[Federal Register: March 7, 2005 (Volume 70, Number 43)]
[Notices]
[Page 10989-10992]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07mr05-44]
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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.
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 January 1, 2003, through December
31, 2003. 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).
EFFECTIVE DATE: March 7, 2005.
FOR FURTHER INFORMATION CONTACT: Kristen Johnson at (202) 482-4793, AD/
CVD Operations, Office 3, Import Administration, International Trade
Administration, U.S. Department of Commerce, Room 4014, 14th Street and
Constitution Avenue, NW., Washington, DC 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 Order: Low Enriched Uranium from France, 67 FR 6689 (February 13,
2002) (Amended LEU Final Determination). On February 3, 2004, the
Department published an opportunity to request an administrative review
of this countervailing duty order. See Antidumping or Countervailing
Duty Order, Finding, or Suspended Investigation: Opportunity to Request
an Administrative Review, 69 FR 5125 (February 3, 2004). We received a
timely request for review of Eurodif S.A. (Eurodif)/Compagnie Generale
Des Matieres Nucleaires (COGEMA), the producer/exporter of subject
merchandise covered under this review by both respondents and
petitioners.\1\ On March 26, 2004, the Department published the
initiation of the administrative review of the countervailing duty
order on low enriched uranium from France, covering the January 1,
2003, through December 31, 2003 period of review (POR). See Initiation
of Antidumping and Countervailing Duty Administrative Reviews and
Revocation in Part, 68 FR 15788 (March 26, 2004).
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\1\ Petitioners are USEC Inc. and its wholly owned subsidiary,
United States Enrichment Corporation.
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On April 21, 2004, the Department issued a questionnaire to the
Government of France (GOF) and Eurodif/COGEMA. On June 1, 2004, the
Department received questionnaire responses from the GOF and Eurodif/
COGEMA. On October 19, 2004, 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 Time Limit for Preliminary Results of
Countervailing Duty Administrative Reviews, 69 FR 61470 (October 19,
2004). On October 4, 2004, and January 13, 2005, we issued supplemental
questionnaires to respondents. On November 1, 2004, and January 28,
2005, we received supplemental responses from respondents.
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/COGEMA. This review
covers two programs.
Scope of Order
The product covered by this order is all low enriched uranium
(LEU). LEU is enriched uranium hexafluoride (UF6) with a U\235\ 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 this order.
Specifically, this order does not cover enriched uranium hexafluoride
with a U\235\ 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 (UO2), whether or not
contained in nuclear fuel rods or assemblies. Natural uranium
[[Page 10990]]
concentrates (U3O8) with a U\235\ concentration of no greater than
0.711 percent and natural uranium concentrates converted into uranium
hexafluoride with a U\235\ 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 (UO2) 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 designated
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 currently classifiable 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 January 1, 2003,
through December 31, 2003.
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, an agency of the GOF. Further, Eurodif was 25 percent-owned
by SOFIDIF, a French company that is 60 percent-owned by COGEMA,
thereby effectively placing COGEMA's ownership of Eurodif at
approximately 60 percent during the POR. 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. Purchases at Prices That Constitute ``More Than Adequate
Remuneration''
Eurodif provides LEU to Electricite de France (EdF), a wholly owned
French government agency that supplies, imports, and exports
electricity. EdF is the major supplier of electricity in France, and is
regulated by the Gas, Electricity, and Coal Department of the Ministry
of Industry and the Budget and Treasury Departments of the Ministry of
Finance. 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. Eurodif and EdF entered into a subsequent contract in
1995, under which the POR purchases were made.
In the Final Affirmative Countervailing Duty Determination: Low
Enriched Uranium from France, 66 FR 65901 (December 21, 2001) (LEU
Final Determination), and the Final Results of Countervailing Duty
Administrative Review: Low Enriched Uranium from France, 69 FR 40871
(July 7, 2004) (LEU Final Results), 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 Tariff Act of 1930, as
amended (the Act). The program is specific under section 771(5A)(D)(i)
of the Act because it is available only to Eurodif.
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.'' Pursuant to section 771(5)(E)(iv) of the Act,
the adequacy of remuneration will be determined in relation to the
prevailing market conditions for the good being purchased in the
country which is subject to the review. Therefore, in order to
determine whether the prices paid by EdF constitute ``more than
adequate remuneration,'' we compared the prices paid by EdF to Eurodif
with the prices paid by EdF to its other suppliers.
Due to the difference in the pricing structure between EdF and
Eurodif, as compared with the pricing structure between EdF and its
other suppliers, it is necessary to make certain adjustments for the
comparison. Unlike most other customers, EdF provides its own energy
for Eurodif to use when producing LEU. Beginning in 2002, EdF started
to pay Eurodif in energy for the energy that Eurodif uses to produce
EdF's LEU. Eurodif charges EdF, however, for the operational costs
associated with the production of the LEU. As EdF does not supply
electricity to its other LEU suppliers, these suppliers charge EdF a
single price per separative work unit (SWU).\2\ 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 actual price (i.e., the
price paid by EdF to Eurodif), we included both an operational and
energy price paid by EdF to Eurodif.
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\2\ The ``separative work unit'' or (SWU) is the unit of measure
of effort required to carry out isotopic separation of the uranium
from its natural state to the concentration or ``assay'' required
for power plant use.
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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''
(Final Determination Decision Memorandum) dated December 13, 2001, we
assumed that the value of all natural uranium is the same (see
discussion at page 5). In making purchase comparisons in this review,
we continue 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/
COGEMA during the POR, we calculated a per-SWU price for both the
energy and operational components of the LEU purchased by EdF from
Eurodif. See the February 28, 2005, Memorandum concerning the
Calculations for the Notice of Preliminary Countervailing Duty Results:
Low Enriched Uranium from France (Preliminary Calculations
Memorandum).\3\ After adding these two components together, we compared
the per-SWU price paid to Eurodif by EdF
[[Page 10991]]
in 2003, with the per-SWU price paid by EdF to its other LEU suppliers
in 2003. Based on our analysis, we preliminarily determine that the
per-SWU price paid by EdF to Eurodif was not higher than the per-SWU
price paid by EdF to its other suppliers and, therefore, EdF's LEU
purchases from Eurodif did not confer a countervailable benefit during
the POR.
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\3\ A public version of the document is available on the public
record in the Central Records Unit (CRU) located in the main
Commerce Building in room B-099.
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We, however, did calculate a countervailable benefit from a sale
pursuant to the contract listed in Exhibit 21 of Eurodif/COGEMA's June
1, 2004, questionnaire response.\4\ Consistent with our approach in the
LEU Final Results, we expensed the benefit in the year of receipt. For
a further discussion, see the Preliminary Calculations Memorandum. We
then multiplied the benefit amount by the sales of subject merchandise
to the United States divided by total sales, and then divided that
result by sales that entered U.S. customs territory during 2003. Thus,
we calculated the ad valorem rate for this program using the following
formula:
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\4\ The details of this transaction are business proprietary.
[GRAPHIC] [TIFF OMITTED] TN07MR05.000
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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 territory during the Calendar Year
On this basis, we preliminarily determine the countervailable
subsidy from this program to be less than 0.005 percent ad valorem.\5\
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\5\ Where the countervailable subsidy rate for a program is less
than 0.005 percent, the program is not included in the total
countervailing duty rate. See, e.g., the Other Programs Determined
to Confer Subsidies section of the Issues and Decision Memorandum
that accompanied the Final Results of Administrative Review: Certain
Softwood Lumber Products from Canada, 69 FR 75917 (December 20,
2004).
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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 the percentage of its French government ownership. In
the LEU Final Determination and LEU Final Results, we found this
program to be countervailable. No new information has been provided in
this review to warrant reconsideration of our determination.
During the POR, (i.e., calendar year 2003), Eurodif filed its 2002
corporate income tax return. Based on the governmental tax agreement,
Eurodif was exonerated from a portion of its 2002 income taxes filed
during the POR. Eurodif was also reimbursed that portion of its 2002
income taxes attributable to its percentage of French government
ownership during the POR. This tax exemption and reimbursement
constitute a financial contribution within the meaning of section
771(5)(D)(ii) of the Act. Further, because the tax exemption and
reimbursement is limited to Eurodif, the benefit is specific in
accordance with section 771(5A)(D)(i) of the Act.
In accordance with 19 CFR 351.509(b), we calculated the benefit
under this program by determining the amount of corporate income taxes
that Eurodif would have otherwise paid, absent the program, on the tax
return it filed during the POR. Specifically, we added the amount of
exonerated taxes and the amount of reimbursable taxes during the POR.
We then divided the total benefit amount by Eurodif's total sales for
calendar year 2003. We adjusted Eurodif's sales denominator using the
methodology described in the ``Purchases at Prices that Constitute
`More Than Adequate Remuneration' '' section, above. This methodology
is consistent with our approach in the LEU Final Results. On this
basis, we preliminarily determine a net countervailable subsidy of 1.23
percent ad valorem under this tax program.
Preliminary Results of Review
In accordance with section 703(d)(1)(A)(i) of the Act, we have
calculated an individual rate for Eurodif/COGEMA for 2003. We
preliminarily determine that the total countervailable subsidy rate is
1.23 percent ad valorem.
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 LEU from
France by Eurodif/COGEMA entered, or withdrawn from warehouse, for
consumption from January 1, 2003, through December 31, 2003, at 1.23
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 1.23 percent ad valorem of the f.o.b. invoice
price on all shipments of the subject merchandise from Eurodif/COGEMA
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, and cash deposits
must continue to be collected, at the cash deposit 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 Amended LEU Final
Determination, 67 FR 6689 (February 13, 2002). These rates shall apply
to all non-reviewed companies until a review of a company assigned
these rates is requested.
While the countervailing duty deposit rate for Eurodif/COGEMA may
change as a result of this administrative review, we have been enjoined
from liquidating any entries of the subject merchandise.
[[Page 10992]]
Consequently, we do not intend to issue liquidation instructions for
these entries until such time as the injunctions, issued on June 24,
2002, and November 1, 2004, are lifted.
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. 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, 37 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: February 28, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-927 Filed 3-4-05; 8:45 am]