USTR Modifies HTS to Reflect Canada’s Collection of Softwood Lumber Duties
The Office of the U.S. Trade Representative has issued a notice announcing that it is modifying the Harmonized Tariff Schedule to reflect that Canada will begin collecting the additional 10% duty on exports to the U.S. of softwood lumber products from the provinces of Ontario, Quebec, Manitoba, and Saskatchewan for products with a shipment date of September 1, 2010 or later.
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The U.S. had been collecting these duties on such imports into the U.S. since April 2009, as Canada was found to have breached the Softwood Lumber Agreement of 2006 (SLA 2006). The U.S. and Canada recently agreed to transfer the collection of duties to Canada. In order to prevent any gap in collection of the duty, during this transition, the U.S. will continue to apply 10% import duty to entries after September 1, 2010 with a shipment date of August 31, 2010 or earlier.
HTS Updated to Reflect Change
In accordance with the USTR’s determination that Canada can collect the export duty, HTS Chapter 99, Subchapter III, U.S. Note 13 is amended by replacing the text of subdivision (i) to read as follows:
The additional duties provided for in subheading 9903.53.01 shall apply to articles entered or withdrawn from warehouse for consumption on or after September 1, 2010, if the Canadian export permits associated with the entries display a shipment date prior to September 1, 2010. The additional duties provided for in subheading 9903.53.01 shall not apply to articles entered or withdrawn from warehouse for consumption on or after September 1, 2010, if the Canadian export permits associated with the entries display a shipment date of September 1, 2010 or later.
(Subdivision (i) previously stated that the additional duties provided for in subheading 9903.53.01 shall no longer apply after USTR, in consultation with U.S. Customs and Border Protection, has determined that $54.8 million in additional duties has been collected. USTR shall notify U.S. CBP of the date on which to cease collecting the additional duties, and USTR shall publish a notice in the Federal Register terminating the application of additional duties under subheading 9903.53.01 and deleting this note and subheading 9903.53.01 and the superior text thereto from the HTS.)
Canada to Impose Duty until $54.8 Million USD is Collected, Share Information
Per the understanding between the governments of the U.S. and Canada, Canada will collect the additional 10% duty on exports until the total of the amounts collected under the U.S. import duty and the Canadian duty on exports is equal to US $54.8 million. The understanding also provides for the U.S. and Canada to exchange information on the ongoing amounts collected under the U.S. import duty and the Canadian duty on exports.
(USTR sources recently stated that they believe that over half of the $54.8 million has now been collected by U.S. Customs and Border Protection. Canada stated that once it starts collecting the 10% additional duty, the revenue collected will stay in Canada and be distributed back to the four provinces.)
(See ITT’s Online Archives or 08/23/10 news, 10082315, for BP summary of Canada announcing it would begin collecting these duties.
See ITT’s Online Archives or 08/19/10 news, 10081918, for BP summary of Senator Baucus’ letter to the USTR alleging that the Provincial Government of British Columbia is circumventing the SLA 2006.)