Antidumping and Countervailing Duty Investigations of Certain Softwood Lumber Products From Canada: Preliminary Determinations of Critical Circumstances, 19219-19221 [2017-08469]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 82, Number 79 (Wednesday, April 26, 2017)]
[Notices]
[Pages 19219-19221]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-08469]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-857, C-122-858]


Antidumping and Countervailing Duty Investigations of Certain 
Softwood Lumber Products From Canada: Preliminary Determinations of 
Critical Circumstances

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

SUMMARY: On November 25, 2016, the Department of Commerce (the 
Department) received antidumping duty (AD) and countervailing duty 
(CVD) petitions concerning imports of certain softwood lumber products 
(softwood lumber) from Canada. In the petitions, the Department 
received timely allegations that critical circumstances exist with 
respect to imports of the merchandise under investigation. Based on 
information provided by the Committee Overseeing Action for Lumber 
International Trade Investigations (Petitioner), data placed on the 
record of these investigations by the mandatory and voluntary 
respondents, and data collected by the Department, the Department 
preliminarily determines that critical circumstances exist for imports 
of softwood lumber from certain producers and exporters from Canada.

DATES: Effective April 26, 2017.

FOR FURTHER INFORMATION CONTACT: Stephanie Moore (for CVD) or Thomas 
Martin (for AD), AD/CVD Operations, Enforcement and Compliance, 
International Trade Administration, U.S. Department of Commerce, 1401 
Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-
3692 and (202) 482-3936, respectively.

SUPPLEMENTARY INFORMATION:

Background

    Section 703(e)(1) of the Tariff Act of 1930, as amended (the Act), 
provides that the Department will preliminarily determine that critical 
circumstances exist in CVD investigations if there is a reasonable 
basis to believe or suspect: (A) That ``the alleged countervailable 
subsidy'' is inconsistent with the Subsidies and Countervailing 
Measures (SCM) Agreement of the World Trade Organization; and (B) that 
there have been massive imports of the subject merchandise over a 
relatively short period. Section 733(e)(1) of the Act provides that the 
Department will preliminarily determine that critical circumstances 
exist in AD investigations if there is a reasonable basis to believe or 
suspect: (A)(i) That there is a history of dumping and material injury 
by reason of dumped imports in the United States or elsewhere of the 
subject merchandise, or (ii) that the person by whom, or for whose 
account, the merchandise was imported knew or should have known that 
the exporter was selling the subject merchandise at less than its fair 
value and that there was likely to be material injury by reason of such 
sales; and (B) that there have been massive imports of the subject 
merchandise over a relatively short period.
    Section 351.206 of the Department's regulations provides that, in 
general, imports must increase by at least 15 percent during the 
``relatively short period'' to be considered ``massive,'' \1\ and 
defines a ``relatively short period'' as normally being the period 
beginning

[[Page 19220]]

on the date the proceeding begins (i.e., the date the petition is 
filed) and ending at least three months later.\2\ The regulations also 
provide, however, that if the Department finds that importers, or 
exporters or producers, had reason to believe, at some time prior to 
the beginning of the proceeding, that a proceeding was likely, the 
Department may consider a period of not less than three months from 
that earlier time.\3\
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    \1\ See 19 CFR 351.206(h).
    \2\ See 19 CFR 351.206(i).
    \3\ Id.
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Alleged Countervailable Subsidy Is Inconsistent With the SCM Agreement

    To determine whether there exists a reasonable basis to believe or 
suspect that an alleged countervailable subsidy is inconsistent with 
the SCM Agreement, in accordance with section 703(e)(1)(A) of the Act, 
the Department considered the evidence on the record pertaining to 
Petitioner's allegation that the Export Development Canada: Export 
Guarantee Program is inconsistent with the SCM Agreement. Specifically, 
as described in our initiation checklist,\4\ with regard to this 
program, Petitioner has alleged the elements of a subsidy,\5\ supported 
with information reasonably available to Petitioner, that appears to be 
export contingent, which would render it inconsistent with the SCM 
Agreement. Therefore, the Department preliminarily determines that 
there is a reasonable basis to believe or suspect that an alleged 
subsidy in the CVD investigation is inconsistent with the SCM 
agreement.
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    \4\ See CVD Initiation Checklist, dated December 15, 2016 at 37.
    \5\ See Petitions for the Imposition of Antidumping Duties and 
Countervailing Duties on Imports of Certain Softwood Lumber Products 
from Canada, dated November 25, 2016 (Petitions) at Volume III, pp. 
231-236.
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History of Dumping and Material Injury

    In order to determine whether there is a history of dumping 
pursuant to section 733(e)(1)(A)(i) of the Act, the Department 
generally considers current or previous AD orders on subject 
merchandise from the country in question in the United States and 
current orders imposed by other countries with regard to imports of the 
same merchandise. The Department, therefore, considers that it has 
previously issued an AD order on softwood lumber from Canada, based on 
nearly identical harmonized tariff schedule numbers.\6\ Furthermore, 
and with respect to determining whether there is a history of material 
injury, the Department determines that it is appropriate to rely on the 
International Trade Commission's (ITC) section 129 affirmative threat 
of material injury determination, and finds a history of material 
injury based on this determination.\7\ Therefore, we preliminarily find 
that there is a history of dumping and material injury by reason of 
dumped imports of the subject merchandise.
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    \6\ See Amendment to Antidumping and Countervailing Duty Orders 
on Certain Softwood Lumber Products from Canada, 69 FR 75916 
(December 20, 2004) (Amended Orders).
    \7\ On May 16, 2002, the ITC determined that an industry in the 
United States was threatened with material injury by reason of 
imports from Canada of softwood lumber found to be subsidized and 
sold in the United States at less than fair value, leading the 
Department to publish antidumping and countervailing duty orders on 
softwood lumber from Canada. Subsequently, the Government of Canada 
initiated a dispute settlement proceeding against the United States 
at the World Trade Organization, resulting in findings, inter alia, 
that the ITC did not act in conformity with the United States' 
obligations under the Agreement on Implementation of Article VI of 
the General Agreement on Tariffs and Trade 1994 and the Agreement on 
Subsidies and Countervailing Measures. Accordingly, pursuant to 
section 129 of the Uruguay Round Agreements Act (19 U.S.C. 3538), 
the ITC took action that would render its original determination not 
inconsistent with the findings of the dispute settlement panel. The 
ITC again determined that an industry in the United States was 
threatened with material injury by reason of imports from Canada of 
softwood lumber found to be subsidized and sold in the United States 
at less than fair value. See U.S. International Trade Commission, 
Softwood Lumber from Canada; Investigation Nos. 701-TA-414 and 731-
TA-928 (Section 129 Consistency Determination), Pub. 3740 (Nov. 
2004); see also Amended Orders.
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Massive Imports

    In determining whether there are ``massive imports'' over a 
``relatively short period,'' pursuant to sections 703(e)(1)(B) and 
733(e)(1)(B) of the Act, the Department normally compares the import 
volumes of the subject merchandise for at least three months 
immediately preceding the filing of the petition (i.e., the ``base 
period'') to a comparable period of at least three months following the 
filing of the petition (i.e., the ``comparison period''). Imports 
normally will be considered massive when imports during the comparison 
period have increased by 15 percent or more compared to imports during 
the base period.
    Based on evidence provided by Petitioner, the Department finds 
that, pursuant to 19 CFR 351.206(i), importers, exporters or producers 
had reason to believe, at some time prior to the filing of the 
petition, that a proceeding was likely. Specifically, the Softwood 
Lumber Agreement (SLA) between the United States and Canada expired on 
October 12, 2015, and expressly provided for a ``standstill'' period of 
12 months after the expiration of the agreement, during which the U.S. 
domestic industry agreed to not file AD/CVD petitions.\8\ Because of 
the unique circumstance of the expiration of the SLA in October 2015, 
importers and Canadian producers/exporters were aware that potential 
AD/CVD petitions could be filed as early as October 12, 2016. Thus, the 
Department finds that, pursuant to 19 CFR 351.206(i), importers, 
exporters or producers had reason to believe that proceedings were 
likely following expiration of the SLA on October 12, 2015.
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    \8\ See Petitions at Volume I, pp. 70-73.
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    In order to determine whether there has been a massive surge in 
imports for each mandatory respondent (Canfor Corporation (Canfor), 
Resolute FP Canada Inc. (Resolute), Tolko Marketing Sales Ltd. (Tolko), 
West Fraser Mills Ltd. (West Fraser)) and J.D. Irving (the voluntary 
respondent in the CVD investigation), the Department compared the total 
volume of shipments from October 2015 through June 2016 (i.e., the 
comparison period) with the preceding nine-month period of January 2015 
through September 2015 (i.e., the base period).\9\ For ``all others,'' 
the Department compared Global Trade Atlas (GTA) data for the period 
October 2015 through June 2016 with the preceding nine-month period of 
January 2015 through September 2015.\10\ The Department first 
subtracted the shipments reported by the mandatory respondents and J.D. 
Irving from the GTA data. Based on these comparisons, we preliminarily 
determine that J.D. Irving and ``all others'' had massive surges in 
imports.\11\ The shipment data do not demonstrate massive surges in 
imports for Canfor, Resolute, Tolko, and West Fraser.
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    \9\ Because we only have data from the respondents dating back 
to January 2015, we intend to solicit shipment data for an equal 
number of months prior to January 2015 as the base period to compare 
to the most recent shipment data available through the months of the 
preliminary determinations.
    \10\ The GTA data includes the following harmonized tariff 
schedule numbers: 4407.10.01.01; 4407.10.01.02; 4407.10.01.15; 
4407.10.01.16; 4407.10.01.17; 4407.10.01.18; 4407.10.01.19; 
4407.10.01.20; 4407.10.01.42; 4407.10.01.43; 4407.10.01.44; 
4407.10.01.45; 4407.10.01.46; 4407.10.01.47; 4407.10.01.48; 
4407.10.01.49; 4407.10.01.52; 4407.10.01.53; 4407.10.01.54; 
4407.10.01.55; 4407.10.01.56; 4407.10.01.57; 4407.10.01.58; 
4407.10.01.59; 4407.10.01.64; 4407.10.01.65; 4407.10.01.66; 
4407.10.01.67; 4407.10.01.68; 4407.10.01.69; 4407.10.01.74; 
4407.10.01.75; 4407.10.01.76; 4407.10.01.77; 4407.10.01.82; 
4407.10.01.83; 4407.10.01.92; 4407.10.01.93; 4409.10.05.00; 
4409.10.10.20; 4409.10.10.40; 4409.10.10.60; 4409.10.10.80; 
4409.10.20.00; 4409.10.90.20; 4409.10.90.40; and 4418.90.25.00.
    \11\ See the AD and CVD Preliminary Critical Circumstances 
Memoranda, dated concurrently with this notice.

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[[Page 19221]]

Conclusion

    Based on the criteria and findings discussed above, we 
preliminarily determine that critical circumstances exist with respect 
to imports of softwood lumber shipped by J.D. Irving and ``all 
others.'' We preliminarily determine that critical circumstances do not 
exist with respect to Canfor, Resolute, Tolko, and West Fraser.

Final Critical Circumstances Determinations

    We will issue final determinations concerning critical 
circumstances when we issue our final subsidy and less-than-fair-value 
determinations. All interested parties will have the opportunity to 
address the Department's determinations with regard to critical 
circumstances in case briefs to be submitted after completion of the 
preliminary subsidy and less than fair value determinations.

International Trade Commission Notification

    In accordance with sections 703(f) and 733(f) of the Act, we will 
notify the ITC of our determinations.

Suspension of Liquidation

    In accordance with section 703(e)(2) of the Act, because we have 
preliminarily found that critical circumstances exist with regard to 
imports exported by certain producers and exporters, if we make an 
affirmative preliminary determination that countervailable subsidies 
have been provided to these same producers/exporters at above de 
minimis rates,\12\ we will instruct U.S. Customs and Border Protection 
(CBP) to suspend liquidation of all entries of subject merchandise from 
these producers/exporters that are entered, or withdrawn from 
warehouse, for consumption on or after the date that is 90 days prior 
to the effective date of ``provisional measures'' (e.g., the date of 
publication in the Federal Register of the notice of an affirmative 
preliminary determination that countervailable subsidies have been 
provided at above de minimis rates). At such time, we will also 
instruct CBP to require a cash deposit equal to the estimated 
preliminary subsidy rates reflected in the preliminary determination 
published in the Federal Register. This suspension of liquidation will 
remain in effect until further notice.
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    \12\ The preliminary subsidy determination is currently 
scheduled for April 24, 2017.
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    In accordance with section 733(e)(2) of the Act, because we have 
preliminarily found that critical circumstances exist with regard to 
imports exported by certain producers and exporters, if we make an 
affirmative preliminary determination that sales at less than fair 
value have been made by these same producers/exporters at above de 
minimis rates, we will instruct CBP to suspend liquidation of all 
entries of subject merchandise from these producers/exporters that are 
entered, or withdrawn from warehouse, for consumption on or after the 
date that is 90 days prior to the effective date of ``provisional 
measures'' (e.g., the date of publication in the Federal Register of 
the notice of an affirmative preliminary determination of sales at less 
than fair value at above de minimis rates). At such time, we will also 
instruct CBP to require a cash deposit equal to the estimated 
preliminary dumping margins reflected in the preliminary determination 
published in the Federal Register. This suspension of liquidation will 
remain in effect until further notice.
    This notice is issued and published pursuant to section 777(i) of 
the Act and 19 CFR 351.206(C)(2).

    Dated: April 13, 2017.
Ronald K. Lorentzen,
Acting Assistant Secretary for Enforcement and Compliance.
[FR Doc. 2017-08469 Filed 4-25-17; 8:45 am]
BILLING CODE 3510-DS-P