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Notice of Preliminary Results of Antidumping Duty Changed Circumstances Review: Certain Softwood Lumber Products From Canada

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Import Administration, International Trade Administration, Department of Commerce.


On September 2, 2004, the Department of Commerce published a notice of initiation of changed circumstances review of the antidumping duty order on certain softwood lumber products from Canada. The review was initiated to determine the appropriate cash deposit rate for Produits Forestiers Saguenay Inc., a previously inactive holding company which began producing softwood lumber and exporting it to the United States as of June 1, 2004, and is currently owned by Abitibi Consolidated Company of Canada. We have preliminarily concluded that Produits Forestiers Saguenay Inc. should be assigned the same cash deposit rate as the Abitibi Group.


Effective Dates: March 30, 2005.

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Constance Handley or Saliha Loucif, AD/CVD Enforcement, 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) 482-1779, respectively.

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On July 29, 2004, in accordance with section 751(b)(1) of the Act and 19 CFR 351.216(b) (2004), the Abitibi Group and Produits Forestiers Saguenay (PFS), both Canadian producers of softwood lumber products and interested parties in this proceeding, filed a request for a changed circumstances review. The Abitibi Group is composed of Abitibi-Consolidated Inc. (ACI), Abitibi Consolidated Company of Canada (ACCC), Produits Forestiers Petit Paris Inc. (PFPP), and Societe en Commandite Scierie Opitciwan (Opitciwan).

In response to this request, the Department of Commerce (the Department) initiated a changed circumstances review of the antidumping duty order on certain softwood lumber from Canada. See Initiation of Antidumping Duty Changed Circumstances Review: Certain Softwood Products from Canada, 69 FR 53681 (September 2, 2004) (Initiation Notice). On October 18, 2004, the Department issued to the Abitibi Group a questionnaire requesting further details on PFS' affiliation with the Abitibi Group. The Abitibi Group's response was received by the Department on November 18, 2004. The petitioner, the Coalition of Fair Lumber Imports Executive Commission, did not file comments with respect to the request.

Scope of the Order

For purposes of the order, the products covered are certain softwood lumber products from Canada. For a complete description of the scope of the order, see Initiation Notice.

Preliminary Results of the Review

In submissions to the Department dated July 29, 2004, and November 18, Start Printed Page 162202004, the Abitibi Group contends that PFS should be subject to the Abitibi Group cash deposit rate, because it is controlled by ACCC, which owns the majority of PFS' shares, and because it has production facilities similar or identical to other members of the Abitibi Group as well as intertwined sales processes.

On June 1, 2004, ACCC entered into a three-way agreement with Cooperative Forestiere Laterriere (CFL) and Les Placements H.N.M.A. Inc. (HNMA), its existing partner in Scierie Saguenay Ltee (SSL), to form PFS. ACCC is the main shareholder in PFS. PFS owns and operates four sawmills located in the Saguenay region of Quebec, of which two [1] were previously wholly-owned by ACCC and consequently shared the Abitibi Group's rate, one [2] was 50 percent owned by the ACCC and 50 percent by HNMA, and one [3] was owned by CFL.

In antidumping duty changed circumstances reviews involving a change in ownership, the Department typically examines several factors including, but not limited to, changes in: (1) Management; (2) production facilities; (3) customer base; and (4) supplier relationships. See Brass Sheet and Strip from Canada: Notice of Final Results of Antidumping Administrative Review, 57 FR 20460, 20462 (May 13, 1992).

While we recognize that this is not a typical successor-in-interest situation, since the Abitibi Group has not ceased to exist or been substantially changed, we believe that the factors analyzed as part of a successor-in-interest finding are relevant to our determination of the proper cash deposit rate for Abitibi's new affiliate, PFS.

Based on our review of the questionnaire response, we preliminarily find that PFS functions as part of the Abitibi Group. Indeed, as a result of the agreement that formed PFS, significant components of the Abitibi Group's management, production facilities, supplier relationships, and customer base have been incorporated into PFS. PFS's Board of Directors is predominantly composed of directors appointed by the Abitibi Group (three appointed by ACCC, one appointed by CFL, and one appointed by HNMA). The Abitibi Group appointed board members also serve as President, Secretary and Treasurer of PFS. Furthermore, PFS employs former ACCC employees of St. Fulgence and Petit Saguenay sawmills who continue working from the same Abitibi Group facilities.

With regard to production facilities, as noted above, two of the mills as well as 50 percent of the SSL mill already belonged to the Abitibi Group. Production from the Abitibi mills, which accounts for the bulk of PFS's production, was included in determining the Abitibi Group's current cash deposit rate.

In terms of customer base, PFS's price setting, channel of distributions and sales functions have been assigned to ACI, the sales arm of the Abitibi Group. ACI sells the majority of the softwood lumber produced by all four of PFS's sawmills, including all sales of PFS softwood lumber to the United States. Therefore, PFS's customer base is largely that of ACI. Finally, no information on the record indicates any substantial change in supplier relationships of the mills, whose production as stated earlier, is largely from mills already owned by the Abitibi Group.

When PFS purchased two sawmills previously owned by the Abitibi Group, it began to function as a member of the Abitibi Group. PFS's ownership, management, production facilities, supplier relationships, customer base, sales practices and facilities combine important elements of the Abitibi Group. Therefore, we preliminarily find PFS to be a member of the Abitibi Group and entitled to the Abitibi Group cash deposit rate.

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 next administrative review in which Abitibi Group participates.

Public Comment

Any interested party may request a hearing within 20 days of publication of this notice. 19 CFR 351.310(c). Any hearing, if requested, will be held 34 days after the date of publication of this notice, or the first working day thereafter. Interested parties may submit case briefs not later than 20 days after the date of publication of this notice. 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. We will issue the final results of this changed circumstances review no later than May 23, 2005.

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.

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Dated: March 24, 2005.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

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1.  On May 31, 2004, PFS purchased St. Fulgence and Petit Saguenay sawmills from ACCC, via an asset purchase agreement.

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2.  Scierie Saguenay Ltee.

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3.  On May 17, 2004, through an asset purchase agreement, PFS purchased the Laterriere sawmill and related assets from Cooperative Forestiere Laterriere (CFL), which had been insolvent.

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[FR Doc. E5-1402 Filed 3-29-05; 8:45 am]