Duties on coniferous shingles and sawn shakes from Canada

The U.S. Customs and Border Protection (CBP) agency has issued a Cargo System Messaging Service (CSMS) notice 18-000223 advising that Coniferous Shingles and Sawn Shakes “shingles and shakes” from Canada fall within the scope of anti-dumping and countervailing (AD/CVD) cases A122-857/C122-858 related to softwood lumber, and must be entered under entry type 03 with payment of AD/CV duties.

CBP advises that they will be monitoring importation of this merchandise. Importers should be aware that enforcement actions, including penalties, may be assessed for failure to properly file AD/CVD entries and pay the duty amounting to a combined 20.23% on the entered value of the goods.

Irregular circumstances

The notification by CBP through a CSMS is non-regular. In AD/CVD matters, it would be the normal practice to first see the Department of Commerce (DOC) issue some guidance – especially in an instance where the scope seems to have been expanded. No time was provided to importers or other interested parties to make comments or prepare their business for such an impactful decision.

In this case, CBP is asserting that the shingles and shakes fall inside of the scope description for softwood lumber. The scope of the AD/CVD orders on softwood lumber from Canada (case numbers A-122-857/C-122-858) covers:

“coniferous wood, sawn, or chipped lengthwise, sliced or peeled, whether or not planed, whether or not sanded, or whether or not finger-jointed, of an actual thickness exceeding six millimeters.”

CBP went on to say that the DOC’s preliminary determination and final determination of scope covers softwood lumber products that exceed six millimeters in thickness at one end, even if the products are tapered to less than six millimeters at the other end. Therefore, the fact that certain softwood lumber products are tapered to less than six millimeters in thickness does not remove them from the scope.  Additionally, the fact that certain softwood lumber products are not explicitly named in the scope, or that these products may be covered by a U.S. Harmonized Tariff System (USHTS) heading that was not specifically listed in the scope, does not necessarily remove them from the scope.

However, from the outset of the softwood lumber AD/CVD orders (June 30, 2017 for the anti-dumping order and April 28, 2017 for the countervailing order), it has been the contention of the industry that shingles and shakes were out of scope. In its analysis, CBP did not seem to go far enough in the overall assessment of the scope in this case. Among other reasons, shakes and shingles are a finished product that has undergone sufficient processing that should take them beyond the softwood lumber scope. It’s possible that the action could be connected to further NAFTA renegotiation ammunition or to increase pressure on Canada to reach a Softwood Lumber Agreement with the United States.

Due to the impact, it is expected that affected parties will move forward as quickly as possible to get the DOC to rule specifically on the scope.

Nonetheless, CBP has issued the CSMS as informed compliance to importers. It is now the responsibility of importers to file type 03 entries on shingles and shakes.

The USHTS Codes affected in this case are:

  • 4418.50.0010
  • 4418.50.0030
  • 4418.50.0050

The Case Numbers and duty rates are as follows:

  • A-122-857 = 6.04%
  • C-122-858 = 14.19%