CBP Discontinues 10% Duty on Softwood Lumber Imports from Canada
On
August 30, 3010, the Office of the U.S. Trade
Representative (USTR) issued a notice in the
Federal
Register advising that
U.S. Customs and Border Protection (CBP) will no
longer collect 10 percent duty on softwood
lumber imports from Canada associated with the
Section 301 action, effective for those entries
that bear Canadian export permits and were
shipped on September 1, 2010 or later.
The duty was imposed pursuant to investigation under Section 302 of the Trade Act of 1974, where USTR determined in April 2009 that Canada had breached certain obligations to the U.S. under the 2006 Softwood Lumber Agreement (SLA). The investigation was initiated after an arbitral tribunal determined under the SLA that Canada had breached certain obligations. The tribunal issued a remedy award instructing Canada to collect an additional 10 percent ad valorem export charge on softwood lumber shipments from Ontario, Quebec, Manitoba, and Saskatchewan until an award amount of CDN $68 million had been collected. When Canada failed to collect the additional export charges, USTR imposed a 10 percent duty on imports under the April 2009 action until the U.S. collected the $54.8 million (U.S. dollar equivalent of CDN $68 million) remedy award.
Government of Canada has now adopted its own measures to address Canada’s breach of the SLA. Specifically, Canada will begin collection of an additional 10 percent charge on exports of softwood lumber products from the provinces of Ontario, Quebec, Manitoba, and Saskatchewan with respect to softwood lumber products shipped on September 1, 2010 or later. An understanding between the Governments of the U.S. and Canada has been reached that Canada will collect the additional charge on softwood lumber exports until the total of the remedy award is collected.
CBP will be monitoring all ports to ensure that the 10 percent duty has been paid on the softwood lumber imports from Canada with shipment dates of September 1 or later.
The duty was imposed pursuant to investigation under Section 302 of the Trade Act of 1974, where USTR determined in April 2009 that Canada had breached certain obligations to the U.S. under the 2006 Softwood Lumber Agreement (SLA). The investigation was initiated after an arbitral tribunal determined under the SLA that Canada had breached certain obligations. The tribunal issued a remedy award instructing Canada to collect an additional 10 percent ad valorem export charge on softwood lumber shipments from Ontario, Quebec, Manitoba, and Saskatchewan until an award amount of CDN $68 million had been collected. When Canada failed to collect the additional export charges, USTR imposed a 10 percent duty on imports under the April 2009 action until the U.S. collected the $54.8 million (U.S. dollar equivalent of CDN $68 million) remedy award.
Government of Canada has now adopted its own measures to address Canada’s breach of the SLA. Specifically, Canada will begin collection of an additional 10 percent charge on exports of softwood lumber products from the provinces of Ontario, Quebec, Manitoba, and Saskatchewan with respect to softwood lumber products shipped on September 1, 2010 or later. An understanding between the Governments of the U.S. and Canada has been reached that Canada will collect the additional charge on softwood lumber exports until the total of the remedy award is collected.
CBP will be monitoring all ports to ensure that the 10 percent duty has been paid on the softwood lumber imports from Canada with shipment dates of September 1 or later.