[Federal Register Volume 70, Number 43 (Monday, March 7, 2005)]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-926]
DEPARTMENT OF COMMERCE
International Trade Administration
[(C-428-829); (C-421-809); (C-412-821)]
Preliminary Results of Countervailing Duty Administrative
Reviews: Low Enriched Uranium From Germany, the Netherlands, and the
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) is conducting
administrative reviews of the countervailing duty (CVD) orders on low
enriched uranium from Germany, the Netherlands, and the United Kingdom
for the period January 1, 2003, through December 31, 2003. For
information on the net subsidy for the reviewed companies, please see
the ``Preliminary Results of Reviews'' section of this notice.
Interested parties are invited to comment on these preliminary results.
(See the ``Public Comment'' section of this notice).
EFFECTIVE DATE: March 7, 2005.
FOR FURTHER INFORMATION CONTACT: Darla Brown or Robert Copyak at (202)
482-2786, AD/CVD Operations, Office 3, Import Administration,
International Trade Administration, U.S. Department of Commerce, Room
4012, 14th Street and Constitution Avenue, NW., Washington, DC 20230.
On February 13, 2002, the Department published in the Federal
Register the CVD orders on low enriched uranium from Germany, the
Netherlands, and the United Kingdom. See Notice of Amended Final
Determinations and Notice of Countervailing Duty Orders: Low Enriched
Uranium from Germany, the Netherlands and the United Kingdom, 67 FR
6688 (February 13, 2002) (Amended Final). On February 3, 2004, the
Department published a notice of opportunity to request an
administrative review of these CVD orders. See Antidumping or
Countervailing Duty Order, Finding, or Suspended Investigation;
Opportunity To Request Administrative Review, 69 FR 5125 (February 3,
2004). On February 25, 2004, we received a timely request for review
from Urenco Ltd. (Urenco), the producer and exporter of subject
merchandise. We note that this request covered all subject merchandise
produced by Urenco in Germany, the Netherlands, and the United Kingdom.
On February 26, 2004, we received a timely request for review from
petitioners.\1\ On March 26, 2004, the Department initiated
administrative reviews of the CVD orders on low enriched uranium from
Germany, the Netherlands, and the United Kingdom. See Initiation of
Antidumping and Countervailing Duty Administrative Reviews and Requests
for Revocation in Part, 69 FR 15788 (March 26, 2004).
\1\ Petitioners are the United States Enrichment Corporation
(USEC) and USEC Inc.
On April 13, 2004, the Department issued a questionnaire to the
Government of the United Kingdom (UKG) and Urenco (Capenhurst) Ltd.
(UCL), Urenco's producer of subject merchandise in the United Kingdom.
Also on April 13, 2004, the Department issued a separate questionnaire
to the Government of the Netherlands (GON) and Urenco Nederland B.V.
(UNL), Urenco's producer of subject merchandise in the Netherlands. On
April 16, 2004, the Department issued a questionnaire to the Government
of Germany (GOG) and Urenco Deutschland GmbH (UD), Urenco's producer of
subject merchandise in Germany.
We received questionnaire responses from the GON, the UKG, UCL, and
UNL on May 20, 2004, from the GOG on May 14, 2004, and from UD on May
On October 19, 2004, we issued an extension of the due date for
these preliminary results from October 31, 2004, to February 28, 2005.
See Low Enriched Uranium from France, Germany, the Netherlands, and the
United Kingdom: Extension of Preliminary Results of Countervailing Duty
Administrative Reviews, 69 FR 61470 (October 19, 2004) (Extension
In accordance with 19 CFR 351.213(b), these reviews cover only
those producers or exporters for which a review was specifically
requested. The companies subject to these reviews are UD, UNL, UCL,
Urenco Ltd., and Urenco Inc. These reviews cover four programs.
Scope of the Order
The product covered by these orders is all low enriched uranium
(LEU). LEU is enriched uranium hexafluoride (UF6) with a
U235 product assay of less than 20 percent that has not been
converted into another chemical form, such as UO2, or
fabricated into nuclear fuel assemblies, regardless of the means by
which the LEU is produced (including LEU produced through the down-
blending of highly enriched uranium).
Certain merchandise is outside the scope of these orders.
Specifically, these orders do not cover enriched uranium hexafluoride
with a U235 assay of 20 percent or greater, also known as
highly enriched uranium. In addition, fabricated LEU is not covered by
the scope of these orders. For purposes of these orders, fabricated
uranium is defined as enriched uranium dioxide (UO2),
whether or not contained in nuclear fuel rods or assemblies. Natural
uranium concentrates (U3O8) with a
U235 concentration of no greater than 0.711 percent and
natural uranium concentrates converted into uranium hexafluoride with a
U235 concentration of no greater than 0.711 percent are not
covered by the scope of these orders.
Also excluded from these orders is LEU owned by a foreign utility
end-user and imported into the United States by or for such end-user
solely for purposes of conversion by a U.S. fabricator into uranium
dioxide (UO2) and/or fabrication into fuel assemblies so
long as the uranium dioxide and/or fuel assemblies deemed to
incorporate such imported LEU (i) remain in the possession and control
of the U.S. fabricator, the foreign end-user, or their designed
transporter(s) while in U.S. customs territory, and (ii) are re-
exported within eighteen (18) months of entry of the LEU for
consumption by the end-user in a nuclear reactor outside the United
States. Such entries must be accompanied by the certifications of the
importer and end-user.
The merchandise subject to these orders is currently classifiable
in the Harmonized Tariff Schedule of the United States (HTSUS) at
subheading 2844.20.0020. Subject merchandise may also enter under
2844.20.0030, 2844.20.0050, and 2844.40.00. Although the HTSUS
subheadings are provided for convenience and customs purposes, the
written description of the merchandise is dispositive.
Period of Review
The period of review (POR) for these administrative reviews is
January 1, 2003, through December 31, 2003.
In our Notice of Final Affirmative Countervailing Duty
Determinations: Low Enriched Uranium From Germany, the Netherlands, and
the United Kingdom, 66 FR 65903 (December 21, 2001) (LEU Final) and
accompanying Issues and Decision Memorandum (LEU Decision Memo) at
Comment 2: International Consortium Provision, we found that the Urenco
Group operates as an international consortium within the meaning of
section 701(d) of the Tariff Act of 1930, as amended (the Act). No new
information or evidence of changed circumstances has been presented
the LEU Final which would persuade us to reconsider this conclusion.
Therefore, we continue to find that the Urenco Group of companies
constitutes an international consortium. Accordingly, we have continued
to cumulate all countervailable subsidies received by the member
companies from the GOG, the GON, and the UKG, pursuant to section
701(d) of the Act.
Subsidies Valuation Information
Under section 351.524(d)(2) of the Department's regulations, we
will presume the allocation period for non-recurring subsidies to be
the average useful life (AUL) of renewable physical assets for the
industry concerned, as listed in the Internal Revenue Service's (IRS)
1977 Class Life Asset Depreciation Range System (IRS Tables), as
updated by the Department of the Treasury. The presumption will apply
unless a party claims and establishes that these tables do not
reasonably reflect the AUL of the renewable physical assets for the
company or industry under investigation, and the party can establish
that the difference between the company-specific or country-wide AUL
for the industry under investigation is significant. In this instance,
however, the IRS Tables do not provide a specific asset guideline class
for the uranium enrichment industry.
In the LEU Final, we derived an AUL of 10 years for the Urenco
Group (see LEU Decision Memo at Comment 3: Average Useful Life). The
AUL issue is currently subject to litigation related to the
investigation. Because there has been no final and conclusive court
decision changing the AUL, and no new information or evidence of
changed circumstances has been submitted, for these reviews, we
continue to apply the 10-year AUL that was calculated in the LEU Final.
Programs Preliminarily Determined Not To Confer a Benefit From the
Government of Germany
1. Enrichment Technology Research and Development Program
In the LEU Final, we determined that, under this program, the GOG
promoted the research and development (R&D) of uranium enrichment
technologies. The Federal Ministry for Research and Technology provided
Uranitisotopentrennungsgeselleschaft mbH (Uranit) (the privately-held
German arm of the Urenco Group) a series of grant disbursements for the
funding of R&D projects. The funds were provided to encourage
continuous improvements of centrifuge technologies and to fund the
research of lasers and other advanced technologies. The grant
disbursements under this program were made during the years 1980
Assistance under this program was provided for in two agreements
and two sets of guidelines: the ``Financing Agreement,'' the
``Operating Agreement,'' the ``Terms and Conditions for Allocations on
a Cost Basis to Companies in Industry for Research and Development
Projects'' (BKFT75), and the ``Auxiliary Terms and Conditions for
Grants on a Cost Basis from the Federal Ministry for Research and
Development to Companies in Industry for Research and Development
Projects'' (NKFT88), respectively. According to Article 4, Section 6,
of the ``Financing Agreement,'' the funds provided to Uranit under this
agreement had contingent repayment obligations. The funds were
repayable within five years of disbursement, contingent upon the
company's earnings. If the funds were not repaid within five years,
then the repayment obligation lapsed. The funds provided under the
``Operating Agreement'' were not repayable. Uranit also received funds
for laser R&D pursuant to the terms and conditions of the BKFT75 and
In the LEU Final, we determined that the assistance provided under
this program constitutes countervailable subsidies within the meaning
of section 771(5) of the Act. Specifically, we found that the grant
disbursements constitute a financial contribution and confer a benefit,
as described in sections 771(5)(B) and 771(5)(D)(i) of the Act. We
further found that this program is specific under section 771(5A)(D)(i)
of the Act because the provision of assistance under this program was
limited to one company. In addition, we found that the program provided
non-recurring benefits under section 351.524(c)(2) of the Department's
regulations because the assistance was made pursuant to specific
government agreements and was not provided under a program that would
provide assistance on an ongoing basis from year to year. See LEU
Decision Memo at the ``Enrichment Technology Research and Development
Program'' section. No new information or evidence of changed
circumstances has been presented to warrant reconsideration of this
determination; therefore, for these preliminary results, we continue to
determine that this program is countervailable.
In the first administrative reviews, we determined that grant
disbursements made under this program prior to 1992, including the 1985
disbursement made under the ``Financing Agreement,'' no longer provided
a benefit during those reviews'' POR, i.e., January 14, 2001, through
December 31, 2002. We also determined that only the grant disbursements
made in 1992 and 1993 continued to provide benefits during the 2001-
2002 POR. See Final Results of Countervailing Duty Administrative
Reviews: Low Enriched Uranium From Germany, the Netherlands, and the
United Kingdom, 69 FR 40869 (July 7, 2004) (2001-2002 LEU) and the
accompanying Issues and Decision Memorandum (2001-2002 LEU Decision
Memo) at the ``Analysis of Programs'' section.
In 2001-2002 LEU, we determined that Urenco would not benefit from
Enrichment Technology Research and Development Program subsidies from
the GOG after 2002 because the grants were fully allocated at the end
of 2002. See 2001-2002 LEU Decision Memo at Comment 3: Cash Deposit
Rate for Future Urenco Imports.
Because the grant disbursements under this program were made
between 1980 and 1993, the 10-year allocation period for each grant
disbursement expired prior to the POR. Therefore, we preliminarily
determine that each of these grants has been fully allocated prior to
the POR, and, therefore, no benefit was received under this program
during the POR.
2. Forgiveness of Centrifuge Enrichment Capacity Subsidies
In accordance with the ``Risk Sharing Agreement'' (RSA) and the
``Profit Sharing Agreement'' (PSA) signed between the GOG and Uranit,
the GOG agreed to provide funds to UD to support the promotion of an
uranium enrichment industry. These two agreements were signed on July
18, 1975, and the GOG provided a total of DM 338.3 million from 1975 to
1993 to Uranit in support of the Treaty of Almelo's goal of creating
and promoting the enrichment industry.\2\ Under the terms of the
agreements, repayment of the funds was conditional and based upon the
financial performance of the company. However, in no case was the
amount of the total repayments to exceed twice the amount of the funds
provided to UD by the GOG.
\2\ In March 1970, the GOG, the GON, and the UKG signed the
Treaty of Amelo, which became effective in July 1971. The purpose of
the treaty was for the three governments to collaborate in the
development and exploitation of the gas centrifuge process for
producing enriched uranium. Prior to 1971, the centrifuge R&D
programs in each country were independent.
In 1987, Uranit signed a new agreement with the GOG. This
``Adjustment Agreement'' stipulated that Uranit would repay the GOG for
the DM 333.8 million in centrifuge capacity assistance and an
additional agreed-upon DM 31.7 million which was not related to the
centrifuge subsidies. Prior to the 1993 merger of the Urenco Group, the
GOG and Uranit negotiated a basis to terminate the repayment
obligations of the RSA and the PSA. Based upon these negotiations, a
``Termination Agreement'' was signed on July 13, 1993, and amended on
October 27, 1993. Prior to the Termination Agreement, Uranit had made
repayments totaling DM 5.6 million. Under the terms of the Termination
Agreement, Uranit was to pay the GOG DM 101.1 million, thus terminating
the repayment obligations stipulated in the Adjustment Agreement.
Uranit made this DM 101.1 million payment on July 1, 1994.
In the LEU Final, we determined this program to be countervailable.
We found that assistance provided under this program to Uranit was
specific under section 771(5A)(D)(i) of the Act because the program was
limited to one company. In addition, we determined that a financial
contribution was provided under section 771(5)(D)(i) of the Act. We
also determined that a benefit was provided to the company, within the
meaning of section 771(5)(E) of the Act to the extent that the
repayments made to the GOG were less than the amount of assistance
provided to the company under this program. See LEU Decision Memo at
the ``Forgiveness of Centrifuge Enrichment Capacity Subsidies''
section. No new information or evidence of changed circumstances has
been presented to warrant reconsideration of this determination;
therefore, for these preliminary results, we continue to determine that
this program is countervailable.
In the LEU Final, we determined that this program provided a grant
under 19 CFR 351.505(d)(2) because there was a waiver of a contingent
liability. We determined the adjusted grant amount to be equal to the
difference between the original amount of centrifuge subsidies (DM
338.3 million) and the total amount of repayment attributable to those
centrifuge subsidies (DM 97.556 million), which we calculated to be DM
240.744 million. We also determined that the first year of allocation
was 1993, the year in which the repayment obligation stipulated in the
Adjustment Agreement was waived. No new information or evidence of
changed circumstances has been presented to warrant reconsideration of
In 2001-2002 LEU, we determined that Urenco would not benefit from
Forgiveness of Centrifuge Enrichment Capacity subsidies from the GOG
after 2002 because the grants were fully allocated at the end of 2002.
See 2001-2002 LEU Decision Memo at Comment 3: Cash Deposit Rate for
Future Urenco Imports. Therefore, we preliminarily determine that the
grant has been fully allocated prior to the POR, and, therefore, no
benefit was received under this program during the POR.
Programs Preliminarily Determined To Be Not Used From the Government of
1. Wet Investeringsrekening Law (WIR)
In the LEU Final, we found that the WIR program was not used. In
the instant administrative reviews, we asked UNL if it received or used
benefits under this program during the POR. UNL responded that it did
not apply for, use, or receive benefits from the WIR program during the
POR. Furthermore, UNL reported that the WIR program ended in 1988 and
investment credits could only be claimed through the 1989 tax year.
Therefore, we preliminarily find that the WIR was not used during the
2. Regional Investment Premium
In the Amended Final, we found that, after correcting for a
ministerial error in the LEU Final, the subsidy from the Regional
Investment Program (IPR) was less than 0.5 percent of the Urenco
Group's combined sales and, in accordance with 19 CFR 351.524(b)(2),
was allocable to the year of receipt (1985). As a result of this
revision, the net subsidy for this program decreased from 0.03 percent
ad valorem to 0.00 percent ad valorem. See Amended Final, 67 FR 6688.
Moreover, in the instant reviews, UNL reported that it did not apply
for nor did it use the IPR program during the POR. Therefore, we
preliminarily determine that UNL did not use the IPR program during the
Programs From the Government of the United Kingdom
We preliminarily determine that UCL neither received any subsidies
nor benefitted from any subsides during the POR.
Preliminary Results of Reviews
In accordance with 19 CFR 351.221(b)(4)(i), we calculated an
individual subsidy rate for UD, UNL, UCL, Urenco Ltd., and Urenco Inc,
the only producers/exporters subject to these administrative reviews,
for the POR, i.e., calendar year 2003. We preliminarily determine that
the total estimated net countervailable subsidy rate is 0.00 percent ad
If the final results of these reviews remain the same as these
preliminary results, the Department intends to instruct U.S. Customs
and Border Protection (CBP), within 15 days of publication of the final
results of these reviews, to liquidate without regard to countervailing
duties all shipments of subject merchandise from the producers/
exporters under review, entered, or withdrawn from warehouse, for
consumption during the POR. Should the final results of these reviews
remain the same as these preliminary results, the Department also will
instruct CBP not to collect cash deposits of estimated countervailing
duties on all shipments of the subject merchandise from the reviewed
entity, entered, or withdrawn from warehouse, for consumption on or
after the date of publication of the final results of these reviews.
Because the Uruguay Round Agreements Act (URAA) replaced the
general rule in favor of a country-wide rate with a general rule in
favor of individual rates for investigated and reviewed companies, the
procedures for establishing countervailing duty rates, including those
for non-reviewed companies, are now essentially the same as those in
antidumping cases, except as provided for in section 777A(e)(2)(B) of
the Act. The requested review will normally cover only those companies
specifically named. See 19 CFR 351.213(b). Pursuant to 19 CFR
351.212(c), for all companies for which a review was not requested,
duties must be assessed at the cash deposit rate, and cash deposits
must continue to be collected, at the rate previously ordered. As such,
the countervailing duty cash deposit rate applicable to a company can
no longer change, except pursuant to a request for a review of that
company. See Federal-Mogul Corporation and The Torrington Company v.
United States, 822 F. Supp. 782 (CIT 1993), and Floral Trade Council v.
United States, 822 F. Supp. 766 (CIT 1993) (interpreting 19 CFR
353.22(e), the old antidumping regulation on automatic assessment,
which is identical to the current regulation, 19 CFR
351.212(c)(1)(ii)). Therefore, the cash deposit rates for all companies
except those covered by these reviews will be unchanged by the results
of these reviews.
We will instruct CBP to continue to collect cash deposits for non-
reviewed companies at the most recent company-specific or country-wide
rate applicable to the company. Accordingly, the cash
deposit rate that will be applied to a non-reviewed company covered by
these orders will be the rate for that company established in the most
recently completed administrative proceeding. See Amended Final, 67 FR
6688. These cash deposit rates shall apply to all non-reviewed
companies until a review of a company assigned these rates is
Pursuant to 19 CFR 351.224(b), the Department will disclose to
parties to the proceeding any calculations performed in connection with
these preliminary results within five days after the date of the public
announcement of this notice. Pursuant to 19 CFR 351.309, interested
parties may submit written comments in response to these preliminary
results. Unless otherwise indicated by the Department, case briefs must
be submitted within 30 days after the publication of these preliminary
results. Rebuttal briefs, which are limited to arguments raised in case
briefs, must be submitted no later than five days after the time limit
for filing case briefs, unless otherwise specified by the Department.
Parties who submit argument in this proceeding are requested to submit
with the argument: (1) A statement of the issue, and (2) a brief
summary of the argument. Parties submitting case and/or rebuttal briefs
are requested to provide the Department copies of the public version on
disk. Case and rebuttal briefs must be served on interested parties in
accordance with 19 CFR 351.303(f). Also, pursuant to 19 CFR 351.310,
within 30 days of the date of publication of this notice, interested
parties may request a public hearing on arguments to be raised in the
case and rebuttal briefs. Unless the Secretary specifies otherwise, the
hearing, if requested, will be held two days after the date for
submission of rebuttal briefs.
Representatives of parties to the proceeding may request disclosure
of proprietary information under administrative protective order no
later than 10 days after the representative's client or employer
becomes a party to the proceeding, but in no event later than the date
the case briefs, under 19 CFR 351.309(c)(ii), are due. The Department
will publish the final results of these administrative reviews,
including the results of its analysis of issues raised in any case or
rebuttal brief or at a hearing.
These administrative reviews and this notice are issued and
published in accordance with sections 751(a)(1) and 777(i)(1) of the
Dated: February 28, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-926 Filed 3-4-05; 8:45 am]
BILLING CODE 3510-DS-P