Notice of Preliminary Results of Antidumping Duty Administrative Review, Partial Rescission and Postponement of the Final Results: Certain Softwood Lumber Products From Canada, 33964-33988 [06-5222]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 71, Number 112 (Monday, June 12, 2006)]
[Notices]
[Pages 33964-33988]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-5222]



[[Page 33963]]

-----------------------------------------------------------------------

Part VI





Department of Commerce





-----------------------------------------------------------------------



International Trade Administration



-----------------------------------------------------------------------



Notice of Preliminary Results of Antidumping Duty Administrative 
Review; Partial Rescission and Postponement of the Final Results: 
Certain Softwood Lumber Products From Canada; Notice

Federal Register / Vol. 71, No. 112 / Monday, June 12, 2006 / 
Notices

[[Page 33964]]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-838]


Notice of Preliminary Results of Antidumping Duty Administrative 
Review, Partial Rescission and Postponement of the Final Results: 
Certain Softwood Lumber Products From Canada

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce

EFFECTIVE DATE: June 12, 2006.

FOR FURTHER INFORMATION CONTACT: Constance Handley or David Layton, AD/
CVD Operations, Office 1, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
0631 or (202) 482-0371, respectively.

SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on certain softwood 
lumber products from Canada for the period May 1, 2004, to April 30, 
2005 (the POR). We preliminarily determine that sales of subject 
merchandise made by Blanchette & Blanchette Inc. (Blanchette), 
International Forest Products Ltd. (Interfor), Rene Bernard Inc. (Rene 
Bernard), Tembec Inc. (Tembec), Tolko Industries Ltd. (Tolko), West 
Fraser Mills Ltd. (West Fraser), Western Forest Products Inc. (WFP) and 
Weyerhaeuser Company Limited \1\ (Weyerhaeuser) have been made below 
normal value. In addition, based on the preliminary results for these 
respondents selected for individual review, we have preliminarily 
determined a weighted-average margin for those companies for which a 
review was requested, but that were not selected for individual review. 
If these preliminary results are adopted in our final results, we will 
instruct U.S. Customs and Border Protection (CBP) to assess antidumping 
duties on appropriate entries. Furthermore, twenty-eight companies have 
reported no shipments during the period of review. If we determine that 
the companies did not ship subject merchandise to the United States 
during the POR, we will rescind the review for these companies for the 
final results. Finally, requests for review of the antidumping order 
for thirty-two companies were withdrawn. Because the withdrawal 
requests were timely and there were no other requests for review of the 
companies, we are rescinding the review for these companies. See 19 CFR 
351.213(d)(1). Interested parties are invited to comment on these 
preliminary results and partial rescission.
---------------------------------------------------------------------------

    \1\ Weyerhaeuser Company is the parent of Weyerhaeuser Company 
Limited. The Department has used the term ``Weyerhaeuser Company'' 
interchangeably to refer to both entities. However, Weyerhaeuser 
Company Limited is the respondent in this administrative review.

SUPPLEMENTARY INFORMATION:

Background

    On May 2, 2005, the Department published a notice of opportunity to 
request an administrative review of this order. See Notice of 
Opportunity to Request Administrative Review Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation, 70 FR 
22631 (May 2, 2005). On May 31, 2005, in accordance with section 751(a) 
of the Tariff Act of 1930, as amended (the Act) and 19 CFR 351.213(b), 
the Coalition for Fair Lumber Imports (the Coalition), a domestic 
interested party in this case, requested a review of producers/
exporters of certain softwood lumber products. Also, between May 3, and 
May 31, 2005, certain Canadian producers/exporters requested a review 
on their own behalf or had a review of their company requested by a 
U.S. importer.
    On June 30, 2005, the Department published a notice of initiation 
of administrative review of the antidumping duty order on certain 
softwood lumber products from Canada, covering the POR. See Notice of 
Initiation of Antidumping an Countervailing Duty Administrative 
Reviews, 70 FR 37749 (June 30, 2005) (Initiation Notice).\2\
    The Department received requests for review from more than 450 
companies. Accordingly, in July 2005, in advance of issuing antidumping 
questionnaires, the Department issued to all companies for which an 
administrative review had been requested, a letter requesting total 
production and quantity of subject merchandise exported to the United 
States during the POR.\3\ Companies were required to submit their 
responses to the Department by July 27, 2005.\4\ In addition, we 
received comments from interested parties on the respondent selection 
process, which included proposed methodologies.
---------------------------------------------------------------------------

    \2\ This notice was amended. See Notice of Initiation of 
Antidumping and Countervailing Duty Administrative Reviews, 70 FR 
61601 (0ctober 25, 2005).
    \3\ See Memo from Saliha Loucif, International Trade Compliance 
Analyst, to the File regarding Quantity Letter Mailed to Interested 
Parties on July 11, 2005 (July 25, 2005) (Quantity Request).
    \4\ This deadline was subsequently extended to August 3, 2005. 
See Memo from David Neubacher, International Trade Compliance 
Analyst, to the File regarding Extension for Request for Information 
in Third Administrative Review of Certain Softwood Lumber Products 
from Canada (July 19, 2005).
---------------------------------------------------------------------------

    Upon consideration of the information received with respect to 
respondent selection, on November 23, 2005, the Department selected the 
following eight respondents using a probability-proportional-to-size 
(PPS) sampling methodology: Blanchette, Interfor, Rene Bernard, Tembec, 
Tolko, West Fraser, WFP, and Weyerhaeuser.\5\ See Memorandum from David 
Layton, David Neubacker, and Shane Subler, International Trade 
Compliance Analysts to Stephen J. Claeys, Deputy Assistant Secretary, 
Regarding Selection of Respondents (December 15, 2005) (Respondent 
Selection Memorandum). See also Selection of Respondents section below.
---------------------------------------------------------------------------

    \5\ We note that the Department inadvertently omitted Pacific 
Coast Timber Inc. from the sampling database. Pacific Coast Timber 
Inc. submitted its information to the Department and, therefore, has 
been included on the list of companies receiving the review-specific 
rate for this review.
---------------------------------------------------------------------------

    On November 23, 2005, the Department issued sections A, B, C, D, 
and E of the antidumping questionnaire to the selected respondents. The 
respondents submitted their initial responses to the antidumping 
questionnaire from December 2005 through February 2006. After analyzing 
these responses, we issued supplemental questionnaires to the 
respondents to clarify or correct the initial questionnaire responses. 
We received timely responses to these questionnaires.

Partial Rescission and Preliminary Rescission of Administrative Review

    On July 8, 2005, the Coalition withdrew its request for 
administrative reviews of the antidumping duty order with respect to 
Lawsons Lumber Company Ltd. and Pacific Lumber Company. On September 
13, 2005, Millco Forest Products withdrew its request for an 
administrative review of Skagit Industries Ltd. On September 19, 2005, 
Fred Tebb & Sons, Inc. withdrew its request for an administrative 
review of S&R Sawmills Ltd. On August 15 and September 26, 2005, 
Patrick Lumber Company withdrew its request for administrative reviews 
of CDS Lumber Products Ltd. and Maher Forest Products Ltd. On September 
27, 2005, Alexandre Cote Ltee., Clotures Rustiques L.G. Inc., Les Bois 
K-7 Lumber Inc., and Les Produits Forestiers Dube (Dube Forest 
Products) withdrew

[[Page 33965]]

their requests for administrative reviews of the antidumping duty 
order. On September 28, 2005, Armand Duhamel & Fils Inc., Boscus Canada 
Inc., Byrnexco Inc., Careau Bois Inc., Fletcher Lumber, Fontaine Inc. 
(dba J.A. Fontaine et Fils Incorporee) and its affiliates, including 
Bois Fontaine Inc., Gestion Natanis Inc., and Les Placements Jean-Paul 
Fontaine Ltee), Les Bois Lac Frontiere Inc., Les Scieries J. Lavoie 
Inc., Maibec Industries, Materiaux Blanchet Inc., Max Meilleur et Fils 
Ltee., Optibois Inc., Precibois Inc., Preparabois Inc., Produits 
Forestiers Berscifor Inc., Rembos Inc., Scierie West Brome Inc., Tall 
Tree Lumber Co., and Usine Sartigan Inc. withdrew their requests for 
administrative reviews. Because the withdrawal requests were timely 
filed, i.e., within 90 days of publication of the Initiation Notice, 
and because there were no other requests for review of the above-
mentioned companies, we are rescinding the review with respect these 
companies in accordance with 19 CFR 351.231(d)(1).
    Pursuant to 19 CFR 351.231(d)(3), the Department will rescind an 
administrative review with respect to a particular exporter or producer 
if it concludes that during the period of review there were ``no 
entries, exports, or sales of the subject merchandise.'' Accordingly, 
the Department requires that there be entries during the POR upon which 
to assess antidumping duties, to conduct an administrative review. 
Barrett Lumber Company Limited, Cascadia Forest Products Ltd., 
Cattermole Timber, Chipman Sawmill Inc., Cooper Creek Cedar Ltd., Doman 
Industries Limited, Doman-Western Lumber Ltd., Eacan Timber USA Ltd., 
Kispiox Forest Products Ltd., Les Bois Indifor Lumber Inc., Oregon 
Canadian Forest Products, Rojac Cedar Products Inc.,\6\ Saran Cedar, 
Scierie St-Elzear Inc., Vanderhoof Specialty Wood Products Inc., 
Western Forest Products Limited, WFP Forest Products Limited, and WFP 
Western Lumber Ltd. reported that they had no entries of subject 
merchandise during the POR. Furthermore, we confirmed with the 
following companies that they also had no entries of subject 
merchandise during the POR: Atco Lumber, Ltd., Barry Maedel Woods & 
Timber, Interpac Log & Lumber Ltd., Krystal Klear Marketing Inc., Lamco 
Forest Products, Spruce Forest Products Ltd., Suncoast Lumber & 
Milling, Timber Ridge Forest Products Inc., Velcan Forest Products 
Inc., and Westex Timber Mills, Ltd.\7\
---------------------------------------------------------------------------

    \6\ Counsel for Rojac Cedar Products Inc. and Rojac Enterprises 
Inc. informed the Department that the quantity information reported 
for both companies was inadvertently switched. During the POR, Rojac 
Enterprise Inc. had shipments and Rojac Cedar Products Inc. had no 
shipments. Therefore, based on the updated information, we have 
decided to preliminarily rescind the administrative review for Rojac 
Cedar Products Inc. See Letter from Howrey to the Department 
regarding the Third Administrative Review of Softwood Lumber from 
Canada (March 27, 2006). Rojac Enterprises Inc. is included on the 
list of companies receiving the review-specific rate for this 
review.
    \7\ See Memo from Saliha Loucif, David Neubacher, and David 
Layton, International Trade Compliance Analysts, to the File 
regarding Companies claiming no shipments of subject merchandise 
during the period of review (POR) in response to the Department's 
July 11, 2005 request for information letter (August 23, 2005) and 
Memo from David Neubacher, International Trade Compliance Analyst, 
to the File regarding Phone conversation with Barry Maedel Woods & 
Timber regarding the Department's July 11, 2005 request for 
information letter (July 13, 2005).
---------------------------------------------------------------------------

    The Department did not receive responses from T.F. Specialty 
Sawmill (T.F. Specialty) and Apex Forest Product, Inc. (Apex). However, 
both initial quantity request letters were returned to the Department 
with notes by the carrier that Apex was not located at the address 
given and T.F. Specialty was no longer in business.\8\ Moreover, each 
company's telephone number was disconnected and the Department did not 
have any means to contact T.F. Specialty or Apex,\9\ Therefore, the 
Department examined the CBP data to confirm whether these companies 
shipped subject merchandise during the POR. The Department confirmed 
that the CBP data showed no entries of subject merchandise to the 
United States from these companies during the POR.
---------------------------------------------------------------------------

    \8\ See Memo from David Neubacher, International Trade 
Compliance Analyst, to the File regarding Phone conversation with 
Apex Forest Products, Inc. and T.F. Specialty Sawmill regarding the 
Department's July 11, 2005 request for information letter (August 
11, 2005).
    \9\ See id.
---------------------------------------------------------------------------

    Therefore, in accordance with 19 CFR 351.213(d)(3), we are 
preliminarily rescinding the administrative review with respect to all 
of the above companies because we preliminarily find that they had no 
shipments and, with respect to T.F. Specialty and Apex, we were unable 
to locate the companies and believe them no longer to be in business.
    The Department notes that respondents' certified questionnaire 
responses and statements are its primary sources of information in 
antidumping proceedings while data from CBP may either corroborate or 
contradict a respondents ' reported data. We are still examining 
statements in regards to no shipments by the following companies. Deep 
Cove Forest Products, E. Tremblay et File Ltee, Newcastle Lumber Co., 
Inc., and Slocan Forest Products Ltd. If the CBP data confirms each 
company's no shipment claims, we will issue an ``intent to rescind'' 
notice after the preliminary review results.

Postponement of Final Results

    Section 751(a)(3)(A) of the Act, requires the Department to 
complete the final results of an administrative review within 120 days 
after the data on which the preliminary results are published. However, 
if it is not practicable to complete the review within this time 
period, section 751(a)(3)(A) of the Act allows the Department to extend 
the time limit for the final results to 180 days from the data of 
publication of the preliminary results.
    We determine that it is not practicable to compete the final 
results of this review within the original time limit. The Department 
must address a number of significant and complex issues (e.g., use of 
adverse facts available and successor-in-interest) prior to the 
issuance of the final results. Therefore, the Department is extending 
the deadline for completion of the final results of the administrative 
review of the antidumping duty order on certain softwood lumber 
products form Canada. The final results of the review will not be due 
no later than 180 days from the date of publication of these 
preliminary results.

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 subheadings 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 mouldings and wood

[[Page 33966]]

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 
U.S. Customs purposes, the written description of the merchandise 
subject to this order is dispositive.
    As specifically stated in the Issues and Decision Memorandum 
accompanying the Notice of Final Determination of Sales at Less Than 
Fair Value: Certain Softwood Lumber Products from Canada, 67 FR 15539 
(April 2, 2002) (see comment 53, item D, page 116, and comment 57, item 
B-7, page 126), available at www.ia.ita.doc.gov/frn, drilled and 
notched lumber and angle cut lumber are covered by the scope of this 
order.
    The following softwood lumber products are excluded from the scope 
of this order provided they meet the specified requirements detailed 
below:
    (1) 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.
    (2) 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.
    (3) 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.
    (4) 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.
    (5) 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 the 
satisfaction of CBP that the lumber is of U.S. origin.
    (6) Softwood lumber products contained in single family home 
packages or kits,\10\ regardless of tariff classification, are excluded 
from the scope of this order if the importer certifies to items 6 A, B, 
C, D, and requirement 6 E is met:
---------------------------------------------------------------------------

    \10\ To ensure administrability, we clarified the language of 
exclusion number 6 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.
---------------------------------------------------------------------------

    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, sub floor, sheathing, 
beams, posts, connectors, and if included in the 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. Softwood lumber products entered as part of a single family home 
package or kit, whether in a single entry or multiple entries on 
multiple days, will be used solely for the construction of the single 
family home specified by the home design matching the entry.
    E. For each entry, the following documentation must be retained by 
the importer and made available to CBP upon request:
    i. A copy of the appropriate home design, plan, or blueprint 
matching the entry;
    ii. A purchase contract from a retailer of home kits or packages 
signed by a customer not affiliated with the importer;
    iii. A listing of inventory of all parts of the package or kit 
being entered that conforms to the home design package being entered;
    iv. In the case of multiple shipments on the same contract, all 
items listed in E(iii) which are included in the present shipment shall 
be identified as well.
    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 4418.90.45.90, 4421.90.70.40, 
and 4421.90.97.40.
    Finally, as clarified throughout the course of the investigation, 
the following products, previously identified as Group A, remain 
outside the scope of this order. They are:
    1. Trusses and truss kits, properly classified under HTSUS 4418.90;
    2. I-joist beams;
    3. Assembled box spring frames;
    4. Pallets and pallet kits, properly classified under HTSUS 
4415.20;
    5. Garage doors;
    6. Edge-glued wood, properly classified under HTSUS 4421.90.97.40;
    7. Properly classified complete door frames;
    8. Properly classified complete window frames; and
    9. Properly classified furniture.
    In addition, this scope language was further clarified to specify 
that all softwood lumber products entered from Canada claiming non-
subject status based on U.S. country or origin will be treated as non-
subject U.S.-origin merchandise under the countervailing duty order, 
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.\11\ The 
presumption of non-subject status can, however, be rebutted by evidence 
demonstrating that the merchandise was substantially transformed in 
Canada.
---------------------------------------------------------------------------

    \11\ See the scope clarification message (3034202), 
dated February 3, 2003, to CBP, regarding treatment of U.S. origin 
lumber on file in Room B-099 of the Central Records Unit (CRU) of 
the Main Commerce Building.
---------------------------------------------------------------------------

    On March 3, 2006, the Department issued a scope ruling that any 
product entering under HTSUS 4409.10.05 which is continually shaped 
along its end and/or side edges which otherwise

[[Page 33967]]

conforms to the written definition of the scope is within the scope of 
the order.\12\
---------------------------------------------------------------------------

    \12\ See Memorandum from Constance Handley, Program Manager, to 
Stephen J. Claeys, Deputy Assistant Secretary regarding Scope 
Request by the Petitioner Regarding Entries Made Under HTSUS 
4409.10.05, dated March 3, 2006.
---------------------------------------------------------------------------

Use of Adverse Facts Available

    Section 776(a) of the Act, provides that, if an interested party 
(A) withholds information requested by the Department, (B) fails to 
provide such information by the deadline, or in the form or manner 
requested, (C) significantly impedes a proceeding, or (D) provides 
information that cannot be verified, the Department shall use facts 
otherwise available in reaching the applicable determination.
    Pursuant to sections 776(a)(2)(A) and (B) of the Act, we 
preliminarily find that Tembec withheld species-specific stumpage 
information specifically requested by the Department in its March 7, 
2006 and April 28, 2006 supplemental section D questionnaires. 
Therefore, the Department is preliminarily using facts otherwise 
available to adjust Tembec's wood costs pursuant to section 776(a) of 
the Act.
    Pursuant to sections 776(a)(2)(A) and (C) of the Act, we 
preliminarily find that Chasyn Wood Technologies, Cowichan Lumber Ltd., 
Forwood Forest Products Inc., Hyak Specialty Wood Products Ltd., Jasco 
Forest Products, Noble Custom Cut Ltd., North American Hardwoods Ltd., 
North of 50, Scierie A&M St-Pierre Inc., South-East Forest Products 
Ltd., Spruce Products, Triad Forest Products, Ltd., Westmark Products 
Ltd., Woodko Enterprises Ltd., and Woodtone Industries Inc. withheld 
information specifically requested by the Department in its Quantity 
Request letter. Additionally, by not responding to the quantity 
request, the companies significantly impeded the proceeding. Therefore, 
the Department has preliminarily determined to base the companies' 
dumping margins on the facts otherwise available pursuant to section 
776(a) of the Act.
    In selecting from among the facts otherwise available, section 
776(b) of the Act authorizes the Department to use an adverse inference 
if the Department finds that an interested party ``failed to cooperate 
by not acting to the best of its ability to comply with a request for 
information.'' The Court of Appeals for the Federal Circuit (Federal 
Circuit) has held that the statutory mandate that a respondent act to 
the ``best of its ability'' requires the respondent to do the maximum 
it is able to do. See, e.g., Nippon Steel Corp. v. United States, 377 
F.3d 1373, 1382 (Fed. Cir. 2003).
    In Tembec's case, the Department's two supplemental section D 
questionnaires each requested that Tembec report species-specific wood 
costs. Tembec instead reported species-specific wood costs for only two 
of the provinces from which it obtains wood, Ontario and Quebec. For 
the remaining province, British Columbia, Tembec claimed that it could 
not report species-specific wood costs. However, Tembec stated in its 
January 27, 2006 section D response at pages D-4 and D-5, 
``{t{time} hat harvest areas in British Columbia are identified on 
forest cover maps and that these maps generally identify the species 
mix, the age, and the height of the candidate stands. A timber survey 
is then conducted to ensure that the stand actually is comprised of the 
target species and to ensure that quality and volume needs are met. 
When needs are met, a formal timber cruise is completed. Using detailed 
measuring techniques, stands are surveyed for the purpose of 
determining gross and net volumes, species mix, age, height and piece 
size.'' Tembec continued to state that ``{t{time} hese surveys are then 
entered into a computerized information management system so that more 
detailed harvest planning may commence.'' Based on these statements, we 
preliminarily conclude that Tembec could have provided the stumpage 
costs by species, using the details in these surveys and the stumpage 
fees actually paid for each stand.
    Moreover, other respondents did provide the requested information, 
under the same circumstances described by Tembec, for all provinces, 
and did so in this review, in the prior review, and in the 
investigation. For example, Tolko stated in its January 30, 2006 
section D response at page D-24, ``{t{time} hat for the sawmills that 
processed multiple species Tolko has allocated stumpage cost to the 
various species processed based on relative appraisal values.'' Also, 
West Fraser stated in its January 27, 2006 section D response at page 
D-23, ``{t{time} hat based on an analysis of the stumpage fees assessed 
on each cutting permit during the POR, it has computed a species-
specific adjustment to its average stumpage cost per cubic meter for 
each applicable sawmill.''
    Both Tolko and West Fraser relied on the appraisal values and 
cutting permit data, which are prepared in conjunction with the timber 
survey that is performed before harvesting, to determine species-
specific wood costs. Because Tembec prepared such surveys and uses them 
in conducting its business, the Department finds that Tembec had the 
capability to report species-specific wood costs for all provinces and 
that Tembec did not provide such information in the form or manner 
requested.
    In the case of the companies not responding to the quantity 
request, the Department finds that those companies failed to respond to 
the Department's requests. The Department specifically requested in its 
July 11, 2005, letter to all companies named in the initiation that 
they report their quantity of subject merchandise entered into the 
United States during the POR. In the same letter, the Department stated 
that, absent a response, ``the Department may use information that is 
adverse to your interest in conducting its analysis.'' \13\ The 
Department confirmed that all of the above companies received the 
letter and also contacted the companies directly to request the 
information. However, as stated on the record, the companies failed to 
respond and we preliminarily find that they have withheld information 
that the Department specifically requested.\14\
---------------------------------------------------------------------------

    \13\ See Quantity Request at Attachment 1, page 3.
    \14\ See, e.g., Memo from Saliha Loucif, David Neubacher, and 
David Layton, International Trade Compliance Analysts, to the File 
retarding companies that did not respond to the Department's July 
11, 2005 request for information letter (August 16, 2005), Memo from 
David Neubacher, International Trade Compliance Analyst, to the File 
regarding Phone conversation with Westmark Products Ltd. regarding 
the Department;s July 11, 2005 request for information letter 
(August 17, 2005), and Memo from Saliha Loucif, David Neubacher, and 
David Layton, International Trade Compliance Analysts, to the File 
regarding Companies that did not respond to the Department's July 
11, 2005 request for information letter (November 21, 2005).
---------------------------------------------------------------------------

    The Department finds that all of the above companies could have 
responded to the Department's requests for information, but did not do 
so. Accordingly, the Department finds that these companies failed to 
cooperate to the best of their ability in complying with the 
Department's requests for information. Consequently, in selecting from 
among the facts otherwise available, the Department is making an 
inference that is adverse to the interests of the above companies due 
to their refusal to cooperate to the best of their ability. See section 
776(b) of the Act.
    Section 776(b) of the Act authorizes the Department to use as 
adverse facts available (AFA) information derived from (1) the 
petition, (2) a final determination in the investigation under this 
title, (3) any previous review under section 751 or determination under 
section 753, or (4) any other information on the record.
    Pursuant to section 776(b)(4) of the Act, we have selected AFA for 
Tembec using information the company has

[[Page 33968]]

placed on the record. To account for all log species in British 
Columbia for which Tembec only reported average stumpage cost, we have 
increased the British Columbia wood costs by the difference between the 
average per-unit stumpage for the highest stumpage cost species and the 
average per-unit stumpage costs for all species in Ontario and Quebec.
    The Department's practice, when selecting an AFA rate for companies 
that did not provide any usable or reliable information is to select 
from among the possible sources of information, a margin that is 
sufficiently adverse ``as to effectuate the statutory purposes of the 
adverse facts available rule to induce respondents to provide the 
Department with complete and accurate information in a timely manner.'' 
See, e.g., Notice of Final Determination of Sales at Less Than Fair 
Value: Static Random Access Memory Semiconductors from Taiwan, 63 FR 
8909, 8932 (February 23, 1998). The Department's practice also ensures 
``that the party does not obtain a more favorable result by failing to 
cooperate than if it had cooperated fully.'' See Statement of 
Administrative Action Accompanying the Uruguay Round Agreements Act, 
H.R. Rep. No. 103-316, at 870 (1994) (SAA), see also Notice of Final 
Determination of Sales at Less than Fair Value: Certain Frozen and 
Canned Warmwater Shrimp from Brazil, 69 FR 76910 (December 23, 2004); 
see also D&L Supply Co. v. United States, 113 F. 3d 1220, 1223 (Fed. 
Cir. 1997).
    In order to ensure that the margin is sufficiently adverse so as to 
induce cooperation, we have preliminarily assigned a rate of 37.64 
percent to those companies that did not provide quantity data in 
response to the Department's request. This is the rate alleged in the 
petition, as adjusted at the initiation of the LTFV investigation.\15\ 
The Department finds that this rate is sufficiently high to effectuate 
the purpose of the adverse facts available rule (i.e., we find that 
this rate is high enough to encourage participation in future segments 
of this proceeding in accordance with section 776(b) of the Act).
---------------------------------------------------------------------------

    \15\ See Notice of Initiation of Antidumping Duty Investigation: 
Certain Softwood Lumber Products From Canada, 66 FR 21328 (April 30, 
2001) (Initiation of Certain Softwood Lumber Products).
---------------------------------------------------------------------------

    Section 776(c) of the Act provides that, where the Department 
selects from among the facts otherwise available and relies on 
``secondary information,'' the Department shall, to the extent 
practicable, corroborate that information from independent sources 
reasonably at the Department's disposal. Secondary information is 
described in the SAA as ``information derived from the petition that 
gave rise to the investigation or review, the final determination 
concerning the subject merchandise, or any previous review under 
section 751 concerning the subject merchandise.'' See SAA at 870. The 
SAA states that ``corroborate'' means to determine that the information 
used has probative value. As explained in Tapered Roller Bearings and 
Parts Thereof, Finished and Unfinished, from Japan, and Tapered Roller 
Bearings Four Inches or Less in Outside Diameter, and Components 
Thereof, from Japan: Preliminary Results of Antidumping Duty 
Administrative Reviews and Partial Termination of Administrative 
Review, 61 FR 57391, 57392 (November 6, 1996) (TRBs), in order to 
corroborate secondary information the Department will examine, to the 
extent practicable, the reliability and relevance of the information 
used. The SAA also states that independent sources used to corroborate 
such evidence may include, for example, published price lists, official 
import statistics and customs data, and information obtained from 
interested parties during the particular investigation. See 19 CFR 
351.308(d) and SAA at 870.
    With respect to corroboration, however, the Department will 
consider information reasonably at its disposal as to whether there are 
circumstances that would render a margin inappropriate. Where 
circumstances indicate that the selected margin is not appropriate as 
AFA, the Department may disregard the margin and determine an 
appropriate margin. See, e.g., Fresh Cut Flowers from Mexico; Final 
Results of Antidumping Duty Administrative Review, 61 FR 6812, 6814 
(February 22, 1996) (where the Department disregarded the highest 
margin as AFA because the margin was based on another company's 
uncharacteristic business expense resulting in an unusually high 
margin). Therefore, we examined whether any information on the record 
would discredit the selected rate as reasonable facts available.
    The petition rate of 37.64 percent was based on a comparison of 
price to constructed value (CV) using actual market prices referenced 
from Random Lengths \16\ and price quotes from Canadian producers. 
Because the above data used to calculate CV in the petition was derived 
from publicly available Canadian domestic industry data and proprietary 
data from the members of the Coalition adjusted for known differences, 
the Department believes that this information is reliable and deemed it 
adequate and reasonable for the purposes of initiating an 
investigation.
---------------------------------------------------------------------------

    \16\ Random Lengths is a weekly newsletter that is received by 
subscribers in the United States, Canada, and 41 other countries. 
The publication reports prices and examines issues affecting markets 
for the North American softwood lumber industry.
---------------------------------------------------------------------------

    Because the companies did not submit information to the Department 
or participate in a previous segment of this proceeding, we do not have 
such information to consider in determining whether the petition rate 
is relevant to each of them. To determine whether the margin is 
reliable and relevant in this administrative review, we examined the 
transaction-specific rates of all respondents in this administrative 
review compared to the rate of 37.64 percent and found that it was 
reliable and relevant for use in this administrative review. For the 
company-specific information used to corroborate this rate, see 
Memorandum from Constance Handley, Program Manager, to the File 
regarding Research for Corroboration for the Preliminary Results in the 
2004-2005 Antidumping Duty Administrative Review of Certain Softwood 
Lumber Products from Canada (May 31, 2006). We find the 37.64 percent 
margin to be probative because it does not appear to be aberrational 
when compared to the respondents' transaction-specific rates and no 
information has been presented to call into question the relevance of 
that information.
    Therefore, we have determined that the 37.64 percent margin is 
appropriate as AFA and are assigning it to Chasyn Wood Technologies, 
Cowichan Lumber Ltd., Forwood Forest Products Inc., Hyak Specialty Wood 
Products Ltd., Jasco Forest Products, Noble Custom Cut Ltd., North 
American Hardwoods Ltd., North of 50, Scierie A&M St-Pierre Inc., 
South-East Forest Products Ltd., Spruce Products, Triad Forest 
Products, Ltd., Westmark Products Ltd., Woodko Enterprises Ltd., and 
Woodtone Industries Inc.

Selection of Respondents

    Section 777A(c)(1) of the Act directs the Department to calculate 
individual dumping margins for each known exporter and producer of the 
subject merchandise. However, section 777A(c)(2) of the Act gives the 
Department the discretion, when faced with a large number of exporters/
producers, to limit its examination to a reasonable number of such 
companies if it is not practicable to examine all companies. Where it 
is not practicable to examine all known exporters/

[[Page 33969]]

producers of subject merchandise, this provision permits the Department 
to review either: (1) A sample of exporters, producers, or types of 
products that is statistically valid based on the information available 
at the time of selection, or (2) exporters and producers accounting for 
the largest volume of the subject merchandise that can reasonably be 
examined.
    Responses to the Department's information request were received 
July 18 through September 29, 2005. After consideration of the data 
submitted, and the complexities unique to this proceeding, as well as 
the resources available to the Department, we determined that it was 
not practicable in this review to examine all known exporters/producers 
of subject merchandise. Accordingly, we limited the number of mandatory 
respondents to eight and, as explained in our Respondent Selection 
Memorandum, based our selection of mandatory respondents on a PPS 
sampling methodology. We received written requests from three companies 
to be included as voluntary respondents in this review.\17\ We were not 
able to accommodate these requests due to resource constraints and 
preliminarily determine, pursuant to section 782(a)(2), that an 
individual review of these companies would be unduly burdensome and 
inhibit the timely completion of this administrative review.
---------------------------------------------------------------------------

    \17\ These companies were the Abitibi Group (November 30, 2005), 
Canfor Corporation (November 30, 2005) and Pope & Talbot (July 15, 
2005).
---------------------------------------------------------------------------

Successor-in-Interest

    In submissions to the Department dated December 21, 2005, and March 
30, 2006, Tolko advised the Department that Tolko acquired a 
controlling interest in Riverside Forest Products Ltd. (Riverside) on 
October 26, 2004, and Tolko acquired the remaining Riverside shares by 
February 2, 2005.\18\ On January 1, 2006, Riverside ceased to exist as 
a separate corporate entity. The post-acquisition Tolko assumed all 
softwood lumber, flooring and siding industry operations formerly held 
by Riverside, in addition to continuing its own operations.
---------------------------------------------------------------------------

    \18\ See Tolko's supplemental questionnaire response 
(Questionnaire Response) dated March 30, 2006, Securities Register 
at Exhibit 5.
---------------------------------------------------------------------------

    In antidumping duty successor-in-interest determinations, 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: Notice of Final Results of Antidumping 
Administrative Review, 57 FR 20460, 20462 (May 13, 1992) (Canada 
Brass). While 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., Industrial Phosphoric Acid from Israel: 
Final Results of Changed Circumstances Review, 59 FR 6944, 6945 
(February 14, 1994), and Canada Brass, 57 FR 20462. 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, 9980 
(March 1, 1999).
    Based on our review of the Questionnaire Response, we preliminarily 
determine that the post-acquisition Tolko is the successor-in-interest 
to both the pre-acquisition Tolko and Riverside. As a result of the 
acquisition, significant components of both pre-acquisition Tolko's and 
Riverside's production facilities, supplier relationships, and customer 
base were incorporated into the post-acquisition Tolko.
    Following the acquisition, Tolko's management structure was revised 
to incorporate former Riverside managers. By March 2005, pre-
acquisition Riverside's Executive Vice-President became the Executive 
Vice-President of post-acquisition Tolko.\19\ A small number of senior 
plant and site managers with the pre-acquisition Riverside held 
managerial posts in the post-acquisition Tolko.\20\ Thus, managers of 
both companies held management positions in the post-acquisition Tolko.
---------------------------------------------------------------------------

    \19\ See id. at Exhibit 10.
    \20\ See id. at Exhibit 9.
---------------------------------------------------------------------------

    The transfer of Riverside's fixed assets to Tolko resulted in a 
dramatic increase in Tolko's production capacity. Prior to the 
acquisition, Tolko had five sawmills and Riverside had five sawmills. 
Following the acquisition, Tolko operated the combined ten 
sawmills.\21\ Moreover, prior to the acquisition, Tolko produced only 
small quantities of stud grade lumber. Because three of Riverside's 
lumber mills specialized in stud grade lumber, the acquisition of 
Riverside enabled Tolko to significantly diversify and increase its 
production capabilities.\22\ Moreover, Tolko reports that, due to the 
established reputation of Riverside studs, Tolko continues to sell 
certain stud products under the Riverside name and logo.\23\ Thus, the 
post-acquisition Tolko produced a much larger quantity of and a wider 
range of products than were produced by either Tolko or Riverside 
before the acquisition.\24\
---------------------------------------------------------------------------

    \21\ See id. at page 8.
    \22\ See Tolko's second supplemental questionnaire response, 
(Second Supplemental Questionnaire Response), dated May 8, 2006, at 
page 2.
    \23\ See id. at page 5.
    \24\ Id. at Exhibits 11 and 12.
---------------------------------------------------------------------------

    Further, the acquisition of Riverside allowed Tolko to 
significantly increase its customer base. In addition to Tolko's own 
customers, former Riverside customers purchase from the post-
acquisition Tolko.\25\ Likewise, many suppliers that previously 
serviced Riverside continued to supply the post-acquisition Tolko.\26\ 
Thus, the post-acquisition Tolko9 noticeably increased the number of 
customers to whom it sells, and its list of suppliers became more 
diversified.
---------------------------------------------------------------------------

    \25\ Id. at page 9.
    \26\ Id. at page 10 and Exhibits 14 and 15. See also Second 
Supplemental Questionnaire Response at page 5-7.
---------------------------------------------------------------------------

    When as the result of a acquisition, the post-acquisition entity 
contains significant elements of both companies involved in the 
acquisition, we consider the post-acquisition entity to be a successor-
in-interest to both of the pre-acquisition companies. The post-
acquisition Tolko's production facilities, supplier relationships, 
customer base and sales facilities combine important elements of both 
the pre-acquisition Tolko and Riverside. Consequently, we preliminarily 
determine that the post-acquisition Tolko is the successor in interest 
to both the pre-acquisition Tolko and Riverside.
    Because the post-acquisition Tolko operated for six months of the 
POR, we are basing the cash deposit rate for Tolko on the antidumping 
rate calculated for the post-acquisition Tolko.

Collapsing Determinations

    The Department's regulations provide that affiliated producers will 
be treated as a single entity where: (1) Those producers have 
production facilities for similar or identical products that would not 
require substantial retooling of either facility in order to 
restructure manufacturing priorities; and (2) the Department concludes 
that there is a

[[Page 33970]]

significant potential for the manipulation of price or production.\27\ 
In identifying a significant potential for the manipulation of price or 
production, the Department may consider such factors as: (i) The level 
of common ownership; (ii) the extent to which managerial employees or 
board members of one firm sit on the board of directors of an 
affiliated firm; and (iii) whether operations are intertwined, such as 
through the sharing of sales information, involvement in production and 
pricing decisions, the sharing of facilities or employees, or 
significant transactions between the affiliated producers.\28\ These 
factors are illustrative, and not exhaustive.
---------------------------------------------------------------------------

    \27\ See 19 CFR 351.401(f)(1).
    \28\ See 19 CFR 351.401(f)(2).
---------------------------------------------------------------------------

    In their questionnaire responses, respondents reported the sales of 
certain affiliated companies. Blanchette reported the sales of its 
affiliate, Barrette-Chapais Ltee. Interfor reported sales from its 
affiliates BW Creative Wood Industries Ltd. and Sauder Industries 
Limited. Tembec reported the sales of Les Industries Davidson, Inc.\29\ 
as well as Tembec affiliates Marks Lumber Ltd., Temrex Limited 
Partnership, and 791615 Ontario Limited (Excel Forest Products). Tolko 
was excused from reporting the sales of Gilbert Smith Forest Products, 
Ltd. (Gilbert Smith), although it continues to be collapsed with 
Tolko\30\ West Fraser reported the sales of its affiliates West Fraser 
Forest Products Inc. and Seehta Forest Products Ltd. WFP reported sales 
by WFP Lumber Sales Ltd., its wholly-owned subsidiary that is 
responsible for sales of all lumber produced by WFP's sawmill 
divisions. Prior to July 27, 2004, WFP operated as Doman Industries 
Limited (Doman) and its subsidiary companies. The Department determined 
that WFP is the successor-in-interest to Doman.\31\ Therefore, WFP also 
reported all POR sales by Doman prior to July 27, 2004. Weyerhaeuser 
reported the sales of its affiliate Weyerhaeuser Saskatchewan Ltd. Upon 
review of the questionnaire responses, we determined that the 
affiliates discussed above were properly collapsed with the respective 
respondent companies for the purposes of this review.
---------------------------------------------------------------------------

    \29\ Tembec purchased the shares of Davidson on November 5, 
2001, and as of December 27, 2003, Davidson became a division of 
Tembec. The Davidson Division's financial results have been fully 
incorporated in Tembec's financial statements for the entire POR. 
Therefore, we are no longer listing Davidson separately as part of 
the Tembec Group.
    \30\ See Memorandum from Saliha Loucif, International Trade 
Compliance Analyst, through Constance Handley, Program Manager, to 
Susan Kuhbach, Director, regarding Individual Reporting Exemption 
Requests of Certain Respondent Companies (January 31, 2006).
    \31\ See Notice of Final Results of Antidumping Duty Changed 
Circumstances Review: Certain Softwood Lumber Products from Canada, 
70 FR 48673, dated August 19, 2005.
---------------------------------------------------------------------------

    Rene Bernard reported sales of subject merchandise produced or 
further processed by its affiliates Iren[eacute]e Grondin &Fils 
Lt[eacute]e. (Grondin) and Les Sechoirs a Bois Rene Bernard Ltee. 
(Sechoirs). Rene Bernard also reported sales by two affiliated 
companies, Bois Bohemia Inc. (BB), and Bermorg LLC (Bermorg) which 
involved lumber which BB and Bermorg purchased from unaffiliated 
suppliers and then further processed. We have preliminarily determined 
that Rene Bernard, BB, and Bermorg are the producers of the lumber that 
they process and sell.\32\ Therefore, we have also collapsed Rene 
Bernard, BB and Bermorg for these Preliminary Results.\33\
---------------------------------------------------------------------------

    \32\ See Memorandum from David Layton, International Trade 
Analyst, to Susan Kuhbach, Director, regarding Whether to Collapse 
Ren[eacute] Bernard Inc. with Certain Affiliated Parties (April 11, 
2006).
    \33\ See id.
---------------------------------------------------------------------------

    The Department excused individual respondents from reporting the 
sales of specific merchandise or sales by certain affiliates during 
this review. These specific reporting exemptions were granted to the 
companies because the sales were determined to be a relatively small 
percentage of total U.S. sales, burdensome to the company to report and 
for the Department to review, and would not materially affect the 
results of this review.\34\
---------------------------------------------------------------------------

    \34\ See Memorandum from Saliha Loucif, International Trade 
Compliance Analyst, through Constance Handley, Program Manager, to 
Susan Kuhbach, Director, regarding Individual Reporting Exemption 
Requests of Certain Respondent Companies (January 31, 2006).
---------------------------------------------------------------------------

Treatment of Sales Made on a Random-Length Basis

    Most of the respondents made a portion of their sales during the 
POR on a random-length \35\ (also referred to as a mixed-tally) basis. 
The industry practice is to negotiate a single per-unit price for the 
whole tally with the customer, but to take the composition of lengths 
in the tally into account when quoting this price. The price of the 
invoice is the blended (i.e., average) price for the tally. Therefore, 
the line-item price on the invoice to the customer does not reflect the 
value of the particular product, but rather the average value of the 
combination of products.
---------------------------------------------------------------------------

    \35\ For the purposes of this review, we are defining a random-
length sale as any sale which contains multiple lengths, for which a 
blended (i.e., average) price has been reported.
---------------------------------------------------------------------------

    Sections 772(a) and (b) and 773(a)(1)(B)(i) of the Act direct the 
Department to use the price at which the product was sold in 
determining export price (EP), constructed export price (CEP), and 
normal value (NV). In this case, the price at which the products were 
sold is the total amount on the invoice. The respondents' choice to 
divide that price evenly over all products on the invoice represents an 
arbitrary allocation which is not reflective of the underlying value of 
the individual products within the tally. However, with the exception 
of Blanchette and West Fraser, the respondents do not keep track of any 
underlying single-length prices in such a way that they can 
``deconstruct'' or reallocate the prices on the invoice to more 
properly reflect the relative differences in the market value of each 
unique product that were taken into account in determining the total 
invoice price.
    For all companies except Blanchette and West Fraser, for purposes 
of these preliminary results, we reallocated the total invoice price of 
sales made on a random-lengths basis, where possible, using the average 
relative values of company-specific, market-specific single-length 
sales made within a two-week period (i.e., one week on either side) of 
the tally whose price is being reallocated. If no such sales were 
found, we used a four-week period (i.e., two weeks on either side of 
the sale).
    We note that a single-length-sale match must be available for each 
line item in the tally in order to perform a reallocation based on 
relative price. If there were not single-length sales for all items in 
the tally within a four-week period, we continued to use the reported 
price as neutral facts available, pursuant to section 776(a)(1) of the 
Act. Blanchette only reported single-length sales. For West Fraser, we 
used the reported length-specific prices. This methodology was fully 
described in detail during the first administrative review and applied 
in the second administrative review. See Notice of Final Results of 
Antidumping Duty Administrative Review and Notice of Final Results of 
Antidumping Duty Changed Circumstances Review: Certain Softwood Lumber 
Products from Canada, 69 FR 75921 (December 20, 2004) and accompanying 
Issues and Decision Memorandum at comment 5.

Fair Value Comparisons

    We compared the EP or the CEP, as applicable, to the NV, as 
described in the Export Price and Constructed Export Price and Normal 
Value sections of this notice. We first attempted to compare

[[Page 33971]]

contemporaneous sales in the U.S. and comparison markets of products 
that were identical with respect to the following characteristics: 
product type, species, grade group, grade, dryness, thickness, width, 
length, surface, trim and processing type. Where we were unable to 
compare sales of identical merchandise, we compared products sold in 
the United States with the most similar merchandise sold in the 
comparison markets based on the characteristics of grade, dryness, 
thickness, width, length, surface, trim and further processing, in this 
order of priority. Consistent with prior segments of this proceeding, 
we did not match across product type, species or grade group. Where 
there were no appropriate comparison-market sales of comparable 
merchandise, we compared the merchandise sold in the United States to 
constructed value (CV), in accordance with section 773(a)(4) of the 
Act. We generally relied on the date of invoice as the date of sale. 
Consistent with the Department's practice, where the invoice was issued 
after the date of shipment, we relied on the date of shipment as the 
date of sale.

Export Price and Constructed Export Price

    In accordance with section 772 of the Act, we calculated either an 
EP or a CEP, depending on the nature of each sale. Section 772(a) of 
the Act defines EP as the price at which the subject merchandise is 
first sold before the date of importation by the exporter or producer 
outside the United States to an unaffiliated purchaser in the United 
States, or to an unaffiliated purchaser for exportation to the United 
States. Section 772(b) of the Act defines CEP as the price at which the 
subject merchandise is first sold in the United States before or after 
the date of importation, by or for the account of the producer or 
exporter of the merchandise, or by a seller affiliated with the 
producer or exporter, to an unaffiliated purchaser, as adjusted under 
sections 772(c) and (d) of the Act.
    For all respondents, we calculated EP and CEP, as appropriate, 
based on prices charged to the first unaffiliated customer in the 
United States. We found that all of the respondents made a number of EP 
sales during the POR. These sales are properly classified as EP sales 
because they were made outside the United States by the exporter or 
producer to unaffiliated customers in the United States prior to the 
date of importation.
    We also found that each respondent, except Interfor, made CEP sales 
during the POR. Some of these sales involved softwood lumber sold from 
U.S. reload centers or through vendor-managed inventory (VMI) 
locations. Because such sales were made by the respondent after the 
date of importation, the sales are properly classified as CEP sales. In 
addition, West Fraser, and Weyerhaeuser made sales to the United States 
through U.S. affiliates.
    We made company-specific adjustments as follows:

(A) Blanchette

    Blanchette made both EP and CEP transactions. We calculated EP for 
sales where the merchandise was sold directly by Blanchette to the 
first unaffiliated purchaser in the United States prior to importation, 
and CEP was not otherwise warranted based on the facts of the record. 
We calculated CEP for sales made by Blanchette to the U.S. customer 
through a U.S. reload center after importation into the United States. 
EP and CEP were based on ex-mill prices, ex-reload prices, delivered 
prices, and prices based on customer-specific sale terms, as 
applicable.
    In accordance with section 772(c)(2)(A) of the Act, we reduced the 
starting price to account for movement expenses. These reductions 
included the freight expenses incurred in transporting the merchandise 
from the mill to the U.S. customer, brokerage expenses, and warehousing 
expenses. We also adjusted the starting price to account for billing 
adjustments, rebates, and early payment discounts.
    In accordance with section 772(d)(1) of the Act, for CEP sales, we 
deducted from the starting price the selling expenses incurred in 
selling the subject merchandise in the United States, including direct 
selling expenses (i.e., credit expenses), and imputed inventory 
carrying costs incurred in the United States. In accordance with 
section 772(d)(3) of the Act, we deducted an amount of profit allocated 
to the expenses deducted under sections 772(d)(1) and (2) of the Act. 
See Memorandum from Saliha Loucif, International Trade Compliance 
Analyst, to the File regarding Blanchette's Analysis for the 
Preliminary Results (May 31, 2006) (Blanchette's Preliminary 
Calculation Memorandum).

(B) Interfor

    Interfor made only EP transactions during the POR. We calculated an 
EP for sales where the merchandise was sold directly by Interfor to the 
first unaffiliated purchaser in the United States prior to importation. 
EP sales were based on the packed, delivered, ex-mill, and free-on-
board (FOB) prices, as applicable
    We made deductions from the starting price for movement expenses in 
accordance with section 772(c)(2)(A) of the Act. These include freight 
to the U.S. customer and brokerage and handling. We also adjusted the 
starting price to account for billing adjustments, rebates, and early 
payment discounts. See Memorandum from Salim Bhabhrawala, International 
Trade Compliance Analyst, to the File regarding Interfor's Analysis for 
the Preliminary Results (May 31, 2006) (Interfor's Preliminary 
Calculation Memorandum).

(C) Rene Bernard

    Rene Bernard made both EP and CEP transactions during the POR. We 
calculated an EP for sales where the merchandise was sold directly by 
Rene Bernard to the first unaffiliated purchaser in the United States 
prior to importation. We calculated a CEP for sales made by Rene 
Bernard to the U.S. customer through intermediate inventory locations. 
EP and CEP were based on the packed, delivered and FOB mill prices, as 
applicable.
    We made deductions from the starting price for movement expenses in 
accordance with section 772(c)(2)(A) of the Act. These include freight 
incurred in transporting merchandise to Canadian transit points, 
loading fees and freight to the U.S. customer or intermediate inventory 
locations. We also deducted from the starting price any discounts and 
added any billing adjustments. In accordance with section 772(d)(1) of 
the Act, for CEP sales, we deducted from the starting price those 
selling expenses that were incurred in selling the subject merchandise 
in the United States, including direct selling expenses (e.g., credit 
expenses) and indirect selling expenses. Finally, in accordance with 
section 772(d)(3) of the Act, we deducted an amount of profit allocated 
to the expenses deducted under sections 772(d)(1) and (2) of the Act. 
See Memorandum from David Layton, International Trade Compliance 
Analyst, to the File, regarding Rene Bernard's Analysis for the 
Preliminary Results (May 31, 2006) (Rene Bernard's Preliminary 
Calculation Memorandum).

(D) Tembec

    Tembec made both EP and CEP transactions during the POR. We 
calculated an EP for sales where the merchandise was sold directly by 
Tembec to the first unaffiliated purchaser in the United States prior 
to importation. We calculated a CEP for sales made by Tembec to the 
U.S.

[[Page 33972]]

customer through U.S. reload facilities or through VMI facilities. EP 
and CEP were based on the packed, deli