ACTIONS SINCE INITIATION:

On April 30, 2001, the Department published in the Federal Register the “Notice of Initiation of Countervailing Duty Investigation: Certain Softwood Lumber Products from Canada” (66 FR 21332) (Notice of Initiation). In the Notice of Initiation, the Department did not exempt the Maritime Provinces from this investigation. However, the Department noted the possibility of addressing the unique circumstances associated with the Maritime Provinces through an exclusion process. The Department invited comments from interested parties concerning exclusions and how to address the unique circumstances of the Maritime Provinces. Initial comments were due by May 15, 2001, and several rounds of rebuttal comments were submitted in subsequent weeks.

In the comments submitted to the Department, parties argued that, consistent with the petition, the Department should have exempted certain lumber produced in the Maritime Provinces from the scope of the investigation. Specifically, petitioners asserted that the Department should have exempted the Maritime Provinces from the investigation. In a subsequent submission, petitioners requested that the Department amend the Notice of Initiation to exempt the Maritime Provinces from the investigation. The Maritime Provinces, the Maritime Lumber Bureau of Canada, and at least one company located in the Maritime Provinces also requested that the Department reconsider its decision to include the Maritime Provinces in the investigation. Additionally, the Government of Canada, in pre-initiation consultations with the Department, supported exempting the Maritime Provinces from the investigation.

ANALYSIS:

We have reconsidered the status of the Maritime Provinces in this investigation. Based on all of the comments submitted, we agree with the views expressed by the interested parties that, given the unique circumstances associated with the investigation of softwood lumber from Canada, as described below, the Department should exempt certain lumber produced in the Maritime Provinces from the scope of the investigation. In reaching this decision, we were guided by the long history of trade cases and trade agreements regarding softwood lumber.

The courts have long recognized that, generally, the statute accords the Department broad discretion in the enforcement of the antidumping and countervailing duty laws. Daewoo Elecs. Co. v. International Union, 6 F.3d 1511, 1516 (Fed. Cir. 1993), cert denied, 512 U.S. 1204 (1994). More specifically, the courts have acknowledged that the Department has the inherent authority to define the parameters of an investigation. Duferco Steel, Inc. v. U.S., 2110 CIT LEXIS 64 (May 29, 2001); Mitsubishi Heavy Industries, Ltd. v. U.S., 986 F. Supp. 1428, 1432 (CIT 1997). Nevertheless, the purpose of the antidumping and countervailing duty laws is to provide the relief sought in the petition, if the allegations in the petition are borne out through investigation. Thus, while the Department has broad discretion to define an investigation, that discretion must be exercised reasonably and with ample deference to the intent of the petition.

Upon reconsideration, we have concluded that, even though the exact circumstances surrounding the exemption of the Maritimes from the 1991 investigation are not present in this case, there are still unique ( printed page 40229) circumstances, discussed in the amendment below, that warrant exempting the Maritime Provinces from this investigation. In fact, the circumstances behind the original exemption of the Maritimes from the 1986 Memorandum of Understanding (1986 MOU) have not changed for the last 15 years. Even though the exemption of the Maritimes from the 1991 countervailing duty investigation was based on a separate legal requirement (see, Self-Initiation of Countervailing Duty Investigation: Certain Softwood Lumber Products from Canada,56 FR 56055, 56058 (October 31, 1991) and Amendment to the Notice of Self-Initiation of Countervailing Duty Investigation: Certain Softwood Lumber Products from Canada,56 FR 56058 (October 31, 1991)), the circumstances associated with the Maritime Provinces are substantially the same as they were at the time of the 1986 MOU. Those circumstances remained the same at the time of the 1991 countervailing duty investigation, the 1996 Softwood Lumber Agreement, and at present with respect to the current investigation. Accordingly, the Department is amending the Notice of Initiation to exempt the Maritime Provinces.