U.S. – Canada Softwood Lumber Agreement 2006 January 2007

Objectives  Obligations  Scope  Exclusions  Entry Summary Information  Document Requirements  Enforcement  Data Quality/Clean-up Campaign

Softwood Lumber Background May 22, 2002  Softwood lumber products from Canada are subject to antidumping and countervailing duties Sept 12, 2006  Softwood Lumber Agreement signed Oct 12, 2006  Softwood Lumber Agreement entered into force Oct 16, 2006  Interim rule promulgated by CBP (71 FR 201 dated 10/18/06) AD/CVD to SLA 2006

Obligations of SLA 2006  Antidumping and Countervailing duties for Softwood Lumber products from Canada were revoked  1,351,752 entries were affected by the revocation  $5,569,628, was refunded  Majority of liquidations completed in 13 weeks  Softwood lumber products are subject to export measures in Canada prior to importation  Some exclusions apply  Requires submission of new entry summary information

Differences between 1996 and 2006  1996  Export permit provided 20 days after release  British Columbia Province code was XC  Provinces – British Columbia, Quebec, Ontario and Alberta  2006  Export permit must be obtained prior to export and the permit number transmitted to CBP at entry summary  British Columbia region was divided into BC Coast - XD and BC Interior - XE  Regions – British Columbia, Quebec, Ontario, Alberta, Manitoba, Saskatchewan  Excluded Regions – Maritime, Yukon, Northwest Territories, Nunavut only when softwood lumber product is produced from logs originating in these regions

Sections of Agreement addressing Customs issues  Article I Scope of Coverage  Annex 1 A Softwood Lumber Products  Article X Exclusions from export measures  Regions – Maritimes, Yukon, Nunavut, Northwest Territories  Companies – Listed in Annex 10  Article XV Information Collection and Exchange  Article XXI Definitions  Defines various terms within the Agreement

Products Subject to SLA 2006  Softwood lumber products processed in Canada and imported into the US and classified in Chapter 44 of the HTS 2007 HTSUS * * * * * Lumber products classified in these tariff numbers that do not conform to the specifications of the exclusion in Annex 1A(4) are subject to SLA HTSUS * * *

First Mill  What is a First Mill?  The facility at which the Softwood Lumber Products are first produced  Why is it important?  The Region of Origin being reported to CBP is based on the Region where the goods were first produced  The Export Charge and Export Charge Plus Volume Restraint is assigned by Region

Export Measures  Regions that selected this Option*:  British Columbia Coast and Interior  Alberta  NOTE: All Regions required to use Option A from Oct. 12, 2006 – Dec. 31, 2006 Option B  Regions that selected this Option:  Manitoba  Saskatchewan  Ontario  Quebec Option A

Exclusions  Excluded from scope of Agreement  Specific products  Products meeting certain requirements  Excluded from export measures in Canada  Specific Regions  Specific Companies

Excluded from Scope of Agreement  Certain softwood lumber products classified in Chapter 44 of the HTS are exempt from the scope of the SLA 2006  List of these products is found in Annex 1A (3)(a-k) Specific Products

Excluded from Scope of Agreement  Processed softwood lumber products that meet specific specifications are exempted from the scope of the SLA 2006  List of these products is found in Annex 1A (4)(a-f) and (5) Products Meeting Certain Requirements

Excluded From Export Measures  First produced in the Yukon, Northwest Territories or Nunavut from logs originating in the those regions Maritime Region Specific Companies  Products produced by certain companies  List of companies found in Annex 10 Specific Regions  First produced in the Maritimes from logs originating in the Maritimes or Maine

Entry Summary Information  Region of Origin  Export Permit Number issued by Canada  Original paper Certificate of Origin issued by the Maritime Lumber Bureau for lumber originating or produced from Maritime logs Additional Required Information*  Remote Location Filing (RLF) may be used for all softwood lumber entries except from the Maritimes

Region of Origin  Country of Origin on entry summary must reflect the Region of Origin in Canada  Region of Origin must reflect corresponding Province Code in Canada  XA = Alberta, etc.  British Columbia  XD = BC Coast  XE = BC Interior Entry Summary Procedures

Export Permit  Export permit MUST be for one entry summary only  NO duplicates allowed under any circumstance  The export permit number MUST be reported on the entry summary for the following:  Products excluded from export measures but included in scope  Products included in scope  The export permit is not required for the following:  Products exempt from the scope Entry Summary Information

Export Permit Configurations  Letter corresponding to month shipped MUST precede export permit number  A = January  B = February  C = March, etc. Lumber Products subject to the Scope

Export Permit Configuration  Products that are within scope but are from a Region or company that is excluded MUST submit an export permit number.  Letter corresponding to the excluded Region or excluded company MUST precede the export permit number (do not report month shipped):  M = Maritimes  N = Nunavut  W = Northwest Territories  Y = Yukon  X = Companies listed in Annex 10 Regions and Companies Excluded from Export Measures

Export Permit Configuration  The export permit field on entry summary is a required field  The following number should be input in the export permit field for products that are excluded from the scope of the SLA 2006 such as those products classified under : P Products Excluded From Scope

Permit Not Obtained  Softwood Lumber Products that require an export permit and one has not been obtained at entry summary should use the following number: R  Export Permit follow-up required Entry Summary Procedures

Maritime Entries  Entry Summary MUST be filed as a paper summary  The Original Certificate of Origin issued by the Maritime Lumber Bureau MUST be provided in paper form with the entry summary documents  Export Permit is required  Maritime Provinces:  New Brunswick  Nova Scotia  Prince Edward Island  Newfoundland and Labrador Entry Summary Procedures

Document Requirements  Export Permit MUST be produced upon request by CBP  Paper copy of Maritime Certificate of Origin MUST be presented at entry summary All Softwood Lumber Entries

Enforcement Actions  Recordkeeping  19 USC 1509(a)1(A) and (g)  Authority to examine and request documents  Penalty for failure to produce requested documents  Broker Penalties  19 USC 1641  Penalties for failure to exercise responsible supervision and control over customs business  Fraud  19 USC 1592  Penalties for fraud, gross negligence and negligence

Data Quality  Submit appropriate Region code  Submit appropriate Export Permit Number format  No Duplicate use of permit numbers  Submit Supplemental Information Letters/Post – Entry Amendments (SIL/PEA) to make corrections

References  The SLA 2006:  Interim Rule and Implementation Instructions:  CBP SLA Questions  or Softwood Lumber Control Hotline