[Federal Register Volume 59, Number 63 (Friday, April 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-7849]


[[Page Unknown]]

[Federal Register: April 1, 1994]


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DEPARTMENT OF COMMERCE
[A-821-802]

 

Amendment to the Agreement Suspending the Antidumping 
Investigation on Uranium From the Russian Federation

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

EFFECTIVE DATE: March 11, 1994.

FOR FURTHER INFORMATION CONTACT: Sally C. Gannon, Eric Hassman, or 
Melissa Skinner, Office of Agreements Compliance, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230; telephone: (202) 482-1391, (202) 482-1382, or (202) 482-0159, 
respectively.

SUMMARY: The Department of Commerce (the Department) and the Government 
of the Russian Federation (GRF) have signed an Amendment (the 
Amendment) to the Agreement Suspending the Antidumping Investigation on 
Uranium from the Russian Federation (the Agreement). The parties signed 
the Amendment recognizing that the Agreement to date had not generated 
the anticipated increase in the price of U.S.-origin natural uranium 
that would have permitted renewed sales of Russian uranium under the 
price-tied quota mechanism nor increased sales of U.S.-origin natural 
uranium or employment in the U.S. uranium industry.

SUPPLEMENTARY INFORMATION:

Background

    On October 16, 1992, the Department and the GRF signed the 
suspension agreement on uranium and, on October 30, 1992, the Agreement 
was published in the Federal Register (57 FR 49220, 49235). The 
Department's latest price calculation, under the terms of the 
Agreement, on October 1, 1993, did not reach the threshold price of 
$13.00 per pound which would allow for Russian Federation imports of 
uranium into the U.S. market under the price-tied quota mechanism 
(Appendix A of the Agreement). Thus, the GRF requested consultations 
with the Department, as specified in Section X.C of the Agreement, in 
order to review the market situation and consider adjustments to the 
quota.
    As a result of these consultations, a proposed amendment to the 
Russian suspension agreement, based on the concept of joint sales 
between U.S. and Russian producers, was initialled on December 15, 
1993, by the Department and the GRF. The Department subsequently 
released the proposed amendment to interested parties for comment. 
After careful consideration by the Department of the comments submitted 
and further consultations between the two parties, the Department and 
the GRF signed the final amendment on March 11, 1994. The text of the 
Amendment follows in Annex 1 to this notice.
    Information on the amount of annual matched imports remaining 
available for the year, as noted in Section IV.E of the Amendment, may 
be obtained from the above-noted contacts in the Office of Agreements 
Compliance. Confirmation requests should be submitted, in accordance 
with 19 CFR 353.31 and 353.32, to: Secretary of Commerce, Attention: 
Import Administration (Office of Agreements Compliance), Central 
Records Unit, Room B-099, U.S. Department of Commerce, Pennsylvania 
Avenue and 14th St. NW., Washington, DC 20230.

    Dated: March 25, 1994.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.

Annex 1--Amendment to the Agreement Suspending the Antidumping 
Investigation on Uranium From the Russian Federation

    The parties recognize that the Agreement Suspending the Antidumping 
Investigation on Uranium from the Russian Federation (``the 
Agreement'') has not generated the anticipated increase in the price of 
U.S.-origin natural uranium that would have permitted renewed sales of 
Russian uranium under the price-tied quota mechanism; nor has the 
Agreement increased sales of U.S.-origin natural uranium or employment 
in the U.S. uranium industry. Because an objective of this Agreement is 
to restore the competitive position of the U.S. industry, the parties 
agree as follows.
    The Agreement is hereby extended until March 31, 2004. Consistent 
with the requirement of Section 734(l) of the U.S. Tariff Act of 1930, 
as amended (the Act) to prevent the suppression or undercutting of 
price levels of domestic products in the United States, Sections II, 
IV, VIII and XIV are amended as set forth below. Appendix A of the 
Agreement is suspended until March 31, 2004, in accordance with amended 
Section XIV. All other provisions of the Agreement, particularly 
Section VII, remain in force and apply to this Amendment.
    The following definitions are added to Section II.

II. Definitions

    (e) For purposes of this Agreement, ``United States'' shall 
comprise the customs territory of the United States of America (the 50 
States, the District of Columbia and Puerto Rico) and foreign trade 
zones located in the territory of the United States of America. (f) 
Separative work unit, or SWU, means the standard measure of enrichment 
services. The effort expended in separating a mass F of feed of assay 
xf into a mass P of product of assay xp and waste of mass W 
and assay xw is expressed in terms of the number of separative 
work units needed, given by the expression 
SWU=WV(xw)+PV(xp)-FV(xf), where V(x) is the ``value 
function,'' defined as V(x)=(1-2x)ln[(1-x)/x].
    (g) ``U.S. producer'' means: (1) a company that owns a production 
interest in a licensed or permitted mine capable of producing uranium 
with sufficient economically recoverable reserves to justify production 
or (2) a U.S. converter or enricher.
    (h) ``For consumption'' means for further processing (as necessary) 
and use as nuclear fuel. Consumption may include such uses as swaps or 
exchanges of material, only where such swaps or exchanges are 
documented to be conducted solely for the purpose of facilitating the 
further processing and use as nuclear fuel by the end-user. The 
material shall not be loaned. The material shall not be resold except 
as a result of force majeure.
    (i) ``End-user'' means an entity, such as an electric utility, 
hospital, or scientific institution, which consumes uranium.
    (j) A ``Spot Contract'' means any contract for natural uranium and/
or SWU that specifies that all deliveries must be completed within 12 
months of contract execution. A ``Long-Term'' contract means any 
contract that is not a spot contract.
    (k) ``Newly-produced'' natural uranium in the form of 
U3O8 means uranium produced, on or after the effective date 
of this Amendment, by conventional mining, in-situ leaching (``ISL'') 
production, co-product or by-product production, or mine water recovery 
production. Newly-produced natural uranium in the form of UF6 
means UF6 containing newly-produced U3O8. If the Russian 
Federation Ministry of Atomic Energy (MINATOM) has not concluded sales 
of at least 2,204,620 pounds U3O8 equivalent during the first 
six months of this Amendment, up to 1,000,000 pounds U3O8 
equivalent mined prior, and milled subsequent to, the effective date of 
the Amendment, may be used for the purpose of matched sales for the 
remainder of that year.
    Section IV.A., IV.B., and IV.C.1., and to the extent that they 
relate to Appendix A, other portions of Section IV, are replaced with:
    IV. Matched Imports. Matched imports are imports of Russian-origin 
natural uranium or SWU that are matched with U.S.-origin natural 
uranium or SWU for delivery to end-users for consumption in the United 
States in accordance with the terms of this Amendment. Russian-origin 
natural uranium or SWU may be imported into the United States under 
this Amendment only if they qualify as matched imports as described 
below. The importer must document that the United States Department of 
Commerce (``the Department'') has issued a confirmation under which the 
shipment may be imported and any prior imports under that confirmation. 
Notwithstanding other provisions of this Amendment, matched imports are 
authorized up to the limits, and subject to the conditions, set forth 
below.
    To qualify as a matched import under this section, ``Russian-
origin'' natural uranium (i.e. U3O8 or UF6) or SWU must 
be matched with an equal portion of ``newly-produced'' U.S.-origin 
natural uranium (i.e. U3O8 or UF6) or SWU, subject to 
adjustment under Section D. For purposes of this Section, Russian-
origin means natural uranium (i.e. U3O8 or UF6) or SWU 
which is produced in Russia, and which is exported from Russia for the 
first time after the effective date of this Amendment. Matched imports 
are subject to the following conditions:
    (a) The U.S.-origin natural uranium must be mined in the United 
States, and/or the U.S.-produced SWU must be or have been performed in 
the United States, subsequent to the effective date of this Amendment 
and must be delivered pursuant to a new contract, or a new extension or 
modification of a contract, to supply the needs of an end-user which 
are uncommitted as of the date of the Amendment;
    (b) In the case of SWU, prior to the presentation of the matched 
sale to the Department for confirmation, the U.S. producer must be 
informed of all material terms of the matched sale to the end-user and 
must consent to the matching of its SWU in that sale with the imported 
Russian SWU;
    (c) In the case of natural uranium, if the U.S. producer is not the 
contracting party with the end-user, then, prior to the presentation of 
the matched sale to the Department for confirmation, the U.S. producer 
must consent to the matching of its uranium in that sale with the 
imported Russian uranium; and
    (d) Prior to the presentation of the matched sales contract to the 
Department for confirmation, the U.S. producer and the Russian producer 
must agree to the schedule of deliveries to the end-user of the 
imported Russian uranium or SWU and of the U.S. uranium or SWU.
    Matched sales may be made only by matching spot contracts to spot 
contracts and long-term contracts to long-term contracts, as defined in 
Section II, and uranium-type to uranium-type (i.e., U3O8 or 
UF6). Consistent with Section III of the Agreement, conversion 
does not change the country-of-origin of uranium ore, and, thus, U.S.-
origin UF6 is U.S-origin U3O8 converted at any 
converter.

A. Limits for Matched Imports

    For 1994 (April 1, 1994-March 31, 1995) and 1995 (April 1, 1995-
March 31, 1996), this Amendment authorizes annual matched sales of up 
to 3,000 metric tons (6,613,860 pounds U3O8 equivalent) per 
year of Russian-origin natural uranium and up to 2 million Russian-
origin SWU per year from the Russian Federation to the United States. 
The matching natural uranium must be sold during 1994 and 1995 but may 
be imported for delivery at any time during the life of the Amendment, 
subject to the conditions contained herein. For the years 1996 through 
2003, this Amendment authorizes additional matching deliveries of 
natural uranium up to, but not exceeding, the levels listed in 
Attachment 1. Deliveries pursuant to the 3,000 metric ton matched 
natural uranium quotas, confirmed in 1994 and 1995 and delivered in 
subsequent years, shall not be counted against the quota limitations 
listed in Attachment 1 for the years 1996 through 2003. Because the 
annual matching SWU quota expires two years from the effective date of 
this Amendment, no additional matched SWU sales, or corresponding 
imports of SWU, will be allowed. However, the matching SWU sold during 
1994 and 1995 may be delivered at any time during the life of the 
matched sales contract.
    For purposes of counting against the 1994 and 1995 sales quota 
limitations for both natural uranium and SWU, the date of the 
Department's confirmation (see Section IV.E) shall determine whether a 
matched import comes within the annual limit. However, for purposes of 
counting against the natural uranium delivery quota limitations for the 
years 1996 through 2003, the date of delivery of the Russian component 
of the confirmed matched sale (see Section IV.E) shall determine 
whether a matched import comes within the annual limit. The sales 
quotas in the first two years and the delivery quotas in subsequent 
years of the Amendment for natural uranium are separate and distinct.
    Enriched uranium from Russia may be imported only if there is a 
matched sale for the SWU component of such enriched uranium. When 
Russian enriched UF6 is imported pursuant to a matching SWU sale, 
an equivalent amount of natural uranium (based on the U235 assay 
of the product assuming a 0.3 tails assay) must be deposited with, 
exchanged, or returned to the seller's account on, before, or up to 
five days after the date of delivery of the imported enriched UF6 
to the buyer or the buyer's account. The feed component shall be 
counted against the natural uranium matched sales quota, through use in 
a matched sale, unless the feed material or its equivalent that is 
returned to the seller is either exported or quarantined from the U.S. 
market. Regardless of the ultimate disposition of the natural feed 
component associated with a sale of Russian-origin SWU, from the time 
any uranium products are delivered or returned to the seller or for the 
seller's account until the time such material is disposed of in 
accordance with the terms of this Section of the Amendment, the seller 
agrees to the following:
     To maintain the material in a separate account exclusively 
for the accounting of this material at the converter, enricher, or 
fabricator;
     To make available to the Department, quarterly, a full 
accounting of all deliveries into and out of this account at the 
converter, enricher, or fabricator including delivery from the account, 
to whom delivery was made, pursuant to which contract, in what 
quantity, and confirmation of the status of any transaction that 
occurred from the account; and
     To certify not to use the imported uranium for loans, 
swaps, or use as loan repayment or any purpose other than delivery in 
accordance with this Section of the Amendment, unless: (i) The amount 
is destined for consumption as defined in Section II(h); (ii) the 
amount is counted against the quota in connection with a confirmed 
matched sale; and (iii) the Department is notified of the transaction.
    Any natural uranium deposited with, exchanged, or returned to the 
seller or the seller's account as a result of sales of Russian SWU 
under matched contracts shall be deemed to be of Russian origin at the 
time of deposit, exchange or return, and, if re-exported, shall clearly 
be identified as Russian origin in all accompanying documentation and 
packaging.
    MINATOM will restrict the volume of direct or indirect exports to 
the United States of the merchandise subject to this Amendment on or 
after the effective date of this Amendment, and will continue to 
restrict the transfer or withdrawal from inventory (consistent with the 
provisions of this Section) of the merchandise subject to this 
Amendment.
    MINATOM will ensure that all exports of merchandise made under this 
provision qualify as matched imports made in conjunction with a U.S. 
producer or enricher, composed of equal parts Russian and newly-
produced U.S.-origin natural uranium (subject to adjustment under 
Section D) or SWU.

B. Per Company Limits for Matched Imports

    For each calendar year's quantity of confirmed matched imports, no 
more than 20 percent of the total allowable limit of matched imports of 
uranium may be matched with uranium sourced from any single U.S. 
producer. Nor may more than fifty (50) percent of the total allowable 
limit be matched with uranium from any single group of producers under 
common ownership or control. For purposes of this section, ``ownership 
or control'' shall be defined consistent with Section 771(13) of the 
Act.

C. Price Limits for Matched Imports

    The unit price paid to the U.S. producer for the U.S. component for 
each sale involving matched imports must be greater than the unit price 
paid by the end-user for consumption in the United States. (If the 
producer is the seller to the end-user, there may be no separate 
payment for the U.S. component.)

D. Monitoring of U.S. Production

    Given that a goal of this Amendment is to stimulate the production 
of natural uranium in the United States, the Department will monitor 
the level of uranium production in the United States through 
information obtained from the U.S. Energy Information Administration.
    Regardless of the level of U.S. production, matched imports during 
the first year of this Amendment will be on a 50-50 basis. Depending on 
the level of U.S. uranium production achieved in the first year, the 
matching requirements for matched imports in the second year may be 
modified as described below.
    The Department will determine the annualized level of U.S. 
production of natural uranium in 1994 using data from April 1, 1994, 
through March 31, 1995. On April 30, 1995, the Department will announce 
the level of U.S. production for 1994 for the purpose of possible 
adjustment to the matching requirement ratio for the following year. If 
the annualized level of U.S. production in the first year is less than 
9 million pounds or more than 10 million pounds, then the ratio 
required for matched import limits during the second year of this 
Amendment will be adjusted in accordance with the following schedule: 

------------------------------------------------------------------------
                                                           Matching     
                                                        requirement for 
                                                          second year   
  U.S. production for first year (millions of lbs.)      (percentages)  
                                                     -------------------
                                                        U.S.     Russian
------------------------------------------------------------------------
4-5.................................................        55        45
5-6.................................................        54        46
6-7.................................................        53        47
7-8.................................................        52        48
8-9.................................................        51        49
9-10................................................       (1)       (1)
10-11...............................................        49        51
11-12...............................................        48        52
12-13...............................................        47        53
13-14...............................................        46        54
14-15...............................................        45       55 
------------------------------------------------------------------------
1No change.                                                             

    Any changes in the ratio required for matched imports during the 
second year of this Amendment will not affect matched imports confirmed 
by the Department during the first year of this Amendment.
    Such a ratio adjustment will only be in force during 1995. For all 
subsequent years of the Amendment, the ratio for matching sales will 
remain at 50-50.

E. Department Confirmation of Matched Imports.

    Any matched sales contract to the end-user to be used in a matched 
sale under this Amendment must be submitted to and confirmed by the 
Department in accordance with this Section. To be confirmed as a 
matched contract, the party submitting the contract must provide the 
following information:
     The date and terms, including price, of the contract with 
the end-user pursuant to which the matched import(s) will be made;
     A description of the physical material being imported;
     Identification of the Russian supplier of the matched 
import(s);
     The estimated date on which the matched import(s) will 
enter the customs territory of the United States;
     The export license number under which the import(s) will 
be exported;
     The U.S. producer and specific production facility from 
which the matched material was or will be sourced;
     Explanation of the U.S. producer's relation to any other 
enterprise involved in the production and/or sale of uranium in the 
United States;
     A copy of the contract with the end-user pursuant to which 
the matched import(s) are to be made;
     A copy of any separate contract or agreement made for the 
U.S. material;
     Certification from the U.S. producer that its production 
will be ``newly-produced'' (within the meaning of this Amendment) to 
fulfill the contract, and its ability and commitment to provide, at the 
time specified in the contract, the contracted volume of natural 
uranium and/or SWU;
     Certification from the U.S. producer that it consents to 
the matching of its material and the estimated delivery schedule;
     An estimated delivery schedule;
     Certification from the end-user that it will consume the 
matched product in the United States in accordance with Section II(h) 
of this Amendment;
     All documentation relating to the escrow account set up 
for the matched sale; and
     Any other information that the Department, after 
consultation with MINATOM, determines necessary to confirm that the 
requirements of this Amendment have been met.
    Within 15 days of filing with the Import Administration's Central 
Records Unit a complete confirmation request, the Department will 
confirm that the matched sales contract qualifies for matching under 
this Amendment or will state specifically why it does not qualify. In 
making such a determination, the Department will limit its review to 
determining (i) whether the contract under review comes within total 
annual limits remaining available for the year in which the request was 
submitted; (ii) whether the U.S. uranium matched under the matched 
sales contract exceeds the per company limitations set forth in Section 
IV.B; and (iii) whether the sales price for the newly-produced U.S. 
uranium, if there is such a separate sale, meets the requirements set 
forth in Section IV.C. Further, in the process of confirmation request 
and approval, the Department will review the specific terms of the 
escrow account documentation.
    The end-user must pay a blended price for all deliveries. When 
deliveries of Russian uranium are made prior to deliveries of the 
matching U.S. product, either:
    a. The U.S. product must be delivered to the end-user within 1 
month of delivery of the Russian component to the end-user, or
    b. The difference between the price paid to the Russian producer 
and the blended price will be paid into a properly drawn escrow account 
specified in the contract. However, the amount deposited in the escrow 
account shall in no case be less than 10 percent of the total 
contracted value of the U.S. component of the matched sale. The escrow 
funds will be forfeited if the U.S. producer fails to deliver any 
portion of the U.S. component of the matched sale. The Department and 
MINATOM will develop a way to dispose of any forfeited escrow funds, 
but in no event will such funds be returned to any matched sales 
participant, e.g., the U.S. or Russian producer, the end-user, or the 
importer.
    If the Department determines upon review that any party has failed 
to deliver or cancelled delivery of uranium or SWU in a matched sale 
contract for any reason other than force majeure, or has otherwise not 
complied with the terms of the Amendment, that party shall be precluded 
from participation in any further matched sales.
    Upon confirmation, the Department will subtract the total amount of 
contracted Russian-origin matched-import uranium and/or SWU from the 
remaining quota for that year. The Department shall also make available 
on a current and continuous basis the amount of annual matched imports 
that remain available for the year. The Department will publish the 
contact office (and telephone number) for obtaining such information 
and the office to which confirmation requests should be sent. If the 
Department fails to respond to a confirmation request for a matched 
import within 15 days, the request shall be deemed to be approved 
notwithstanding any other provisions of this Amendment.
    Russian natural uranium or SWU may be imported into the United 
States prior to the scheduled time for delivery pursuant to a confirmed 
matched sales contract only if:
    (1) The material is placed in a dedicated account for the approved 
contract;
    (2) The importer (if the owner of material, or the person for whom 
or on whose behalf the material is imported) or his consignee, 
certifies to the Department that such material will not be sold, 
loaned, swapped, or utilized other than for delivery to the U.S. end-
user for consumption in accordance with Section II(h) of this 
Amendment; and
    (3) The material enters the U.S. but is not liquidated until such 
time as it is delivered to the end-user.
    Prior to U.S. Customs clearance of the Russian-origin uranium, the 
importer (if the owner of material, or the person for whom or on whose 
behalf the uranium is imported) will notify the Department of the date 
of import, the quantity and declared value of the shipment, the vessel 
name, the port of entry, and the pre-confirmed individual contract 
pursuant to which the shipment is entering. If such information is 
consistent with a pre-confirmed contract and the notice of request for 
delivery from the end-user, the Department will notify the U.S. Customs 
Service within five business days. The importer will provide 
certification to U.S. Customs at time of import that the material will 
be used only for a matched sale subject to the conditions of this 
Amendment and will be consumed in accordance with Section II(h) of this 
Amendment. Once the U.S. Customs Service has received the foregoing 
notification and certification, it will promptly release the shipment.
    The following paragraph constitutes an addendum to Section VIII of 
the Agreement:
    MINATOM agrees to adhere to all reporting requirements specified in 
Section VIII.A. of the Agreement. Appendix B data will be submitted to 
the Department according to the reporting requirements specified in 
Section VIII.A. of the Agreement, and will be treated and verified in 
accordance with the Letter of Administration exchanged between the 
Department and MINATOM simultaneously with the signing of this 
Amendment. The Department and MINATOM agree that the Letter of 
Administration constitutes an integral part of this Amendment.
    Section XIV of the Agreement is amended by adding the following:

C. Miscellaneous

    The parties agree to consult on a regular basis during the term of 
this Agreement on Russia being treated as a market economy or the 
Russian uranium industry being treated as a market-oriented industry 
under U.S. antidumping laws. During such consultations the Department 
will identify the criteria that Russia or the Russian uranium industry 
would need to satisfy to be accorded such treatment by the Department.
    The parties further agree that their intention is, consistent with 
Section IV.J of the Agreement, that Russia be accorded treatment no 
less favorable than any other Republic of the former Soviet Union that 
also has a suspension agreement with the United States with respect to 
trade in uranium. Accordingly, if U.S. law, regulation, administrative 
practice, or policy should change in any manner that would result in 
relatively less favorable treatment for Russia, or if the United States 
should enter into any agreement or understanding or take any action 
that would cause that result, the parties will promptly enter into 
consultations with a view to amending this Agreement so as to eliminate 
such less favorable treatment.
    The Parties agree that this Amendment constitutes an integral part 
of the Agreement.
    The English language version of this Amendment shall be 
controlling.

    Signed on this 11th day of March, 1994.

    For the Ministry of Atomic Energy of the Russian Federation:
Nikolai Yegorov.

    For the United States Department of Commerce:
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.

                              Attachment 1                              
------------------------------------------------------------------------
                                                  Natural               
                                                  uranium               
                     Year                       (lbs U3O8e)      SWU    
                                                                        
------------------------------------------------------------------------
1994\1\.......................................    6,613,860    2,000,000
1995\1\.......................................    6,613,860    2,000,000
1996..........................................    1,930,000          n/a
1997..........................................    2,710,000          n/a
1998..........................................    3,600,000          n/a
1999..........................................    4,040,000          n/a
2000..........................................    4,230,000          n/a
2001..........................................    4,040,000          n/a
2002..........................................    4,890,000          n/a
2003..........................................    4,300,000         n/a 
------------------------------------------------------------------------
\1\The quota volume in these years apply to sales. Deliveries pursuant  
  to these contracts may be delivered in subsequent years.              


[FR Doc. 94-7849 Filed 3-31-94; 8:45 am]
BILLING CODE 3510-DS-P