TRADE ALERT

Softwood Lumber Agreement Update

(September 29, 2006)

U.S. and Canadian officials have signed a softwood lumber agreement (SLA) that aims to end a two-decade long trade dispute. While the agreement is expected to enter into force on October 1, 2006, there still exists uncertainty as to whether or not there will be a postponement. Regardless of whether or not there is a postponement, Deringer advises all softwood lumber clients to prepare themselves for the changes embodied in the new agreement. Significant changes are summarized below.

v Affected parties must apply for a softwood lumber permit prior to the shipment’s arrival at the border

v Importers of Record are required to include the export permit number with the consumption entry (CF7501). Therefore, Deringer recommends that exporters who are applying for the lumber permit themselves legibly write the export permit number on their invoice that is faxed to Deringer and subsequently presented to US Customs & Border Protection (CBP). Deringer will then transmit the export permit number to CBP along with other required entry information.

v If Deringer is obtaining the softwood lumber permit on your behalf, then the following information must be included on your invoice at the time of shipment as defined in the Softwood Lumber Agreement:

o Manufacturer’s Canada Revenue Agency Business Number

o Export and Import Control Bureau Company File Number

o Canadian Customs tariff number (10 digits)

o Export price as defined in the SLA

o Canadian Shipment Date as defined in the SLA

o Maritime Lumber Bureau Certificate of Origin serial number if applicable.

This information must be sent to Deringer well in advance of the shipment date, so that we can apply for the permit prior to the shipment arrival at the border.

Deringer is relying on information provided to them by its clients and assumes no liability for origin or value as implied under the Softwood Lumber Agreement. These are matters that should reviewed by attorneys and other legal advisors.

Affected persons should be aware that nothing in the SLA shall prevent a party from imposing criminal, civil, or administrative penalties for violations of its laws and regulations relating to the matters in the agreement.

All interested parties are encouraged to review the agreement in its entirety at http://www.dfait-maeci.gc.ca/trade/eicb/softwood/SLA-main-en.asp.

Deringer, continues to monitor this issue and will provide more information as it becomes available. For more information, please contact your local Deringer branch at 800-448-8108.