Slip Op. 01-103

UNITED STATES COURT OF INTERNATIONAL TRADE

___________________________________

:

AD HOC COMMITTEE OF DOMESTIC :

URANIUM PRODUCERS, :

: Court No. 00-09-00450

Plaintiff, :

:

v. :

:

THE UNITED STATES, :

:

Defendant, :

:

and :

:

GOVERNMENT OF UZBEKISTAN and NAVOI :

MINING AND METALLURGICAL COMBINAT, :

:

Defendant-Intervenors. :

___________________________________:

[ITC determination sustained.]

Dated: August 14, 2001

Akin, Gump, Strauss, Hauer & Feld (Valerie A. Slater,

Stephen J. Claeys and Catherine J. Finnegan) for plaintiff.

Lyn M. Schlitt, General Counsel, James M. Lyons, Deputy

General Counsel, Office of the General Counsel, United States

International Trade Commission (Robin L. Turner) for defendant.

White & Case, LLP (Carolyn B. Lamm and Adams C. Lee) for

defendant-intervenor.

OPINION

RESTANI, Judge: This matter is before the court on the

motion of plaintiff Ad Hoc Committee of Domestic Uranium

Producers under United States Court of International Trade

(“C.I.T.”) Rule 56.2 for judgment upon the administrative record
COURT NO. 00-09-00450 PAGE 2

before the International Trade Commission (“Commission” or

“ITC”). Plaintiff challenges the negative results as to

Uzbekistan in the sunset review determination found in Uranium

from Russia, Ukraine and Uzbekistan, USITC Pub. 3334, Inv. Nos.

731-TA-539-C, E and F (Review) (Aug. 2000) [hereinafter “Final

Determination”]. Plaintiff challenges the decision of the

Commission not to cumulate imports from at least two of the three

countries under review. It also challenges the Commission’s

determination that the volume of Uzbek imports would not rise to

a significant level if the restraints resulting from the

antidumping duty petition were removed.

Facts

Uzbek imports are subject to a suspension agreement which

has been modified several times. See, e.g., Uranium from

Kazakhstan, Russia, Tajikistan, Ukraine, and Uzbekistan, 57 Fed.

Reg. 49,220, 49,255-61 (Dep’t Comm. 1992) (suspension of invest.)

[hereinafter “Suspension Agreement”]; Agreement Suspending the

Antidumping Investigation on Uranium from Uzbekistan, 60 Fed.

Reg. 55,004 (Dep’t Comm. 1995) (amended susp. agreement). The

challenged sunset review is pursuant to 19 U.S.C.

§ 1675(c)(1)(c), which requires review five years after

publication of such a suspension agreement to determine if

termination of the agreement “would be likely to lead to
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1 Vice Chairman Deanna Tanner Okun did not participate. See

Final Determination, at 3 n.2. The ITC also by a vote of 5-0

made an affirmative determination regarding the suspended

investigation covering uranium from Russia, and a negative

determination covering the antidumping order covering uranium

from Ukraine. See id. at 40, 45. These decisions are not

challenged.

2 The discernible adverse impact finding was unanimous with

regard to Russian imports, see Final Determination, at 21-22, 48-

49, 51, whereas Commissioner Bragg disagreed with the conclusions

of the remaining commissioners regarding the likely impact of

Uzbek imports. See id. at 21-22, 49-52.

continuation or recurrence of dumping . . . and of material

injury.”

The ITC by a vote of 5-0 determined that termination of the

suspended investigation covering uranium from Uzbekistan would

not be likely to lead to continuation or recurrence of material

injury to an industry in the United States within a reasonably

foreseeable time.1 See Final Determination, at 44. The ITC also

unanimously exercised its discretion not to cumulate Russian and

Uzbek subject imports. See id. at 19-24, 49-53.

With regard to cumulation, the ITC first found that the

statutory requirement that all reviews be initiated on the same

day was satisfied. Id. at 20-21. The ITC also did not find that

Russian and Uzbek subject imports would be likely to have no

discernible adverse impact on the domestic industry.2 Id. at 21-

22. A contrary conclusion by the ITC would have ended the

inquiry. See 19 U.S.C. § 1675a(a)(7) (“The Commission shall not
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3 The traditional four-stage production process, known as the

(continued...)

cumulatively assess the volume and effects of imports of the

subject merchandise in a case in which it determines that such

imports are likely to have no discernible adverse impact on the

domestic industry.”). Rather, the ITC considered whether to

exercise its discretion to cumulate such imports. The ITC

majority in two separate views found that Russian and Uzbek

subject imports would likely not compete under similar conditions

of competition, if the suspended investigations were terminated,

and declined to exercise its discretion to cumulate Russian and

Uzbek subject imports in these reviews. See Final Determination,

at 22-24, 52-53.

The ITC found several conditions of competition in the

uranium industry relevant to its determinations in this review. 

First, the ITC found that various forms of uranium – uranium

concentrate (U3O8), natural uranium (natural UF6), enriched

uranium (enriched UF6), and uranium oxides (UO2)– are

individually fungible, commodity products and, for the most part,

substitutable with uranium of the same form produced elsewhere in

the world. Id. at 28. However, the four forms are not

physically interchangeable with each other since they are all

intermediate products each successively contained in one

another.3 Id.
COURT NO. 00-09-00450 PAGE 5

3 (...continued)

“uranium fuel cycle,” proceeds as follows: In the first stage,

“concentrators” mine uranium ore and extract the uranium in a

concentrated form of U3O8, resulting in a product known as

“uranium concentrate.” In the second stage, “converters”

transform the uranium concentrate into natural uranium

hexafluoride (natural UF6). In the third stage, the “enricher”

vaporizes the natural UF6 and processes it using units of effort

called “separative work units” (“SWU”) to increase the percentage

of U235, thereby producing enriched uranium hexafluoride (enriched

UF6). Enriched UF6 is processed for use in nuclear power plants

to a proportion of U235 in the uranium from 0.71 percent to 3-5

percent by weight (low-enriched uranium or LEU) and for use in

nuclear weapons and nuclear propulsion to a proportion of U235 in

uranium of 20 percent or more (highly-enriched uranium or HEU). 

In the fourth and final stage, “fabricators” convert the

“enriched UF6” into uranium dioxide (UO2), which they then

pelletize and encase the pellets into protective metal sheaths,

called fuel assembly rods, to meet the needs of specific nuclear

power plants. While the UO2 in powder or pellet form is part of

the subject merchandise, the fuel assembly rods are not.

4 Created by the U.S. Government in 1992 as the first step

toward the privatization of the Department of Energy’s uranium

enrichment activities, USEC was fully divested of Government

ownership and became a publicly-held corporation in July 1998. 

Final Determination, at 29.

Second, the ITC found that there have been substantial

structural changes to the domestic industry since the original

investigations, including consolidations and closings of U.S.

uranium concentrate and conversion operations. Id. The most

significant change, however, has been the privatization of USEC,4

the only U.S. enricher of uranium. Id. at 28-29. USEC

traditionally has enriched natural UF6 to produce LEU for

electric utilities, but, as the U.S. Government’s Executive Agent

for the Russian HEU Agreement, USEC is required to import large
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quantities of Russian LEU blended down from Russian HEU and sell

it directly to utilities. Id. at 29.

Third, the ITC found that U.S. utilities’ demand for

uranium, as measured by reactor requirements, has been constant

during the review period and is projected to remain relatively

flat for the next decade. Id. Uranium consumption has been

affected by the closure of at least 11 U.S. nuclear power plants

in the past 20 years and no new plant construction. Id. Demand

for uranium also has been affected by deregulation of electrical

utilities, which effectively puts nuclear power plants in

competition with other sources of electricity and increases

pressure on the utilities to cut costs by obtaining uranium at

the lowest cost whether through the traditional fuel cycle or

from non-traditional uranium suppliers. Id. The ITC noted that

the nature of U.S. demand may be changing as U.S. electric

utilities are now able to purchase more advanced products

directly, especially natural UF6 and enriched UF6, whereas in the

past they typically were limited to purchasing the uranium

concentrate and contracting for toll production at each of the

subsequent stages of processing. Id. While long-term contracts

account for a majority of utilities’ purchases, the increased

availability of more advanced products has led to shorter lead

times and allowed a reduction in long-term purchases in favor of

shorter-term contracts, including spot contracts. Id.
COURT NO. 00-09-00450 PAGE 7

Fourth, another significant condition of competition is the

overall increase in the supply of uranium, and, in particular,

the increased availability of uranium in processed forms. Id. at

29-30. Imports under the Russian HEU Agreement have provided a

large and increasing supply of uranium at the LEU stage to the

U.S. market. Id. at 30. Moreover, the Russian feedstock

(natural UF6) also is available for sale in the U.S. market at

annual limits that increase to an annual total of 20 million

pounds in 2007. Id. Increased worldwide availability of

uranium, particularly in processed form, as well as cost-cutting

measures resulting from deregulation, have led some utilities to

sell or trade uranium from their inventories on the open market,

adding to the number of suppliers and the already existing excess

supplies. Id. at 31. The development of the relatively highgrade, low-cost uranium ore reserves in Canada and Australia have

added to the worldwide uranium abundance, and have been an

increasing supply of uranium concentrate to the U.S. market

during the review period. Id. at 30-31.

Fifth, the ITC found that the inventories, which are

typically stored by producers but owned by utilities, created

separate, but interrelated, markets through swaps and loans for

the uranium and enrichment components of enriched UF6. Id. at

31. Finally, the ITC found that trade restrictions in the United

States and Europe affected exports of uranium from the successor
COURT NO. 00-09-00450 PAGE 8

5 While the other related suspension agreements limited the

volume of uranium that the countries could sell into the United

States, the Uzbek suspension agreement imposed numerical quotas,

with the quota being increased if the price of uranium in the

United States increased. See Suspension Agreement, 57 Fed. Reg.

at 49,255-56, 49,260.

6 Documents contained in List 1 of the Administrative Record

are identified as “P.R. Doc. __,” and documents contained in List

(continued...)

countries to the former Soviet Union and resulted in a two-tier

pricing structure.5 Id. at 31-32.

The ITC concluded, based on the facts in the record of the

Uzbek review, that “while there may be some increase in the

volume of subject imports of uranium from Uzbekistan if the

suspended investigation is terminated, it is not likely to reach

significant levels within a reasonably foreseeable time.” Id. at

43. The ITC considered the volume of subject imports in absolute

terms and relative to consumption of all uranium and only uranium

concentrate, imports and U.S. utilities’s reactor requirements. 

Id. at 41-43. The ITC found that Uzbek imports of uranium

concentrate represented a relatively small share of total U.S.

uranium sales and imports of all uranium during the period of

review. Id. at 41. Relevant confidential information is found

at Final Staff Report, at IV-7, C.R. Doc. 46, ITC App., Tab 6, at

IV-7; Uzbekistan Pre-Hearing Br., at 20-21, Exh. 7, C.R. Doc. 16,

ITC App., Tab 3, at 5-6, 8; Post-Hearing Br., at 3, C.R. Doc. 32,

ITC App., Tab 5, at 2.6
COURT NO. 00-09-00450 PAGE 9

6 (...continued)

2 of the Administrative Record are identified as “C.R. Doc. __.”

Capacity utilization was particularly high. The ITC

recognized that since imports of Uzbek uranium have been subject

to quotas, which generally have been fully subscribed, it is

likely that uranium shipments from Uzbekistan may increase to

some degree without the Suspension Agreement quotas. Final

Determination, at 42. However, the ITC found that even if 100

percent of Uzbek’s production capabilities were utilized and all

such product were shipped only to the U.S. market, the volume of

Uzbek imports would still not rise to a significant or injurious

level. Id. at 43.

Based in large part upon its finding that the likely volume

of Uzbek imports will not be significant, the ITC also found

that, in the event of termination of the suspended investigation,

it is unlikely that Uzbek subject imports would result in

significant adverse price effects in the U.S. market. Id. While

the ITC found that the U.S. uranium industry was in a vulnerable

condition, it concluded that in the absence of significant volume

changes or price effects, it is not likely that termination of

the suspended Uzbek investigation will result in a significant

adverse impact on the domestic industry. Id. at 44. Therefore,

the ITC determined that termination of the suspended

investigation on uranium from Uzbekistan is not likely to lead to
COURT NO. 00-09-00450 PAGE 10

7 The prohibition contained in 19 U.S.C. § 1675a(a)(7) against

cumulation of imports with no discernable adverse impact on the

domestic industry is not at issue.

the continuation or recurrence of material injury to the domestic

industry within a reasonably foreseeable time.

Discussion

A. The Commission did not abuse its discretion

as to cumulation.

Cumulative assessment of imports from different countries

under simultaneously initiated reviews is not mandatory in sunset

reviews, even if such imports compete with each other and the

domestic like product to some degree. Contrast 19 U.S.C.

§ 1675a(a)(7) (“the Commission may cumulatively assess the volume

and effect of imports . . .”) with 19 U.S.C. § 1677(7)(G)

(setting forth conditions in original title VII material injury

investigation under which the Commission “shall” cumulate).7 See

also Statement of Administrative Action, accompanying H.R. Rep.

No. 103-826(I), at 887, reprinted in 1994 U.S.C.C.A.N. 4040,

4212; Eveready Battery Co. v. United States, 77 F. Supp. 2d 1327,

1331 (Ct. Int’l Trade 1999) (cumulation in sunset reviews is

discretionary).

Unlike present material injury investigations, both threat

of injury investigations and sunset reviews require the

Commission to assess the likelihood of future injury, and

cumulation is not mandated in either type of proceeding. Compare
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19 U.S.C. 1675a(a)(7) (discretionary cumulation for sunset

reviews) with 19 U.S.C. § 1677(7)(H) (cumulation to the extent

practical for threat of material injury criteria). Both types of

proceedings are inherently prospective and the Commission

attempts to predict the future based on current data and

historical trends, if possible. Combining trends has proved

difficult in threat investigations, and the court has upheld

Commission determinations not to cumulate under such conditions. 

See, e.g., Kern Liebers USA v. United States, 19 CIT 87, 103-04

(1995); Torrington Co. v. United States, 16 CIT 220, 229-30, 790

F. Supp. 1161, 1171-72 (1992).

In this case, both countries’ exports were subject to

suspension agreements, and Russian imports are subject to the

terms of the outstanding HEU agreement, which is not dependent on

the continuation of the antidumping duty regime. See Final Staff

Report, at I-13, ITC App., Tab 6, at I-13. It would be

difficult, therefore, to make any meaningful predictions based on

combining past Russian and Uzbek import volume, market share, and

price effects data, as plaintiff concedes. See Pl.’s Reply Br.

at 9 n.4.

Accordingly, the Commission considered what it expected the

conditions of competition to be for imports from the respective

countries. The Commission considered the large share of the HEU

market guaranteed to Russian imports. Id. at 23. It also
COURT NO. 00-09-00450 PAGE 12

8 The court need not reach the issue of whether the

significance of different production capacities and inventories

was adequately explained, as it finds the other factors cited by

the Commission adequate to support its decision.

considered the full range of market segments served by Russian

imports and the narrow market segment of unprocessed uranium

served by Uzbek imports. Id. at 23-24. Plaintiff does not

dispute these facts. The Commission also did not deny the fact

of some competition. Id. at 23. It simply found insufficiently

similar conditions of competition to warrant cumulation. Id. at

23-24. This is more than sufficient reasoning to justify a

decision not to cumulate in a sunset review.

Plaintiff’s other arguments are insufficient to show error

on the Commission’s part in this regard.8 The Commission may

consider market segmentation in assessing conditions of

competition even when there is one like product. RanchersCattleman Action Legal Foundation v. United States, 74 F. Supp.

2d 1353, 1371-2 (Ct. Int’l Trade 1999).

B. The Commission’s decision that Uzbek imports

were unlikely to reach significant levels was

supported.

The basic inquiry in a sunset review is whether termination

of whatever unfair trade discipline has been imposed will likely

lead to the material injury to the domestic industry sought to be

avoided by the discipline imposed. 19 U.S.C. § 1675a(a)(1). To

this end the likely volume, price effects, and impact of the
COURT NO. 00-09-00450 PAGE 13

imports are considered. Id. Volume is considered in absolute

terms and relative to production or consumption in the United

States. 19 U.S.C. § 1675a(a)(2). In this case volume was

considered in relation to U.S. consumption of all uranium and

also in relation to only uranium concentrate, as well as the

large volume and market share of non-subject imports. Final

Determination, at 41 & nn. 241-42. Uzbek imports were projected

to increase as a result of termination of the suspension

agreement, but the Commission also considered the very high Uzbek

capacity utilization, low inventories and the lack of significant

projected increase in production capacity, id. at 42-43, each of

which it is required to consider under § 1675(a)(2).

Uzbek uranium, for which there is no home market, is largely

sold under long-term contracts and there was no evidence that

significant shifting to U.S. markets would occur. Final

Determination, at 42-43. Nonetheless, as indicated, the

Commission considered the possibility of total capacity

utilization and total diversion to the U.S. market. It still

failed to find significant volume. Id. at 43.

Plaintiff’s chief objection is to the Commission’s decision, 

in the face of long term contracts, not to measure the likely

volume of imports relative to future uncommitted demand. This

argument was rejected in USEC, Inc. v. United States, 132 F.

Supp. 2d 1, 15-16 (Ct. Int’l Trade 2001). Whatever the factual
COURT NO. 00-09-00450 PAGE 14

differences between that case and the one at hand, the principle

that volume need not be assessed relative to uncommitted demand

only is a good one. What percentage of Uzbek volumes would one

measure against uncommitted demand? How long should the contract

term be before the covered volume is removed from consideration? 

Given that the spot market is relatively small, why should that

market dictate the outcome? Whatever merits plaintiff’s position

has, it also has problems, as these questions indicate. No

methodology is perfect. Neither the statute nor the facts of

this case compel the Commission to use plaintiff’s proposed

methodology.

Finally, plaintiff argues that the Commission failed to

measure volume against U.S. production. The statute directs that

the ITC “shall consider whether the likely volume of imports . .

. would be significant . . . either in absolute terms or relative

to production or consumption in the United States.” 19 U.S.C.

§ 1675a(a)(2). Assuming arguendo that this issue was not waived,

plaintiff is correct that the Commission may not ignore its

statutory mandate to evaluate the possible significance of

subject import volumes relative to U.S. production. 

Notwithstanding this oversight on the part of the Commission,

remand is unnecessary because the court does not find that the

ITC would have arrived at a different conclusion regarding the

impact of subject import volumes. See NLRB v. Wyman-Gordon Co.,
COURT NO. 00-09-00450 PAGE 15

394 U.S. 759, 766 n.6 (1969) (refusing to remand despite agency

error of law where remand would be an “idle and useless

formality”); Illinois v. ICC, 722 F.2d 1341, 1348-49 (7th Cir.

1984) (refusing to remand despite agency error of law because

agency would not have arrived at a different conclusion); NLRB v.

American Geri-Care, Inc., 697 F.2d 56, 64 (2d Cir. 1982) (same). 

Where nonsubject imports are an important factor, assessment in

terms of U.S. production is not likely to be useful. Cf. Gerald

Metals, Inc. v. United States, 132 F.3d 716, 722-23 (Fed. Cir.

1997) (in finding wrong standard of injury applied, court notes

effects of nonsubject imports must be considered by Commission). 

In such cases, measurement of subject import volumes against U.S.

consumption likely will give a clearer picture of the

significance of subject import volumes. Under the facts of this

case, particularly the prominence of nonsubject imports, see

Final Determination, at 30-31, there is no point to assessment of

subject import volumes relative to U.S. production at this stage,

as assessment against such a limited factor will not reveal the

significance of the imports in a market heavily affected by nonU.S. products. None of plaintiff’s subsidiary arguments

undermine the Commission’s determination.
COURT NO. 00-09-00450 PAGE 16

In sum, this does not appear to be a close case and the

Commission’s unanimous result is sustained.

________________________

Jane A. Restani

 JUDGE

Dated: New York, New York

 This 14th day of August, 2001.