[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