65 FR 41441, July 5, 2000
                                                A-844-802
                                                Sunset Review
                                                Public Document

MEMORANDUM TO: Troy H. Cribb
               Acting Assistant Secretary
                 for Import Administration

FROM:          Jeffrey A. May
               Director 
               Office of Policy

SUBJECT: Issues and Decision Memorandum for the Sunset Review of Uranium
         from Uzbekistan; Final Results 

Summary: 

We have analyzed the comments and rebuttals of interested parties in the
full sunset review of the suspended antidumping duty investigation
covering uranium from Uzbekistan. We recommend that you approve the
positions we have developed in the Discussion of the Issues section of
this memorandum. Below is the complete list of the issues in this final
results of full sunset review for which we received case briefs and
rebuttal comments by parties:

1. Scope

2. Domestic industry response

3. Likelihood of continuation or recurrence of dumping
   A. Weighted-average dumping margin 
   B. Volume of imports 
   C. Other Factors 

4. Magnitude of the margin likely to prevail
   A. Margins from the investigation 
   B. Use of a more recent margin 

Background:

On February 28, 2000, the Department of Commerce (the Department)
published in the Federal Register a notice of preliminary results of the
full sunset review of the antidumping duty investigation on uranium from
Uzbekistan (65 FR 10471) pursuant to section 751(c) of the Tariff Act of
1930, as amended (the Act). In our preliminary results, we found that
termination of the agreement suspending the antidumping duty investigation
would likely result in continuation or recurrence of dumping at a weighted-
average margin of 115.82 percent for all producers/exporters from
Uzbekistan.

On March 24, 2000, we received a request from Navoi Mining and
Metallurgical Combinat ("Navoi") and the Government of Uzbekistan ("GOU")
(together, "respondent interested parties") for an extension of time for
filing rebuttal comments to case briefs until April 18, 2000. The
Department 
agreed to extend the deadline to April 18, 2000. (1)

On March 29, 2000, the Ad Hoc Committee of Domestic Uranium Producers
(the "Ad Hoc Committee"), requested a hearing in this review. On April 14,
2000, the Ad Hoc Committee formally withdrew its March 29, 2000, request
for a hearing in this review; therefore, the Department canceled the
public hearing.

On April 10, 2000, we received case briefs on behalf of the Ad Hoc
Committee, the Ad Hoc Utilities Group ("AHUG"), (2) and respondent
interested parties. On April 18, 2000, within the deadline specified in 19
CFR 351.309(d), the Department received rebuttal comments from the Ad Hoc
Committee and respondent interested parties. 

We have addressed the comments received below.

Discussion of the Issues

In accordance with section 751(c)(1) of the Act, the Department conducted
this sunset review to determine whether termination of the antidumping
duty investigation would likely lead to continuation or recurrence of
dumping. Section 752(c) of the Act provides that, in making this
determination, the Department shall consider the weighted-average dumping
margins determined in the investigation and subsequent reviews and the
volume of imports of the subject merchandise for the period before and the
period after the issuance the suspension agreement. In addition, section
752(c)(3) of the Act provides that the Department shall provide to the
International Trade Commission ("the Commission") the magnitude of the
margin of dumping likely to prevail if the order or suspension agreement
is revoked.

1. Scope

Interested Party Comments

In its case brief, the Ad Hoc Committee states that the Department
properly confirmed that the scope of the Uzbek suspension agreement
includes all forms of uranium, including highly enriched uranium ("HEU")
and low enriched uranium ("LEU") derived from HEU, and Uzbek uranium
enriched in a third country prior to importation into the United States
(see April 10, 2000, case brief of the Ad Hoc Committee at 2). The Ad Hoc
Committee urges the Department to reconfirm that the above forms of
uranium are within the scope of the agreement and the underlying
investigation. Id.

In its case brief, AHUG opposes the Department's preliminary
determination, reiterates and incorporates by reference its comments filed
with the Department on September 1, 1999, and September 13, 1999 (see
April 10, 2000, case brief of AHUG at 2).

Respondent interested parties contend in their case brief that the
Department failed to acknowledge in its preliminary results review the
important distinction between the negotiated terms of a "suspension
agreement" and the scope of the "suspended investigation," and urge the
Department to properly focus on whether dumping is likely to continue or
recur if the suspended investigation is terminated, and conduct a
prospective analysis of what is likely to occur in the future if the
suspended investigation and the suspended agreement no longer existed 
(see April 10, 2000, case brief of respondent interested parties at 37).
Accordingly, respondent interested parties argue, the rule that
"enrichment confers origin" would replace the third-country "bypass"
amendment of the suspension agreement to which the Department refers in
the 
February 18, 2000, Issues and Decision Memorandum for the Sunset Review
of Uranium from Uzbekistan; Preliminary Results. In doing so, it would
contradict the requirement that likelihood of dumping be assessed on an
"order-wide" basis and the sunset standards set forth in the statute, the
Statement of Administrative Action ("SAA"), and the Sunset Policy
Bulletin. Id. at 38. Moreover, respondent interested parties argue that
the principle that "enrichment confers origin" is a basic tenet of the
Department's prior uranium determinations and rules of origin ruling of
the U.S. Custom's service, and overturning this fundamental principle
would potentially cause chaos in uranium trade. Id. at 38-39.

In addition, respondent interested parties assert that HEU is not covered
by the underlying investigation or the Uzbek suspension agreement because
Uzbekistan produces only natural uranium, is incapable of exporting HEU to
the United States, has no nuclear weapons grade material or stockpile HEU
material, and does not produce any LEU blended down from HEU and its
return feed. Id. at 39. Thus, respondent interested parties state, the
importation of HEU to the United States is governed by an entirely
different regulatory scheme under the USEC Privatization Act, and the
Department should re-evaluate the Diversified criteria, including physical
characteristics, channels of trade, purchaser expectations, and cost,
which would no longer support inclusion of HEU in the same class or kind
as the natural uranium produced in Uzbekistan. Id. at 39-40.

In its rebuttal brief, the Ad Hoc Committee states that all forms of
uranium are within the scope of this proceeding because both the
suspension agreement and the suspended investigation make clear that HEU
and uranium enriched in third countries are within the scope of the
underlying investigations, the suspension agreements, and this sunset
review (see April 18, 2000, rebuttal of the Ad Hoc Committee at 14). The
Ad Hoc Committee also asserts that the GOU's request that the Department
reconsider its Diversified analysis and 1992 scope ruling is inappropriate
for this proceeding; sunset reviews are not scope proceedings, and neither
the statute, the SAA, nor the Department's regulations provide for a
reconsideration of the scope of the proceeding during a sunset review. Id.
at 15. Further, the Ad Hoc Committee states, it is irrelevant that the GOU
does not currently produce HEU and unnecessary that respondent interested
parties produce any or all "subclasses" within the class or kind.
Accordingly, the Department correctly determined that all forms of uranium
constitute one class or kind of merchandise. Id. at 16.

Respondent interested parties rebut that there is no basis for including
HEU in the scope of this sunset review. They reassert that the proper
scope of a sunset review must be consistent with a prospective analysis of
whether dumping would be likely to continue or recur if the suspension
agreement no longer existed and, thus, the third-country bypass amendment
was no longer in place (see April 18, 2000, rebuttal comments of
respondent interested parties at 6). Further, respondent interested
parties contend that the Department's preliminary determination undermines
the fundamental principle that "enrichment confers origin," which has been
established through numerous uranium decisions by the Department and U.S.
customs. Id. Finally, respondent interested parties reassert that an
analysis of the traditional Diversified criteria establishes that HEU and
LEU blended down from HEU are readily distinguishable from the natural
uranium concentrates produced in Uzbekistan. Id. 

Department's Position 

In response to the arguments of interested parties, we find it useful to
summarize the history of the scope of the Uzbek suspension agreement.

According to the June 3, 1992, preliminary determination the suspended
investigation included natural uranium in the form of uranium ores and
concentrates; natural uranium metal and natural uranium compounds; alloys,
dispersions (including cermets), ceramic products, and mixtures containing
natural uranium or natural uranium compound; uranium enriched in U235 and
its compounds; alloys dispersions (including cermets), ceramic products
and mixtures containing uranium enriched in U235 or compounds or uranium
enriched in U235; and any other forms of uranium within the same class or
kind. The uranium subject to these investigations was provided for under
subheadings 2612.10.00.00, 2844.10.10.00, 2844.10.20.10, 2844.10.20.25,
2844.10.20.50, 2844.10.20.55, 2844.10.50, 2844.20.00.10, 2844.20.00.20,
2844.20.00.30, and 2844.20.00.50 of the Harmonized Tariff Schedule of the
United States ("HTSUS"). (3) In addition, the Department preliminarily
determined that highly-enriched uranium ("HEU") was not covered within the
scope of the investigation, and that the subject merchandise constituted a
single class or kind of merchandise.

On October 30, 1992, the Department issued a suspension of the
antidumping duty investigation of uranium from Uzbekistan and an amendment
of the preliminary determination. (4) The notice amended the scope of the
investigation to include HEU. (5) The suspension agreement provided that
uranium ore from Uzbekistan that is milled into U3O8 and/or converted into
UF6 in another country prior to direct and/or indirect importation into
the United States is considered uranium from Uzbekistan and is subject to
the terms of the Agreement. (6) Further, uranium enriched in U235 in
another country prior to direct and/or indirect importation into the
United States was not considered uranium from Uzbekistan and was not
subject to the terms of the suspension agreement. (7) In this suspension
agreement, imports of uranium ores and concentrates, natural uranium
compounds, and all forms of enriched uranium are classifiable under HTSUS
subheadings 2612.10.00, 2844.10.20, 2844.20.00, respectively. Imports of
natural uranium metal and forms of natural uranium other than compounds
were classifiable under HTSUS subheadings 2844.10.10 and 2844.44.10.50. 

On October 13, 1995, the Department issued an amendment to the suspension
agreement on uranium from Uzbekistan. Among other things, this amendment
modifies the agreement to include Uzbek uranium enriched in a third
country prior to importation into the United States. 

The scope of this sunset review is set forth above.

We agree with the Ad Hoc Committee that the sunset review is an improper
forum for the analysis or determination of the scope of the underlying
suspended investigation. We do not find that the Department should
reconsider its Diversified analysis and 1992 scope of the proceeding
during a sunset review. Such request may be appropriately
contemplated/considered in the context of a scope inquiry. Accordingly, we
leave the scope as described both in the preliminary determination and the
suspension agreement unchanged for purposes of this sunset review.

2. Domestic Industry Support

Interested Party Comments

The Ad Hoc Committee asserts in its case brief that the Department
correctly held that a complete substantive response from a single domestic
interested party constitutes adequate domestic industry participation in
this sunset review, under 19 CFR 351.218(e)(1)(i), to warrant continuation
of the review (see April 10, 2000, case brief of the Ad Hoc Committee at
2). The Ad Hoc Committee states that its present members include Rio
Algom, URI, Cotter Corporation ("Cotter"), Everest Exploration, Inc.
("Everest"), and ConverDyn, all of which are domestic interested parties
under section 771(9)(c) of the Act and 19 CFR 351.102(b). Id. at 2-3. 

Respondent interested parties assert in their case brief that the
Department's reliance on its regulations in its preliminary results can
only be consistent with the SAA and Articles 6 and 11 of the GATT
Agreement on the Implementation of Article VI ("Antidumping Agreement") if
the one responding domestic party controls a significant proportion of
production or market share (see April 10, 2000, case brief of respondent
interested parties at 41). Respondent interested parties state that there
are only two domestic producers, Rio Algom and URI, that have participated
in the sunset proceeding, and that these companies represented a mere 2.02
percent of total domestic production of uranium products in 1998. Further,
according to their annual reports, these companies phased down or
eliminated mining production in 1998-99 in favor of importing uranium, so
the likely future production of these two producers is minuscule or
nonexistent. Id. at 42. Therefore, given the inadequate response of any
domestic interested party, respondent interested parties assert that the
Department should issue a final determination terminating the suspended
investigation. Id.

In its rebuttal comments, the Ad Hoc Committee contends that the
Department, in response to a U.S. manufacturer's claim that no review
should be conducted because most domestic parties favored revocation,
explained why the domestic interested parties' response is adequate. In
doing so, the Ad Committee asserts that the SAA language cited by the GOU
does not alter the Department's analysis (see April 18, 2000, rebuttal
comments of the Ad Hoc Committee at 17). As a result, the Ad Hoc Committee
continues to argue that the Department should reject in its final
determination the GOU's challenge to the adequacy of domestic interested
party responses. Id. 

In their rebuttal comments, respondent interested parties reassert that
the only members relevant to the Department's adequacy determination are
Rio Algom and URI, and the Department must take into account, under SAA
adequacy standards, the proportion of parties and market share accounted
for by these two companies (see April 18, 2000, rebuttal comments of
respondent interested parties at 7). Thus, given the minuscule U.S.
production and market share accounted for by these two companies, the
Department should find the Ad Hoc Committee's response to be inadequate
and terminate the suspended investigation in the final results. Id.

Department's Position

We agree with the domestic interested parties that the industry support
requirements are inapplicable to sunset reviews beyond the adequacy
determination. As we stated in our preliminary results, the Department
normally will not analyze and evaluate standing and industry support in
the course of a sunset review. The Department's mandate in a sunset review
is to determine whether termination of the suspended investigation is
likely to result in the continuation or recurrence of dumping, and it made
clear in its regulations that a complete substantive response from one
domestic interested party is considered adequate for purposes of
continuing the review. Therefore, given that we received a response from
at least one member of the domestic industry, in accordance with section
351.218(e)(1)(i) of the regulations, we determine that we have adequate
domestic industry participation. 

3. Likelihood of Continuation or Recurrence of Dumping:

Interested Party Comments:

In its case brief, the Ad Hoc Committee contends that the Department
properly found that the continuation or recurrence of dumping is a likely
result of revoking the Uzbek suspension agreement and underlying
investigation. Specifically, the Ad Hoc Committee states that the
Department correctly held that market conditions are such that removal of
restrictions imposed by the suspension agreement will likely result in the
continuation or recurrence of dumping in light of the fungible, commodity
nature of uranium, the restricted access of Uzbek uranium to European and
Asian markets, and the fact that some Uzbek deliveries are now made under
long-term contracts (see April 10, 2000, case brief of the Ad Hoc
Committee at 3). As a result, the removal of the Uzbek agreement's
restrictions would result in an increase in Uzbek imports and a decrease
in subject import prices. Id.

In their case brief, respondent interested parties argue that there is no
record evidence to support the Department's preliminary determination of
likelihood that dumping will continue or recur if the suspended
investigation is terminated. Further, the Department fails to address the
substantial record evidence demonstrating that Uzbekistan has never
engaged in less-than-fair-value ("LTFV") sales, and that prices of sales
to the United States would likely increase if the suspended investigation
is terminated. Respondent interested parties assert that the Act, SAA, and
Policy Bulletin plainly establish the Department's criteria for analysis
and the Department expressly acknowledges, in its Decision Memorandum,
that none of these three scenarios is supported by the price or import
volume data on the record of this sunset review (see April 10, 2000, 
case brief of respondent interested parties at 4). 

With respect to whether dumping has occurred at any level above de
minimis since the acceptance of the suspension agreement, respondent
interested parties reassert that the Department has never calculated any
margin that would establish that Uzbekistan has sold uranium to the United
States at LTFV, and has never permitted Uzbekistan to submit complete
country-specific data establishing the absence of dumping. Id. First, the
Department cannot rely on the original preliminary margin as evidence of
any likelihood of dumping by Uzbekistan because the original preliminary
margin was improperly based on highly adverse best information available
("BIA") data from the USSR, rather than on any country-specific data or
allegations relating to Uzbekistan. Id. at 5. 

Second, respondent interested parties argue that the operation of the
Uzbek suspension agreement ensures that sales of uranium from Uzbekistan
have not been at dumped prices. Specifically, the Uzbek suspension
agreement can be distinguished from other non-market economy suspension
agreements because it contains a unique price-tied quota mechanism that
eliminates the possibility of dumping. Id. at 6. Respondent interested
parties assert that all of Uzbekistan's imports from 1992 through 1995
were made pursuant to contracts entered into before March 1992, and record
evidence demonstrates that all of the prices were at or above U.S. market
prices. Id. Further, they assert that the Department has ensured that
deliveries of Uzbek uranium to the United States under the suspension
agreement have been made pursuant to long-term contracts in which the
selling prices are above the comparable U.S. market prices. Id. at 7. 

Third, respondent interested parties contend that record evidence of
actual selling prices under long-term contracts confirms Uzbekistan's
above-market prices and contradicts the Department's statement in its
Decision Memorandum that the existence of these contracts says nothing
with respect to whether such prices are at, or above, normal market value
("NV"). Id. at 8. Rather, the evidence demonstrates that all of
GOU/Navoi's sales are most likely at prices above- market prices. 

Finally, respondent interested parties assert that Navoi's contract
commitments and capacity constraints ensure that it cannot sell at dumped
prices in the future, and that the relevant window of foreseeability for
the Department's likelihood of dumping determination should not be
extended beyond 2004, the year in which the suspension agreement is
scheduled to expire. Further, respondent interested parties contend that
Navoi has no economic incentive to sell at lower prices with respect to
future contracts; rather, Navoi will benefit from selling its production
into the United States at the higher prices it receives under long-term
contracts. Id. at 9-10. Moreover, Uzbekistan accounts for only a small
fraction of U.S. uranium supply, and Navoi, because of its capacity
constraints, has a very strong economic incentive to maximize its
profitability and foreign exchange revenues by selling its limited
production quantities of uranium at the highest possible prices under all
current and future contracts, regardless of whether the suspended
investigation is terminated. Id. at 10.

With respect to whether imports of the subject merchandise did not cease
after issuance of the suspension agreement, respondent interested parties
assert that the import volume data submitted by GOU/Navoi plainly shows
that imports did not cease; rather, imports were significant immediately
following issuance of the suspension agreement. Id. at 12.

With respect to whether dumping was eliminated after issuance of the
suspension agreement, and import volumes have remained steady or
increased, respondent interested parties contend that record evidence
establishes that dumping did not occur after issuance of the suspension
agreement. Id. Contrary to the Department's characterization of Uzbek
import volumes, the record data indicates that uranium from Uzbekistan has
consistently been imported at significant levels since the issuance of the
suspension agreement, and that imports have increased during the last four
semi-annual periods. Id. at 13. Moreover, imports increased relative to
pre-suspension agreement levels, and Uzbekistan's share of the domestic
uranium purchases by U.S. utilities has remained steady in 1997 and 1998.
Id. 

With respect to other factors, respondent interested parties assert that
volume and market share evidence reflects that Uzbekistan is able to
export significant quantities of uranium to the United States without
dumping, however, import volumes have not been identical in every year
because of unrelated factors, such as Navoi's changes in technology and
mining methods. Id. at 13-14. Further, the fact that Uzbek imports are
constrained by a quota does not mean that the volume and market share data
is inconclusive; rather, this record data reflects that Navoi has been
able to maintain market share by exporting significant levels of uranium
to the United States without dumping. Id. at 14. 

Respondent interested parties assert that none of the additional
information cited in the Department's Decision Memorandum provides any
basis for finding that dumping is likely to continue or recur.
Specifically, they contend that record evidence reflects that Uzbekistan
has not engaged in dumping since the issuance of the suspension agreement
as all of Uzbekistan's sales have been at under long-term contracts at
above-market prices, and prices of Uzbek uranium would in the future rise
toward the restricted market prices because of uranium purchasing
decisions. Id. at 15-16. Moreover, respondent interested parties add, if
current Uzbek prices do not reflect dumping, then the resulting higher
prices as a result of removing restrictions cannot be dumped prices. Id.
at 16. 

Respondent interested parties continue, the Department's citation to the
basic laws of supply and demand provide no basis for concluding that sales
are likely to be at dumped prices. First, they state that imports of Uzbek
uranium cannot increase by an amount sufficient to have any impact on
overall market prices because it would take many years and enormous
capital expenditure to expand Navoi's mining capacity; such an expansion
would not be feasible under current of foreseeable market conditions. Id.
at 17. Second, given the record evidence that Uzbekistan's exports are
already at capacity and committed under long-term contracts, generalized
price declines in the market due to an overall increase in supply cannot
be treated as per se evidence of dumping. Id. at 18. Further, establishing
the likelihood of sales at LTFV for a non-market economy respondent
requires the construction of a NV based on valuation of inputs and factors
of production, and the Department has never made a determination of NV for
Uzbek uranium. Id. at 19.

Finally, respondent interested parties contend that specific record
evidence confirms that a large proportion of Uzbek production is in fact
committed to customers in the EU and Asian markets, and could not be
diverted to the United States if the suspension investigation is
terminated. Id. at 19-20. Further, these markets are completely open to
Uzbek imports and will have increasing demand, while the remaining
uncommitted proportion of Uzbek production is simply too small to be
affected by Eurotom's flexible limits.

The Ad Hoc Committee, in its rebuttal comments, restates that the
Department correctly determined that removal of the restrictions imposed
by the suspension agreement is likely to result in the continuation or
recurrence of dumping and incorporates by reference its entire September
13, 1999, rebuttal submission. First, the Ad Hoc Committee reasserts that
this sunset review is not the appropriate forum for the GOU's complaints
about alleged procedural defects in the underlying investigation; in fact,
the Court of International Trade ("CIT") upheld the Department's decision
to continue the uranium investigations upon the dissolution of the USSR
and the Department afforded the GOU adequate opportunity to respond to the
Department's questionnaires (see April 18, 2000, rebuttal comments of the
Ad Hoc Committee at 4). The GOU then had the opportunity to request
continuation of the investigation, obtain a final determination, and
appeal any issues to the CIT. 

Second, the Ad Hoc Committee reasserts that the GOU's argument that the
Department cannot find likelihood because there has been no dumping of
Uzbek uranium during the entire term of the suspension agreement rest on
two faulty premises: (1) that the Uzbek suspension agreement, by its
operation, prevents dumping, and (2) that it is appropriate to assume that
pricing behavior under an agreement would characterize behavior in the
absence of an argument. Id. at 4-5. All sales of Uzbek uranium being "at
market" or above U.S. market prices is not the same as being "fairly
traded" - the agreement includes no provision that ensures Uzbek prices
will be at or above normal value. Id at 5. In addition, the Ad Hoc
Committee argues that none of the pricing or volume behavior experience
with respect to Uzbek uranium since 1992 can be reasonably assumed to have
been driven solely by Uzbek commercial practices rather than the
requirements of the agreement. Id. at 6.

In its rebuttal comments, respondent interested parties argue that the Ad
Hoc Committee failed to provide any evidence that dumping is likely to
continue, that the Department's final determination must ultimately be
based on actual facts supported by substantial evidence placed on the
record by the parties (see April 18, 2000, rebuttal comments of respondent
interested parties at 1). Respondent interested parties assert that the
Department cannot impose such an adverse presumption of dumping against
Uzbekistan based on an oversimplified supply-and-demand theory because (1)
purchasing decisions are based on price is contradicted by record
evidence; and (2) termination would result in increased imports from
Uzbekistan is disproved by substantial record evidence regarding Navoi's
severe capacity constraints and the fact that Uzbek production is already
committed under long-term contracts beyond the time at which the
suspension agreement is scheduled to expire in 2004; and (3) the Ad Hoc
Committee has failed to provide any evidence supporting assertions that
Uzbek access to markets in Asia and Europe is restricted. Id. at 2-3.

Finally, according to respondent interested parties, the supply-and-
demand theory ignores the fact that any potential imports by Uzbekistan
would be dwarfed by the other dominant sources of supply in the U.S.
market, including the Department of Energy inventories inherited by USEC
and the increasing levels of imports from non-subject counties. Therefore,
the Department should use in its final results its substantial evidence of
Navoi's past behavior to speculate Navoi's future behavior. Id. at 4.

Department's Position

As an initial matter, we agree with the Ad Hoc Committee that the sunset
review is not the appropriate forum for respondent interested parties'
complaints about alleged procedural defects in the underlying
investigation. We disagree with respondent interested parties' argument
that, because the Department allegedly did not conduct an independent
investigation, there is no record evidence to support a finding of
likelihood. Respondent interested parties could have requested termination
of the suspension agreement and a continuation of the investigation of
Uzbek uranium; however, they have not made such request. Moreover, the
U.S. CIT held that the Department adequately notified Uzbekistan and the
other former Soviet republics of the investigation.

In addition, although the Department may in the course of sunset review
request or collect new information to support a likelihood determination,
we disagree with respondent interested parties' suggestion that the
Department should calculate a new margin based on "other factors" in the
uranium industry with respect to Navoi. As stated in our preliminary
results, an interested party that wishes the Department to consider new
information or evidence may submit such information in its substantive
response to the notice of initiation. 

As stated in our preliminary results, although the Department has not
conducted an administrative review of the suspension agreement, it has
monitored imports of Uzbek uranium over the life of the suspension
agreement to ensure compliance with its terms. For the purposes of this
sunset review, we considered the volume of imports for the period before
and after the suspended investigation. The respondent interested parties
provided statistics on uranium exports from Uzbekistan for the period 1990-
1991 and 1994-1998 demonstrating that import volumes have fluctuated over
the life of the agreement. Thus, we agree with the interested parties that
the observed patterns regarding U.S. sales prices and import volumes
pursuant to the suspension agreement are not necessarily indicative of the
likelihood of future dumping. Therefore, we determined to consider the
additional information submitted with respect to the likelihood of future
dumping and considered the arguments presented by the interested parties
with respect to a variety of market and economic factors. 

All of the interested parties acknowledge the post-suspension agreement
distinction between the unrestricted/restricted uranium markets. AHUG and
respondent interested parties argued that removal of the restrictions
imposed by the suspension agreement would cause the price of Uzbek uranium
to rise whereas the Ad Hoc Committee argued that removal of the
restrictions would increase supply thereby causing prices to fall. While
we agree that the restrictions imposed by the suspension agreement may
have resulted in the price distinction, we do not agree that removal of
the restrictions will necessarily cause the price of Uzbek uranium to
rise. Even if the price of uranium from Uzbekistan were to rise closer to
restricted market prices, there is no information or evidence on the
record that would permit a determination that such a price would reflect
the absence of a likelihood of continuation or recurrence of dumping. 

Therefore, we continue to rely on the basic laws of supply and demand
which suggest that an increase in supply as a result of removal of the
restrictions would increase the availability and supply of Uzbek uranium
in the U.S. market and decrease prices.

As for the restrictions on access to the EU and Asian markets, we agree
that the information presented by the parties indicates that the EU and
Asian markets are not closed to Uzbek uranium, but we also find that these
markets are not completely open to Uzbek uranium. The GOU attempts to
argue that dumping is not likely to continue or recur on the basis that a
major portion of Uzbekistan's uranium production is already committed
under Appendix A long-term contracts at prices above-market through 2004.
However, the negotiated duration of the suspension agreement reflects the
nature of uranium marketing, specifically, the role of long-term
contracts. The fact that currently existing long-term contracts provide
for delivery at prices above-market does not indicate that dumping is not
likely to continue or recur with respect to whether such prices are at, or
above, normal value and the prices for contracts that will be negotiated
between now and 2004.

We agree with the domestic interested parties that, as noted in the SAA
at 883, the determination called for in these types of reviews is
inherently predictive and speculative and that there may be more than one
likely outcome following termination. Although we acknowledge the changes
that have taken place in Uzbekistan and in the worldwide uranium market
during the 1990s, we do not agree with the arguments submitted by GOU,
Navoi, and AHUG that conditions have changed to such an extent that
termination of the suspension agreement and underlying investigation is
not likely to result in the continuation or recurrence of dumping. The
arguments outlined above indicate that the market conditions are such that
the removal of the restrictions imposed by the suspension agreement will
likely result in the continuation or recurrence of dumping. 

We agree with the Ad Hoc Committee that the statute indicates that the
Department must in a sunset review only find likelihood of recurrence or
continued dumping. We preliminarily determined in this case, that without
the discipline of the suspension agreement in place, there is likelihood
of recurrence or continued dumping. Our determination was not made solely
on the basis of observed patterns regarding U.S. sales prices and import
volumes pursuant to the suspension agreement. Instead, the Department
structured its decision based upon the SAA provisions which clearly
contemplate the existence of good cause to consider "other factors"
insofar as they affect the likelihood of future dumping. 

Although significant changes have taken place in Uzbekistan and in the
worldwide uranium market during the 1990s, we do not agree with the
arguments submitted by the GOU, Navoi, and AHUG that conditions have
changed to such an extent that termination of the suspension agreement and
underlying investigation is not likely to result in the continuation or
recurrence of dumping. We reassert that the procedural history of the
original investigation, including the fact that the calculation of a
margin for Uzbekistan was based on BIA, does not undermine the validity of
the investigation. 

As stated in our preliminary results, the sunset review is inherently
predictive and speculative and there may be more than one likely outcome 
following termination; the removal of restrictions from the suspension 
agreement do not rule out the possibility that dumping is likely to occur. 
However, because the observed patterns regarding U.S. sales prices and 
import volumes pursuant to the suspension agreement are not necessarily
indicative of the likelihood of future dumping, we considered additional
information about a variety of market and economic factors submitted by
the parties, including supply diversification and reliability, flexibility
in quantities of supply, and payment and delivery terms. We continue to
find that purchasing decisions are based almost exclusively on price.
Accordingly, the removal of the restriction of the agreement will not, as
the AHUG and respondent interested parties have argued, necessarily
increase Uzbek uranium prices. Instead, we continue to find that an
increase in supply will result in a decrease in prices. Moreover, as
stated in our preliminary results, there is no information or evidence on
the record that would permit a determination that such a price would
reflect the absence of a likelihood of continuation or recurrence of
dumping.

With respect to Uzbekistan's access to the EU and Asian markets, we
determine that the information presented by the parties indicates that the
EU and Asian markets are neither closed to Uzbek uranium, nor completely
open to Uzbek uranium. Further, the fact that currently existing long-term
contracts provide for delivery at prices above-market does not indicate
that dumping is not likely to continue or recur; the contracts do not
reflect whether such prices are at, or above, normal value nor do they
indicate the possible contract negotiations between now and 2004.
Likewise, capacity constraints and market incentives do not necessarily
indicate that dumping will not occur in the future. Therefore, we
determine that the removal of the restrictions imposed by the suspension
agreement will likely result in the continuation or recurrence of dumping. 

4. Magnitude of the Margin Likely to Prevail

Interested Party Comments

In its case brief, the Ad Hoc Committee asserts that the Department's
decision to select the original margin is in accordance with the Sunset
Policy Bulletin, which provides that, in a suspended investigation, the 
Department may provide to the Commission the margin that was determined 
in the preliminary determination of the original investigation (see April 
10, 2000, case brief of the Ad Hoc Committee at 4). Moreover, the Ad Hoc 
Committee asserts that the original margin is the only margin available 
to the Department, and calculating a new margin would be inaccurate and 
involve undue speculation because the margin would inevitably reflect the 
effect of the restrictions under the Uzbek suspension agreement. Id. Thus, 
the Department should confirm its determination to report to the
Commission 
the 115.82 percent margin determined in the preliminary determination. Id.

In their case brief, respondent interested parties argue that the
Department erred in selecting the preliminary margin from the original
investigation as the rate likely to prevail if the suspended investigation
is terminated. They contend that this BIA margin cannot be used as the
margin likely to prevail because (1) Uzbekistan is entitled to a country-
specific calculation whereas the preliminary margin is based on BIA for an
entirely different country that no longer exists; (2) this margin is
inapplicable to Uzbekistan due to procedural defects; and (3) the
Department is unlawfully imposing adverse facts available against a
respondent that has fully cooperated to the best of its ability (see April
10, 2000, case brief of respondent interested parties at 21-22). 

Respondent interested parties assert that the Department should permit
Uzbekistan for the final results to submit the complete data and
information necessary for valuation of the relevant factors of production
and construction of a country-specific normal value for Uzbek uranium. Id.
at 22. Further, if the Department refuses to permit the submission of
complete country-specific information, the calculation used in the
original preliminary determination from June 1992 should be adjusted to
reflect less adverse BIA using publicly available information bearing a
closer relationship to Uzbek data. Id. 

First, respondent interested parties contend that the SAA permits margins
to be calculated in sunset reviews as long as extraordinary circumstances
are present, and they state that there is nothing in the statute or
legislative history proscribing the calculation of a sunset review margin
that is not based on projections of future data, but rather utilizes
actual such data and information from a past time period. Under such
extraordinary circumstances, Navoi is prepared to provide detailed data
and information relating to any past period for purposes of calculating a
reliable country-specific margin that does not require any speculation
about future prices, costs, or sales. Id. at 23.

Second, respondent interested parties state that the original preliminary
margin relied upon by the Department cannot be applied to Uzbekistan
because it its not country or exporter-specific. Further, the selected
margin in this sunset review was based on BIA that was not even based on
data relating to the same country of production or the same company. Id.
at 24. Moreover, the Antidumping Agreement expressly requires that sunset
margin determinations must be made on a country/exporter-specific basis.
Thus, at a minimum, the Department must rely on a margin calculated for a
known exporter or producer from Uzbekistan and, by violating these
provisions of the Antidumping Agreement, the Department also contravenes
the obligations of the United States to accord unconditional Most Favored
Nation ("MFN") treatment to Uzbekistan under the 1993 Bilateral Trade
Agreement Between the United States and Uzbekistan.

Third, respondent interested parties assert that the margin relied on by
the Department is invalid due to the procedural deficiencies in the
underlying proceedings and lacks any probative value because Uzbekistan's
industry, economy, and trading patterns have changed dramatically since
1991. Id. at 27-28. In addition, they describe the extraordinary
circumstances in the underlying investigation, including the lack of
proper communication, that have prevented a country-specific margin from
being available for use by the Department and that that warrants the
unusual step of calculating a margin in the sunset review context.

Furthermore, respondent interested parties state that the Department and
judicial precedent reflect that Uzbekistan is entitled to an opportunity
to submit country-specific data in this sunset review and that the CIT has
specifically cautioned that the Department must afford each NIS the
opportunity to provide country-specific data. Id. at 29. Respondent
interested parties also assert that the Department has arbitrarily imposed
on Uzbekistan a margin that was based on BIA data for another country and
issued without any notice or opportunity to comment, and has simply
ignored the extraordinary geopolitical changes that have occurred.
Moreover, the Department's preliminary results are incompatible with the
Department's previous recognition of identical procedural and due process
concerns. For instance, the Department determined that it was appropriate
to give Kazakhstan a renewed opportunity to provide country-specific data.
Id. at 30.

Respondent interested parties criticize the Department's rationale for
denying Uzbekistan a similar opportunity. They assert that the only way
Uzbekistan will receive fair and equitable treatment is if it chooses to
terminate its suspension agreement and submit country-specific data in a
resumed investigation, thus, undermining the intent of the statutory
provisions relating to suspension agreements, the U.S. - Uzbekistan
Bilateral Trade Agreement, and the terms of the Uzbek suspension agreement
despite Uzbekistan's continued efforts to cooperate with its terms.

In addition, respondent interested parties contend that the June 1992
preliminary margin is not probative evidence of the magnitude of the
margin likely to prevail if the suspended investigation is terminated and,
particularly, in light of the extraordinary geopolitical and uranium
market changes that have taken place in Uzbekistan since the issuance of
the preliminary determination as discussed in detail in the GOU/Navoi's
substantive response of September 1, 1999. Id. at 33.

Finally, respondent interested parties contend that the Department's
reliance on the preliminary margin constitutes the unlawful imposition of
adverse facts available, despite respondent interested parties' full
cooperation to the best of its ability. They state that Uzbekistan has
cooperated fully in this proceeding as the GOU and Navoi have submitted
information, requested the Department to issue a complete questionnaire or
permit the submission of the 1991-92 questionnaire response, and have been
cooperative in providing information to the Department. Id. at 35-36.
Respondent interested parties add that the Department should, at a minimum
adjust the margin adopted in the preliminary results to reflect a more
probative and non-adverse form of BIA for Uzbekistan rather than the
punitive BIA by utilizing publically available information as surrogate
values for these factors of production. Id. at 36.

In its rebuttal, the Ad Hoc Committee contends that the Department should
reject the GOU/Navoi's arguments and reasserts that the Department's
methodology for selecting a margin is very clear, and entirely consistent
with the statute and the SAA (see April 18, 2000, rebuttal of the Ad Hoc
Committee at 7). The Ad Hoc Committee continues that the SAA makes it
clear that sunset reviews are not intended to be vehicles for the
recalculations or new calculation of margins, and the SAA cautions the
Department against calculating future margins because it would involve
"undue speculation" by the Department. Id. at 9. Further, it would be
impossible to conduct a recalculation in the context of a sunset review
that can satisfy the SAA's direction that a sunset review assume a margin
that reveals the GOU's behavior without the discipline of the suspension
agreement and does not violate the SAA's prohibition on speculation by the
Department. Id. 

With respect to respondent interested parties' argument that the
Department adjust the preliminary margin to reflect a more probative and
non-adverse form of BIA for Uzbekistan rather than the punitive BIA
selected, the Ad Hoc Committee argues that the GOU's provision of new
information in its case brief is untimely, and requests that this
information be removed from the record and returned to the GOU. Id. at 10.
Rather, any new information that a party wishes the Department to consider
in a sunset review may be submitted in that party's substantive response.
Moreover, the Ad Hoc Committee asserts that if the GOU had wished to
challenge the Department's choice of BIA, it should have done so in the
underlying investigation; the Department cannot permit parties in sunset
reviews to re-assert previously rejected challenges or to raise new
objections to margin calculations that have been completed and subject to
judicial review at the time of completion. Id. at 11. Such use of a sunset
review would be contrary to the Department's rule permitting the post-
final correction of margins only for ministerial errors. Id. 

The Ad Hoc Committee argues that the Department's use of BIA in
calculating its preliminary margin was appropriate and consistent with
Department practice and law. With respect to the GOU's argument the
Department's use of BIA in calculating the Uzbek-specific margin in the
original investigation violates the Antidumping Agreement, the Ad Hoc
Committee notes that, because Uzbekistan is not a member of the WTO,
Uzbekistan has no standing to complain that its rights under the
Antidumping Agreement are somehow diminished. Id. at 11-12. In addition,
the claims that selection of a BIA margin is inappropriate in a sunset
review directly conflicts with the intent of the sunset statute and the
Department's regulations and practice. Since a BIA investigation margin in
this case is based on the best information then available and is the only
margin that provides an accurate picture of the GOU's behavior absent the
discipline of the suspension agreement, the preliminary BIA margin
calculated for Uzbekistan is the correct margin to utilize in this case.

Moreover, the Ad Hoc Committee asserts that the GOU's additional claim
that the Department allowed Kazakhstan to submit additional data upon
resumption of its investigation is inapplicable in this review. Id. at 13-
14. According to the Ad Hoc Committee, the Department noted that it
allowed Kazahkstan to submit such data in the context of a resumed
investigation and not a sunset review. Id. at 14. Therefore, the
Department should not consider the Kazakh investigation as relevant
precedent to this proceeding.

In its rebuttal response, respondent interested parties argue that the Ad
Hoc Committee provides no support for the Department's continued reliance
on the preliminary margin from June 1992. They reassert that Uzbekistan
has cooperated fully in these sunset review proceedings, throughout the
underlying investigation and the suspension agreement, such that there is
no lawful basis for imposing against GOU/Navoi a margin that was
calculated using highly adverse BIA (see April 18, 2000, rebuttal response
of respondent interested parties at 4).

Respondent interested parties restate that the SAA specifically
contemplates that it may be necessary for the Department to calculate a
sunset review margin under "extraordinary circumstances"and, further, all
parties have acknowledge that there is simply no country-specific margin
available to the Department in this case. Id. at 5. Continued reliance on
this margin in the final results would be unduly punitive, because it
results in the rejection of low-margin information in favor of high margin
information that is demonstrably less probative. Rather, the Department
should request that Uzbekistan submit a country-specific questionnaire
response or, at a minimum, the Department must adjust the selected highly
adverse margin from the June 1992 preliminary results to derive a margin
that is based on non-adverse BIA by using publically available factors of
production information that is contemporaneous with and more probative of
the country-specific behavior of Uzbekistan. Id. at 5-6.

Department's Position

We agree with domestic interested parities. As stated in our preliminary
results, the SAA cautions the Department against calculating future
margins in sunset reviews because it would involve undue speculation by
the Department; the sunset review is not intended to be a vehicle for
recalculations or new calculations of margins. Contrary to the GOU's
arguments, the Department in choosing a margin calculated using BIA
instead of an Uzbek-specific margin is not in violation of the Antidumping
Agreement or the obligations of the United States to accord unconditional
MFN treatment under the 1993 Bilateral Trade Agreement between the United
States and Uzbekistan. Rather the Department's selection of a BIA margin
is consistent with the sunset provision of the Act and the Department's
regulations and practice.

Although the GOU and Navoi request in their case briefs that the
Department accept the original questionnaire response from the
investigation and examine new data and information during the course of
this sunset review, we choose not to request or accept such submission and
we will not conduct the requested recalculation. 

Further, the Department's use of BIA in calculating the margin for our
preliminary results was appropriate and consistent with Department
practice and law. As noted above, the procedural history of the original
investigation, including the fact that the calculation of a margin for
Uzbekistan was based on BIA, does not undermine the validity of the
investigation. The preliminary margin was based on the best information
available during the period of investigation and remains the only margin
available to the Department without the discipline of the suspension
agreement. We cannot, in the course of this sunset review, calculate a
margin of dumping by relying on a previously rejected, untimely
questionnaire response, or more recent information. As stated in our
preliminary results, continuation of the investigation, not a sunset
review, would be the appropriate forum for consideration of information
related to the period of investigation. 

While we agree that significant changes have taken place in Uzbekistan
and in the worldwide uranium market during the 1990s, we do not agree that
conditions have changed to such and extent that the termination of the
suspension agreement and underlying investigation is not likely to result
in the continuation or recurrence of dumping. We have no information on
the record to conclude with certainty that this would be the case, and
would, hence, need to resort to speculation. Nor do we agree with the
GOU's arguments that changes in Uzbekistan and its industry since 1992
constitute "extraordinary circumstances" that require the Department to
consider new information. The Department's use of a margin based on BIA
Soviet-era data does not constitute extraordinary circumstances, as the
margin from the investigation is the only calculated rate that reflects
the behavior of exporters and foreign governments without the discipline
of the suspension agreement in place. The submission of new information in
this case might be appropriate in the context of a resumed investigation,
or a changed circumstances review. Because other administrative
proceedings are available to respondent interested parties that are more
appropriate for the consideration of their request, we do not view these
circumstances as sufficiently extraordinary so as to essentially conduct a
renewed investigation in the context of a sunset review.

The SAA makes clear that the calculation of future dumping margins would
involve undue speculation regarding future selling prices, costs of
production, selling expenses, exchange rates, and sales and production
volumes. Given the restrictions imposed by the suspension agreement with
respect to imports of uranium, any such calculation would reflect the
behavior of producers and exporters with the restrictions of the
suspension agreement in place. Therefore, we determine that the margins
calculated in the original investigation are probative of the behavior of
Uzbek manufacturers/exporters of uranium were the suspended investigation
terminated. As such, the Department will report to the Commission the rate
from the original investigation as the magnitude of the margin likely to
prevail if the suspended investigation were terminated, as contained in
the Final Results of Review section of the accompanying Federal Register
notice.

Recommendation:

Based on our analysis of the comments received, we recommend adopting all
of the above positions. If these recommendations are accepted, we will
publish the final results of review in the Federal Register.

AGREE____ DISAGREE____

______________________________________________________________________
footnotes:

1. See April 4, 2000, Letter from Jeffrey A. May, Director, Office of
Policy, to Carolyn B. Lamm, granting an extension for time for filing
rebuttal comments to the case briefs. 

2. AHUG consists of U.S. industrial users Ameren UE, Baltimore Gas and
Electric Co., Carolina Power and Light Co., Commonwealth Edison Co.,
Consumers Energy, Duke Power Co., Entergy Services, Ins., FirstEnergy
Nuclear Operating Co., Florida Power and Light Co., Northern States Power
Co., PECO Energy Co., Southern Nuclear Operating Co., Texas Utilities
Electric Co., and Virginia Power. 

3. See Preliminary Determination of Sales at Less Than Fair Value:
Uranium from Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Ukraine and
Uzbekistan; and Preliminary Determination of Sales at Not Less Than Fair
Value: Uranium from Armenia, Azerbaijan, Byelarus, Georgia, Moldova and
Turkmenistan, 57 FR 23381, 23382 (June 3, 1992). 

4. See Antidumping; Uranium from Kazakhstan, Kyrgyszstan, Russia,
Tajikistan, Ukraine, and Uzbekistan; Suspension of Investigations and
Amendment of Preliminary Determinations, 57 FR 49220 (October 30, 1992). 

5. Id. at 49221. 

6. Id. at 49255. 

7. Id.