Trade Compliance

GHY discusses changes to international trade regulations and explores cutting-edge compliance strategies.

Cash Deposits Now Required on Canadian Softwood Lumber Imports

Posted May 02, 2017

The U.S. Department of Commerce last Friday officially published in the Federal Register the preliminary countervailing duty determination on softwood lumber from Canada. Accordingly, cash deposit requirements on imports of the subject goods will be effective as of April 28, 2017.

The deposit rates vary, with each of the five individually investigated companies paying their own rate (ranging from 3.02% to 24.12%), and all other producers and exporters paying 19.88%.

Collection of cash deposits for four of the individually investigated companies (Resolute, Tolko, West Fraser, and Canfor) will affect subject goods entering the U.S. on or after Friday.

Additionally, because the Department preliminarily determined that “critical circumstances” exist for Irving and “all other” producers and exporters, cash deposit requirements for those companies retroactively apply to imports which entered up to 90 days prior to Friday’s publication.

Cash deposits are not a final assessment of duties, but are collected by U.S. Customs at the time of import as a form of security as the investigation proceeds.  Preliminary CVD cash deposits will be collected by Customs and Border Protection for four months (i.e., until late August).  Meanwhile, Commerce will complete the investigation and determine final rates which will apply if the International Trade Commission makes an affirmative injury determination.

If the final rates announced later this year are higher than the preliminary rates announced this week, a higher cash deposit rate will take effect at that time.  If the final rates are lower, cash deposits will decrease to match those rates, and companies will receive a refund, with interest, for the difference paid in the interim.  If there is an order at the end of the investigations (i.e., if there is both a final affirmative CVD and injury determination), cash deposits will resume at those rates; if there is no order, all deposits are refunded, with interest.

After one year, companies will have an opportunity to request annual reviews by the Department of Commerce of the rates calculated in the investigation.  Upon completion of those reviews, the Department of Commerce will calculate and assess final duties for past entries, and cash deposits going forward will be adjusted to reflect those new rates.

Supplementary Documents

In addition to the Federal Register notice and the brief report summarizing preliminary findings of the Commerce Department, a more comprehensively detailed explanation of the reasons and methodology underpinning the U.S. government’s decision can be found in the unpublished 124-page Preliminary Determination Memorandum that can be viewed here.