J&J International Trade Notice 2003-2

July 23, 2003 – Five Pages

Reman Rates Take Precedent Over Primary/First Mill

In a completely unprecedented move, and contrary to Commerce’s November 7, 2001 verbal instructions and historical precedent, Customs has revised “Producer” status for purposes of determining CVD/ADD rates to be used. As opposed to the acknowledged Primary/First Mill status, as “Producer”, Customs’ July 18, 2003 Trade Information Notice (Blaine PIN 2003-45) NOW deems that lumber “further processed” by a second Canadian company (remanner) negates Primary/First Mill “Producer” status.

Immediately upon receipt of Commerce’s November 6, 2001 Memorandum announcing CVD and ADD Margins, J & J requested written clarification as to this exact matter. Commerce “verbally” confirmed that CVD/ADD rates would be applicable to the Primary/First Mill or “Producer” – that a Reman was NOT a “Producer” for purposes of this investigation”. We were advised that because a precedent had been set - no written clarification would be required. All CVD/ADD submissions, with the exception of Maritime Exempt Province materials remanned in a non-exempt Province, per Commerce’s confirmation, have been filed using Primary /First Mill “Producer” rates.

J & J’s April 1, 2003 petition argued “Entry Rejects” and “CF-29 Notices of Actions” requiring payment of “Other Margin” CVD/ADD assessments for materials sourced from “Exempted” or “Reduced Rate” Primary/First Mills remanned by a second Canadian company prior to export. Our petition shared 1) Commerce’s November 2001 position, 2) pointed out that Primary/First Mill “Producer” CVD/ADD rates have been used since the margins were announced, and 3) that where higher Primary/First Mill rates were used instead of the Canadian reman’s lower “Other Margin “ rate - Customs did not “Reject”, remit “CF-29 Notices of Action”, or otherwise instruct that the lower rate should be used.

Commerce never responded to our petitions. This Customs “Notice” is obviously an example of how Commerce intends to deal with politically sensitive matters. Unless the issue is successfully argued in court – these departments will continue to win by default.

Customs makes no mention as to how the Trade is to deal with past “inaccurately” submitted entries, leaving us to assume they plan to deal with this matter upon liquidation. We are, however, legally required to instruct that from this point forward - export documents and payments should reflect last Canadian “Producer” (reman) rates.

Jones & Jones Customs Brokers

Michael D. Jones, President