Certain Softwood Lumber Products From Canada: Preliminary Results and Partial Rescission of the Countervailing Duty Administrative Review; 2017-2018

AGENCY:

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

SUMMARY:

The Department of Commerce (Commerce) preliminarily determines that countervailable subsidies are being provided to producers and exporters of certain softwood lumber products (softwood lumber) from Canada. The period of review is April 28, 2017 through December 31, 2018. Interested parties are invited to comment on these preliminary results.

DATES:

Applicable February 7, 2020.

FOR FURTHER INFORMATION CONTACT:

Peter Zukowski (Canfor), Nicholas Czajkowski (JDIL), Kristen Johnson (Resolute), and George McMahon (West Fraser), AD/CVD Operations, Offices I and III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-0189, (202) 482-1395, (202) 482-4793, and (202) 482-1167, respectively.

SUPPLEMENTARY INFORMATION:

Background

On January 3, 2018, Commerce published in the Federal Register a countervailing duty (CVD) order on softwood lumber from Canada. Several interested parties requested that Commerce conduct an administrative review of the CVD Order, and, on April 1, 2019, Commerce published in the Federal Register a notice of initiation of the first administrative review of the CVD Order. On May 17, 2019, Commerce selected the following producers and exporters as the mandatory respondents in the administrative review: Canfor Corporation, Resolute FP Canada Inc., and West Fraser Mills Ltd. On July 18, 2019, Commerce selected J.D. Irving, Limited as a voluntary respondent in the administrative review. On September 6, 2019, Commerce postponed the preliminary results of this review extending the deadline until January 31, 2020.

Scope of the Order

The product covered by this order is certain softwood lumber products from Canada. For a complete description of the scope of the order, see the Preliminary Decision Memorandum.

Methodology

Commerce is conducting this CVD administrative review in accordance with section 751(a)(1)(A) of the Tariff Act of 1930, as amended (the Act). For each of the subsidy programs found countervailable, Commerce preliminarily determines that there is a subsidy, i.e., a financial contribution by an “authority” that confers a benefit to the recipient, and that the subsidy is specific.

For a full description of the methodology underlying our preliminary conclusions, see the Preliminary Decision Memorandum. The Preliminary Decision Memorandum is a public document that 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 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 electronic versions of the Preliminary Decision Memorandum are identical in content. The list of topics discussed in the Preliminary Decision Memorandum is included as an appendix to this notice.

Partial Rescission of Administrative Review

Pursuant to 19 CFR 351.213(d)(1), Commerce will rescind an administrative review, in whole or in part, if the party or parties that requested a review withdraws the request within 90 days of the publication date of the notice of initiation of the review. On June 19, 2019, the Committee Overseeing Action for Lumber International Trade Investigations or Negotiations (COALITION) withdrew its request for several of the companies for which Commerce initiated an administrative review. On July 1, 2019, Fontaine, Inc. and Mobilier Rustique withdrew their respective requests for administrative review. All withdrawal of review requests were timely submitted within 90 days of the publication date of the notice of initiation. No other parties requested an administrative review of the order with respect to these entities for which the requests for review were withdrawn.

On January 15, 2020, Commerce issued a memorandum regarding its intent to rescind the administrative review for those companies for which a withdrawal of review request was received and invited interested parties to comment. On January 21, 2020, Brink Forest Products Ltd. and Vanderhoof Specialty Wood Products Ltd. (Brink Forest/Vanderhoof) submitted a comment on the companies' exclusion from the review and stated that they should remain subject to the review. On January 22, 2020, Tolko Marketing and Sales Ltd. and Tolko Industries Ltd. (Tolko) submitted a comment requesting Commerce retain Tolko Industries Ltd. in the administrative review. Commerce replied to the comments filed by Brink Forest/Vanderhoof and Tolko. Brink Forest/Vanderhoof are not included in the administrative review because the petitioner withdrew its request for review of the companies and Brink Forest/Vanderhoof did not request a review of themselves. The review of Tolko Industries Ltd. is not being rescinded. In the investigation, Commerce found Tolko Marketing and Sales Ltd. to be cross-owned with Tolko Industries Ltd. and Meadow Lake OSB Limited Partnership and, therefore, all three companies are subject to the administrative review.

No other party submitted comments on the Intent to Rescind Memorandum. In accordance with 19 CFR 351.213(d)(1), Commerce is rescinding this administrative review of the CVD Order with respect to the entities for which a withdrawal of review request was received.

Additionally, as a result of the final results of the CVD expedited review covering the CVD Order, subject merchandise produced and exported by certain companies is excluded from the order. We therefore are also rescinding the administrative review with respect to the excluded companies for which there was a request for review.

For more information on the companies for which a review was rescinded, see the Intent to Rescind Memorandum.

Rate for Non-Selected Companies Under Review

There are 247 companies for which a review was requested and not rescinded, but were not selected as mandatory respondents. The statute and Commerce's regulations do not directly address the establishment of rates to be applied to companies not selected for individual examination where Commerce limits its examination in an administrative review pursuant to section 777A(e)(2) of the Act. However, Commerce normally determines the rates for non-selected companies in reviews in a manner that is consistent with section 705(c)(5) of the Act, which provides instructions for calculating the all-others rate in an investigation.

Section 705(c)(5)(A)(i) of the Act instructs Commerce, as a general rule, to calculate an all-others rate equal to the weighted average of the countervailable subsidy rates established for exporters and/or producers individually examined, excluding any zero, de minimis, or rates based entirely on facts available. In this review, none of the rates for the respondents were zero, de minimis, or based entirely on facts available. Therefore, for 2017 and 2018, we are assigning to the non-selected companies an average of the subsidy rates calculated for the companies that were selected as respondents in the administrative review. For further information on the calculation of the non-selected rate, see “Preliminary Ad Valorem Rate for Non-Selected Companies under Review” in the Preliminary Decision Memorandum.

Preliminary Results of Review

As a result of this review, we preliminarily determine that, for 2017 and 2018, the following estimated countervailable subsidy rates exist:

Disclosure and Public Comment

Commerce intends to disclose to the parties to this proceeding the calculations performed in reaching these preliminary results within five days of publication of this notice in the Federal Register. Commerce also intends to issue post-preliminary decision memoranda subsequent to the publication of this notice. Commerce will notify the parties to this proceeding of the deadlines for the submission of case and rebuttal briefs after the issuance of the last post-preliminary decision memorandum via a memorandum to the file of the proceeding.

Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing, limited to the 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 and whether any participant is a foreign national; and a list of the issues to be discussed. If a request for a hearing is made, Commerce intends to hold the hearing at 1401 Constitution Avenue NW, Washington, DC 20230, at a time and date to be determined. Parties should confirm by telephone the date and time of the hearing two days before the scheduled date.

Unless the deadline is extended pursuant to section 751(a)(3)(A) of the Act, Commerce intends to issue the final results of this administrative review, including the results of its analysis of issues raised in any written briefs, within 120 days after the date of publication of this notice.

Assessment Rates and Cash Deposit Requirement

In accordance with 19 CFR 351.221(b)(4)(i), Commerce has preliminarily assigned subsidy rates as indicated above. Upon issuance of the final results, Commerce shall determine, and U.S. Customs and Border Protection (CBP) shall assess, countervailing duties on all appropriate entries covered by this review. We intend to issue instructions to CBP 15 days after publication of the final results of this review.

Pursuant to section 751(a)(2)(C) of the Act, Commerce also intends to instruct CBP to collect cash deposits of estimated countervailing duties in the amount calculated for the year 2018 from the companies identified above, on shipments of subject merchandise entered, or withdrawn from warehouse, for consumption on or after the date of publication of the final results of this review. For all non-reviewed companies, we will instruct CBP to collect cash deposits of estimated countervailing duties at the most recent company-specific or all-others rate applicable to the company, as appropriate. These cash deposit requirements, when imposed, shall remain in effect until further notice.

Assessment for Companies With Rescinded Reviews

Commerce will instruct CBP to assess countervailing duties on all entries of subject merchandise during the period April 28, 2017 through December 31, 2018, at the rate equal to the cash deposit of estimated countervailing duties required at the time of entry, or withdrawal from warehouse, for consumption, in accordance with 19 CFR 351.212(c)(1)(i). Commerce intends to issue appropriate assessment instructions to CBP 15 days after the publication of this notice.

With regard to D&G, MLI, NAFP (located in Saint-Quentin, New Brunswick), Roland, and Lemay, only subject merchandise that is produced and exported by D&G, MLI, NAFP, Roland, and Lemay are excluded from the CVD Order. Subject merchandise from either a producer or exporter identified in the producer/exporter combinations above, where the other entity in the transaction does not match the excluded producer/exporter combinations, remains subject to the CVD Order.

Notification to Interested Parties

These preliminary results are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act, and 19 CFR 351.221(b)(4).

Appendix

List of Topics Discussed in the Preliminary Decision Memorandum

I. Summary

II. Background

III. Rescission of Review

IV. Period of Review

V. Scope of the Order

VI. Subsidies Valuation

VII. Analysis of Programs

VIII. Preliminary Ad Valorem Rate for Non-Selected Companies Under Review

IX. Programs To Be Addressed After the Preliminary Results

X. Recommendation