Certain Softwood Lumber Products from Canada: Notice of Preliminary Results of Antidumping Duty Changed Circumstances Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of preliminary results of antidumping duty changed circumstances review.

SUMMARY:

On March 27, 2003, the Department of Commerce (the Department) published a notice of initiation of a changed circumstances review to determine whether entries naming Monterra Lumber Mills Limited (Monterra), a Canadian producer of softwood lumber products and an interested party in this proceeding, as manufacturer and exporter should receive the “All Others” cash deposit rate of 8.43 percent. See Initiation of Antidumping Duty Changed Circumstances Review: Certain Softwood Lumber Products From Canada, 68 FR 14947 (March 27, 2003) (Initiation Notice). We have preliminarily determined that entries naming Monterra as manufacturer and exporter should receive the “All Others” cash deposit rate of 8.43 percent.

EFFECTIVE DATE:

July 25, 2003.

FOR FURTHER INFORMATION CONTACT:

Keith Nickerson or Constance Handley, at (202) 482-3813 or (202) 482-0631, respectively; Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW, Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

As a result of the antidumping duty order issued following the completion of the less-than-fair-value investigation of certain softwood lumber products from Canada, imports of softwood lumber from Monterra, a subsidiary of respondent company Weyerhaeuser Company Limited (Weyerhaeuser), became subject to a cash deposit rate of 12.39 percent (See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Order: Certain Softwood Lumber Products from Canada, 67 FR 36068 (May 22, 2002)). On February 4, 2003, Monterra notified the Department that effective December 23, 2002, Weyerhaeuser sold its interest in Monterra to 1554545 Ontario, Inc. (1554545 Ontario), a wholly owned subsidiary of Tercamm Corp., a privately owned Canadian investment company. As a result, Monterra requested that the Department conduct a changed circumstances review in order to conclude that, effective December 23, 2002, it be subject to the “All Others” cash deposit rate of 8.43 percent, rather than Weyerhaeuser's 12.39 percent rate. On March 27, 2003, the Department published a notice of initiation of a changed circumstances review to determine whether entries naming Monterra as manufacturer and exporter should receive the “All Others” cash deposit rate of 8.43 percent.

On April 29, 2003, Monterra, at the request of the Department, submitted additional information and documentation regarding its sale by Weyerhaeuser to 1554545 Ontario. On May 8, 2003, the petitioner¹ submitted comments on the information provided by Monterra and requested that the Department issue a supplemental questionnaire. On May 21, 2003, the Department issued a supplemental questionnaire requesting further details and documentation surrounding the sale and purchase, which was provided by Monterra in its subsequent submission of June 4, 2003. The petitioner did not comment on Monterra's June 4, 2003, submission.

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 headings 4407.1000, 4409.1010, 4409.1090, and 4409.1020, respectively, of the Harmonized Tariff Schedule of the United States (HTSUS), and any softwood lumber, flooring and siding described below. These softwood lumber products include:

(1) coniferous wood, sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or finger-jointed, of a thickness exceeding six millimeters;

(2) coniferous wood siding (including strips and friezes for parquet flooring, not assembled) continuously shaped (tongued, grooved, rabbeted, chamfered, v-jointed, beaded, molded, rounded or the like) along any of its edges or faces, whether or not planed, sanded or finger-jointed;

(3) other coniferous wood (including strips and friezes for parquet flooring, not assembled) continuously shaped (tongued, grooved, rabbeted, chamfered, v-jointed, beaded, molded, rounded or the like) along any of its edges or faces (other than wood moldings and wood dowel rods) whether or not planed, sanded or finger-jointed; and

(4) coniferous wood flooring (including strips and friezes for parquet flooring, not assembled) continuously shaped (tongued, grooved, rabbeted, chamfered, v-jointed, beaded, molded, rounded or the like) along any of its edges or faces, whether or not planed, sanded or finger-jointed.

Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise under investigation is dispositive. Preliminary scope exclusions and clarifications were published in three separate federal register notices.

Softwood lumber products excluded from the scope:

• trusses and truss kits, properly classified under HTSUS 4418.90
• I-joist beams
• assembled box spring frames
• pallets and pallet kits, properly classified under HTSUS 4415.20
• garage doors
• edge-glued wood, properly classified under HTSUS item 4421.90.98.40
• properly classified complete door frames.
• properly classified complete window frames
• properly classified furniture

Softwood lumber products excluded from the scope only if they meet certain requirements:

• Stringers (pallet components used for runners): if they have at least two notches on the side, positioned at equal distance from the center, to properly accommodate forklift blades, properly classified under HTSUS 4421.90.98.40.
• Box-spring frame kits: if they contain the following wooden pieces - two side rails, two end (or top) rails and varying numbers of slats. The side rails and the end rails should be radius-cut at both ends. The kits should be individually packaged, they should contain the exact number of wooden components needed to make a particular box spring frame, with no further processing required. None of the components exceeds 1” in actual thickness or 83” in length.
• Radius-cut box-spring-frame components, not exceeding 1” in actual thickness or 83” in length, ready for assembly without further processing. The radius cuts must be present on both ends of the boards and must be substantial cuts so as to completely round one corner.
• Fence pickets requiring no further processing and properly classified under HTSUS 4421.90.70, 1” or less in actual thickness, up to 8” wide, 6' or less in length, and have finials or decorative cuttings that clearly identify them as fence pickets. In the case of dog-eared fence pickets, the corners of the boards should be cut off so as to remove pieces of wood in the shape of isosceles right angle triangles with sides measuring 3/4 inch or more.
• U.S. origin lumber shipped to Canada for minor processing and imported into the United States, is excluded from the scope of this order if the following conditions are met: 1) the processing occurring in Canada is limited to kiln-drying, planing to create smooth-to-size board, and sanding, and 2) if the importer establishes to U.S. Bureau of Customs and Border Protection's (BCBP) satisfaction that the lumber is of U.S. origin.²

• Softwood lumber products contained in single family home packages or kits,³ regardless of tariff classification, are excluded from the scope of the orders if the following criteria are met:

1. 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;

2. The package or kit must contain all necessary internal and external doors and windows, nails, screws, glue, subfloor, sheathing, beams, posts, connectors and if included in purchase contract decking, trim, drywall and roof shingles specified in the plan, design or blueprint;

3. 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;

4. The whole package must be imported under a single consolidated entry when permitted by the BCBP, whether or not on a single or multiple trucks, rail cars or other vehicles, which shall be on the same day except when the home is over 2,000 square feet;

5. The following documentation must be included with the entry documents:

• a copy of the appropriate home design, plan, or blueprint matching the entry;
• a purchase contract from a retailer of home kits or packages signed by a customer not affiliated with the importer;
• a listing of inventory of all parts of the package or kit being entered that conforms to the home design package being entered;
• in the case of multiple shipments on the same contract, all items listed immediately above which are included in the present shipment shall be identified as well.

We have determined that the excluded products listed above are outside the scope of this order provided the specified conditions are met. Lumber products that the BCBP may classify as stringers, radius cut box-spring-frame components, and fence pickets, not conforming to the above requirements, as well as truss components, pallet components, and door and window frame parts, are covered under the scope of this order and may be classified under HTSUS subheadings 4418.90.40.90, 4421.90.70.40, and 4421.90.98.40. Due to changes in the 2002 HTSUS whereby subheading 4418.90.40.90 and 4421.90.98.40 were changed to 4418.90.45.90 and 4421.90.97.40, respectively, we are adding these subheadings as well.

Preliminary Results of Changed Circumstances Review

Pursuant to section 751(b)(1) of the Tariff Act of 1930, as amended (the Act), the Department will conduct a changed circumstances review upon receipt of information concerning, or a request from an interested party of, an antidumping duty order which shows changed circumstances sufficient to warrant a review of the order. Monterra contends that, because it is no longer owned by Weyerhaeuser, it should be subject to the “All Others” cash deposit rate. In accordance with 19 CFR 351.216 (c), due to the change in ownership, the Department found good cause to initiate a changed circumstances review despite the final determination being in existence for fewer than 24 months. Therefore, we initiated a changed circumstances administrative review pursuant to section 751(b)(1) of the Act and 19 CFR 351.216(c) to determine whether entries naming Monterra as manufacturer and exporter should receive the “All Others” cash deposit rate of 8.43 percent.

In reviewing the information provided by Monterra, the Department has preliminarily found that Monterra, as a result of the sale by Weyerhaeuser and purchase by 1554545 Ontario on December 23, 2002, is no longer owned by or in any way affiliated with Weyerhauser and, as a result, should not be subject to Weyerhaeuser's cash deposit rate of 12.39 percent. In addition, we note that during the antidumping duty investigation of certain softwood lumber from Canada, the Department granted an exemption to Weyerhaeuser allowing it to exclude reporting the U.S. sales by Monterra since these sales represented such a small amount of Weyerhaeuser's total U.S. sales.⁴ As a result, Monterra's sales had no effect on the calculation of Weyerhaeuser's cash deposit rate of 12.39 percent. Therefore, for the above-stated reasons, we have preliminarily determined that entries naming Monterra as manufacturer and exporter should receive the “All Others” cash deposit rate of 8.43 percent.

We are denying Monterra's request to have the cash deposit rate of 8.43 percent made effective as of December 23, 2002. Because cash deposits are only estimates of the amount of antidumping duties that will be due, changes in cash deposit rates are not made retroactively. See Certain Hot-Rolled Lead and Bismuth Carbon Steel Products From the United Kingdom: Final Results of Changed-Circumstances Antidumping and Countervailing Duty Administrative Reviews, 64 FR 66880 (November 30, 1999). However, on May 30, 2003, Monterra requested, during the anniversary month of the publication of the order, an administrative review of those entries to determine the proper assessment rate and receive a refund of any excess deposits. Accordingly, on July 1, 2003, the Department published a notice of initiation of an administrative review of the antidumping duty order on certain softwood lumber products from Canada for 421 companies, including Monterra. (See Initiation of Antidumping Duty Administrative Review, 68 FR 39059 (July 1, 2003).)

Public Comment

Any interested party may request a hearing within 30 days of publication of this notice. See 19 CFR 351.310(c). Any hearing, if requested, will be held 45 days after the date of publication of this notice, or the first working day thereafter. Interested parties may submit case briefs and/or written comments not later than 30 days after the date of publication of this notice. Rebuttal briefs, which must be limited to issues raised in such briefs or comments, may be filed not later than 37 days after the date of publication of this notice. 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.

Due to the fact that the petitioner has not agreed to the outcome of this proceeding, the Department will conduct this review in accordance with section 351.216(e) of its regulations. Thus, consistent with section 351.216(e) of the Department's regulations, we will issue the final results of this changed circumstances review no later than 270 days after the date on which this review was initiated.

This notice is in accordance with sections 751(b)(1) and 777(I)(1) of the Act and 19 CFR 351.216, 351.221(b), and 351.222(g)(3)(I).