[Federal Register Volume 69, Number 24 (Thursday, February 5, 2004)]
[Notices]
[Pages 5502-5505]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-2523]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-427-819]


Preliminary Results of Countervailing Duty Administrative Review: 
Low Enriched Uranium from France

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of Preliminary Results of Countervailing Duty 
Administrative Review.

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SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the countervailing duty order on low enriched 
uranium from France for the period May 14, 2001 through December 31, 
2002\1\. For information on the net subsidy for the reviewed company, 
please see the ``Preliminary Results of Review'' section of this 
notice. Interested parties are invited to comment on these preliminary 
results. (See the ``Public Comment'' section of this notice).
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    \1\ Consistent with the Department's practice, for the purposes 
of these preliminary results, we have analyzed data for the period 
January 1, 2001 through December 31, 2001 to determine the subsidy 
rate for exports of subject merchandise made during the period in 
2001 when liquidation of entries was suspended. In addition, we have 
analyzed data for the period January 1, 2002 through December 31, 
2002 to determine the subsidy rate for exports during that period. 
Further, we are using the 2002 subsidy rate to establish the cash 
deposit rate for entry of subject merchandise subsequent to the 
issuance of the final results of this administrative review.

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EFFECTIVE DATE: February 5, 2004.

FOR FURTHER INFORMATION CONTACT: Carrie Farley at (202) 482-0395 or 
Tipten Troidl at (202) 482-1767, Office of AD/CVD Enforcement VI, Group 
II, Import Administration, International Trade Administration, U.S. 
Department of Commerce, Room 4012, 14th Street and Constitution Avenue, 
N.W., Washington, D.C. 20230.

SUPPLEMENTARY INFORMATION:

Background

    On February 13, 2002, the Department published in the Federal 
Register the countervailing duty order on low enriched uranium from 
France. See Amended Final Determination and Notice of Countervailing 
Duty Orders: Low Enriched Uranium from France, 67 FR 6689 (February 13, 
2002). On February 3, 2003, the Department published an opportunity to 
request an administrative review of this countervailing duty order. See 
Antidumping or Countervailing Duty

[[Page 5503]]

Order, Finding, or Suspended Investigation; Opportunity to Request an 
Administrative Review, 68 FR 5272 (February 3, 2003). We received a 
timely request for review of Eurodif S.A. (Eurodif), by both 
respondents and petitioners.\2\ On March 25, 2003, the Department 
published the initiation of the administrative review of the 
countervailing duty order on low enriched uranium from France, covering 
the period of review (POR) May 14, 2001 through December 31, 2002. See 
Initiation of Antidumping and Countervailing Duty Administrative 
Reviews and Revocation in Part, 68 FR 14394 (March 25, 2003).
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    \2\ USEC Inc., its wholly owned subsidiary, United States 
Enrichment Corporation (USEC) and the Paper, Allied-Industrial, 
Chemical and Energy Workers International Union, AFL-CIO, CLC, and 
Local 5-550 and Local 5-689 (the petitioners)
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    On May 2, 2003, the Department issued a questionnaire to the 
Government of France (GOF) and Eurodif. On June 19, 2003, the 
Department received questionnaire responses from the GOF, and Eurodif. 
On October 23, 2003, the Department published in the Federal Register 
an extension of the deadline for the preliminary results. See Low 
Enriched Uranium from France, Germany, the Netherlands, and the United 
Kingdom: Extension of Preliminary Results of Countervailing Duty 
Administrative Reviews, 68 FR 60643 (October 23, 2003). On October 14, 
2003 and November 3, 2003, we issued supplemental questionnaires to 
respondents. On October 31, 2003 and November 7, 2003, we received 
supplemental responses from respondents. From November 11 through 
November 14, 2003, we conducted verification of the responses of 
Eurodif and the GOF.
    In accordance with 19 CFR 351.213(b), this review covers only those 
producers or exporters for which a review was specifically requested. 
The company subject to this review is Eurodif. This review covers 2 
programs.

Scope of Order

    For purposes of this order, the product covered is all low enriched 
uranium (LEU). LEU is enriched uranium hexafluoride (UF[bdi6]) with a 
U[bds2][bds3][bds5] product assay of less than 20 percent that has not 
been converted into another chemical form, such as UO[bdi2], 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 this order. 
Specifically, this order does not cover enriched uranium hexafluoride 
with a U[bds2][bds3][bds5] assay of 20 percent or greater, also known 
as highly enriched uranium. In addition, fabricated LEU is not covered 
by the scope of this order. For purposes of this order, fabricated 
uranium is defined as enriched uranium dioxide (UO[bdi2]), whether or 
not contained in nuclear fuel rods or assemblies. Natural uranium 
concentrates (U[bdi3]O[bdi8]) with a U[bds2][bds3][bds5] concentration 
of no greater than 0.711 percent and natural uranium concentrates 
converted into uranium hexafluoride with a U[bds2][bds3][bds5] 
concentration of no greater than 0.711 percent are not covered by the 
scope of this order.
    Also excluded from this order 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 (UO[bdi2]) 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 this order is classified 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 POR for which we are measuring subsidies is May 14, 2001, 
through December 31, 2002.

Company History

    Eurodif was formed in 1973 by French and foreign government 
agencies to provide a secure source of LEU, in order to facilitate the 
development of nuclear energy programs in participating countries. 
During the POR, Eurodif was 44.65 percent-owned by COGEMA, which itself 
is principally owned by a subsidiary of the Commissariat d'Energie 
Atomique (CEA), an agency of the GOF. Further, Eurodif was 25 percent-
owned by SOFIDIF, a French company 60 percent-owned by COGEMA, thereby 
effectively placing COGEMA's ownership of Eurodif during the POR at 
approximately 60 percent. The remaining major shareholders of Eurodif 
during the POR were ENUSA, an entity of the Spanish government, 
SYNATOM, an entity of the Belgian government, and ENEA, an entity of 
the Italian government.

Programs Preliminarily Determined To Confer Subsidies

1. Purchase at Prices that Constitute ``More Than Adequate 
Remuneration''

    Eurodif provides low enriched uranium to EdF. EdF is a wholly-owned 
French government agency that supplies, imports and exports 
electricity. EdF is regulated by the Gas, Electricity and Coal 
Department of the Ministry of Industry (DIGEC) and the Budget and 
Treasury Departments of the Ministry of France. EdF is the major 
supplier of electricity in France and EdF's nuclear facilities account 
for approximately 85 percent of the power supplied by EdF in 2002. To 
date, EdF has entered into three long-term contracts with Eurodif to 
secure LEU. The first contract was negotiated in 1975; Eurodif began 
enrichment at its Georges-Besse gaseous diffusion facility in 1979.
    In the Final Affirmative Countervailing Duty Determination: Low 
Enriched Uranium from France, 66 FR 65901 (December 21, 2001) (1999 
LEU) we found this program to be countervailable. The facts on which 
this determination was made have not changed. EdF is still owned by the 
GOF, and because EdF is purchasing a good from Eurodif a financial 
contribution is being provided under section 771(5)(D)(iv) of the Act. 
In addition, because this program is available only to Eurodif, we 
continue to find that this program is specific under section 
771(5A)(D)(i) of the Act.
    Next, we must determine whether a benefit is provided to Eurodif 
under this program. Under section 771(5)(E)(iv) of the Act, a 
countervailable benefit may be provided by a government's purchase of a 
good for ``more than adequate remuneration.'' Under section 
771(5)(E)(iv) of the Act, the adequacy of remuneration will be 
determined in relation to the prevailing market conditions for the 
goods being purchased in the country which is subject to investigation. 
Therefore, in order to determine whether the prices paid by EdF 
constitute ``more than adequate remuneration,'' we must compare the 
prices paid by EdF to Eurodif with the prices paid by EdF to its other 
suppliers.

[[Page 5504]]

    Due to the difference in the pricing structure between Eurodif and 
EdF, as compared with the pricing between EdF and its other suppliers, 
it is important to make certain adjustments to our comparison. Unlike 
most other customers, EdF provides its own energy for Eurodif to use 
when producing LEU for EdF. In 2001, Eurodif paid EdF for the energy it 
used and re-billed EdF an identical amount. In 2002, Eurodif and EdF 
changed their billing practice so that EdF now pays Eurodif in energy 
for the energy Eurodif uses to produce EdF's LEU. For both years, 
Eurodif charged EdF for the operational costs associated with the 
production of its LEU. As EdF does not supply electricity to its other 
LEU suppliers, these suppliers charge EdF a single price per separative 
work unit (SWU). Thus, we have used this single price per SWU as our 
benchmark price. In order to make a proper comparison between the 
benchmark price and the government price (i.e., the price paid by EdF), 
the Department has included both operational and energy prices paid by 
EdF to Eurodif.
    As part of the arrangement for obtaining LEU, customers often 
provide an amount of natural uranium equal to that which theoretically 
went into the LEU they are purchasing. The record does not contain 
information on the value of the natural uranium provided by EdF or 
other customers to Eurodif. In the ``Issues and Decision Memorandum 
from Bernard T. Carreau, Deputy Assistant Secretary for AD/CVD 
Enforcement II to Faryar Shirzad, Assistant Secretary for Import 
Administration concerning the Final Affirmative Countervailing Duty 
Determination: Low Enriched Uranium from France - Calendar Year 1999'' 
(Decision Memorandum) dated December 13, 2001, we assumed that the 
value of all natural uranium is the same. See Decision Memorandum at 5. 
In making the comparison in this review we have continued to assume 
that the value of all natural uranium is the same in instances where 
EdF supplied its own feed material for enrichment. Thus, we have not 
included a value for the natural uranium component of the LEU delivered 
to EdF by Eurodif .
    In order to determine whether a benefit was provided to Eurodif 
during the POR, we calculated a per-SWU price for both the energy and 
operational components of the LEU purchased by EdF from Eurodif based 
on the price for the component divided by the quantity of SWU. To 
derive the per-SWU energy component cost under the new billing 
arrangement in 2002 where we did not have a euro price, we multiplied 
the MwH/SWU rate paid by EdF to Eurodif by Eurodif's cost of 
electricity from EdF. After adding these two components together, we 
compared the per-SWU price paid to Eurodif by EdF during each calendar 
year with the per-SWU price paid by EdF to its other LEU suppliers 
during each calendar year. Based on our analysis, we preliminarily 
determine that prices paid by EdF to Eurodif were higher than prices 
EdF paid to its other suppliers. Therefore, in accordance with section 
771(5)(E)(iv) of the Act, we preliminarily determine that this program 
conferred countervailable benefits to Eurodif during both 2001 and 
2002. Because EdF's purchases of this product from Eurodif are not 
exceptional but, rather, are made on an ongoing basis from year to 
year, we determine that the benefit conferred under this program is 
recurring under section 351.524(c) of the Department's Regulations. 
Therefore, the benefit is expensed in the year of receipt, i.e., the 
year in which the purchases are made. To calculate the benefit 
conferred to Eurodif, we multiplied the calculated price differential 
by the quantity of SWU component of the LEU purchased from Eurodif by 
EdF during each calendar year.
    Although the cash component of EdF's LEU purchases from Eurodif was 
paid on a ``per-SWU'' basis, the contracts also contained provisions 
for the natural uranium component of the LEU as well as the electricity 
used by Eurodif in the production of EdF's LEU. As stated above, we 
have determined that the value of the natural uranium component of the 
LEU produced by Eurodif from EdF's feed material is equal to that 
produced by EdF's other suppliers from EdF's feed material. Therefore, 
we did not need to calculate a price differential for the natural 
uranium component of the LEU. Rather, the natural uranium components of 
the LEU cancelled each other out.
    Also, we calculated an additional benefit from sales pursuant to 
the contract listed in Exhibit 16 J of Eurodif's June 19, 2003 
questionnaire response. For a more detailed discussion, see Memorandum 
on ``Eurodif's sales pursuant to the contract provided in Exhibit 16J 
of the June 19, 2003 questionnaire response,'' dated January 29, 2004, 
in the case file in the Central Records Unit, main Commerce building, 
room B-099 (the CRU).
    Next, we multiplied the benefit amount by the sales of subject 
merchandise to the United States, divided by total sales, and divided 
the result by sales that entered U.S. Customs during calendar years 
2001 and 2002 respectively. Thus, we have calculated the ad valorem 
rate for this program using the following formula:
A = B * (C/D)
 [dash1][dash2][dash3][dash4][dash5][dash6]
     E
Where:
A = Ad Valorem Rate
B = Subsidy Benefit
C = Sales of Subject Merchandise to the United States During the 
Calendar Year
D = Total Sales During the Calendar Year (including COGEMA sales on 
behalf of Eurodif)
E = Sales That Entered U.S. Customs During the Calendar Year
    On this basis, we preliminarily determine a net countervailable 
subsidy under this program of 6.20 percent ad valorem for 2001 and 1.40 
percent ad valorem for 2002 for Eurodif.

2. Exoneration/Reimbursement of Corporate Income Taxes

    Under a specific governmental agreement entered into upon Eurodif's 
creation, Eurodif is only liable for income taxes on the portion of its 
income relating to the percentage of its private ownership. Eurodif is 
fully exonerated from payment of corporate income taxes corresponding 
to the percentage of its foreign government ownership and is eligible 
for a reimbursement of the amount of corporate income taxes 
corresponding to its percentage of French government ownership. Based 
on this governmental agreement, Eurodif was exonerated from a portion 
of its 2000 and 2001 corporate income taxes filed during calendar years 
2001 and 2002. This tax exemption constitutes a financial contribution 
within the meaning of section 771(5)(D)(ii) of the Act. Further, 
because the tax exemption is limited to Eurodif, the benefit is 
specific in accordance with section 771(5A)(D)(i) of the Act. In 1999 
LEU, we found this program to be countervailable. See Decision 
Memorandum at 7.
    As noted above, Eurodif was also eligible for a reimbursement of 
the amount of income taxes corresponding to its percentage of French 
government ownership. Eurodif reported that the portion of its taxes 
attributable to French government ownership was paid in 2000 and 2001, 
and was reimbursed in 2001 and 2002. In 1999 LEU, we found this program 
to be countervailable. See Decision Memorandum at 7. No new information 
has been provided in this review to warrant reconsideration of these 
determinations.
    To calculate the benefit conferred upon Eurodif from both parts of 
this program, we divided the amount of

[[Page 5505]]

exonerated and reimbursed taxes in each calendar year by Eurodif's 
total sales during that calendar year. We adjusted Eurodif's sales 
denominator using the methodology described in the ``Purchase at Prices 
that Constitute ``More Than Adequate Remuneration'' section, above. On 
this basis, we preliminarily determine a net countervailable subsidy to 
Eurodif from this program of 0.34 percent ad valorem in 2001 and 1.63 
percent ad valorem in 2002.

Verification

    In accordance with section 782(i) of the Act, we conducted 
verification at Eurodif and the GOF on November 11 through November 14, 
2003.

Preliminary Results of Review

    In accordance with section 703(d)(1)(A)(i) of the Act, we have 
calculated an individual rate for Eurodif, the only company under 
review, for 2001 and 2002. We preliminarily determine that the total 
estimated net countervailable subsidy rate is 6.54 percent ad valorem 
for 2001 and 3.03 percent ad valorem for 2002.
    If the final results of this review remain the same as these 
preliminary results, the Department intends to instruct the U.S. 
Customs and Border Protection(CBP), within 15 days of publication of 
the final results of this review, to liquidate shipments of low 
enriched uranium from France by Eurodif entered, or withdrawn from 
warehouse, for consumption from May 14, 2001 through September 11, 2001 
at 6.54 percent ad valorem and from February 13, 2002 through December 
31, 2002 at 3.03 percent ad valorem of the f.o.b. invoice price. The 
Department also intends to instruct CBP to collect cash deposits of 
estimated countervailing duties at 3.03 percent ad valorem of the 
f.o.b. invoice price on all shipments of the subject merchandise from 
the reviewed company, entered, or withdrawn from warehouse, for 
consumption on or after the date of publication of the final results of 
this review.
    Because the 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 antidumping regulation on automatic 
assessment, which is identical to 19 CFR 351.212(c)(ii)(2). Therefore, 
the cash deposit rates for all companies except those covered by this 
review will be unchanged by the results of this review.
    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 rates 
that will be applied to non-reviewed companies covered by this order 
will be the rate for that company established in the most recently 
completed administrative proceeding. See Notice of Amended Final 
Determination and Notice of Countervailing Duty Order: Low Enriched 
Uranium from France, 67 FR 6889 (February 13, 2002). These rates shall 
apply to all non-reviewed companies until a review of a company 
assigned these rates is requested.

Public Comment

    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 date of publication of this 
notice, and rebuttal briefs, 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, that is, thirty-seven days after the 
date of publication of these preliminary results.
    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 this administrative review, including 
the results of its analysis of arguments made in any case or rebuttal 
briefs.
    This administrative review is issued and published in accordance 
with sections 751(a)(1) and 777(I)(1) of the Act (19 U.S.C. 1675(a)(1) 
and 19 U.S.C. 1677f(I)(1)).

    Dated: January 29, 2004.
James J. Jochum,
Assistant Secretary Import Administration.
[FR Doc. 04-2523 Filed 2-4-04; 8:45 am]
BILLING CODE 3510-DS-S