Federal Register / Vol. 66, No. 93 / Monday, May 14, 2001 / Notices 24329

1Upon the issuance of the questionnaire, we

informed the GOG, GON, and the UKG that it was

their governments’ responsibility to forward the

questionnaires to all producers/exporters that

shipped subject merchandise to the United States

during the period of investigation.

duties of the Assistant Secretary for

Import Administration.

Dated: May 7, 2001.

Bernard T. Carreau,

Deputy Assistant Secretary, Import

Administration.

[FR Doc. 01–12063 Filed 5–11–01; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[C–428–829; C–421–809; C–412–821]

Notice of Preliminary Affirmative

Countervailing Duty Determinations

and Alignment With Final Antidumping

Duty Determinations: Low Enriched

Uranium From Germany, the

Netherlands, and the United Kingdom

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of Preliminary

Affirmative Countervailing Duty

Determination.

EFFECTIVE DATE: May 14, 2001.

FOR FURTHER INFORMATION CONTACT:

Robert Copyak (Germany) at (202) 482–

2209, Stephanie Moore (the

Netherlands) at (202) 482–3692, and

Eric B. Greynolds (United Kingdom) at

(202) 482–6071, 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, NW., Washington,

DC 20230.

Preliminary Determination

The Department of Commerce (the

Department) preliminarily determines

that countervailable subsidies are being

provided to producers and exporters of

low enriched uranium (subject

merchandise) from Germany, the

Netherlands, and the United Kingdom.

For information on the estimated

countervailing duty rates, please see the

‘‘Suspension of Liquidation’’ section of

this notice.

SUPPLEMENTARY INFORMATION:

Petitioners

The petition in this investigation was

filed by USEC Inc., its wholly-owned

subsidiary, United States Enrichment

Corporation (USEC), and Paper, AlliedIndustrial, Chemical and Energy

Workers International Union, AFL–CIO,

CLC, and Local 5–550 and Local 5–689

(collectively PACE) (the petitioners).

Case History

Since the publication of the notice of

initiation in the Federal Register (see

Notice of Initiation of Countervailing

Duty Investigations: Low Enriched

Uranium from France, Germany, the

Netherlands, and the United Kingdom,

66 FR 1085 (January 5, 2001) (Initiation

Notice)), the following events have

occurred: Beginning on January 16,

2001, we issued countervailing duty

questionnaires to the Government of

Germany (GOG), the Government of the

Netherlands (GON), and the

Government of the United Kingdom

(UKG).1 Beginning on March 22, 2001,

we received questionnaire responses

from Urenco Deutschland GmbH of

Germany (Urenco Deutschland), Urenco

Nederland BV of the Netherlands (UNL),

and Urenco (Capenhurst) Limited

(UCL), the GOG, the GON, and the UKG

(collectively referred to as respondents).

Beginning on April 9, 2001, we issued

supplemental questionnaires to

respondents. Beginning on April 23,

2001, we received supplemental

questionnaire responses from

respondents.

On February 21, 2001, we issued an

extension of the due date for this

preliminary determination from March

2, 2001 to May 7, 2001. See Low

Enriched Uranium from France,

Germany, the Netherlands, and the

United Kingdom: Extension of Time

Limit for Preliminary Determinations in

Countervailing Duty Investigations, 66

FR 11000 (February 21, 2001)

(Extension Notice).

On May 3, 2001, consultations in

accordance with Article 13.2 of the

Agreement on Subsidies and

Countervailing Measures were held in

Geneva, Switzerland with the

Governments of Germany, the

Netherlands, the United Kingdom, and

the Delegation of the European

Commission.

In our Initiation Notice, we invited

interested parties to comment on the

scope of these investigations. We

received comments from respondents on

January 17, 2001, and from petitioners

on January 23, 2001. In addition, we

received comments from the Ad Hoc

Utilities Group, an industrial user/

consumer, on April 5, 2001. Our

analysis of these comments can be

found in the May 7, 2001 Public

Memorandum to Bernard Carreau,

entitled Low Enriched Uranium from

France, Germany, the Netherlands and

the United Kingdom; Comments on the

Scope of the Investigations, on file in

the Central Records Unit, room B–099,

of the Main Commerce Building.

Petitioners’ New Subsidy Allegations

On April 23, 2001, petitioners

submitted a new subsidy allegation

involving Urenco Deutschland, UNL,

and UCL (collectively referred to as the

Urenco Group). In their submission,

they alleged that the one-third

ownership obtained by British Nuclear

Fuels Limited (BNFL) and UltraCentrifuge Nederland (UCN) along with

the shareholder loans made by the two

government-owned companies

constituted equity infusions into the

Urenco Group, which they assert was

unequityworthy at the time the alleged

infusions were made. In support of their

allegation, petitioners cite to various

annual reports of BNFL, UCN, and

Uranitisotopentrennungsgeselleschaft

mbH (Uranit) (the privately-held

German arm of the Urenco Group) as

well as several corporate studies which

they claim indicated a bleak outlook for

the LEU industry in the years preceding

the impending merger. In addition,

petitioners claim that, prior to the

merger there was no objective evidence

before BNFL or UCN indicating that the

planned restructuring and merger would

do anything to improve the efficiency

and financial prospects of the

companies involved. On this basis,

petitioners request that the Department

investigate whether the investments

constituted countervailable equity

infusions into an unequityworthy

company.

We have determined not to initiate an

investigation of this allegation. As

discussed in further detail below in the

‘‘Urenco Group Corporate History’’

section, immediately preceding the

creation of the Urenco Group, the

enrichment operations were controlled

by BNFL in the United Kingdom, UCN

in the Netherlands, and Uranit in

Germany. Both BNFL and UCN were

owned and controlled by their

respective governments while Uranit

was privately-held. On September 1,

1993, pursuant to the terms of the

merger agreement, BNFL, UCN, and

Uranit transferred their enrichment

operations to the Urenco Group. In

return, BNFL, UCN, and Uranit each

received a one-third ownership interest

in the Urenco Group. Thus, based on the

information submitted by respondents,

we find that this aspect of the merger

did not constitute an equity infusion but

rather represented a restructuring of the

Urenco Group in which the three

companies, BNFL, UCN, and Uranit,

24330 Federal Register / Vol. 66, No. 93 / Monday, May 14, 2001 / Notices

contributed their respective assets in

return for one-third ownership of the

Group.

In addition to the allegation involving

the E23 asset write down, which we are

addressing in this preliminary

determination, on April 27 and 30,

2001, petitioners made an allegation

with respect to the Netherlands and the

United Kingdom involving an

additional asset write down. We are not

addressing this allegation in this

determination due to the lateness of the

allegation. We will address it after this

determination. If we decide to initiate

on this allegation then prior to making

our final determination, we will issue a

preliminary analysis memorandum

regarding this allegation and allow the

parties to comment.

Scope of the Investigation

For purposes of these investigations,

the product covered is low enriched

uranium (LEU). LEU is enriched

uranium hexafluoride (UF6) with a U235

product assay of less than 20 percent

that has not been converted into another

chemical form, such as UO2, or

fabricated into nuclear fuel assemblies,

regardless of the means by which the

LEU is produced (including LEU

produced through the down-blending of

highly enriched uranium).

Certain merchandise is outside the

scope of the investigation. Specifically,

this investigation does not cover

enriched uranium hexafluoride with a

U235 assay of 20 percent or greater, also

known as highly enriched uranium. In

addition, fabricated LEU is not covered

by the scope of these investigations. For

purposes of this investigation, fabricated

uranium is defined as enriched uranium

dioxide (UO2), whether or not contained

in nuclear fuel rods or assemblies.

Natural uranium concentrates (U3O8)

with a U235 concentration of no greater

than 0.711 percent and natural uranium

concentrates converted into uranium

hexafluoride with a U235 concentration

of no greater than 0.711 percent are not

covered by the scope of the

investigation.

The merchandise subject to these

investigations 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 U.S. Customs

purposes, the written description of the

merchandise under investigation is

dispositive.

In our notice of initiation we invited

parties to comment on scope issues

raised by these investigations. These

comments are addressed in a scope

memo dated May 7, 2001. However, to

the extent that some of the comments on

scope issues re-argue the determination

of industry support for the petition, we

draw parties attention to section

702(c)(4)(E) and 732(c)(4)(E) which

states in pertinent part: ‘‘after the

administering authority makes a

determination with respect to initiating

an investigation, the determination

regarding industry support shall not be

reconsidered.’’

The Applicable Statute and Regulations

Unless otherwise indicated, all

citations to the statute are references to

the provisions effective January 1, 1995,

the effective date of the amendments

made to the Tariff Act of 1930 (the Act)

by the Uruguay Round Agreements Act

(URAA). In addition, unless otherwise

indicated, all citations to the

Department’s regulations are to the

regulations codified at 19 CFR Part 351

(2000).

Injury Test

Because Germany, the Netherlands,

and the United Kingdom are ‘‘Subsidy

Agreement Countries’’ within the

meaning of section 701(b) of the Act, the

International Trade Commission (ITC) is

required to determine whether imports

of the subject merchandise from these

countries materially injure or threaten

material injury to a U.S. industry. On

January 31, 2001, the ITC published its

preliminary determination finding that

there is a reasonable indication that an

industry in the United States is being

materially injured, or is threatened with

material injury, by reason of imports

from Germany, the Netherlands, and the

United Kingdom of subject

merchandise. See Low Enriched

Uranium from France, Germany, the

Netherlands, and the United Kingdom,

66 FR 8424 (January 31, 2001).

Alignment With Final Antidumping

Duty Determination

On May 4, 2001, petitioners submitted

a letter requesting alignment of the final

determination in these investigations

with the final determinations in the

companion antidumping duty

investigations. Therefore, in accordance

with section 705(a)(1) of the Act, we are

aligning the final determination in these

investigations with the final

determinations in the antidumping duty

investigations of low enriched uranium

from Germany, the Netherlands, and the

United Kingdom.

Period of Investigation

The period of investigation (POI) for

which we are measuring subsidies is

January 1, 1999, through December 31,

1999.

Urenco Group: Corporate History

Pre-Merger

Prior to the Treaty of Almelo, the

production group of the U.K. Atomic

Energy Authority (UKAEA) was

responsible for the U.K. enrichment

program. BNFL was created from the

existing assets of UKAEA. The

Capenhurst site assets and all of the

British centrifuge enrichment

development work were transferred to

BNFL. In the Netherlands, UCN was

incorporated in November 1969, as a

limited company, with the Dutch

government holding 55 percent and the

remaining 45 percent held by various

industrial interests. UCN was

designated by the Dutch government to

develop ultracentrifuge technology for

uranium enrichment in the Netherlands.

By the time the Treaty of Almelo (the

Treaty) came into effect in 1971,

Germany already had two centrifuge

companies dedicated to the enriched

uranium industry: Gesellschaft fur

Nuklearverfahrestechnik mbH (GnV),

which was involved in centrifuge

development and manufacturing and

plant design; and Uranit, which took

over earlier R&D and cascade work.

Both companies were owned by private

industrial shareholders.

Treaty of Almelo

In March 1970, the GOG, the GON,

and the UKG signed the Treaty, which

became effective in July 1971. The

purpose of the Treaty was for the three

governments to collaborate in the

development and exploitation of the gas

centrifuge process for producing

enriched uranium. Prior to 1971, the

centrifuge R&D programs in each

country were independent.

Pursuant to Article 1(2) of the Treaty,

the three governments agreed that there

should be two ‘‘joint industrial

enterprises’’ to carry out the centrifuge

collaboration: one to conduct R&D and

to design and build centrifuge

equipment, and the other, an

enrichment organization to own and

operate the enrichment plants and

market the output. Centec GmbH was

established in Germany, its shareholders

being BNFL, UCN and GnV, to conduct

R&D and plant design work. Urenco

Ltd., located in the U.K., gained

responsibility for the marketing. Urenco

Ltd. was incorporated in September

1971, and its shareholders were BNFL,

UCN and Uranit.

In addition, in 1971, the production

organization had two established

partnerships. The first was Urenco

Federal Register / Vol. 66, No. 93 / Monday, May 14, 2001 / Notices 24331

2Respondents have argued that this merger

constituted a ‘‘change in ownership’’ under section

771(5)(F) of the Act. However, in both the

Netherlands and the UK, the assets at the

enrichment operations were directly owned by their

respective governments before the merger and

indirectly after the merger. We preliminarily

determine that there was no change in ownership

in 1993 but merely a merging and restructuring of

assets by the three Urenco Group partners, i.e., the

Government of the Netherlands, the Government of

the United Kingdom, and the private German

shareholders of the Group, each of whom remained

as owners in Urenco Ltd.

(U.K.), a partnership under English Law,

between BNFL (75 percent), UCN (12.5

percent) Uranit (12.5 percent), and

Urenco Ltd. with a nominal share. The

second was the Dutch partnership,

Urenco Nederland v.o.f., which then

consisted of UCN (43.75 percent), Uranit

(43.75 percent), BNFL (12.5 percent),

and Urenco Ltd. with a nominal share.

In the late 1970s, a third partnership,

Urenco Deutschland was established

under German law. The partners were

Uranit (96 percent), BNFL and UCN

with two percent shares each, and

Urenco Ltd. with a nominal share. In

1980, ownership in Urenco Nederland

v.o.f. changed; UNC and Uranit

increased their share in the company to

49 percent each, while BNFL reduced

its participation to 2 percent. Likewise,

for Urenco (U.K.), BNFL’s share

increased to 96 percent, while UCN and

Uranit decreased their participation to

two percent each.

In preparation for the merger, each of

the three operating partnerships was

combined and their assets transferred

into a limited company, owned in each

case by the managing partner.

Specifically, BNFL changed the name of

its subsidiary BNFL Enrichment Ltd. to

Urenco (Capenhurst) Ltd. (UCL), and

transferred to UCL the relevant portion

of the Capenhurst site, buildings and

equipment related to the enrichment

business. The activities of the former

Urenco Nederland v.o.f. (enrichment)

and of UCN (centrifuge manufacturing)

were transferred into a new company,

Urenco Nederland B.V. (UNL). At the

request of Uranit, the German

shareholder, the enrichment plant was

initially leased to Urenco Deutschland

on a basis comparable to UCL and UCN.

Each of these limited companies became

the sole owner of the relevant plants,

including the sites, buildings, R&D

facilities and centrifuge manufacturing.

1993 Merger

Subsequently, in September 1993, the

Urenco operations in the three countries

were merged.2 This was accomplished

by a two-step process whereby the

partnerships in each country were

collapsed and replaced by newly

created limited companies, UCL of the

United Kingdom managed by

International Nuclear Fuels Limited

(INFL), BNFL’s wholly-owned

subsidiary, Urenco Deutschland of

Germany managed by Uranit, and UNL

of the Netherlands managed by UCN

and Uranit. The limited companies

became the sole owners of the

enrichment facilities. On September 1,

1993, the voting shares of the limited

companies were transferred to Urenco

Ltd. in exchange for one-third interest in

Urenco. Therefore, Urenco Ltd., became

the parent company and, indirectly,

ultimate owner of the plants, R&D

facilities, and centrifuge manufacturing

facilities.

Joint Committee

Pursuant to Article II 5(e) of the

Treaty, a Joint Committee of government

representatives was created to ensure

that the terms of the Treaty were carried

out. Through the Joint Committee and

under the Treaty, each of the member

countries had to give their consent and

approval for the merger. Since the

merger, Urenco Ltd. provides status

reports to the Joint Committee twice a

year. These reports include a

description of operations, volume of

production and secured service

contracts as well as any health and

safety issues, and capacity extension

and major production milestones.

Post Merger

Urenco Ltd. is a private limited

company which wholly owns four

subsidiary companies: UCL, Urenco

Deutschland, UNL and Urenco Inc. (UI).

Urenco Ltd. owns 100 percent of the

voting shares and exercises control over

the subsidiaries. Urenco Ltd. functions

as the ‘‘headquarters’’ for the Urenco

Group and is also the worldwide

marketing arm of the Urenco Group. The

Board of Directors (Board) is made up of

four Executive Directors, ten nonExecutive Directors, nine of which are

appointed by the shareholders of

Urenco and one of which is elected by

the board as an independent Director.

The Board meets four times a year,

during which it sets major policies,

monitors financial performances, and

monitors the performance of the

executive directors. The Board is further

divided into three sub-committees: The

Executive Board, which is responsible

for conducting day-to-day management,

the Remuneration Committee, which

decides the terms of employment and

remuneration of the Executive Directors,

and the Audit Committee.

UCL, Urenco Deutschland, UNL

While Urenco Ltd. is responsible for

the marketing and contracting of the

Urenco Group, it is the responsibility of

each of the subsidiaries to produce and

deliver the product based upon the

contractual terms. The day-to-day

responsibilities of running the

operations, meeting the agreed targets

and implementing the group strategies

lies with each of the companies. Each of

the companies continues to provide the

enrichment products sold by Urenco

Ltd. While the enrichment facilities

were transferred to the managing

partnerships and then to Urenco’s

subsidiaries, local business activities

were not transferred to Urenco Ltd. and

are not shared across the group. Each

company within the Urenco Group is a

separate legal entity, with its own

directors and senior management team;

however, they work under the direction

and in close co-operation with the

Executive Board.

International Consortium

As discussed above, the Treaty of

Almelo was signed in 1970 by the

Governments of Germany, the

Netherlands, and the United Kingdom

in order to collaborate in the

development and exploitation of the gas

centrifuge process for producing

enriched uranium. Towards this end,

the three governments provided

subsidies for the research and

development of gas centrifuge

technology and for the construction and

support of enrichment production

operations. For example, the GOG

provided grants specifically to help

construct enrichment plants used by the

Urenco Group in the Netherlands and

the United Kingdom. Further, as a result

of the 1993 merger, each of the

respective participants in Germany, the

Netherlands, and the United Kingdom

owns a one-third interest in Urenco Ltd.

Therefore, given that the Treaty of

Almelo was specifically entered into by

the three governments to produce and

sell the subject merchandise and that

each of these participating companies

share R&D, as well as share in the

production and marketing of the subject

merchandise, we preliminarily

determine that such an arrangement

constitutes an international consortium.

Under section 701(d) of the Act, if the

members of an international consortium

engaged in the production of the subject

merchandise receive countervailable

subsidies from their respective home

countries to assist, permit, or otherwise

enable their participation through

production or manufacturing operations

in their respective home countries, then

24332 Federal Register / Vol. 66, No. 93 / Monday, May 14, 2001 / Notices

3H.R. No. 100–576, 100th Cong., 2d Sess. 589

(1988) (‘‘Omnibus Trade and Competitiveness Act

of 1988,’’ Conference Report) (Conference Report).

the Department will cumulate all such

countervailable subsidies, as well as

subsidies provided directly to the

international consortium, in

determining any countervailing duty

upon such merchandise. Based upon the

information on the record, section

701(d) of the Act is applicable to these

investigations. As explicitly instructed

by Congress in the legislative history of

this provision, section 701(d) of the Act

‘‘is applicable to cases in which foreign

governments provide subsidized

assistance for participation in

international production and marketing

ventures.’’ 3

Therefore, because we find the

Urenco Group of companies to

constitute an international consortium,

pursuant to section 701(d) of the Act,

we have cumulated all countervailable

subsidies received by the member

companies from the GOG, GON, and the

UKG in order to calculate one

countervailing duty rate applicable to

the production and exportation of the

subject merchandise from this

consortium.

Subsidies Valuation Information

Allocation Period

Under section 351.524(d)(2) of the

Department’s CVD Regulations, we will

presume the allocation period for nonrecurring subsidies to be the average

useful life (AUL) of renewable physical

assets for the industry concerned, as

listed in the Internal Revenue Service’s

(IRS) 1977 Class Life Asset Depreciation

Range System (IRS Tables), as updated

by the Department of Treasury. The

presumption will apply unless a party

claims and establishes that these tables

do not reasonably reflect the AUL of the

renewable physical assets for the

company or industry under

investigation, and the party can

establish that the difference between the

company-specific or country-wide AUL

for the industry under investigation is

significant. In this instance, however,

the IRS Tables do not provide a specific

asset guideline class for the uranium

enrichment industry.

In their questionnaire responses, the

Urenco Group companies have

calculated company-specific AULs by

dividing their respective aggregate,

annual, average gross book values of

their depreciable productive fixed assets

by their aggregated annual charge to

accumulated depreciation for a ten-year

period in the manner specified by

section 351.524(d)(2)(iii) of the CVD

Regulations. Based on this calculation,

Urenco Deutschland reports an AUL of

13 years, UNL reports an AUL of 12

years, and UCL reports an AUL of 10

years. Based on information submitted

by respondents, we have preliminarily

used company-specific AUL data when

calculating the AUL of the Urenco

Group.

As discussed above, we preliminarily

determine that the companies of the

Urenco Group operate as an

international consortium within the

meaning of section 701(d) of the Act.

We note that our decision to apply the

international consortium provision

affects the manner in which we must

calculate the AUL in this investigation.

The legislative history clarifies the

application of that provision. It points

out that the amendment, i.e., section

701(d) of the Act, explicitly authorized

the Department to ‘‘* * * cumulate the

amounts of subsidies from all

{participating countries in an

international consortium} in

determining the relevant countervailing

duty to be applied to the product subject

to that investigation.’’ See Conference

Report at 589. Thus, consistent with the

Congressional intent, which directed the

Department to cumulate the subsidies

received from countries in an

international consortium, we have

calculated a single AUL for the Urenco

Group by weight-averaging the

company-specific AULs of the Urenco

Group companies by their respective

total average gross book values. On this

basis, we derived an AUL of 12 years for

the Urenco Group.

We note that at verification we will

closely examine the AUL information

submitted by the Urenco Group

companies. In addition, we welcome

any comments interested parties may

have with regard to our approach on

this issue.

In the Initiation Notice, we stated that,

with respect to petitioners’ allegations

regarding UNL’s receipt of certain

research and development (R&D)

subsidies, we would determine during

the course of this investigation whether

the provisions of section

351.524(d)(2)(iv) of the CVD Regulations

should apply to this case. See page 14

of the December 27, 2000, Initiation

Checklist, the public version of which is

on file in room B–099 of the main

Commerce Building (Initiation

Checklist). Section 351.524(d)(2)(iv) of

the CVD Regulations states that under

certain ‘‘extraordinary circumstances’’

the Department may consider an

allocation period other than the AUL or

it may determine that the benefit stream

of a non-recurring subsidy should begin

at a date other than the date at which

the subsidy was bestowed. In the

Preamble to the CVD Regulations, we

explain that when a government

provides a subsidy to fund the

development of certain new

technologies, or to fund an

extraordinarily large project for the

development of new products that

encompasses not only basic research

and development, but also

implementation and commercialization,

the duration of the benefit may not

necessarily be related to the AUL of

assets for that industry. See the

Preamble, 63 FR 65348, 65396

(November 25, 1998). We further state in

the Preamble that there could be a

significant lead time between receipt of

the subsidy and development of the

product and the product’s

commercialization. We have explained

that, in those instances, even if we were

to rely on the AUL of assets, there is a

question as to whether the benefit

stream should begin at the time the

grant is received or at the time the

product reaches commercial production.

Id. at 65396.

As stated above, we have

preliminarily determined that the AUL

for the Urenco Group companies is 12

years. Thus, in using a 12-year AUL,

1988 marks the last year in which one

of the Urenco Group companies could

have received a non-recurring grant and

still have those subsidies be allocable to

the POI. With respect to R&D subsidies

received by the Urenco Group

companies, namely those of UNL and

Urenco Deutschland, in which the

application of the ‘‘extraordinary

circumstances’’ provision under section

351.524(d)(2)(iv) of the CVD Regulations

might have been an issue, we note that

all of the production plants for which

the R&D subsidies were received began

commercial production prior to 1988. In

other words, even if the Department

were to apply the ‘‘extraordinary

circumstances’’ provision under section

351.524(d)(2)(iv) of the CVD Regulations

to the R&D subsidies received by the

Urenco Group companies, the use of a

12-year AUL would result in the benefit

streams of the respective subsidies being

fully allocated prior to the POI.

Accordingly, we preliminarily

determine that section 351.524(d)(2)(iv)

of the CVD Regulations is not relevant

to this case.

Benchmarks for Loans and Discount

Rate

In accordance with section

351.524(d)(3)(i)(A) of the CVD

Regulations, we used, where available,

discount rates that were based on the

cost of long-term, fixed-rate financing

for commercial loans received by the

Urenco Group companies. Where the

Federal Register / Vol. 66, No. 93 / Monday, May 14, 2001 / Notices 24333

4Because we have determined that the Urenco

Group constitutes an international consortium as

defined by section 701(d) of the Act, we have

calculated the ad valorem rates by dividing the

benefits received by the companies of the Urenco

Group by the applicable sales denominator of the

Urenco Group.

Urenco Group companies had no

comparable commercial loans, we used

national average interest rates as

provided by the companies’

corresponding government as specified

by section 351.505(a)(3)(ii) of the CVD

Regulations. In addition, we note that

one countervailable program used by

the Urenco Group required the use of

discount rate benchmarks denominated

in several foreign currencies. In those

instances where the Urenco Group did

not report a comparable, commercial

discount rate benchmark for a particular

foreign currency, we used currencyspecific ‘‘Lending Rates’’ from private

creditors as published in the

International Financial Statistics as the

foreign currency denominated discount

rate.

Treatment of the Denominator

Based on our review of the responses,

it appears as though respondents did

not report a value for the natural

uranium component of certain LEU

sales. Therefore, in order to determine

more accurately the level of subsidy

applicable to the subject merchandise,

we have estimated a value for this

component. Based on petitioners’

estimation that the enrichment

component accounts for 60 percent of

the value of LEU, we have increased the

reported sales value to include an

estimated value for the natural uranium

component. We recognize that this is an

estimate of the value of LEU sold by

respondents. We intend to seek

additional information from

respondents prior to our final

determination.

I. Programs Preliminarily Determined

To Confer Subsidies From the

Government of Germany

A. Enrichment Technology Research

and Development Program

Under this program, the Government

of Germany promoted the research and

development of uranium enrichment

technologies. The Federal Ministry for

Research and Technology provided

Urenco Deutschland a series of grant

disbursements for the funding of

research and development projects. The

funds were provided to encourage

continuous improvements of centrifuge

technologies and to fund the research of

lasers and other advanced technologies.

The grant disbursements under this

program were made during the years

1980 through 1993. The total amount of

grant disbursements made under both

this program equaled DM 244.3 million.

Assistance under this program was

provided for in two agreements entitled

‘‘Financing Agreement’’ and ‘‘Terms

and Conditions for Allocations on a Cost

Basis to Companies in Industry for

Research and Development Projects’

(Laser R&D Agreement). According to

Article 4, Section 6, of the Financing

Agreement, the funds provided to

Urenco Deutschland under this

agreement had repayment obligations.

The funds were repayable within five

years of disbursement, contingent upon

the company’s earnings. If the funds

were not repaid within five years, then

the repayment obligation lapsed. The

second agreement covered grants for

laser enrichment R&D. Under the Laser

R&D Agreement, the obligation to make

repayment began three years after the

project’s completion, and repayment

was to be made in five equal annual

installments. However, the obligation

for repayment would be terminated if

the objective of the project was not

achieved. According to the responses of

both the company and the government,

no portion of any of the disbursements

received by Urenco Deutschland was

repaid.

We preliminarily determine that the

assistance provided under this program

constitutes countervailable subsidies

within the meaning of section 771(5) of

the Act. The grant disbursements

constitute a financial contribution and

confer a benefit, as described in sections

771(5)(D)(i) and 771(5)(B) of the Act.

Also, we preliminarily determine that

this program is specific under section

771(5A)(D)(i) of the Act because

provision of assistance under this

program was limited to one company. In

addition, we preliminarily determine

that this program provided nonrecurring benefits to Urenco

Deutschland under section 351.524(c)(2)

of the CVD Regulations because the

assistance provided to Urenco

Deutschland was made pursuant to

specific government agreements and

was not provided under a program that

would provide assistance on an ongoing

basis from year to year.

Under the Financing Agreement, there

was a contingent repayment obligation

attached to each of the grant

disbursements. Within the first five

years of receipt of the funds, Urenco

Deutschland had an obligation to repay

the government contingent upon the

company’s earnings. At the end of the

five-year period, the repayment

obligation expired. Because the

company was no longer obligated to

repay the assistance, the amount of the

funds disbursed became a grant equal to

the amount of the disbursement.

Consistent with our treatment of

‘‘contingent liabilities,’’ we determine

the year of receipt of the grant to be the

year in which the five-year time frame

for repayment expired, that is, the fifth

year from the day the funds were

disbursed to the company. (See e.g., the

treatment of the ‘‘Export Promotion

Capital Goods Scheme’’ in the Final

Affirmative Countervailing Duty

Determination: Certain Cut-to-Length

Carbon-Quality Steel Plate From India,

64 FR 73131 (December 29, 1999); and

‘‘Government Debt Forgiveness in 1989’’

in the Final Affirmative Countervailing

Duty Determination: Certain Hot Rolled

Lead and Bismuth Carbon Steel

Products From Germany, 58 FR 6233

(January 27, 1993)). With respect to the

grant disbursements made under the

Laser R&D Agreement, we find that the

obligation for repayment ended when

the GOG terminated the project in 1993

because it was determined the project

would not achieve commercial results.

Therefore, consistent with our treatment

of contingent liabilities, we determine

that the R&D funds provided under this

Agreement should be treated as grants

having been received in 1993 when the

repayment obligation effectively ended.

In order to calculate the benefits

received under this program, we first

determined the total amount of grants

provided each year under both the

Financing Agreement and the Laser R&D

Agreement. We then applied the

Department’s standard grant

methodology and allocated the grants

over the AUL. See the allocation period

discussion under the ‘‘Subsidies

Valuation Information’’ section, above.

We used as our discount rates the longterm corporate bond rates in Germany

because the grants were denominated in

Deutschmarks. We then summed the

benefits received by Urenco

Deutschland during 1999, from each of

the grant disbursements. We then

divided the total benefit attributable to

the POI by the Urenco Group’s total

sales for the POI.4 On this basis, we

preliminarily determine the

countervailable subsidy rate under this

program to be 0.77 percent ad valorem

for the Urenco Group.

B. Forgiveness of Centrifuge Enrichment

Capacity Subsidies

In accordance with the ‘‘Risk Sharing

Agreement’’ and the ‘‘Profit Sharing

Agreement’’ signed between the GOG

and Urenco Deutschland, the GOG

agreed to provide funds to Urenco

Deutschland to support the promotion

of an uranium enrichment industry.

24334 Federal Register / Vol. 66, No. 93 / Monday, May 14, 2001 / Notices

These two Agreements were signed on

July 18, 1975. Under the Risk Sharing

Agreement and the Profit Sharing

Agreement, the GOG provided

contributions totaling DM 338.3 million

to Urenco Deutschland in support of the

Treaty of Almelo’s goal of creating and

promoting the enrichment industry. An

amount of DM 158.8 million was

provided during the years 1980 through

1993 with regard to expanding the

enrichment capacity of the Urenco

Group. Prior to 1980, the GOG provided

Urenco Deutschland with a total amount

of funds equal to DM 179.5 million,

which was used for the construction of

enrichment facilities in Almelo and

Capenhurst.

Under the terms of the assistance

provided by the GOG under the Risk

Sharing Agreement and Profit Sharing

Agreement, the funds were conditional

in that Urenco Deutschland was

required to make repayments to the

GOG based upon the financial

performance of the company. However,

in no case was the amount of the total

repayments to exceed twice the amount

of the funds provided to Urenco

Deutschland by the GOG under these

Agreements. Repayment obligations

were of indefinite duration. During the

years 1980 through 1992, Urenco

Deutschland made repayments to the

GOG equal to DM 5.6 million.

In 1987, Urenco Deutschland and the

GOG signed an Adjustment Agreement,

under which the GOG would be relieved

of providing further funding under the

program and Urenco Deutshland’s

repayment obligations would be capped

at MDM 370.

According to the response of the

company, with the 1993 merger of the

Urenco Group enrichment operations,

the German enrichment operation

would be merged with its counterparts

in the Netherlands and the United

Kingdom. Prior to the merger, the GOG

and Urenco Deutschland negotiated a

basis to terminate the repayment

obligations of the Risk Sharing

Agreement and the Profit Sharing

Agreement. Based upon the negotiations

between the GOG and Urenco

Deutschland, a ‘‘Termination

Agreement’’ was signed on July 13,

1993, and amended on October 27,

1993. Under the terms of the

Termination Agreement, Urenco

Deutschland was to pay the government

DM 101.1 million in final payment of

the funds provided under the Risk

Sharing and Profit Sharing Agreements.

With this payment under the

Termination Agreement, the repayment

obligations under the Risk Sharing and

Profit Sharing Agreements terminated.

On July 1, 1994, the entire amount of

the DM 101.1 million was repaid by the

company to the GOG.

We preliminarily determine that

assistance provided under this program

to Urenco Deutschland is specific under

section 771(5A)(D)(i) of the Act because

the program was limited to one

company. In addition, we determine

that a financial contribution was

provided under section 771(5)(D)(i) of

the Act. A benefit was also provided to

the company, within the meaning of

section 771(5)(E) of the Act to the extent

that the repayments made to the GOG

were less than the amount of assistance

provided to the company under this

program.

Under this program, the company was

provided with a total of DM 338.3

million in repayable funds and was

obligated in a 1987 Agreement signed

with the GOG to repay the GOG DM 370

million for this assistance. Prior to the

Termination Agreement, the company

had made repayments totaling DM 5.6

million. Under the Termination

Agreement, which terminated the

company’s repayment obligations,

Urenco Deutschland made a final

repayment of DM 101.1 million to the

government. However, Urenco

Deutschland was obligated to make DM

370 million in repayments for the

assistance it received under this

program, but only repaid DM 106.7

million by the time the repayment

obligation was terminated in 1993.

Therefore, we preliminarily determine

that the difference, DM 263.3 million,

constitutes a grant provided to Urenco

Deutschland in 1993, the year in which

the repayment obligation under the

program was terminated. Therefore, we

preliminarily determine that a

countervailable benefit was provided to

Urenco Deutschland under this

program. Because the termination of the

repayment obligation was a one-time

government action, we preliminarily

determine the resultant benefit arising

from this program to be non-recurring

under section 351.524(c)(2) of the CVD

Regulations.

To determine the benefit conferred by

this program during the POI, we applied

the Department’s standard grant

methodology and allocated the grant

amount of DM 263.3 million over the

AUL. See the allocation period

discussion under the ‘‘Subsidies

Valuation Information’’ section, above.

We used as our discount rate the longterm corporate bond rate in Germany for

1993. We then took the benefit

attributable to Urenco Deutschland

during the POI from the grant and

divided that benefit by the Urenco

Group’s total sales for the POI. On this

basis, we preliminarily determine the

net countervailable subsidy under this

program to be 1.98 percent ad valorem

for the Urenco Group.

C. Investment Allowance Act

Urenco Deutschland received grants

from the GOG under the Investment

Allowance Act. This program is

administered by the Federal Ministry of

Economics. Under this program, grants

are provided by the GOG to companies

located in identified regional

development areas within the country.

Urenco Deutschland received grants

under this program for its enrichment

plant in Gronau and for its R&D facility

in Julich. Under the Investment

Allowance Act, both Gronau and Julich

qualified as regional development areas.

A total of DM 51.403 million in grant

disbursements was received by Urenco

Deutschland during the years 1982

through 1990.

We preliminarily determine this

program to be specific under section

771(5A)(D)(iv) of the Act because grants

provided under this program are limited

to companies located in designated

regions within Germany. A financial

contribution is also provided by this

program under section 771(5)(D)(i) of

the Act. In addition, a benefit is

provided to Urenco Deutschland within

the meaning of section 771(5)(E) of the

Act in the amount of grant

disbursements it received under this

program. Therefore, we preliminarily

determine this program to be

countervailable. We also preliminarily

determine that this program provided

non-recurring benefits to Urenco

Deutschland under section 351.524(c)(2)

of the CVD Regulations because the

assistance provided to Urenco

Deutschland was tied to the capital

assets of the company and assistance

under this program was not provided on

an ongoing basis from year to year.

To determine the benefit during the

POI, we applied the Department’s

standard grant methodology and

allocated the grants it received over the

AUL. See the allocation period

discussion under the ‘‘Subsidies

Valuation Information’’ section, above.

We used as our discount rate the longterm corporate bond rate in Germany at

the time of the grant approval. We then

took the benefit attributable to Urenco

Deutschland during the POI from the

grants and divided that amount by the

Urenco Group’s total sales for the POI.

On this basis, we preliminary determine

the net countervailable subsidy rate

under this program to be 0.18 percent

ad valorem for the Urenco Group.

Federal Register / Vol. 66, No. 93 / Monday, May 14, 2001 / Notices 24335

5The Regional Government Provision of

Industrial Site program is specific under section

771(5A)(D)(i) of the Act because the program was

limited to one company. A financial contribution

was also provided under section 771(5)(D)(iii) of the

Act. The Regional Development Grant program is

specific under section 771(5A)(D)(iv) of the Act

because grants under this program are issued to

companies located in designated regions. A

financial contribution is also provided under

section 771(5)(D)(i) of the Act.

II. Program Preliminarily Determined

To Confer Subsidies From the

Government of the Netherlands

A. Regional Investment Premium

Under the Regional Investment

Premium (IPR) program, the GON

provided UCN grants for the expansion

of its centrifuge manufacturing facilities.

Grants under this program are only

available to companies located in

certain regions of the Netherlands. UCN

received four grants under this program.

Although grants under this program

were first approved by the GON in 1982,

the disbursement of the grants occurred

during the years 1982 through 1993.

We preliminarily determine that this

program is specific under section

771(5A)(D)(iv) of the Act because grants

provided under this program are limited

to companies in designated regions of

the country. A financial contribution is

also provided by this program under

section 771(5)(D)(i) of the Act. In

addition, a benefit is provided to UCN

under section 771(5)(E) of the Act in the

amount of grants it received under this

program. Therefore, we preliminarily

determine this program to be

countervailable. We also preliminarily

determine that this program provided

non-recurring benefits to UCN under

section 351.524(c)(2) of the CVD

Regulations because the assistance

provided to UCN was tied to the capital

assets of the company and the assistance

under this program was not provided on

an ongoing basis from year to year.

To determine the benefit during the

POI, we applied the Department’s

standard grant methodology and

allocated the grants UCN received over

the AUL. See the allocation period

discussion under the ‘‘Subsidies

Valuation Information’’ section, above.

We used as our discount rate the longterm government bond rate in the

Netherlands at the time of the grant

approval. The Department took the

allocated benefits received during the

POI for the two grant amounts and

converted this amount to Pounds using

the average Dutch Guilder to Pounds

exchange rate for the POI. We then took

this amount over the adjusted total sales

of Urenco Group. Based on the

information on the record, the

Department preliminarily determines

that the net countervailable subsidy rate

under this program to be 0.06 percent

ad valorem for the Urenco Group.

III. Program Preliminarily Determined

To Confer Subsidies From the

Government of the United Kingdom

A. Assumption of Debt: European

Investment Bank Loans

Beginning in 1978, BNFL received

four long-term loans from the European

Investment Bank that were guaranteed

by the UKG under the Nuclear Industry

(Finance) Act (NIFA). According to

UCL’s questionnaire response, the loans

were extended to finance the

construction of two enrichment plants

at the Capenhurst facility.

As explained above in the ‘‘Urenco

Group: Corporate History’’ section of

this notice, in preparation for the 1993

merger, BNFL changed the name of its

subsidiary BNFL Enrichment Ltd. to

UCL, and transferred to UCL the

relevant portion of the Capenhurst site

(the buildings and equipment related to

the enrichment business), which

included the buildings that were

constructed with the EIB financing.

Though BNFL transferred the

enrichment operations to UCL, it

retained the liabilities for the EIB loans

that were tied to those facilities.

Because BNFL is owned by the UKG,

we find that BNFL’s retention of the EIB

liabilities constitutes a government

assumption of debt. Therefore, we

preliminarily determine that BNFL’s

failure to transfer those liabilities to

UCL constituted a financial contribution

and conferred a benefit within the

meaning of sections 771(5)(D)(i) and

771(5)(E) of the Act. Furthermore,

because the benefit stemming from this

event was limited to UCL, we

preliminarily determine that it was

specific to a particular enterprise within

the meaning of section 771(5A)(D)(i) of

the Act. We note that this approach is

consistent with the approach taken by

the Department in past proceedings

involving the assumption or retention of

debts that resulted in the bestowal of

countervailable subsidies. See, e.g.,

Final Affirmative Countervailing Duty

Determination: Stainless Steel Sheet

and Strip in Coils From Italy, 64 FR

30624, 30628 (June 8, 1999).

Under section 351.508(a) of the CVD

Regulations, in the case of an

assumption or forgiveness of a firm’s

debt obligation, a benefit exists equal to

the amount of the principal and/or

interest (including accrued, unpaid

interest) that the government has

assumed or forgiven. Furthermore,

section 351.508(c) states that the benefit

from an assumption of debt will be

treated as a non-recurring subsidy.

Therefore, for purposes of this

preliminary determination, we are

treating the benefit attributable to UCL

under this program as a non-recurring

subsidy that is equal to the principal

payments made by BNFL after the

merger.

According to information in the

questionnaire responses of the UKG and

UCL, the transfer of the enrichment

operations took place in September of

1993. Therefore, for purposes of this

preliminarily determination, we are

using September 1993 as the date of

bestowal. In addition, in accordance

with section 351.508(c) of the CVD

Regulations, we are treating the

principal outstanding retained by BNFL

as a non-recurring subsidy received as

of the date of the merger.

Because the subsidy amounts were

denominated in foreign currencies, we

allocated the subsidies over time in

their original currency. We used as our

discount rates the rates discussed in the

‘‘Benchmarks for Loans and Discount

Rate’’ section of this notice. Once we

allocated the foreign currencydenominated benefit to the POI, we

converted the benefit amount into

pounds using the average annual

exchange in effect during the POI. We

then divided the amounts of the benefits

attributable to the POI by the Urenco

Group’s total sales during the POI. On

this basis, we preliminarily determine

the net countervailable subsidy under

this program to be 0.73 percent ad

valorem for the Urenco Group.

IV. Programs Preliminarily Determined

Not To Confer a Benefit From the

Government of Germany

Based upon the information in the

response, the programs listed below

meet the requirements for specificity

and provision of a financial contribution

under the Act.5 However, based upon a

12 year AUL, we have preliminarily

determined that no benefit was received

under these programs during the POI.

A. Regional Government Provision of

Industrial Site

B. Regional Development Grants

V. Programs Preliminarily Determined

Not To Confer a Benefit From the

Government of the Netherlands

Based upon the information in the

response, the programs listed below

meet the requirements for specificity

24336 Federal Register / Vol. 66, No. 93 / Monday, May 14, 2001 / Notices

6The Centrifuge Enrichment Technology

Research and Development Programs (R&D

Program), funding given from 1969 through 1981,

and the 1981 Equity Conversion are specific under

section 771 (5A)(D)(i) of the Act because these

programs are limited to one company. The R&D

program provided a financial contribution under

section 771(5)(D)(i) and the 1981 Equity Conversion

Program provided a financial contribution under

section 771(5)(D)(i) of the Act because we

determine that no objective studies of the company

had been prepared prior to the GON’s 1981 equity

infusion as reuqired under section 351.5079(a)(4)(ii)

of the CVD Regulations.

7The Department found this program

countervailable in Certain Hot-Rolled Lead and

Bismuth Carbon Steel Products from the United

Kingdom: Preliminary Results of Countervailing

Duty Administrative Review, 64 FR 16920, 16923

(April 7, 1999). Affirmed in Certain Hot-Rolled

Lead and Bismuth Carbon Steel Products From the

United Kingdom: Final Results of Countervailing

Duty Administrative Review, 64 FR 43673, 43675

(August 11, 1999).

8 INFL is a wholly-owned subsidiary of the UKGowned BNFL.

and provision of a financial contribution

under the Act.6 However, based upon a

12 year AUL, we have preliminarily

determined that no benefits were

received under these three programs

during the POI.

A. Centrifuge Enrichment Technology

Research and Development

B. 1981 Equity Conversion

VI. Program Preliminarily Determined

Not To Confer a Benefit From the

Government of the United Kingdom

A. Regional Development Grants

Based upon the information in the

response, this program meets the

requirements for specificity and

provision of a financial contribution

under the Act.7 However, based upon a

12 year AUL, we have preliminarily

determined that no benefits were

received under this program during the

POI.

B. Centrifuge Development Grant

Petitioners alleged that BNFL/E

received a grant of £47.8 million from

the UKG to fund the development work

and plant construction of a tripartite gas

centrifuge project. According to UCL’s

questionnaire response, the Centrifuge

Development Grant received by BNFL

was repaid in 1987 as a lump sum.

Supporting documentation confirms

that in 1987 a payment of £47.5 million

was made to the UKG in full and final

settlement of the grant.

We note that information submitted

by UCL indicates that it paid back £47.5

million of the original grant amount of

£47.8 million, leaving £300,000 unpaid.

Although this £300,000 could be

considered a subsidy to UCL, the

amount is so small that, pursuant to

section 351.524(b)(2) of the CVD

Regulations, it would be expensed in

the year of receipt, 1987. Therefore, we

preliminarily determine that no benefits

were provided under this program

during the POI.

C. Fossil Fuel Levy

Petitioners state that pursuant to the

Electricity Act of 1989, the UKG

established a governmental levy known

as the Fossil Fuel Levy (FFL) that was

in place from 1990 until the late 1990s.

This tax was placed on electricity sales

to make up the difference between the

price of fossil-fuel fired electricity and

the cost of nuclear-generated electricity.

Petitioners allege that the portion of the

levy received by the nuclear power

companies was dedicated, in principle,

to fund the future decommissioning of

the United Kingdom’s nuclear electrical

power plants.

UCL states in its questionnaire

response that neither Urenco Ltd. nor

UCL was eligible to receive benefits

under the FFL. According to UCL’s

questionnaire response, the money for

the levy was paid out to generators of

electricity from non-fossil fuel sources,

such as producers of nuclear power.

UCL states that because Urenco and

UCL are not nuclear generators, they

were not eligible to receive monies

under the FFL. They add that BNFL did

receive such benefits from the FFL

solely with respect to electricity

generated by its Calder Hall Sellafield

Power Station.

We preliminarily determine that this

program did not confer countervailable

benefits on subject merchandise during

the POI. According to information in its

questionnaire response, BNFL received

FFL levies with respect to a powergenerating plant that was not related to

the production or exportation of LEU.

Therefore, we preliminarily determine

that any assistance received by BNFL

under this program was tied to nonsubject merchandise, and, therefore, did

not provide a benefit to subject

merchandise.

D. Forgiveness of Decommissioning Debt

Starting in 1983, the year after the

facility ceased operations, and

continuing to the present day, BNFL

decommissioned its gaseous diffusion

plant which was located at the

Capenhurst enrichment plant.

Petitioners allege that the retention by

BNFL of responsibility for

decommissioning the older gaseous

diffusion enrichment plant was a

liability that should have been borne by

Urenco and UCL, and, therefore,

constitutes, in effect, a financial

contribution that bestowed a

countervailable grant to Urenco in the

form of debt forgiveness. According to

UCL’s questionnaire response, the

decommissioning liabilities of BNFL

relating to its gaseous diffusion plant

were not transferred to UCL because

that plant was built to produce high

enriched uranium (HEU) for defense

purposes, and, therefore, is not related

to the business and asset base of the

Urenco organization. According to

UCL’s questionnaire response, BNFL’s

gaseous diffusion plant was never used

to produce subject merchandise, LEU,

and neither Urenco nor any of the

predecessor entities within BNFL had

any involvement in its operation.

Because the plant in question was

never related to the production of LEU,

we preliminarily determine that any

benefits received by BNFL under this

program are tied to non-subject

merchandise, and, therefore, do not

confer a benefit on the subject

merchandise.

VII. Program Preliminarily Determined

Not Countervailable From the

Government of the Netherlands

A. Subordinated Shareholder Loan

Provided to Urenco Ltd. by UCN

Petitioners allege that the Dutch

government directly subsidized the

Urenco Group through a 1993

shareholder loan made by UCN on noncommercial terms. As part of the 1993

restructuring arrangements a loan was

made by the shareholders of Urenco Ltd.

UCN, as one-third shareholder in

Urenco Ltd., granted one-third of the

loan.

According to information in UCL’s

questionnaire response, the

shareholders of the Urenco Ltd.,

(International Nuclear Fuels Limited

(INFL),8 UCN, and Uranit), advanced

subordinated shareholder loans to the

company. Each shareholder contributed

equal principal amounts and each

charged the same interest rate. In its

questionnaire response, UCN further

explains that in the event of the

liquidation of Urenco Ltd., the

subordinated loans would be repaid

only after all other creditors had been

repaid, but before share capital would

be returned to investors. Information in

UCN’s questionnaire response also

indicates that the repayment terms

(principal, interest rates charged,

repayment periods) are set by reference

to a number of factors, including likely

period of the loans and the risks

attached to the loans.

Section 771(5)(E)(ii) of the Act and

section 351.505(a)(1) of the CVD

Regulations stipulate that in the case of

a loan, a benefit exists to the extent that

the amount a firm pays on the

Federal Register / Vol. 66, No. 93 / Monday, May 14, 2001 / Notices 24337

9 In the Initiation Notice, we also initiated an

investigation of the 1993 Debt Forgiveness of £16.2

million as a separate program. See 66 FR at 1087.

According to information in UCL’s questionnaire

response, this loan is the same loan that was

involved in the Loan Stock Debt Forgiveness

program.

government-provided loan is less than

the amount the firm would pay on a

comparable commercial loan that the

firm could actually obtain on the

market. Under section 351.505(a)(2) of

the CVD Regulations, a comparable

commercial loan is defined as a loan

that is comparable to the governmentprovided loan. The provision goes on to

state that the Department will place

primary emphasis on similarities in the

structure of the loans.

There are three shareholders of

Urenco Ltd., with each shareholder

owning one-third interest in the

company. Two of the shareholders are

government-owned, one by the UKG

and one owned by the GON. The third

shareholder, Uranit, is a privatelyowned company in Germany. According

to information on the record, this

private shareholder also extended a loan

to Urenco Ltd., in the same amount, at

the same terms and on the same date as

the UCN loan to Urenco Ltd. The

Department finds that this loan from

Uranit, a private source, constitutes a

comparable commercial loan to use as

the benchmark. See section

351.505(a)(2)(ii) of the CVD Regulations.

Because the two government loans were

on the same terms as the Uranit loans,

we preliminarily determine that this

loan was made on a commercial basis

and is not countervailable. We note that

for the final determination, we will

examine the use of this benchmark

closely, given the nature of the three

governments’ involvement in the

consortium.

B. 1998 Shareholder Loan

Petitioners alleged that a loan on

Urenco Ltd.’s annual report may be a

shareholders loan made by UCN.

Petitioners further alleged that the loan

may be non-commercial and not

consistent with the usual practices of

private investors. In UNL’s

questionnaire response, it stated that the

1998 loan is not a shareholder loan; it

was provided from a commercial bank

and did not carry a government

guarantee. Based upon this information,

we preliminarily determine that this

loan does not constitute a

countervailable subsidy under 701(a)(1)

of the Act.

VIII. Programs Preliminary Determined

Not Countervailable From the

Government of the United Kingdom

A. Loan-Stock Debt Forgiveness Program

Petitioners allege that UCL received

countervailable benefits when its

obligation to repay loan stock issued to

BNFL was nullified in the 1993

corporate restructuring of the Urenco

Group.

In its questionnaire response, UCL

stated that all loans from BNFL to UCL

were repaid with the exception of a

£16.2 million ‘‘loan waiver.’’ 9 With

respect to the £16.2 million ‘‘loan

waiver,’’ which is referred to in

Urenco’s 1994 Annual report, UCL

explains that the figure reflects the loss

incurred by BNFL in connection with

the merger. Specifically, UCL explains

that the £16.2 million represents the

difference between the total sum owed

to BNFL in the books of UCL on the

merger date and the agreed merger

valuation of UCL. UCL further states

that the £16.2 million appears on its

financials as a ‘‘loan waiver’’ because,

according to its accounting practices,

the amount had to be accounted for

either as a loss on a disposal of assets

or a failure to recover money advanced.

Based on information submitted by

UCL, it appears that the 6.2 million at

issue is the result of a difference in the

manner in which the assets that were

transferred from BNFL to Urenco Ltd.

were valued rather than the result of a

loan waiver. Therefore, we preliminarily

determine that there was no debt

forgiveness under this program.

However, we must also examine

whether there was a potential

countervailable subsidy provided in this

transaction.

We addressed a similar program in

the Initiation Notice involving the

transfer of assets from BNFL and

whether the transfer provided a subsidy

on enrichment production. In the

Initiation Notice, we determined not to

initiate on petitioners’ allegation that

the transfer of one of the enrichment

plants from BNFL to Urenco Ltd. was at

less than adequate remuneration.

Specifically, in the Initiation Notice, we

stated that ‘‘{t}he mere fact that the A3

plant was allegedly sold at a price that

was below its book value is not enough

information to warrant initiating an

investigation of less than adequate

remuneration allegation without any

reference to prevailing market

conditions for the good in question.’’

See, 66 FR at 1087.

With respect to the program under

investigation, the amount of £16.2

million is due to the transfer or sale of

assets to Urenco at below the book value

as recorded by BNFL. Similar to the

situation with the sale of the A3 plant

addressed in the Initiation Notice, there

is no evidence on the record that

indicates that these assets were sold for

less than adequate remuneration.

Therefore, based on the information on

the record and on our approach in the

Initiation Notice, we preliminarily

determine that this program is not

countervailable. We will, however,

examine all aspects of the restructuring

and subsequent merger of the Urenco

Group during verification.

B. Subordinated Shareholder Loan

Provided to Urenco Ltd. by INFL

Petitioners allege that the UKG

directly subsidized Urenco Ltd. through

a 1993 shareholder loan made on noncommercial terms by INFL.

According to information in UCL’s

questionnaire response, the

shareholders of Urenco Ltd., INFL,

UCN, and Uranit, advanced

subordinated shareholder loans to the

company. Each shareholder contributed

equal principal amounts and each

charged the same interest rate. In its

questionnaire response, UCL further

explains that in the event of the

liquidation of Urenco Ltd., the

subordinated loans would be repaid

only after all other creditors had been

repaid, but before share capital would

be returned to investors. Information in

UCL’s questionnaire response also

indicates that the repayment terms

(principal interest rates charged,

repayment periods) are set by reference

to a number of factors, including

duration of the loans and the risks

attached to the loans.

Section 771(5)(E)(ii) of the Act and

section 351.505(a)(1) of the CVD

Regulations stipulates that in the case of

a loan, a benefit exists to the extent that

the amount a firm pays on the

government-provided loan is less than

the amount the firm would pay on a

comparable commercial loan that the

firm could actually obtain on the

market. Under section 351.505(a)(2) of

the CVD Regulations, a comparable

commercial loan is defined as a loan

that is comparable to the governmentprovided loan. The provision goes on to

state that the Department will place

primary emphasis on similarities in the

structure of the loans.

There are three shareholders of

Urenco Ltd., with each shareholder

owning one-third interest in the

company. Two of the shareholders are

government-owned, one by the UKG

and one owned by the GON. The third

shareholder, Uranit, is a privatelyowned company in Germany. According

to information on the record, this

private shareholder also extended a loan

to Urenco Ltd., in the same amount, at

24338 Federal Register / Vol. 66, No. 93 / Monday, May 14, 2001 / Notices

the same terms and on the same date as

the INFL loan to Urenco Ltd. The

Department finds that this loan from

Uranit, a private source, constitutes a

comparable commercial loan to use as

the benchmark. See section

351.505(a)(2)(ii) of the CVD Regulations.

Therefore, we preliminarily determine

that the loan provided to Urenco Ltd. by

INFL was made on a commercial basis

and is not countervailable. We note that

for the final determination, we will

examine the use of this benchmark

closely, given the nature of the three

governments’ involvement in the

consortium.

C. Extraordinary Asset Write Downs

Prior to Transfer of BNFL Enrichment

Facilities

Petitioners explain that the 1992–

1993 Annual Report of UCL indicates

that the value of the physical assets of

the Capenhurst enrichment operations

decreased to £196 million as of March

31, 1993, due in large part to a

extraordinary depreciation charge of £20

million. Petitioners allege that this

extraordinary depreciation charge could

have conferred a benefit upon UCL.

In its questionnaire response, UCL

states that the extraordinary

depreciation relates to the value of a

building known as the E23 building,

which was constructed in the mid-1980s

for the purpose of housing centrifuge

operations. UCL further explains in its

response that due to a downturn in

market conditions, the centrifuge

machines were never installed in the

E23 building. Because it was estimated

during the merger that there was little

chance that production of LEU would

ever take place in the E23 building, the

parties to the merger agreed to write

down the value of the building.

According to information provided in

the response, the write down of the E23

plant was required by law. Under the

Companies Act of 1985, Schedule 4

Paragraph 19(2), the government

requires that:

Provisions for diminution in value shall be

made in respect of any fixed asset which has

diminished in value if the reduction in its

value is expected to be permanent. * * * and

any such provisions which are not shown in

the profit and loss account shall be disclosed

(either separately or in aggregate) in a note

to the accounts.

Furthermore, UCL’s questionnaire

response indicates that the

extraordinary write downs taken by

BNFL on the E23 building did not give

rise to any changes in the corporation

tax computation or any benefits on the

tax returns filed in fiscal years 1992–

1993 or 1993–1994 for UCL.

According to information on the

record of this investigation, pursuant to

UKG corporate law, BNFL was

apparently required to write down the

value of the E23 building in order to

more accurately reflect its true value.

On this basis, we preliminarily

determine that this program is not

countervailable.

IX. Programs Preliminarily Determined

Not To Be Not Used in the Netherlands

A. Wet Investeringsrekening Law (WIR)

B. Subsidized Loan Forgiveness

X. Program Preliminarily Determined

Not To Be Not Used in the United

Kingdom

A. Financial Assistance Under the

Electricity Act of 1989

Verification

In accordance with section 782(i) of

the Act, we will verify the information

submitted by respondents prior to

making our final determination.

Suspension of Liquidation

In accordance with 703(d)(1)(A)(i) of

the Act, we have calculated an

individual rate for the Urenco Group.

The ‘‘all others’’ rate is the same as the

rate for UCL. These rates are

summarized in the table below:

Producer/exporter Net subsidy rate

Urenco Group Ltd. ....... 3.72% ad valorem.

All Others ..................... 3.72% ad valorem.

In accordance with section 703(d) of

the Act, we are directing the U.S.

Customs Service to suspend liquidation

of all entries of the subject merchandise

from the UK, which are entered or

withdrawn from warehouse, for

consumption on or after the date of the

publication of this notice in the Federal

Register, and to require a cash deposit

or bond for such entries of the

merchandise in the amounts indicated

above. This suspension will remain in

effect until further notice.

ITC Notification

In accordance with section 703(f) of

the Act, we will notify the ITC of our

determination. In addition, we are

making available to the ITC all nonprivileged and nonproprietary

information relating to this

investigation. We will allow the ITC

access to all privileged and business

proprietary information in our files,

provided the ITC confirms that it will

not disclose such information, either

publicly or under an administrative

protective order, without the written

consent of the Assistant Secretary for

Import Administration.

In accordance with section 705(b)(2)

of the Act, if our final determination is

affirmative, the ITC will make its final

determination within 45 days after the

Department makes its final

determination.

Public Comment

In accordance with 19 CFR 351.310,

we will hold a public hearing, if

requested, to afford interested parties an

opportunity to comment on this

preliminary determination. Any

requested hearing will be tentatively

scheduled to be held 57 days from the

date of publication of the preliminary

determination at the U.S. Department of

Commerce, 14th Street and Constitution

Avenue, NW., Washington, DC 20230.

Individuals who wish to request a

hearing must submit a written request

within 30 days of the publication of this

notice in the Federal Register to the

Assistant Secretary for Import

Administration, U.S. Department of

Commerce, Room 1870, 14th Street and

Constitution Avenue, NW., Washington,

DC 20230. Parties should confirm by

telephone the time, date, and place of

the hearing 48 hours before the

scheduled time.

Requests for a public hearing should

contain: (1) The party’s name, address,

and telephone number; (2) the number

of participants; and, (3) to the extent

practicable, an identification of the

arguments to be raised at the hearing. In

addition, six copies of the business

proprietary version and six copies of the

non-proprietary version of the case

briefs must be submitted to the

Assistant Secretary no later than 50 days

from the date of publication of the

preliminary determination. As part of

the case brief, parties are encouraged to

provide a summary of the arguments not

to exceed five pages and a table of

statutes, regulations, and cases cited.

Six copies of the business proprietary

version and six copies of the nonproprietary version of the rebuttal briefs

must be submitted to the Assistant

Secretary no later than 5 days from the

date of filing of the case briefs. An

interested party may make an

affirmative presentation only on

arguments included in that party’s case

or rebuttal briefs. Written arguments

should be submitted in accordance with

19 CFR 351.309 and will be considered

if received within the time limits

specified above.

This determination is published

pursuant to sections 703(f) and 777(i) of

the Act. Effective January 20, 2001,

Bernard T. Carreau is fulfilling the

Federal Register / Vol. 66, No. 93 / Monday, May 14, 2001 / Notices 24339

duties of the Assistant Secretary for

Import Administration.

Dated: May 7, 2001.

Bernard T. Carreau,

Deputy Assistant Secretary for Import

Administration.

[FR Doc. 01–12064 Filed 5–11–01; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric

Administration

National Estuarine Research Reserve

System

AGENCY: Estuarine Reserves Division,

Office of Ocean and Coastal Resource

Management, National Ocean Service,

National Oceanic and Atmospheric

Administration, U.S. Department of

Commerce.

ACTION: Notice of approval and

availability of revision to the Final

Revised Management Plan for the Jobos

Bay National Estuarine Research

Reserve, 2001–2005.

SUMMARY: Notice is hereby given that

the Estuarine Reserves Division, Office

of Ocean and Coastal Resource

Management, has approved the revised

Management Plan for the Jobos Bay

National Estuarine Research Reserve

(JBNERR). The JBNERR was designated

in 1981 and has been operating under a

Management Plan approved in 1982.

Pursuant to Section 315 of the Coastal

Zone Management Act, 16 U.S.C.

Section 1461, and Section 921.33(c) of

the implementing regulations, a state

must revise its management plan at least

every five years, or more often if

necessary. This revision is Puerto Rico’s

effort to comply with this requirement.

FOR FURTHER INFORMATION CONTACT:

Nathalie Peter, OCRM, Estuarine

Reserves Division, 1305 East-West

Highway, 11th Floor (N/ORM5), Silver

Spring, Maryland 20910. (301) 713–

3155, Extension 119.

SUPPLEMENTARY INFORMATION: The

JBNERR Management Plan Revision

contains the program mission, goals and

objectives of the JBNERR, and

establishes policies that will protect the

natural resources and ecological

integrity of the reserve. It provides

guidance for reserve operation and

management with the objective of

providing long-term opportunities for

research, education and stewardship.

The JBNERR Management Plan

Revision was prepared by the Puerto

Rico Department of Natural and

Environmental Resources (DNER). It

was presented at a public hearing at the

JBNERR Visitors Center on March 30,

1999. The Puerto Rico Planning Board

adopted the plan on March 3, 2000,

under Resolution Number JB–2000–PM–

JOBANERR. It was subsequently

approved by an Executive Order signed

by the Governor on December 29, 2000.

The Planning Board approval process

renders the JBNERR Management Plan

an enforceable document to be upheld

by the Government of Puerto Rico.

The JBNERR Management Plan

Revision submitted for the Planning

Board approval process contained an

action plan covering the years 2000–

2004. NOAA is approving the

Management Plan revision for the years

2001–2005. To remedy the discrepancy

in the five-year time period, NOAA has

requested and DNER has agreed to

submit a supplemental 2005 action plan

and update for NOAA approval in 2004.

Revisions to the JBNERR Management

Plan include the following:

1.Updated and detailed boundary

maps and maps of natural resources and

land uses within and adjacent to the

reserve.

2. A full discussion of the

management issues at the reserve.

3. A section detailing staffing needs,

roles, and responsibilities.

4. A facilities description. Under a

NOAA matching grant, the DNER has

renovated a historic building to serve as

the Visitors Center. This central facility

consists of administrative offices, an

information center, a conference and

exhibit area, and a laboratory.

5. A new section addressing resource

protection that includes goals and

objectives; a management sector zoning

plan establishing preservation,

conservation, and limited use sectors;

and resource protection guidelines that

prohibit jet skis and allow seasonal

hunting in designated areas.

6. Appendices that provide a set of

regulations for the use and protection of

JBNERR resources; summaries of the

commonwealth legal authorities

applicable to the reserve; a surveillance

and enforcement plan for the DNER

Ranger Corps; and guidelines for

research, monitoring, manipulation, and

education activities to be undertaken at

the reserve.

The chief areas of concentration for

the JBNERR in the next four years are

as follows:

1. Establishing a Citizens’ Advisory

Committee, Research Advisory

Committee, and Education Advisory

Committee.

2. Increasing coordination among

Federal and local agencies related to

surveillance and enforcement.

3. Expanding the reserve’s role in

protecting and restoring reserve

resources through boundary delineation

and increased signage, acquisition, the

special area planning process, and

action on the U.S. Environmental

Protection Agency consent order related

to the northern boundary of the reserve.

4. Improving the transfer of estuarine

information between reserve programs

and external groups (e.g. local

neighbors, local and commonwealth

decision-makers in the scientific,

governmental and educational

communities) through exhibits,

newsletters, interpretive trails, teaching

guides and curriculum materials, and

coastal decision-maker workshops.

5. Encouraging community

stewardship of the estuary and

watershed through an expanded

outreach program and enhanced access

to the reserve.

6. Initiating a reserve volunteer

program.

7. Completing an environmental

characterization and site profile for the

reserve.

8. Designing and implementing a

long-term environmental monitoring

program that incorporates the national

System-Wide Monitoring Program.

9. Actively promoting collaborative

research activities.

Copies of the document can be

obtained from the Jobos Bay National

Estuarine Research Reserve, Department

of Natural and Environmental

Resources, Call Box B, Aguirre, Puerto

Rico, 00704. (787) 853–4617.

Federal Domestic Assistance Catalog Number

11.420

Dated: May 3, 2001.

Ted Lillestolen,

Deputy Assistant Administrator for Ocean

Services and Coastal Zone Management.

[FR Doc. 01–11995 Filed 5–11–01; 8:45 am]

BILLING CODE 3510–08–P

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric

Administration

Office of Oceanic and Atmospheric

Research; Notice of Solicitation for

NOAA Science Advisory Board

Members

ACTION: Notice of solicitation for NOAA

Science Advisory Board members.

SUMMARY: The Under Secretary for

Oceans and Atmosphere is soliciting

nominations for membership on the

NOAA Science Advisory Board (SAB).

The SAB is the only Federal Advisory

Committee with responsibility to advise

the Under Secretary of Commerce for

Oceans and Atmosphere on long- and