To date, we have filed two Nissho-Iwai "Third Tier Pricing" letters to U.S Customs outlining our respective clients’ desires to avail themselves of this "manufacturer to middleman" valuation allowance for CVD/ADD duty purposes. Each letter provides the specifics of the respective sale, attesting to the qualifying criteria: intended for export, have no possible alternative destination, and that the manufacturer and the middleman are dealing with each other at arm’s length. And as usual, to date, we have heard nothing from Customs either in writing or verbally - questioning us or our clients regard this matter. Customs’ silence only makes us that much more concerned about their appearance of acquiescing to our position that a Canadian lumber wholesaler’s sale of materials sourced from a non-related Canadian manufacturer to fulfill the wholesaler’s U.S. buyer’s order meets the conditions of the Nissho-Iwai case or McAfee decision.

We had hoped that Customs, through "Internal Advisories", would indicate their acceptance or present their arguments so that we could act accordingly - whether it be offering further evidence Customs would require or advising our clients that this format was found incontrovertibly unacceptable. We would be in a position to respond or react NOW as opposed to down the road after extensive liabilities had accrued.

We would, therefore, counsel anyone wishing to avail themselves of this pricing format to seek binding rulings from the U.S. Customs Service, respective to the merits of their individual cases. Normally, a binding ruling would apply to other parties exporting under an identical situation, as should be the case here. However, as we have implied, the basis for this valuation acceptance is an anomaly to otherwise historically precedent pricing requirements. We should get a much clearer picture of our chances of success after Customs responds to the first such binding ruling request. Upon written instructions, we will tender individual requests on any of our client’s behalf.

Sincerely,

Michael D. Jones, President