A recent ruling from the U.S. Court of International Trade could see the U.S. Department of Commerce offer additional explanation for why it denied a request for a changed circumstances review from Canada’s GreenFirst Forest Products with respect to countervailing duties. After initially denying the request for a changed circumstances review in 2021, the department now has approximately 90 days to file its redetermination.

According to case background included in the court’s order, GreenFirst, which serves the residential, commercial and industrial construction market, acquired Rayonier A.M. Canada G.P.’s lumber and newsprint business in August 2021, with Rayonier subject to countervailing duties as imposed by Commerce in 2017. Once GreenFirst acquired Rayonier’s lumber business, it requested that the U.S. Department of Commerce initiate a changed circumstances review that could have resulted in GreenFirst being named Raynonier’s successor-in-interest.

“If Commerce determines that GreenFirst is (Rayonier’s) successor-in-interest, GreenFirst would be subject to (Rayonier’s) cash deposit rate of 6.32% rather than the all-others rate of 14.19% from Commerce’s initial investigation,” reads the background within the order.
In November 2021, the U.S. Department of Commerce denied the request for a changed circumstances review, saying that such reviews do not take place when there is evidence of a “significant change that could have affected the nature and extent of subsidization.” According to the department, GreenFirst’s acquisition constituted a “significant change.”

GreenFirst argues that Commerce’s “significant change” exception only applies if the predecessor company was individually examined, and the successor company administratively reviewed. GreenFirst says neither prerequisite exists in the matter at hand.

Commerce, however, says the exception applies regardless of whether a company has been individually examined. According to Commerce, it does not examine how a significant change impacts subsidization levels. Instead, it is only concerned with whether a change actually occurred.

Judge Claire R. Kelly of the U.S. Court of International Trade wrote in the court’s ruling that “it is unclear from Commerce’s explanation why its significant change practice applies.”

“On remand, Commerce must either reconsider or further explain the basis for its determination that its significant changes practice applies where the predecessor company was not individually examined,” the judge wrote.

The U.S. Department of Commerce has 90 days from Nov. 18 to file its redetermination.

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