In addition, a complete version of the 
Preliminary Decision Memorandum can be accessed directly at http://enforcement.trade.gov/frn/. The signed and the electronic versions of 
the Preliminary Decision Memorandum are identical in content.
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    \1\ See Certain Softwood Lumber Products from Canada: Initiation 
of Less-Than-Fair-Value Investigation, 81 FR 93892 (December 22, 
2016) (Initiation Notice).
    \2\ See Certain Softwood Lumber Products from Canada: 
Postponement of Preliminary Determination of Antidumping Duty 
Investigation, 82 FR 18421 (April 19, 2017).
    \3\ See Antidumping and Countervailing Duty Investigations of 
Certain Softwood Lumber Products From Canada: Preliminary 
Determinations of Critical Circumstances, 82 FR 19219 (April 26, 
2017) (Preliminary Critical Circumstances Determinations).
    \4\ See Preliminary Decision Memorandum.
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Scope of the Investigation

    The product covered by this investigation is softwood lumber from 
Canada. For a complete description of the scope of this investigation, 
see Appendix I.

Scope Comments

    In accordance with the preamble to the Department's regulations,\5\ 
the Initiation Notice set aside a period of time for interested parties 
to raise issues regarding product coverage (i.e., scope).\6\ Certain 
interested parties commented on the scope of the investigation as it 
appeared in the Initiation Notice. For a summary of the product 
coverage comments and rebuttal responses submitted to the record for 
this preliminary determination, and accompanying discussion and 
analysis of all comments timely received, see the Scope Decision.\7\ 
The Department is preliminarily modifying the scope language as it 
appeared in the Initiation Notice. See the revised scope in Appendix I 
to this notice. Furthermore, the Department has proposed additional 
changes to the scope language and has invited further input from the 
interested parties.\8\ Finally, the Department has responded to the 
Committee Overseeing Action for Lumber International Trade 
Investigations or Negotiations' (the petitioner's) request to amend the 
petition to exclude Atlantic Lumber Board (ALB)-certified lumber from 
the scope of the antidumping and countervailing duty (CVD) 
investigations.\9\
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    \5\ See Antidumping Duties; Countervailing Duties, Final Rule, 
62 FR 27296, 27323 (May 19, 1997).
    \6\ See Initiation Notice.
    \7\ See Memorandum, ``Certain Softwood Lumber Products from 
Canada: Scope Decision,'' dated concurrently with this preliminary 
determination (Scope Decision).
    \8\ Id.
    \9\ See Memorandum, ``Decision Memorandum for Exclusion of 
Certain Softwood Lumber Products Certified By the Atlantic Lumber 
Board in the Antidumping Duty and Countervailing Duty Investigations 
of Certain Softwood Lumber Products from Canada,'' dated June 23, 
2017 (ALB Decision Memorandum) where the Department preliminarily 
excluded from the scope softwood lumber products certified by the 
ALB as being first produced in the Provinces of Newfoundland and 
Labrador, Nova Scotia, or Prince Edward Island from logs harvested 
in these three provinces. However, as noted in the ALB Decision 
Memorandum, U.S. Customs and Border Protection (CBP) has not yet 
begun collecting ALB certifications, and the Department needs 
assurance that CBP will have a system in place to collect the 
certifications before we permit these products to be excluded. Thus, 
CBP will continue to suspend liquidation of entries of merchandise 
subject to the CVD investigation, and we will instruct CBP to begin 
suspension of liquidation of merchandise subject to this 
investigation. If there are no changes to the preliminary decision 
to exclude this merchandise, at the final determination, the 
Department will instruct CBP to stop suspension of liquidation of 
the merchandise subject to the exclusion and to refund cash 
deposits.
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Particular Market Situation (PMS) Allegation

    On May 15, 2017, the petitioner alleged that certain particular 
market situations exist within the Canadian lumber industry.\10\ The 
petitioner's PMS allegation asserts that the Government of Canada (GOC) 
increased the demand for lumber byproducts by establishing and 
supporting bioenergy, electricity and stumpage programs. The petitioner 
alleges that the demand created by these programs caused an increase in 
the production of byproducts, which, in turn, increased the production 
of lumber. The petitioner asserts that the only remedy for addressing 
the distortion to the cost of production (COP) caused by the GOC's 
interventions is to deny the byproduct offset to COP claimed by the 
respondents.
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    \10\ See Letter from the petitioner to the Secretary, regarding 
``Certain Softwood Lumber Products from Canada: Particular Market 
Situation Regarding Respondents' Cost of Production,'' dated May 15, 
2017 (PMS allegation).
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    Specifically, regarding bioenergy programs, the petitioner alleges 
that the GOC has increased the demand for lumber byproducts by 
encouraging the development of energy from biomass, including wood 
chips from lumber. Regarding electricity, the petitioner alleges that 
the GOC has instituted certain energy initiatives that allow sawmills 
and consumers of lumber byproducts to either reduce or offset their 
electricity costs. The petitioner alleges these actions have decreased 
the electricity costs associated with producing lumber and lumber 
byproducts, which, in turn, distorts the COP of lumber producers. For 
stumpage, the petitioner alleges that lumber producers are able to 
obtain a steady supply of subsidized logs, which then enables them to 
meet the increased demand for byproducts.
    The Department finds that the petitioner's presentation and 
discussion of the bioenergy, electricity and stumpage programs promoted 
by the GOC, substantiates the petitioner's allegations that such 
interventions and subsidies may have distorted the byproduct market and 
consequently the COP of lumber producers. The Department intends to 
further investigate and analyze the alleged distortions to COP raised 
by the petitioner in its PMS allegation. We intend to issue a schedule 
to provide deadlines for interested parties to submit further factual 
information related to the PMS allegation. We also intend to issue a 
supplemental questionnaire to all interested parties to obtain 
additional information to aid us in the analysis of the petitioner's 
PMS allegation. For further discussion of this matter, refer to the PMS 
Allegation Memorandum.\11\
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    \11\ See Memorandum, ``Less-Than-Fair-Value Investigation of 
Certain Softwood Lumber Products from Canada: Particular Market 
Situation Allegation,'' dated concurrently with this memorandum (PMS 
Allegation Memorandum).
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Methodology

    The Department is conducting this investigation in accordance with 
section 731 of the Act. The Department has calculated export prices in 
accordance with section 772(a) of the Act. Constructed export prices 
have been calculated in accordance with section 772(b) of the Act. 
Normal value (NV) is calculated in accordance with section 773 of the 
Act. For a full description of the methodology underlying the 
preliminary determination, see the Preliminary Decision Memorandum.

Preliminary Affirmative Determination of Critical Circumstances, in 
Part

    As explained above, on April 13, 2017, the Department preliminarily 
determined that critical circumstances exist for all-others and do not 
exist for Canfor, Resolute, Tolko, and West Fraser. For a full 
description of the methodology and results of the Department's critical 
circumstances analysis, see the Preliminary Critical Circumstances 
Determinations.

All-Others Rate

    Sections 733(d)(1)(ii) and 735(c)(5)(A) of the Act provide that in 
the preliminary determination the Department shall determine an

[[Page 29835]]

estimated all-others rate for all exporters and producers not 
individually examined. This rate shall be an amount equal to the 
weighted average of the estimated weighted-average dumping margins 
established for exporters and producers individually investigated, 
excluding any zero and de minimis margins, and any margins determined 
entirely under section 776 of the Act.
    In this investigation, the Department calculated estimated 
weighted-average dumping margins for Canfor, Resolute, Tolko, and West 
Fraser, none of which are zero, de minimis, or based entirely on facts 
otherwise available. The Department calculated the all-others' rate 
using a weighted-average of the estimated weighted-average dumping 
margins calculated for the examined respondents using each company's 
business proprietary data for the merchandise under consideration.\12\
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    \12\ For a complete analysis of the data, please see the All-
Others Calculation Memorandum dated concurrently with this notice.
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Preliminary Determination

    The Department preliminarily determines that the following 
estimated weighted-average dumping margins exist:
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    \13\ The Department preliminarily determines that Canfor, 
Canadian Forest Products Ltd., and Canfor Wood Products Marketing 
Ltd. are a single entity. See Memorandum, ``Antidumping Duty 
Investigation of Certain Softwood Lumber from Canada: Tolko 
Industries Ltd. and Tolko Marketing and Sales Ltd. Preliminary 
Affiliation and Collapsing Memorandum,'' dated June 23, 2017.
    \14\ The Department preliminarily determines that Resolute and 
Resolute Growth Canada Inc. (Resolute Growth), Abitibi-LP Engineered 
Wood Inc. (Abitibi-LP), Abitibi-LP Engineered Wood II Inc. (Abitibi-
LP II), Forest Products Mauricie LP (Mauricie), Produits Forestiers 
Petit-Paris Inc. (Petit-Paris), Soci[eacute]t[eacute] en commandite 
Scierie Opitciwan (Opitciwan), 9265-7030 Qu[eacute]bec Inc. (9265-
7030 Inc.), are a single entity. See Memorandum, ``Antidumping Duty 
Investigation of Certain Softwood Lumber from Canada: Resolute FP 
Canada Inc. Preliminary Affiliation and Collapsing Memorandum,'' 
dated June 23, 2017.
    \15\ The Department preliminarily determines that Tolko and 
Gilbert Smith Forest Products Ltd. are a single entity. See 
Memorandum, ``Antidumping Duty Investigation of Certain Softwood 
Lumber from Canada: Tolko Industries Ltd. and Tolko Marketing and 
Sales Ltd. Preliminary Affiliation and Collapsing Memorandum,'' 
dated June 23, 2017.
    \16\ The Department preliminarily determines that West Fraser 
and Blue Ridge Lumber Inc. (Blue Ridge), Manning Forest Products 
Ltd. (Manning), and Sundre Forest Products Inc. (Sundre) are a 
single entity. See Memorandum, ``Antidumping Duty Investigation of 
Certain Softwood Lumber from Canada: West Fraser Mills Ltd. 
Preliminary Affiliation and Collapsing Memorandum,'' dated June 23, 
2017.

------------------------------------------------------------------------
                                                      Estimated weighted-
                  Exporter/producer                     average dumping
                                                       margins (percent)
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Canfor Corporation, Canadian Forest Products Ltd.,                  7.72
 and Canfor Wood Products Marketing Ltd \13\........
Resolute FP Canada Inc \14\.........................                4.59
Tolko Marketing and Sales Ltd. and Tolko Industries                 7.53
 Ltd \15\...........................................
West Fraser Mills Ltd \16\..........................                6.76
All-Others..........................................                6.87
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Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, the Department 
will direct CBP to suspend liquidation of entries of subject 
merchandise, as described in Appendix I, entered, or withdrawn from 
warehouse, for consumption on or after the date of publication of this 
notice in the Federal Register. Further, pursuant to section 
733(d)(1)(B) of the Act and 19 CFR 351.205(d), the Department will 
instruct CBP to require a cash deposit equal to the estimated weighted-
average dumping margin or the estimated all-others rate, as follows: 
(1) The cash deposit rate for the respondents listed above will be 
equal to the company-specific estimated weighted-average dumping 
margins determined in this preliminary determination; (2) if the 
exporter is not a respondent identified above, but the producer is, 
then the cash deposit rate will be equal to the company-specific 
estimated weighted-average dumping margin established for that producer 
of the subject merchandise; and (3) the cash deposit rate for all other 
producers and exporters will be equal to the all-others estimated 
weighted-average dumping margin.
    Section 733(e)(2) of the Act provides that, given an affirmative 
determination of critical circumstances, any suspension of liquidation 
shall apply to unliquidated entries of subject merchandise entered, or 
withdrawn from warehouse, for consumption on or after the later of (a) 
the date which is 90 days before the date on which the suspension of 
liquidation was first ordered, or (b) the date on which notice of 
initiation of the investigation was published. As discussed in 
Preliminary Critical Circumstances Determinations, the Department 
preliminarily found that critical circumstances exist for imports of 
subject merchandise shipped by the companies subject to the all-others 
rate. In accordance with section 733(e)(2)(A) of the Act, the 
suspension of liquidation shall apply to unliquidated entries of 
shipments of subject merchandise from companies subject to the all-
others rate that were entered, or withdrawn from warehouse, for 
consumption on or after the date which is 90 days before the 
publication of this notice.

Disclosure

    The Department intends to disclose its calculations and analysis 
performed to interested parties in this preliminary determination 
within five days of any public announcement or, if there is no public 
announcement, within five days of the date of publication of this 
notice in accordance with 19 CFR 351.224(b).

Verification

    As provided in section 782(i)(1) of the Act, the Department intends 
to verify the information relied upon in making its final 
determination.

Public Comment

    Case briefs or other written comments may be submitted to the 
Assistant Secretary for Enforcement and Compliance no later than seven 
days after the date on which the last verification report is issued in 
this investigation, unless the Secretary alters the time limit. 
Rebuttal briefs, limited to issues raised in case briefs, may be 
submitted no later than five days after the deadline date for case 
briefs.\17\ Pursuant to 19 CFR 351.309(c)(2) and (d)(2), parties who 
submit case briefs or rebuttal briefs in this investigation are 
encouraged to submit with each argument: (1) A statement of the issue; 
(2) a brief summary of the argument; and (3) a table of authorities.
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    \17\ See 19 CFR 351.309; see also 19 CFR 351.303 (for general 
filing requirements).

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[[Page 29836]]

    Pursuant to 19 CFR 351.310(c), interested parties who wish to 
request a hearing, limited to issues raised in the case and rebuttal 
briefs, must submit a written request to the Assistant Secretary for 
Enforcement and Compliance, U.S. Department of Commerce, within 30 days 
after the date of publication of this notice. Requests should contain 
the party's name, address, and telephone number, the number of 
participants, whether any participant is a foreign national, and a list 
of the issues to be discussed. If a request for a hearing is made, the 
Department intends to hold the hearing at the U.S. Department of 
Commerce, 1401 Constitution Avenue NW., Washington, DC 20230, at a time 
and date to be determined. Parties should confirm by telephone the 
date, time, and location of the hearing two days before the scheduled 
date.

International Trade Commission Notification

    In accordance with section 733(f) of the Act, the Department 
intends to notify the International Trade Commission (ITC) of its 
preliminary affirmative determination. If the final determination is 
affirmative, the ITC will determine before the later of 120 days after 
the date of this preliminary determination or 45 days after the final 
determination whether these imports are materially injuring, or 
threaten material injury to, the U.S. industry.

Notification to Interested Parties

    We intend to issue and publish this notice in accordance with 
sections 733(f) and 777(i)(1) of the Act and 19 CFR 351.205(c).

    Dated: June 23, 2017.
Ronald Lorentzen,
Acting Assistant Secretary for Enforcement and Compliance.

Appendix I

Scope of the Investigation

    The merchandise covered by this investigation is softwood 
lumber, siding, flooring and certain other coniferous wood (softwood 
lumber products). The scope includes:
     Coniferous wood, sawn, or chipped lengthwise, sliced or 
peeled, whether or not planed, whether or not sanded, or whether or 
not finger-jointed, of an actual thickness exceeding six 
millimeters.
     Coniferous wood siding, flooring, and other coniferous 
wood (other than moldings and dowel rods), including strips and 
friezes for parquet flooring, that is continuously shaped 
(including, but not limited to, tongued, grooved, rebated, 
chamfered, V-jointed, beaded, molded, rounded) along any of its 
edges, ends, or faces, whether or not planed, whether or not sanded, 
or whether or not end-jointed.
     Coniferous drilled and notched lumber and angle cut 
lumber.
     Coniferous lumber stacked on edge and fastened together 
with nails, whether or not with plywood sheathing.
     Components or parts of semi-finished or unassembled 
finished products made from subject merchandise that would otherwise 
meet the definition of the scope above.
    Softwood lumber product imports are generally entered under 
Chapter 44 of the Harmonized Tariff Schedule of the United States 
(HTSUS).\18\ This chapter of the HTSUS covers ``Wood and articles of 
wood.'' Softwood lumber products that are subject to this 
investigation are currently classifiable under the following ten-
digit HTSUS subheadings in Chapter 44: 4407.10.01.01; 4407.10.01.02; 
4407.10.01.15; 4407.10.01.16; 4407.10.01.17; 4407.10.01.18; 
4407.10.01.19; 4407.10.01.20; 4407.10.01.42; 4407.10.01.43; 
4407.10.01.44; 4407.10.01.45; 4407.10.01.46; 4407.10.01.47; 
4407.10.01.48; 4407.10.01.49; 4407.10.01.52; 4407.10.01.53; 
4407.10.01.54; 4407.10.01.55; 4407.10.01.56; 4407.10.01.57; 
4407.10.01.58; 4407.10.01.59; 4407.10.01.64; 4407.10.01.65; 
4407.10.01.66; 4407.10.01.67; 4407.10.01.68; 4407.10.01.69; 
4407.10.01.74; 4407.10.01.75; 4407.10.01.76; 4407.10.01.77; 
4407.10.01.82; 4407.10.01.83; 4407.10.01.92; 4407.10.01.93; 
4409.10.05.00; 4409.10.10.20; 4409.10.10.40; 4409.10.10.60; 
4409.10.10.80; 4409.10.20.00; 4409.10.90.20; 4409.10.90.40; and 
4418.99.10.00.
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    \18\ Throughout this document, all references to the HTSUS are 
based on the HTSUS as it exists at https://hts.usitc.gov/current.
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    Subject merchandise as described above might be identified on 
entry documentation as stringers, square cut box-spring-frame 
components, fence pickets, truss components, pallet components, 
flooring, and door and window frame parts. Items so identified might 
be entered under the following ten-digit HTSUS subheadings in 
Chapter 44: 4415.20.40.00; 4415.20.80.00; 4418.99.90.05; 
4418.99.90.20; 4418.99.90.40; 4418.99.90.95; 4421.91.70.40; and 
4421.91.97.80.
    Although these HTSUS subheadings are provided for convenience 
and customs purposes, the written description of the scope of these 
investigations is dispositive.
    The scope of the order excludes the following items:
    U.S.-origin lumber shipped to Canada for processing and imported 
into the United States is excluded from the scope of the 
investigations if the processing occurring in Canada is limited to 
one or more of the following: (1) Kiln drying; (2) planing to create 
smooth-to-size board; or (3) sanding.
    Box-spring frame kits are excluded 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 must be radius-
cut at both ends. The kits must be individually packaged and must 
contain the exact number of wooden components needed to make a 
particular box spring frame, with no further processing required. 
None of the components exceeds 1'' in actual thickness or 83'' in 
length.
    Radius-cut box-spring-frame components, not exceeding 1'' in 
actual thickness or 83'' in length, ready for assembly without 
further processing are excluded. The radius cuts must be present on 
both ends of the boards and must be substantially cut so as to 
completely round one corner.

Appendix II

List of Topics Discussed in the Preliminary Decision Memorandum

I. Summary
II. Background
III. Period of Investigation
IV. Critical Circumstances
V. Scope of the Investigation
VI. Scope Comments
VII. Affiliation and Collapsing of Affiliates
VIII. Discussion of the Methodology
    A. Determination of the Comparison Method
    B. Results of the Differential Pricing Analysis
IX. Product Comparisons
X. Date of Sale
XI. Random-Length Board Sales
XII. Export Price and Constructed Export Price
XIII. Normal Value
    A. Home Market Viability
    B. Level of Trade
    C. Cost of Production (COP) Analysis
    1. Calculation of COP
    2. Test of Comparison-Market Sales Prices
    3. Results of the COP Test
    D. Calculation of NV Based on Comparison-Market Prices
    E. Price-to-CV Comparisons
XIV. Currency Conversion
XV. Conclusion

[FR Doc. 2017-13794 Filed 6-29-17; 8:45 am]
 BILLING CODE 3510-DS-P