Canadian Lumber Company Challenges Commerce's Decision Not to Start Changed Circumstances Review

The Commerce Department unlawfully decided not to initiate a changed circumstances review following GreenFirst Forest Productions' acquisition of Rayonier A.M. Canada's lumber mills, GreenFirst said in a March 25 complaint at the Court of International Trade. GreenFirst said that Commerce misapplied agency practice in denying the CCR since RYAM's rate was not based on any subsidies it received. The agency also violated Congress' directive to investigate changed circumstances sufficient to warrant a review when it declined to embark on the CCR (GreenFirst Forest Products Inc. v. United States, CIT #22-00097).

The case concerns the countervailing duty order on softwood lumber from Canada. During the investigation and the first three administrative reviews, RYAM was never individually examined but received a non-selected companies rate of 6.32%. In 2021, however, GreenFirst acquired all of RYAM's lumber and newsprint operations, leading GreenFirst to request a CCR. Commerce rejected the bid to open the review, citing its significant change practice.

The agency presumed there had been a change that could've affected the nature and level of subsidization. But GreenFirst said RYAM's rate was not based on its level of subsidization. "By unreasonably relying upon an inapplicable practice, the Department created an insurmountable bar for obtaining a successor-in-interest determination and has caused GreenFirst to suffer millions of dollars of injury," the complaint said.

The effect of Commerce's denial to start the CCR was a 14.19% CVD rate for GreenFirst, a potential injury of millions of dollars, the company said. Not only did this decision apply an inapplicable practice, it violated congressional intent, GreenFirst argued. "The Department contradicted Congress’ directive in 19 USC § 1675(b)(1) that the Department 'shall' conduct a CCR where it receives information 'which shows changed circumstances sufficient to warrant a review,'" the brief said. "GreenFirst provided the documentation the Department enumerated in [Commerce's] practice as being 'sufficient' for initiating a CCR. Despite satisfying the required criteria, the Department refused to initiate a CCR."