TRADE ALERT

Canada-U.S. Softwood Lumber Agreement of 2006

(September 15, 2006)

 

U.S. and Canadian officials have signed a softwood lumber agreement (SLA) that aims to end a two-decade long trade dispute. The government of Canada expects that the agreement will enter into force on October 1, 2006. With the signing and implementation of this landmark agreement, Canada has announced certain initiatives relative to the agreement.

Refund Mechanism

Export Development Canada (EDC) has been designated as agent to facilitate the return of duties owed to Canadian companies by the U.S. Government. For companies that participate in the deposit refund mechanism, EDC will purchase the rights to the duties and interest owed to them, eliminating the waiting period expected for U.S. Customs to process refunds which may take up to two years. It is anticipated that the EDC will be in a position to deliver payments to participating companies within four to eight weeks after the agreement comes into force. More information and next steps are available on line at http://www.edc.ca/english/softwood_11547.htm

Registration/Permit Process

Canada Revenue Agency (CRA) is currently mailing out a documentation package to all Canadian softwood exporters relative to registering for the softwood lumber products export charge. They are:

Effected companies should examine this process carefully, as the requirements are very detailed and require precise coordination. Parties with questions relative to this documentation may contact CRA at (800) 935-0313 (English) or (800) 935-0340 (French). Additional information is available on line at http://www.cra-arc.gc.ca/tax/business/topics/swl/menu-e.html.

Importers and exporters who are affected by this agreement should be aware that U.S. Customs and Border Protection have not yet provided information regarding the effect the agreement may have on their operations or procedures.

Deringer, continues to monitor this issue and will provide more information as it becomes available.

Deringer's consulting & regulatory affairs group offers a full scope of services to support importers/exporters, carriers, and supply chain partners. For more information regarding this advisory, please call 518-297-3511, or email us at consulting@anderinger.com.