The Softwood Lumber Agreement of 2008 was enacted June 18, 2008, and was to become effective on August 18, 2008. However, as of August 18, Customs and Border Protection (CBP) has yet to publish the rule and, due to the complexity of the programming changes required by Customs to implement the rule, it is not yet ready to begin enforcement.

CBP will therefore delay the enforcement of the SLA 2008 for 30 days- beginning the enforcement of the data collection requirements on September 18. Entries of softwood lumber made between August 18 and September 17 will not be rejected based on any SLA 2008 requirements, nor will they be required to be neither amended nor supplemented to provide the three new data elements retroactively. CBP suggests that importers use this time to prepare for enforcement on September 18, 2008.

Background

The Food, Conservation, and Energy Act of 2008, also known as the Farm bill, became law on June 18, 2008. One of the sections of the bill contains significant changes to the requirements for importing softwood lumber and certain softwood lumber products such as plywood, posts, trusses and beams, and fence posts into the United States. The products included in this bill are the same articles that currently are included in the U.S.-Canada Softwood Lumber Agreement (SLA). Most softwood lumber imports come from Canada, but the bill affects importations of softwood lumber and certain products from any country.

The law, which is expected to take effect on August 18, 2008, requires a declaration regarding the export price and export charges for each shipment. The importer will be required to submit the following information.

1. The export price for each shipment of softwood lumber or softwood lumber products.
   
   
2. The estimated export charge, if any, applicable to each shipment of softwood lumber or softwood lumber products as calculated by applying the percentage factor, as determined monthly by the Department of Commerce, (DOC) to the export price.

In addition the importer will submit an Importer’s Declaration stating that

1. The importer has made the appropriate inquiry, including seeking appropriate documentation from the exporter and consulting the determinations and percentage published by the DOC; and
   
   
2. To the best of the person’s knowledge and belief—
   
   
   1. The export price provided is determined according to the definition of Export Price as provided in the bill (see the attachment).
      
      
   2. The export price provided is consistent with the export price provided on the export permit, if any, granted by the country of export; and
      
      
   3. The exporter has paid, or committed to pay, all export charges due under any agreement between the United States and the country of export.

At this point Customs has not clearly defined the mechanism for making or reporting the declaration. It is expected that Customs may allow a blanket declaration, but that is not currently part of the bill. Customs is expected to provide a method of reporting the declaration electronically, but has not yet done so. The export charge percentage for those countries included in the SLA will be published on a DOC website that has not yet been created.

Failing to provide this information, or failing to use proper care in determining this information may result in shipment delays or in penalties levied by U.S. Customs and Border Protection.

Further updates will be provided as information becomes available.

The text of the law can be found at http://thomas.loc.gov/cgi-bin/query/F?c110:3:./temp/~c110DXoV00:e15616 : under Title VIII—Softwood lumber

ATTACHMENT: EXPORT PRICE

IN GENERAL- The term 'export price' means one of the following:

1. In the case of softwood lumber or a softwood lumber product that has undergone only primary processing, the value that would be determined F.O.B. at the facility where the product underwent the last primary processing before export.
   
   
2. 1. In the case of softwood lumber or a softwood lumber product described in subclause (II), the value that would be determined F.O.B. at the facility where the lumber or product underwent the last primary processing.
   2. Softwood lumber or a softwood lumber product described in this subclause is lumber or a product that underwent the last remanufacturing before export by a manufacturer who--
      1. does not hold tenure rights (rights to harvest timber on public land) provided by the country of export;
      2. did not acquire standing timber directly from the country of export; and
      3. is not related to the person who holds tenure rights or acquired standing timber directly from the country of export.
3. 1. In the case of softwood lumber or a softwood lumber product described in subclause (II), the value that would be determined F.O.B. at the facility where the product underwent the last processing before export.
   2. Softwood lumber or a softwood lumber product described in this subclause is lumber or a product that undergoes the last remanufacturing before export by a manufacturer who--
      1. holds tenure rights provided by the country of export;
      2. acquired standing timber directly from the country of export; or
      3. is related to a person who holds tenure rights or acquired standing timber directly from the country of export.

In the event that the FOB Value cannot be determined, market price for substantially similar lumber shipments will be used.

If you require additional information or clarification, please contact your local DHL Global Forwarding representative.

Sincerely,
Paul E. Vroman
Manager, Regulatory & Compliance Consulting and Projects
Licensed Customs Broker
NCBFAA Certified Customs Specialist