Notice of Preliminary Results of Antidumping Duty Changed Circumstances Review: Certain Softwood Lumber Products from Canada, 2189-2192 [E6-332]
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Federal Register / Vol. 71, No. 9 / Friday, January 13, 2006 / Notices
questionnaire requesting further details
on its acquisition of Weldwood. On July
1, 2005, the Department granted West
Fraser an extension until July 19, 2005,
to file its response. The Department
received West Fraser’s response on July
19, 2005. The Coalition submitted
comments to the Department on August
1, 2005.
DEPARTMENT OF COMMERCE
International Trade Administration
(A–122–838)
Notice of Preliminary Results of
Antidumping Duty Changed
Circumstances Review: Certain
Softwood Lumber Products from
Canada
Import Administration,
International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: January 13, 2006.
FOR FURTHER INFORMATION CONTACT:
Shane Subler or David Neubacher at
(202) 482–0189 or (202) 482–5823,
respectively; AD/CVD Operations,
Office 1, Import Administration,
International Trade Administration,
U.S. Department of Commerce, 14th
Street & Constitution Avenue, NW.,
Washington, DC 20230.
SUMMARY: On June 21, 2005, the
Department of Commerce (the
Department) published a notice of
initiation of a changed circumstances
review of the antidumping duty order
on certain softwood lumber products
from Canada. See Initiation of
Antidumping Duty Changed
Circumstances Review: Certain
Softwood Products from Canada, 70 FR
35632, dated June 21, 2005 (Initiation
Notice). The Department initiated this
review to determine the appropriate
cash deposit rate for West Fraser Mills
Limited (West Fraser), which acquired
Weldwood of Canada Limited
(Weldwood) on December 31, 2004. We
preliminarily determine that the post–
acquisition West Fraser is the
successor–in-interest to the pre–
acquisition West Fraser. Therefore, we
preliminarily conclude that the post–
acquisition West Fraser should be
assigned the same cash deposit rate as
West Fraser prior to the acquisition.
Interested parties are invited to
comment on these preliminary results.
SUPPLEMENTARY INFORMATION:
AGENCY:
hsrobinson on PROD1PC70 with NOTICES
Background
On April 29, 2005, the Coalition for
Fair Lumber Imports Executive
Committee (the Coalition), a domestic
interested party to this proceeding,
submitted a request that the Department
initiate a changed circumstances review
of the antidumping duty order on
certain softwood lumber products from
Canada pursuant to Section 751(b) of
the Tariff Act of 1930, as amended (the
Act). On June 21, 2005, the Department
published the Initiation Notice in the
Federal Register. Also on June 21, 2005,
the Department issued West Fraser a
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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 review is
dispositive.
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
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classified under HTSUS 4415.20
• garage doors
• edge–glued wood, properly
classified under HTSUS
4421.90.97.40 (formerly HTSUS
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 4421.90.97.40 (formerly
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
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Federal Register / Vol. 71, No. 9 / Friday, January 13, 2006 / Notices
importer establishes to U.S.
Customs and Border Protections’s
(CBP’s) satisfaction that the lumber
is of U.S. origin.
• Softwood lumber products
contained in single family home
packages or kits,1 regardless of tariff
classification, are excluded from the
scope of the orders if the following
criteria are met:
(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, subfloor, sheathing, beams,
posts, connectors and if included in
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) The whole package must be
imported under a single
consolidated entry when permitted
by CBP, 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;
(E) 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
1 To ensure administrability, we clarified the
language of this exclusion 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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the specified conditions are met.
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
4418.90.40.90, 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.
In addition, this scope language has
been further clarified to now specify
that all softwood lumber products
entered from Canada claiming non–
subject status based on U.S. country of
origin will be treated as non–subject
U.S.-origin merchandise under the
antidumping and countervailing duty
orders, 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.2 The
presumption of non–subject status can,
however, be rebutted by evidence
demonstrating that the merchandise was
substantially transformed in Canada.
In an antidumping duty changed
circumstances review involving a
successor–in-interest determination, 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;
Preliminary Results of Antidumping
Duty Administrative Review, 57 FR 5128
(February 12, 1992) (Canada Brass). The
Department has discretion in
determining successorship because
there is no explicit legal standard for
determining whether one company is a
successor to another under the Act or
under the Department’s regulations. See
Industrial Phosphoric Acid from Israel:
Final Results of Changed Circumstances
Review, 59 FR 6944–945 (February 14,
1994) (Industrial Phosphoric Acid).
Although 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., Canada
Brass, 57 FR 5128; see also Industrial
Phosphoric Acid, 59 FR 6944–945.
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 9979–980 (March 1,
1999).
In its July 19, 2005, questionnaire
response,3 West Fraser stated that it
purchased the sole Weldwood share
from International Paper Company (IP)
on December 31, 2004. The acquisition
agreement and related amendments
located at Exhibits 3 and 4 of the CCR
Response indicate that IP transferred its
sole outstanding share in Weldwood to
West Fraser on the closing date of
December 31, 2004. The certificate of
amalgamation located at Exhibit 5 of the
CCR Response indicates that West
Fraser and Weldwood were
amalgamated as one company as of
January 1, 2005.
As shown in Exhibit 7 of the CCR
Response, West Fraser’s board of
directors did not change as a result of
the acquisition. Weldwood had a
single–member board that ceased to
exist as of January 1, 2005. The board
member accepted a position with IP. In
addition, as detailed in Exhibit 8 of the
CCR Response, the acquisition of
Weldwood resulted in minimal changes
to the composition of West Fraser’s top
management. Weldwood’s vice–
president of sales became West Fraser’s
vice–president for export lumber sales
and market development (i.e., sales
outside of North America). Two of
Weldwood’s remaining eight
management officers accepted non–
officer positions in operations for West
Fraser. Weldwood’s other five officers
did not accept positions with West
Fraser. The original 11 management
2 See the scope clarification message (3034202),
dated February 3, 2003, to CBP, regarding treatment
of U.S.-origin lumber on file in the Central Records
Unit, Room B-099 of the main Commerce Building.
3 See Letter from West Fraser to the Department,
Re: Changed Circumstances Questionnaire - West
Fraser’s Questionnaire Response, dated July 19,
2005 (CCR Response).
Preliminary Results of the Review
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officers of West Fraser all continued as
officers following the acquisition.
West Fraser’s customer base also did
not change significantly following the
acquisition. At Exhibit 12 of the CCR
Response, West Fraser provided a list of
all of its U.S. and Canadian customers
during the first five months of 2005 and
the sales volume to these customers.
The list also identifies whether these
customers were customers of Weldwood
or West Fraser prior to the acquisition.
The list shows a strong similarity
between the customer base of
Weldwood and the customer base of
West Fraser prior to the acquisition. A
high percentage of the post–acquisition
West Fraser’s sales volume was to
customers that were customers of West
Fraser prior to the acquisition.
Furthermore, West Fraser states that a
number of its customers in 2005 that
purchased only from Weldwood in 2004
had purchased from West Fraser in prior
years.
West Fraser’s supplier base also did
not change significantly after the
acquisition. On page 9 of the CCR
Response, West Fraser states that all of
Weldwood’s largest suppliers also
supplied West Fraser prior to the
acquisition. West Fraser provides
examples of these suppliers, including
the provinces of Alberta and British
Columbia (stumpage), Canadian
National railway, and major energy
suppliers. West Fraser acknowledges
that many local suppliers to Weldwood
mills have continued to supply the same
mills after the acquisition.
Of the four specific changed
circumstances review analysis criteria
listed in Canada Brass, the criterion that
changed most significantly for West
Fraser was its production capacity. Prior
to the acquisition, West Fraser’s
production capacity for softwood
lumber was 2,530 million board feet
(MBF). This figure includes West
Fraser’s proportionate share of
production at four mills that it owned
jointly with Weldwood and other
parties. Weldwood’s production
capacity at the time of the acquisition
was 1,297 MBF, which also includes
Weldwood’s proportionate share of
production at three jointly–owned mills.
As a result of adding Weldwood’s
capacity, West Fraser increased its
production capacity by 48.7 percent
immediately following the acquisition.
West Fraser adds, however, that it will
finish reconstructing and expanding its
mill in Quesnel, British Columbia, in
2006. It claims that the 119 MBF
expansion was planned before the
acquisition of Weldwood and does not
relate to the acquisition. Furthermore,
West Fraser states that it has an
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agreement with the Canadian
Commissioner of Competition to sell its
interest in two mills that it owned
jointly with Weldwood. It states that the
sale of the mills will decrease its
capacity by approximately 343 MBF.
Therefore, West Fraser calculates that its
net increase in softwood lumber
production capacity as a result of the
acquisition is 36 percent, which
includes the effect of the Quesnel
reconstruction and the sale of the
jointly–owned mills.
In addition to the four CCR criteria
specified in Canada Brass, the
questionnaire to West Fraser requested
details on other aspects of the
company’s operations. First, the CCR
Response indicates that West Fraser’s
product line did not change
significantly as a result of the
acquisition. In Exhibit 10 of the CCR
Response, West Fraser listed the total
volume of U.S. and Canadian sales by
species and grade for Weldwood, for
West Fraser prior to the acquisition, and
for West Fraser during the first five
months following the acquisition. The
sales information shows that
approximately 2.5 percent of West
Fraser’s combined U.S. and Canadian
sales volume during the first five
months of 2005 was of a grade and
species combination that West Fraser
did not sell in 2004. Although
Weldwood sold some products that
West Fraser did not sell prior to the
acquisition, the sales volumes for these
products were much lower than for the
products sold by both companies prior
to the acquisition. In addition, West
Fraser’s top 10–selling products in the
United States and Canada during the
first five months of 2005 were sold by
both companies prior to the acquisition.
A review of the other top–selling
products for Weldwood and for West
Fraser prior to the acquisition shows a
close similarity.
Furthermore, other information in the
CCR Response indicates that West
Fraser’s operations did not change
significantly as a result of the
acquisition. First, Weldwood no longer
exists as a corporate entity. West Fraser
does not sell products under the
Weldwood brand. Furthermore, West
Fraser is expanding its headquarters in
Quesnel, British Columbia, and will
close Weldwood’s Vancouver
headquarters upon completion of the
expansion. West Fraser explains that its
sales personnel now manage all sales
activity at Weldwood’s former
Vancouver office. As a result of the
headquarters closure, only one of
Weldwood’s North American sales
employees has accepted a position with
West Fraser in Quesnel. The others have
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2191
either left the company or have
announced plans to leave by the end of
2005. Also, West Fraser will continue to
use Lumbertrak, its product
management software, for all sales
operations. Finally, West Fraser has
maintained three Weldwood sales
personnel in Japan, but it has
consolidated all export sales operations
(i.e., sales outside of the United States
and Canada) at its export sales office in
Vancouver, which West Fraser operated
prior to the acquisition.
Based on our review of West Fraser’s
questionnaire response, we
preliminarily determine that the post–
acquisition West Fraser is the
successor–in-interest to the pre–
acquisition West Fraser. In its analysis
of changes to the respondent’s
management in Industrial Phosphoric
Acid, the Department stated, ‘‘The
changes in (the respondent’s) personnel
are well within the normal range of
personnel changes that one would
expect over time within the same
operation.’’4 We find that the overall
changes to West Fraser’s operations are
well within the range of changes that
one would expect over time in the same
operation.
The most significant change to West
Fraser’s operations is the increase in its
production capacity. In analyzing
whether West Fraser’s operations have
changed significantly as a result of the
acquisition, however, the Department
must consider West Fraser’s operations
as a whole. We find that the capacity
increase is outweighed by the absence of
significant changes to West Fraser’s
board of directors, top management,
suppliers, customer base, product line,
corporate structure, brand
identification, sales process, and sales
operations. Therefore, we preliminarily
determine that the post–acquisition
West Fraser should be assigned the
same cash deposit rate of West Fraser
prior to the acquisition.
If the above preliminary results are
affirmed in the Department’s final
results, the cash deposit rate from this
changed circumstances review will
apply to all entries of the subject
merchandise entered, or withdrawn
from warehouse, for consumption on or
after the date of publication of the final
results of this changed circumstances
review. See Granular
Polytetrafluoroethylene Resin from Italy;
Final Results of Antidumping Duty
Changed Circumstances Review, 68 FR
25327 (May 12, 2003). This deposit rate
shall remain in effect until publication
of the final results of the third
4 See
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Industrial Phosphoric Acid at 6944.
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Federal Register / Vol. 71, No. 9 / Friday, January 13, 2006 / Notices
antidumping duty administrative
review.
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 44
days after the date of publication of this
notice, or the first working day
thereafter. Interested parties may submit
case briefs not later than 30 days after
the date of publication of this notice.
See 19 CFR 351.309(c)(ii). Rebuttal
briefs, which must be limited to issues
raised in such briefs, must be filed not
later than 37 days after the date of
publication of this notice. 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.
In accordance with 19 CFR 351.216(e),
we will issue the final results of this
changed circumstances review no later
than March 10, 2006.
This notice is in accordance with
sections 751(b) and 777(i)(1) of the Act
and section 351.221(c)(3)(i) of the
Department’s regulations.
Dated: January 9, 2006.
David M. Spooner,
Assistant Secretaryfor Import Administration.
[FR Doc. E6–332 Filed 1–12–06; 8:45 am]
BILLING CODE 3510–DS–S
DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric
Administration
Availability of Seats for the Florida
Keys National Marine Sanctuary
Advisory Council
Authority: 16 U.S.C. Sections 1431, et seq.
(Federal Domestic Assistance Catalog
Number 11.429 Marine Sanctuary Program)
National Marine Sanctuary
Program (NMSP), National Ocean
Service (NOS), National Oceanic and
Atmospheric Administration,
Department of Commerce (DOC).
ACTION: Notice and request for
applications.
hsrobinson on PROD1PC70 with NOTICES
AGENCY:
SUMMARY: The Florida Keys National
Marine Sanctuary (FKNMS or
Sanctuary) is seeking applicants for the
following vacant seats on its Sanctuary
Advisory Council (Council): Citizen-atLarge, Middle Keys; Maritime Heritage;
Research & Monitoring Alternate;
Marine Life Alternate; Education
Alternate and South Florida Ecosystem
Restoration Alternate. Applicants are
chosen based upon their particular
expertise and experience in relation to
the seat for which they are applying;
community and professional affiliations;
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15:41 Jan 12, 2006
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philosophy regarding the protection and
management of marine resources; and
possibly the length of residence in the
area affected by the Sanctuary.
Applicants who are chosen as members
should expect to serve 2 or 3 year terms,
pursuant to the Council’s Charter.
DATES: Applications are due by March
31, 2006.
ADDRESSES: Application kits may be
obtained from Fiona Wilmot, Florida
Keys National Marine Sanctuary, P.O.
Box 500368, Marathon, FL 33050, or
electronically from
Fiona.Wilmot@noaa.gov. They may also
be downloaded from the Web site
www.fknms.noaa.gov. Completed
applications should be returned to the
same address.
FOR FURTHER INFORMATION CONTACT:
Fiona Wilmot at the above address or by
telephone at (305) 743–2437, extension
27.
SUPPLEMENTARY INFORMATION: The
FKNMS Advisory Council was
established in 1991, and is the oldest of
the 13 councils in the NMSP. It has 20
members covering a wide spectrum of
interests in the Florida Keys
community, including boating,
conservation, diving, education,
Everglades restoration, fishing
(commercial and recreational),
government, maritime heritage,
research, tourism and the communityat-large. The Council meets bimonthly
and also has a number of working
groups focusing on specific issues at any
given time. Ad hoc committees are
formed to deal with one-time issues.
The Council deals with emergent issues,
acts as a conduit to the community with
the Sanctuary, and advises Federal and
State sanctuary managers on a
consensus basis.
Dated: January 9, 2006.
Daniel J. Basta,
Director, Office of National Marine
Sanctuaries, National Oceanic and
Atmospheric Administration.
[FR Doc. 06–338 Filed 1–12–06; 8:45 am]
BILLING CODE 3510–NK–M
DEPARTMENT OF DEFENSE
Office of the Secretary
[No. DoD–2006–OS–0004]
Proposed Collection; Comment
Request
Marine Corps Marathon Office,
Marine Corps Base Quantico, DoD.
AGENCY:
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ACTION:
Notice.
In compliance with Section
3506(c)(2)(A) of the Paperwork
Reduction Act of 1995, the Marine
Corps Marathon Office, Marine Corps
Base Quantico announces the proposed
public information collection and seeks
public comment on the provisions
thereof. Comments are invited on: (a)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
agency, including whether the
information shall have practical utility;
(b) the accuracy of the agency’s estimate
of the burden of the proposed
information collection; (c) ways to
enhance the quality, utility, and clarity
of the information to be collected; and
(d) ways to minimize the burden of the
information collection on respondents,
including through the use of automated
collection techniques or other forms of
information technology.
DATES: Consideration will be given to all
comments received by March 14, 2006.
ADDRESSES: You may submit comments,
identified by docket number and or RIN
number and title, by any of the
following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov.
• Mail: Federal Docket Management
System Office, 1160 Defense Pentagon,
Washington, DC 20301–1160.
Instructions: All submissions received
must include the agency name and
docket number or Regulatory
Information Number (RIN) for this
Federal Register document. The general
policy for comments and other
submissions from members of the public
is to make these submissions available
for public viewing on the Internet at
https://regulations.gov as they are
received without change, including any
personal identifiers or contact
information.
FOR FURTHER INFORMATION CONTACT: To
request more information on this
proposed information collection or to
obtain a copy of the proposal and
associated collection instruments,
please write to Marine Corps Marathon
office, Attn: Angela Huff, PO Box 188,
Quantico, VA 22134, or call the Marine
Corps Marathon office at 703–432–1159.
E-mail is marine.marathon@usmc.mil.
Title and OMB Number: Marine Corps
Marathon Race Applications: OMB
Number 0703–TBD.
Needs and Uses: The information
collection requirement is necessary to
obtain and record the information of
runners to conduct the races, for timing
purposes and for statistical use.
Affected Public: Individuals or
households.
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[Federal Register Volume 71, Number 9 (Friday, January 13, 2006)]
[Notices]
[Pages 2189-2192]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-332]
[[Page 2189]]
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DEPARTMENT OF COMMERCE
International Trade Administration
(A-122-838)
Notice of Preliminary Results of Antidumping Duty Changed
Circumstances Review: Certain Softwood Lumber Products from Canada
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: January 13, 2006.
FOR FURTHER INFORMATION CONTACT: Shane Subler or David Neubacher at
(202) 482-0189 or (202) 482-5823, respectively; AD/CVD Operations,
Office 1, Import Administration, International Trade Administration,
U.S. Department of Commerce, 14\th\ Street & Constitution Avenue, NW.,
Washington, DC 20230.
SUMMARY: On June 21, 2005, the Department of Commerce (the Department)
published a notice of initiation of a changed circumstances review of
the antidumping duty order on certain softwood lumber products from
Canada. See Initiation of Antidumping Duty Changed Circumstances
Review: Certain Softwood Products from Canada, 70 FR 35632, dated June
21, 2005 (Initiation Notice). The Department initiated this review to
determine the appropriate cash deposit rate for West Fraser Mills
Limited (West Fraser), which acquired Weldwood of Canada Limited
(Weldwood) on December 31, 2004. We preliminarily determine that the
post-acquisition West Fraser is the successor-in-interest to the pre-
acquisition West Fraser. Therefore, we preliminarily conclude that the
post-acquisition West Fraser should be assigned the same cash deposit
rate as West Fraser prior to the acquisition. Interested parties are
invited to comment on these preliminary results.
SUPPLEMENTARY INFORMATION:
Background
On April 29, 2005, the Coalition for Fair Lumber Imports Executive
Committee (the Coalition), a domestic interested party to this
proceeding, submitted a request that the Department initiate a changed
circumstances review of the antidumping duty order on certain softwood
lumber products from Canada pursuant to Section 751(b) of the Tariff
Act of 1930, as amended (the Act). On June 21, 2005, the Department
published the Initiation Notice in the Federal Register. Also on June
21, 2005, the Department issued West Fraser a questionnaire requesting
further details on its acquisition of Weldwood. On July 1, 2005, the
Department granted West Fraser an extension until July 19, 2005, to
file its response. The Department received West Fraser's response on
July 19, 2005. The Coalition submitted comments to the Department on
August 1, 2005.
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 review is
dispositive.
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
4421.90.97.40 (formerly HTSUS 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 4421.90.97.40 (formerly 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
[[Page 2190]]
importer establishes to U.S. Customs and Border Protections's (CBP's)
satisfaction that the lumber is of U.S. origin.
Softwood lumber products contained in single family home
packages or kits,\1\ regardless of tariff classification, are excluded
from the scope of the orders if the following criteria are met:
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\1\ To ensure administrability, we clarified the language of
this exclusion 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, subfloor, sheathing,
beams, posts, connectors and if included in 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) The whole package must be imported under a single consolidated
entry when permitted by CBP, 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;
(E) 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 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 4418.90.40.90,
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.
In addition, this scope language has been further clarified to now
specify that all softwood lumber products entered from Canada claiming
non-subject status based on U.S. country of origin will be treated as
non-subject U.S.-origin merchandise under the antidumping and
countervailing duty orders, 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.\2\ 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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\2\ See the scope clarification message (3034202), dated
February 3, 2003, to CBP, regarding treatment of U.S.-origin lumber
on file in the Central Records Unit, Room B-099 of the main Commerce
Building.
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Preliminary Results of the Review
In an antidumping duty changed circumstances review involving a
successor-in-interest determination, 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; Preliminary
Results of Antidumping Duty Administrative Review, 57 FR 5128 (February
12, 1992) (Canada Brass). The Department has discretion in determining
successorship because there is no explicit legal standard for
determining whether one company is a successor to another under the Act
or under the Department's regulations. See Industrial Phosphoric Acid
from Israel: Final Results of Changed Circumstances Review, 59 FR 6944-
945 (February 14, 1994) (Industrial Phosphoric Acid). Although 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., Canada Brass, 57 FR 5128; see also Industrial Phosphoric Acid, 59
FR 6944-945. 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 9979-980 (March 1, 1999).
In its July 19, 2005, questionnaire response,\3\ West Fraser stated
that it purchased the sole Weldwood share from International Paper
Company (IP) on December 31, 2004. The acquisition agreement and
related amendments located at Exhibits 3 and 4 of the CCR Response
indicate that IP transferred its sole outstanding share in Weldwood to
West Fraser on the closing date of December 31, 2004. The certificate
of amalgamation located at Exhibit 5 of the CCR Response indicates that
West Fraser and Weldwood were amalgamated as one company as of January
1, 2005.
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\3\ See Letter from West Fraser to the Department, Re: Changed
Circumstances Questionnaire - West Fraser's Questionnaire Response,
dated July 19, 2005 (CCR Response).
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As shown in Exhibit 7 of the CCR Response, West Fraser's board of
directors did not change as a result of the acquisition. Weldwood had a
single-member board that ceased to exist as of January 1, 2005. The
board member accepted a position with IP. In addition, as detailed in
Exhibit 8 of the CCR Response, the acquisition of Weldwood resulted in
minimal changes to the composition of West Fraser's top management.
Weldwood's vice-president of sales became West Fraser's vice-president
for export lumber sales and market development (i.e., sales outside of
North America). Two of Weldwood's remaining eight management officers
accepted non-officer positions in operations for West Fraser.
Weldwood's other five officers did not accept positions with West
Fraser. The original 11 management
[[Page 2191]]
officers of West Fraser all continued as officers following the
acquisition.
West Fraser's customer base also did not change significantly
following the acquisition. At Exhibit 12 of the CCR Response, West
Fraser provided a list of all of its U.S. and Canadian customers during
the first five months of 2005 and the sales volume to these customers.
The list also identifies whether these customers were customers of
Weldwood or West Fraser prior to the acquisition. The list shows a
strong similarity between the customer base of Weldwood and the
customer base of West Fraser prior to the acquisition. A high
percentage of the post-acquisition West Fraser's sales volume was to
customers that were customers of West Fraser prior to the acquisition.
Furthermore, West Fraser states that a number of its customers in 2005
that purchased only from Weldwood in 2004 had purchased from West
Fraser in prior years.
West Fraser's supplier base also did not change significantly after
the acquisition. On page 9 of the CCR Response, West Fraser states that
all of Weldwood's largest suppliers also supplied West Fraser prior to
the acquisition. West Fraser provides examples of these suppliers,
including the provinces of Alberta and British Columbia (stumpage),
Canadian National railway, and major energy suppliers. West Fraser
acknowledges that many local suppliers to Weldwood mills have continued
to supply the same mills after the acquisition.
Of the four specific changed circumstances review analysis criteria
listed in Canada Brass, the criterion that changed most significantly
for West Fraser was its production capacity. Prior to the acquisition,
West Fraser's production capacity for softwood lumber was 2,530 million
board feet (MBF). This figure includes West Fraser's proportionate
share of production at four mills that it owned jointly with Weldwood
and other parties. Weldwood's production capacity at the time of the
acquisition was 1,297 MBF, which also includes Weldwood's proportionate
share of production at three jointly-owned mills. As a result of adding
Weldwood's capacity, West Fraser increased its production capacity by
48.7 percent immediately following the acquisition. West Fraser adds,
however, that it will finish reconstructing and expanding its mill in
Quesnel, British Columbia, in 2006. It claims that the 119 MBF
expansion was planned before the acquisition of Weldwood and does not
relate to the acquisition. Furthermore, West Fraser states that it has
an agreement with the Canadian Commissioner of Competition to sell its
interest in two mills that it owned jointly with Weldwood. It states
that the sale of the mills will decrease its capacity by approximately
343 MBF. Therefore, West Fraser calculates that its net increase in
softwood lumber production capacity as a result of the acquisition is
36 percent, which includes the effect of the Quesnel reconstruction and
the sale of the jointly-owned mills.
In addition to the four CCR criteria specified in Canada Brass, the
questionnaire to West Fraser requested details on other aspects of the
company's operations. First, the CCR Response indicates that West
Fraser's product line did not change significantly as a result of the
acquisition. In Exhibit 10 of the CCR Response, West Fraser listed the
total volume of U.S. and Canadian sales by species and grade for
Weldwood, for West Fraser prior to the acquisition, and for West Fraser
during the first five months following the acquisition. The sales
information shows that approximately 2.5 percent of West Fraser's
combined U.S. and Canadian sales volume during the first five months of
2005 was of a grade and species combination that West Fraser did not
sell in 2004. Although Weldwood sold some products that West Fraser did
not sell prior to the acquisition, the sales volumes for these products
were much lower than for the products sold by both companies prior to
the acquisition. In addition, West Fraser's top 10-selling products in
the United States and Canada during the first five months of 2005 were
sold by both companies prior to the acquisition. A review of the other
top-selling products for Weldwood and for West Fraser prior to the
acquisition shows a close similarity.
Furthermore, other information in the CCR Response indicates that
West Fraser's operations did not change significantly as a result of
the acquisition. First, Weldwood no longer exists as a corporate
entity. West Fraser does not sell products under the Weldwood brand.
Furthermore, West Fraser is expanding its headquarters in Quesnel,
British Columbia, and will close Weldwood's Vancouver headquarters upon
completion of the expansion. West Fraser explains that its sales
personnel now manage all sales activity at Weldwood's former Vancouver
office. As a result of the headquarters closure, only one of Weldwood's
North American sales employees has accepted a position with West Fraser
in Quesnel. The others have either left the company or have announced
plans to leave by the end of 2005. Also, West Fraser will continue to
use Lumbertrak, its product management software, for all sales
operations. Finally, West Fraser has maintained three Weldwood sales
personnel in Japan, but it has consolidated all export sales operations
(i.e., sales outside of the United States and Canada) at its export
sales office in Vancouver, which West Fraser operated prior to the
acquisition.
Based on our review of West Fraser's questionnaire response, we
preliminarily determine that the post-acquisition West Fraser is the
successor-in-interest to the pre-acquisition West Fraser. In its
analysis of changes to the respondent's management in Industrial
Phosphoric Acid, the Department stated, ``The changes in (the
respondent's) personnel are well within the normal range of personnel
changes that one would expect over time within the same operation.''\4\
We find that the overall changes to West Fraser's operations are well
within the range of changes that one would expect over time in the same
operation.
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\4\ See Industrial Phosphoric Acid at 6944.
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The most significant change to West Fraser's operations is the
increase in its production capacity. In analyzing whether West Fraser's
operations have changed significantly as a result of the acquisition,
however, the Department must consider West Fraser's operations as a
whole. We find that the capacity increase is outweighed by the absence
of significant changes to West Fraser's board of directors, top
management, suppliers, customer base, product line, corporate
structure, brand identification, sales process, and sales operations.
Therefore, we preliminarily determine that the post-acquisition West
Fraser should be assigned the same cash deposit rate of West Fraser
prior to the acquisition.
If the above preliminary results are affirmed in the Department's
final results, the cash deposit rate from this changed circumstances
review will apply to all entries of the subject merchandise entered, or
withdrawn from warehouse, for consumption on or after the date of
publication of the final results of this changed circumstances review.
See Granular Polytetrafluoroethylene Resin from Italy; Final Results of
Antidumping Duty Changed Circumstances Review, 68 FR 25327 (May 12,
2003). This deposit rate shall remain in effect until publication of
the final results of the third
[[Page 2192]]
antidumping duty administrative review.
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 44 days after the date of publication of this
notice, or the first working day thereafter. Interested parties may
submit case briefs not later than 30 days after the date of publication
of this notice. See 19 CFR 351.309(c)(ii). Rebuttal briefs, which must
be limited to issues raised in such briefs, must be filed not later
than 37 days after the date of publication of this notice. 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. In accordance with 19 CFR
351.216(e), we will issue the final results of this changed
circumstances review no later than March 10, 2006.
This notice is in accordance with sections 751(b) and 777(i)(1) of
the Act and section 351.221(c)(3)(i) of the Department's regulations.
Dated: January 9, 2006.
David M. Spooner,
Assistant Secretaryfor Import Administration.
[FR Doc. E6-332 Filed 1-12-06; 8:45 am]
BILLING CODE 3510-DS-S
