CSMS Message: 97-000205

TO : ALL ABI BROKERS.

FROM : GARY ZZ-MANES

SUBJECT : SOFTWOOD LUMBER--NEW REGS

DATE : 02/27/97

7058071
FEBRUARY 27, 1997

TO : ALL PORT DIRECTORS AND ENTRY FILERS

FROM : DIRECTOR, TRADE AGREEMENTS

SUBJECT: COLLECTION OF THE PERMIT TYPE CODES AND PERMIT NUMBERS
FOR ENTRY SUMMARY PROCESSING OF IMPORTATIONS OF CANADIAN
SOFTWOOD LUMBER

PASS TO: ALL IMPORT SPECIALISTS, NATIONAL AND FIELD IMPORT
SPECIALISTS, INSPECTORS, ENTRY PERSONNEL, OTHER CONCERNED
CUSTOMS EMPLOYEES. BROKERS AND IMPORTERS

REFERENCE: ON FEBRUARY 26, 1997 CUSTOMS REGULATIONS 19 CFR 12.140 --
SOFTWOOD LUMBER FROM CANADA, AND 19 CFR 113.62(K) --
CUSTOMS BONDS WERE PUBLISHED IN THE FEDERAL REGISTER.

THIS NOTICE REMINDS THE IMPORTING COMMUNITY OF THEIR OBLIGATIONS
UNDER THESE REGULATIONS, AND SUPERSEDES ALL PREVIOUS
INSTRUCTIONS CONCERNING THE COLLECTION OF EXPORT PERMIT DATA
COVERING SOFTWOOD LUMBER SUBJECT TO THE U.S./CANADA SOFTWOOD
LUMBER AGREEMENT OF 1996.

BACKGROUND

ON MAY 29, 1996, THE UNITED STATES ENTERED INTO THE SOFTWOOD
LUMBER AGREEMENT (THE AGREEMENT) WITH CANADA UNDER THE AUTHORITY
OF SECTION 301(C)(1)(D) OF THE TRADE ACT OF 1974, AS AMENDED.

THE AGREEMENT REFERS SPECIFICALLY TO SOFTWOOD LUMBER MILL
PRODUCTS CLASSIFIED IN SUBHEADINGS 4407.10.00, 4409.10.10,
4409.10.20, AND 4409.10.90 OF THE HARMONIZED TARIFF SCHEDULE OF
THE UNITED STATES (HTSUS) THAT WERE "FIRST MANUFACTURED" INTO A
PRODUCT OF ONE OF THOSE HTSUS SUBHEADINGS IN THE CANADIAN
PROVINCES OF ONTARIO (XO), QUEBEC (XQ), BRITISH COLUMBIA (XC) OR
ALBERTA (XA).

THE AGREEMENT REQUIRED THE COLLECTION OF INFORMATION BY CANADA IN
CONNECTION WITH THE ISSUANCE OF EXPORT PERMITS FOR SOFTWOOD
LUMBER FIRST MANUFACTURED IN ONTARIO, QUEBEC, BRITISH COLUMBIA
AND ALBERTA AND THE COLLECTION OF INFORMATION BY THE UNITED
STATES IN CONNECTION WITH IMPORT TRANSACTIONS INVOLVING SUCH
LUMBER.

- 2 -

WITH REGARD TO THE IMPORT END, THE AGREEMENT OBLIGATES THE UNITED
STATES TO REQUIRE THAT THE U.S. IMPORTER PROVIDE SPECIFIC
INFORMATION IN CONNECTION WITH THE ENTRY OF THE LUMBER UNDER
SECTION 484 OF THE TARIFF ACT OF 1930, AS AMENDED (19 U.S.C.
1481). THE INFORMATION REQUIRED TO BE COLLECTED UNDER THE
AGREEMENT INCLUDES THE FOLLOWING THREE SPECIFIC DATA ELEMENTS:
(1) THE PROVINCE OF FIRST MANUFACTURE OF THE LUMBER; (2) THE
EXPORT PERMIT NUMBER ISSUED IN CANADA OF THE SHIPMENT; AND (3)
THE FEE STATUS OF THE LUMBER FOR WHICH THE EXPORT PERMIT WAS
ISSUED (WHETHER THE LUMBER IN THE SHIPMENT WAS ATTRIBUTED TO A
QUANTITY TO WHICH NO FEE APPLIES OR TO A QUANTITY THAT IS SUBJECT
TO THE $ 50 FEE OR TO A QUANTITY THAT IS SUBJECT TO THE US$100
FEE OR TO A QUANTITY THAT IS COVERED BY THE TRIGGER PRICE
MECHANISM).

VALID FEE STATUS CODES (PERMIT TYPE CODES) ARE "A", "B", "C", AND "D".
WHEN THE FEE STATUS CODE (PERMIT TYPE CODE) IS "D", IT MUST
BE FOLLOWED BY "01" THROUGH "20". THE NUMBERS "01" THROUGH "20"
REPRESENT THE APPLICABLE QUARTER OVER THE FIVE (5) YEAR LIFE OF THE
AGREEMENT BEGINNING ON APRIL 1, 1996. IN ACCORDANCE WITH
19 CFR 12.140, THE FOLLOWING REPRESENT THE FEE STATUS CODES
(PERMIT TYPE CODES) AND FEE SCHEDULES FOR SOFTWOOD LUMBER IMPORTS FROM
CANADA INTO THE UNITED STATES:

1. A -- NO FEE - THE EXPORTED PRODUCT FALLS WITHIN
THE BASE AMOUNT OF 14.7 BILLION BOARD
FEET;

2. B -- $50 MBF (THOUSAND BOARD FEET) - THE EXPORTED
PRODUCT FALLS BETWEEN 14.7 BILLION BOARD
FEET BUT IS NOT IN EXCESS OF 15.35
BILLION BOARD FEET;

3. C -- $100 MBF - THE EXPORTED PRODUCT IS IN EXCESS
OF 15.35 BILLION BOARD FEET; OR

4. D -- NO FEE WHEN THE EXPORTED PRODUCT IS EXPORTED
IN EXCESS OF 14.7 BILLION BOARD FEET BECAUSE
THE AVERAGE PRICE OF THE EXPORTED PRODUCT
EXCEEDED A PRESCRIBED TRIGGER PRICE DURING
ANY PREVIOUS QUARTERLY PERIOD.

ABI FILERS WILL TRANSMIT THE EXPORT FEE PAYMENT STATUS (PERMIT
TYPE CODE) IN POSITIONS 70 THROUGH 72 OF THE 40 RECORD, AND THE
PERMIT NUMBER IN POSITIONS 57 THROUGH 65 (RIGHT JUSTIFIED) OF THE
51 RECORD. THE PERMIT TYPE CODE WILL BE PLACED ON THE CF 7501
DIRECTLY BELOW THE HTSUS ITEM NUMBER, WITH THE PERMIT NUMBER
ADJACENT THERETO.

**********

- 3 -

THE FOLLOWING WARRANT FURTHER DISCUSSION BECAUSE OF THE
UNIQUENESS TO THIS AGREEMENT.

UNTIMELY ISSUANCE OF EXPORT PERMIT (19 CFR 12.140(C)).

THE NEW 19 CFR 12.140(C), NOTWITHSTANDING THE REQUIREMENT SET
FORTH IN 19 CFR 142.12(B), PROVIDES AN ADDITIONAL 10 WORKING
DAYS TO FILE ENTRY SUMMARY DOCUMENTATION FOR SHIPMENTS OF COVERED
SOFTWOOD LUMBER FOR WHICH THE GOVERNMENT OF CANADA HAS NOT ISSUED
AN EXPORT PERMIT. IF THE EXPORT PERMIT DATA (PEMIT NUMBER AND
FEE STATUS) IS NOT RECEIVED WITHIN 20 WORKING DAYS AFTER THE TIME
OF ENTRY OF THE PRODUCT, THE ENTRY SUMMARY SHALL BE FILED ON THE
NEXT BUSINESS DAY WITH THE FOLLOWING INFORMATION, IN LIEU OF THE
ACTUAL PERMIT CODE AND PERMIT NUMBER, ON THE ENTRY SUMMARY OR AN
ELECTRONIC EQUIVALENT:

1. THE PERMIT NUMBER FIELD SHALL BE COMPLETED BY INSERTING
AS MANY EIGHTS (8'S) AS ARE NECESSARY TO COMPLETE THE FIELD;
AND

2. THE EXPORT FEE PAYMENT STATUS FIELD (PERMIT TYPE CODE)
SHALL BE COMPLETED BY INSERTING AN "A" FOLLOWED BY TWO
ZEROES.

ENTRIES FILED WITH THESE CODES PRIOR TO THE EXPIRATION OF 20 WORKING
DAYS WILL BE REJECTED. THIS PROVISION WAS ADOPTED TO PROVIDE
ADDITIONAL TIME FOR THE IMPORTER OF RECORD TO OBTAIN THE EXPORT PERMIT
DATA.

THIS PROCEDURE IN NO WAYS RELIEVES THE IMPORTER OF RECORD FROM
THE OBLIGATIONS SET FORTH IN NEW 12.140(A). FAILURE TO PROVIDE THE
PERMIT NUMBER AND THE EXPORT FEE PAYMENT STATUS (PERMIT TYPE CODE)
WITHIN 20 WORKING DAYS OF ENTRY SHALL CONSTITUTE A FAILURE TO COMPLETE
THE ENTRY WITHIN THE MEANING OF 19 CFR 113.62(B), AND SUBJECT THE
IMPORTER OF RECORD TO LIQUIDATED DAMAGES OF $100 PER THOUSAND BOARD
FEET OF THE IMPORTED LUMBER TO BE ASSESSED UNDER THE CUSTOMS BOND.

WHEN THE EXPORT PERMIT DATA IS SUBMITTED SUBSEQUENT TO THE 20
WORKING DAYS PERIOD, THE ENTRY SECTION WILL UPDATE THE APPLICABLE
ENTRY SUMMARY LINE ITEM RECORD IN ACS BY COMPLETING THE FIELDS,
LUM PERMIT AND LUM PERM NUM ON THE ENLC SCREEN WITH THE PERMIT
TYPE CODE AND PERMIT NUMBER RESPECTIVELY.

**********

- 4 -

ABSENCE OF EXPORT PERMIT NUMBER AND FEE STATUS DATA FOR CERTAIN
REMANUFACTURED SOFTWOOD LUMBER PRODUCTS (19 CFR 12.140(D))

FOR ALL U.S. SOFTWOOD LUMBER EXPORTED TO THE CANADIAN PROVINCES
OF ONTARIO (XO), QUEBEC (XQ), BRITISH COLUMBIA (XC) OR ALBERTA
(XA) FOR FURTHER MANUFACTURE, AND, UPON RETURN TO THE U.S.,
CLASSIFIED UNDER TARIFF ITEMS 4407.10.00, 4409.10.10, 4409.10.20
OR 4409.10.90, FILERS SHOULD, IN LIEU OF AN ACTUAL PERMIT CODE
AND PERMIT NUMBER, ON THE ENTRY SUMMARY OR ELECTRONIC EQUIVALENT:

1. COMPLETE THE PERMIT NUMBER FIELD BY INSERTING AS MANY
NINES (9'S) AS ARE NECESSARY TO COMPLETE THE FIELD; AND

2. INSERT AN "A" IN THE EXPORT FEE PAYMENT STATUS FIELD
(PERMIT TYPE CODE) FOLLOWED BY TWO ZEROES.

**********

CUSTOMS BONDS (19 CFR 113.62(K)(1)(5)).

IN ACCORDANCE WITH NEW PARAGRAPH (K) OF 19 CFR 113.62, THE
PRINCIPAL AGREES, AS SET FORTH IN SECTION 19 CFR 12.140(A), TO
ASSUME THE OBLIGATION TO ENSURE WITHIN 20 WORKING DAYS OF RELEASE
OF THE MERCHANDISE THAT THE APPLICABLE EXPORT PERMIT NUMBER AND
EXPORT FEE PAYMENT STATUS (PERMIT TYPE CODE) WILL BE PRESENTED TO
U.S. CUSTOMS.

NEW PARAGRAPH (5) OF 19 CFR 113.62(K)(1)) PROVIDES THAT A
DEFAULT BY THE PRINCIPAL OF THIS AGREEMENT WILL RESULT IN THE
ASSESSMENT OF LIQUIDATED DAMAGES EQUAL TO $100 PER THOUSAND BOARD
FEET OF THE IMPORTED LUMBER.

*******

FINALLY, THE PROVISIONS IN ARTICLE IV OF THE AGREEMENT FOR
INFORMATION COLLECTION, EXCHANGE AND RECONCILIATION WERE DESIGNED
TO IDENTIFY PROBLEMS AND RESOLVE DISCREPANCIES PROMPTLY IN A
MANNER THAT ENSURES THE VIABILITY OF THE AGREEMENT. THEREFORE,
THE NEED FOR ACCURACY WHEN TRANSMITTING THIS DATA CAN NOT BE OVER
EMPHASIZED.

THESE REQUIREMENTS APPLY TO ENTRY SUMMARY PROCESSING VIA ABI AS
WELL AS ON-LINE. FOR ANSWERS TO QUESTIONS ON ABI ISSUES PLEASE
CONTACT YOUR ABI CLIENT REPRESENTATIVE. FOR QUESTIONS CONCERNING
THIS MESSAGE CONTACT GARY MANES AT (202) 927-1133.

(SIGNED)
JOYCE METZGER