[Federal Register Volume 64, Number 111 (Thursday, June 10, 1999)]
[Notices]
[Pages 31179-31188]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-14782]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-834-802]


Final Determination of Sales at Less Than Fair Value: Uranium 
From the Republic of Kazakhstan

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

EFFECTIVE DATE: June 10, 1999.

FOR FURTHER INFORMATION CONTACT: James C. Doyle, Sally C. Gannon or 
Juanita H. Chen, Enforcement Group III, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street & Constitution Avenue, N.W., Washington, DC 20230; telephone: 
202-482-3793.

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SUMMARY: After the Republic of Kazakhstan (``Kazakhstan'') terminated 
the suspension agreement on uranium from Kazakhstan, the U.S. 
Department of Commerce (``Department'') resumed its antidumping 
investigation on uranium from Kazakhstan. The Department determines 
that imports of uranium from Kazakhstan are being sold, or are likely 
to be sold, in the United States at less than fair value, as provided 
in Section 735 of the Tariff Act of 1930, as amended (1994) (``the 
Act'').

SUPPLEMENTARY INFORMATION:

The Applicable Statute

    Unless otherwise indicated, all citations to the Act are references 
to the provisions effective in 1994. In addition, unless otherwise 
indicated, all citations to the Department's regulations are citations 
to the regulations at 19 CFR Part 353 (1994).

Case History

    On November 29, 1991, the Department initiated an antidumping 
investigation on uranium from the Union of Soviet Socialist Republics 
(``Soviet Union''). See Initiation of Antidumping Duty Investigation: 
Uranium from the Union of Soviet Socialist Republics, 56 FR 63711 
(December 5, 1991). On December 25, 1991, the Soviet Union dissolved 
and the United States subsequently recognized the twelve newly 
independent states (``NIS'') which emerged, one of which was the 
Republic of Kazakhstan. On January 16, 1992, the Department presented 
an antidumping duty questionnaire to the Embassy of the Russian 
Federation, the only NIS which had a diplomatic facility in the United 
States at that time, for service on Kazakhstan. On January 30, 1992, 
the Department sent questionnaires to the

[[Page 31180]]

United States Embassy in Moscow, which served copies of the 
questionnaire on the permanent representative to the Russian Federation 
of each NIS. The questionnaires were served on February 10 and 11, 
1992. On March 25, 1992, the Department stated that it intended to 
continue its antidumping duty investigation with respect to the NIS of 
the former Soviet Union. See Postponement of Preliminary Antidumping 
Duty Determination: Uranium from the Former Union of Soviet Socialist 
Republics (USSR), 57 FR 11064 (April 1, 1992).
    On June 3, 1992, the Department issued its preliminary 
determination, in its antidumping duty investigation on uranium from 
Kazakhstan, that imports of uranium from Kazakhstan were being, or were 
likely to be, sold in the United States at less than fair value, as 
provided for in the Act. See Preliminary Determinations of Sales at 
Less Than Fair Value: Uranium from Kazakhstan, Kyrgyzstan, Russia, 
Tajikistan, Ukraine and Uzbekistan; and Preliminary Determinations of 
Sales at Not Less Than Fair Value: Uranium from Armenia, Azerbaijan, 
Byelarus, Georgia, Moldova and Turkmenistan, 57 FR 23380 (June 3, 
1992). On October 16, 1992, the Department amended the preliminary 
determination to include highly enriched uranium (``HEU'') in the scope 
of the investigation. See Antidumping; Uranium from Kazakhstan, 
Kyrgyzstan, Russia, Tajikistan, Ukraine, and Uzbekistan; Suspension of 
Investigations and Amendment of Preliminary Determinations, 57 FR 49221 
(October 30, 1992). Also on this date, the Department also signed an 
agreement suspending the InvestigationInvestigation investigation. See 
Agreement Suspending the Antidumping Investigation on Uranium from 
Kazakhstan, 57 FR 49222 (October 30, 1992) (``Suspension Agreement''). 
The basis for the Suspension Agreement was an agreement by Kazakhstan 
to restrict exports of uranium to the United States.
    On November 10, 1998, the Department received notice from 
Kazakhstan of its intent to terminate the Suspension Agreement. Section 
XII of the Suspension Agreement provides that Kazakhstan may terminate 
the Suspension Agreement at any time upon notice to the Department, and 
termination would be effective 60 days after such notice. Accordingly, 
on January 11, 1999, the Department terminated the Suspension 
Agreement, as requested by Kazakhstan, and resumed the 
iInvestigationnvestigation. See Termination of Suspension Agreement, 
Resumption of Antidumping Investigation, and Termination of 
Administrative Review on Uranium From Kazakhstan, 64 FR 2877 (January 
19, 1999). On January 13, 1999, the Department issued a supplemental 
questionnaire for the original period of investigation (``POI'') to 
Kazakhstan. The supplemental questionnaire was issued to Kazakhstan as 
requests for separate rates were not submitted to the Department. On 
January 28, 1999, Kazakhstan requested a 60-day postponement of the 
date of the Department's final determination. On February 1, 1999, 
Kazakhstan submitted its response to Section A of the supplemental 
questionnaire. On February 3, 1999, Kazakhstan submitted minor 
corrections to its Section A response. On February 17, 1999, Kazakhstan 
submitted its response to Sections C and D of the supplemental 
questionnaire.
    In reviewing Kazakhstan's response, the Department determined that 
Kazakhstan's response required significant additional information. 
Therefore, on March 5, 1999, the Department issued a second 
supplemental questionnaire. On March 12, 1999, the Department published 
a notice in the Federal Register postponing the final determination 
date to June 3, 1999 and postponing the hearing date to May 12, 1999. 
See Notice of Postponement of Final Antidumping Determination: Uranium 
From Kazakhstan, 64 FR 12287 (March 12, 1999). On March 17, 1999, 
Kazakhstan responded to the Department's second supplemental 
questionnaire. Kazakhstan stated that it has endeavored to the best of 
its ability to assemble the information, but complete data no longer 
exists for the POI. Kazakhstan argued that it should not be penalized 
for actions taken by parties, such as the Russian Federation Ministry 
for Atomic Energy (``MINATOM''), prior to the existence of Kazakhstan. 
Instead, Kazakhstan provided information from 1994, which it claimed 
was the earliest available data, and provided no translations for the 
documents previously submitted. On April 19, 1999, Kazakhstan submitted 
additional information to supplement its Section D response.
    The Department conducted verification of the provided information. 
The Department conducted verification in Almaty, Kazakhstan, from May 
4, 1999 through May 8, 1999. On May 5, 1999, the Department published a 
notice in the Federal Register extending the deadline for case briefs 
until May 17, 1999, rebuttal briefs until May 21, 1999, and extending 
the hearing date to May 25, 1999. See Antidumping Investigation on 
Uranium from the Republic of Kazakhstan: Notice of Extension of Time 
for Briefs and Hearing, 64 FR 24137 (May 5, 1999).
    On May 17, 1999, the Department received case briefs from 
Kazakhstan and from the uranium coalition consisting of the Ad Hoc 
Committee of Domestic Uranium Producers (a petitioner), the Paper, 
Allied-Industrial-Chemical and Energy Workers International Union (the 
successor to petitioner Oil, Chemical, and Atomic Workers' Union), and 
USEC, Inc. (hereinafter collectively ``Uranium Coalition''). On May 21, 
1999, the Department received rebuttal briefs from Kazakhstan and the 
Uranium Coalition. On May 26, 1999, the Department conducted a hearing 
on the issues.

Scope of the Investigation

    The merchandise covered by this investigation constitutes one class 
or kind of merchandise. The merchandise covered by this investigation 
includes natural uranium in the form of uranium ores and concentrates; 
natural uranium metal and natural uranium compounds; alloys, 
dispersions (including cermets), ceramic products and mixtures 
containing natural uranium or natural uranium compounds; uranium 
enriched in U235 and its compounds; alloys, dispersions 
(including cermets), ceramic products, and mixtures containing uranium 
enriched in U235 or compounds of uranium enriched in 
U235. Both low enriched uranium (``LEU'') and HEU are 
included within the scope of this investigation. LEU is uranium 
enriched in U235 to a level of up to 20 percent, while HEU 
is uranium enriched in U235 to a level of 20 percent or 
more. The uranium subject to this investigation is provided for under 
subheadings 2612.10.00.00, 2844.10.10.00, 2844.10.20.10, 2844.10.20.25, 
2844.10.20.50, 2844.10.20.55, 2844.10.50.00, 2844.20.00.10, 
2844.20.00.20, 2844.20.00.30, and 2844.20.00.50, of the Harmonized 
Tariff Schedule (``HTS''). Although the HTS subheadings are provided 
for convenience and customs purposes, our written description of the 
scope of these proceedings is dispositive. HEU is also included in the 
scope of this investigation. ``Milling'' or ``conversion'' performed in 
a third country does not confer origin for purposes of this 
investigation. Milling consists of processing uranium ore into uranium 
concentrate. Conversion consists of transforming uranium concentrate 
into natural uranium hexafluoride (UF6).

[[Page 31181]]

Since milling or conversion does not confer origin, uranium ore or 
concentrate of Kazakhstan origin that is subsequently milled and/or 
converted in a third country will be considered of Kazakhstan origin. 
The Department continues to regard enrichment of uranium as conferring 
origin.

Period of the Investigation

    The POI is June 1, 1991 through November 30, 1991.

Verification

    As provided in Section 776(b) of the Act, the Department conducted 
a verification of the information provided by Kazakhstan using standard 
verification procedures including, where possible, the examination of 
relevant sales and financial records and attempts to trace back to 
original source documentation containing relevant information, as well 
as the examination of 1994 documentation and other available 
information.

Best Information Available

    The Department has determined, in accordance with Section 776(c) of 
the Act, that the use of best information available (``BIA'') is 
appropriate in this investigation. In deciding whether to use BIA, 
Section 776(c) provides that the Department may take into account 
whether the respondent provided a complete, accurate, and timely 
response to the Department's request for factual information. The 
Department requires a response which provides complete and accurate 
information on U.S. sales and factors of production in order to 
consider the response in its final determination. The responses which 
Kazakhstan submitted were severely deficient on their face: no U.S. 
sales data was provided, and factors of production information from the 
POI was so incomplete as to render the data useless for the 
Department's purposes. Furthermore, the Department was unable to verify 
the information which Kazakhstan did provide. Accordingly, the 
incomplete nature of Kazakhstan's responses and the failure of the data 
to verify requires the Department to use BIA. BIA is based on 
information submitted in the petition, detailed in the Department's 
initiation notice, and analyzed in the preliminary determination. See 
Comment 2, below.

Fair Value Comparisons

    To determine whether sales of uranium from Kazakhstan to the United 
States were made at less than fair value, the Department sought to 
compare the United States prices to the foreign market value. See 
Comment 2, below.

Interested Party Comments

    Comment 1: The Uranium Coalition argues that the Department's 
decision to issue a new questionnaire to Kazakhstan after termination 
of the Suspension Agreement, because Kazakhstan may not have had a full 
opportunity to respond to the original antidumping questionnaire, was 
inconsistent with the factual record and established legal precedent. 
The Uranium Coalition contends that record evidence indicates the 
Department gave Kazakhstan ample opportunity to respond in the 
preliminary segment of this Investigationinvestigation. The Uranium 
Coalition states that the Department exceeded the minimum requirements 
of delivering a public version of the petition to the Embassy for the 
Soviet Union in Washington, D.C., notifying Kazakhstan of the deadline 
for its response, providing Kazakhstan an opportunity to extend the 
deadline for its response, and ensuring Kazakhstan had adequate 
opportunity to comment on information submitted by other parties. See 
19 C.F.R. Sections 353.12(g), 353.31(b)(2), and 353.31(c)(3). The 
Uranium Coalition notes that the Department delivered two copies of the 
petition, two copies of the questionnaire, extended the deadline for 
responses three times, issued a new service list, and remained in 
constant contact with the Deputy Trade Representative of the Trade 
Representation of the Russian Federation. The Uranium Coalition further 
notes that in the Department's cable requesting the Foreign Commercial 
Service deliver the questionnaire, the Department stated that its 
efforts in serving the questionnaires is to give each republic the 
opportunity to fully participate. The Uranium Coalition goes on to 
state that its arguments concerning the Department's efforts are 
supported by the findings of the court in the Techsnabexport, Ltd. v. 
United States proceedings (hereinafter collectively ``Tenex'' 
proceedings). See 795 F. Supp. 428 (Ct. Int'l Trade Ct. Int'l 
Trade1992) (``Tenex I''); 802 F. Supp. 469 (Ct.t. Int'lnt'l Traderade 
1992) (``Tenex II''). The Uranium Coalition points out that it had been 
argued in the Tenex proceedings that the Department had violated the 
parties' procedural due process rights to notice and opportunity to 
participate, and the Court of International Trade (``CIT'') determined 
that the actions taken by the Department provided adequate process and 
the opportunity to participate in the Investigationinvestigation to the 
fullest extent, thus, the Department should not have been concerned 
about Kazakhstan's opportunity to respond to the questionnaire upon 
resumption of the Investigationinvestigation.
    The Uranium Coalition notes that the Department's preliminary 
determination was based on BIA because Kazakhstan did not supply any 
requested information. The Uranium Coalition argues that the Department 
has consistently refused to accept new information submitted to remedy 
deficiencies that led to a BIA preliminary determination, citing 
Certain Fresh Cut Flowers from Columbia; Final Results of Antidumping 
Duty Administrative Reviews, 61 FR 42833, 42855 (August 19, 1995); and 
Final Determination of Sales at Less Than Fair Value: Certain Cold-
Rolled Carbon Steel Flat Products and Certain Cut-to-Length Carbon 
Steel Plate From Italy, 58 FR 37152, 37153 (July 9, 1993). The Uranium 
Coalition also argues that 19 U.S.C. Section 1673c(i)(1)(B) directs the 
Department to treat the date on which the Suspension Agreement is 
terminated as the day on which the preliminary determination is issued. 
The Uranium Coalition argues that allowing submission of information 
after the preliminary determination will lead to abuse of the statutory 
provision for suspension agreements, in that initially non-cooperative 
parties could be afforded an additional opportunity to provide the 
required information, perhaps years later.
    Finally, the Uranium Coalition argues that due process is 
compromised by the collection of new information after the preliminary 
determination, as the Department is left insufficient time to properly 
analyze the information, conduct verification, and interested parties 
are left insufficient time to review and comment on the information. 
The Uranium Coalition notes that due process concerns are particularly 
serious if the Department issues a final determination based on a data 
set different from that used in the preliminary determination.
    Kazakhstan argues that the Department's decision to provide 
Kazakhstan an opportunity to submit information in the resumed 
Investigationinvestigation was correct and proper. Kazakhstan notes 
that the Department ``may request any person to submit factual 
information at any time during a proceeding.'' 19 CFR. Section 
353.31(b)(1). Kazakhstan agrees that the Department made a valiant 
effort to serve the initial questionnaire, but argues that it was 
unable, not unwilling, to respond to the questionnaire. Kazakhstan 
argues that at the time of the initial questionnaire, Kazakhstan was

[[Page 31182]]

undergoing its creation and restructuring, including establishing a 
system to oversee uranium production in its territory. Kazakhstan notes 
that the National Joint-Stock Company of Atomic Energy and Industry 
(``KATEP'') was not created until after the questionnaires were served 
on the NIS. Kazakhstan notes that its willingness to respond is 
demonstrated by its full cooperation with the Department during the 
seven years of the suspension agreement. Kazakhstan argues that this 
indicates that it would have provided the information requested by the 
Department in the original Investigationinvestigation had it been in a 
position to do so at the time.
    Kazakhstan disagrees with the Uranium Coalition's claim that the 
Department is creating bad precedent in suspension agreements by 
allowing Kazakhstan the opportunity to submit sales and factor 
information in the resumed investigation. Kazakhstan argues that 
because the circumstances in this investigation are exceptional, the 
only ``precedent'' established is that the Department has the 
discretion, under extreme circumstances and in the interest of 
fairness, to determine whether it is appropriate to provide an 
opportunity to submit information in a resumed investigation. 
Kazakhstan notes that the Department's decision to provide such an 
opportunity is in accordance with the Tenex proceedings, where the CIT 
stated that if presented with the question, it would ``decide in 
conjunction with review of the final determination whether the 
opportunity given [to provide republic-specific data] was statutorily 
sufficient.'' See 802 F. Supp. at 473
    Kazakhstan also disagrees with the Uranium Coalition's claim that 
the domestic interested parties may not have had an adequate 
opportunity to review and comment on the information submitted in the 
resumed investigation. Kazakhstan notes that the Uranium Coalition had 
over three months to examine Kazakhstan's sales and factor information, 
none of which has materially changed since the date of initial filing. 
Accordingly, Kazakhstan argues that the Uranium Coalition cannot 
contend it had no opportunity to comment on the submitted information. 
Kazakhstan further notes that the Uranium Coalition has never offered 
material comments or submitted any sales or factor information specific 
to Kazakhstan during any point in the investigation.
    In light of the circumstances, Kazakhstan argues that the 
Department appropriately provided Kazakhstan the opportunity to submit 
information in the resumed investigation. Kazakhstan argues that the 
supplemental questionnaires were all the more appropriate considering 
there was no republic-specific information on the record which would 
allow the Department to make a proper analysis of dumping in the 
resumed investigation.
    Department's Position: The Department recognizes that the court in 
the Tenex proceedings determined that the actions taken by the 
Department provided adequate opportunity to participate in the 
investigation to the fullest extent. In discussing notice and 
opportunity to be heard and participate in the investigation, the CIT 
stated that the ``petition gave notice of intent to reach exports from 
the republics as well as the USSR, and the proceedings have been 
sufficiently delayed so that the plaintiffs have had adequate notice 
and opportunity to participate.'' Tenex I at 437. The Court further 
stated that ``although unionwide data was used at the outset, 
presumably the republics have been given the opportunity to provide 
republic-specific data. If presented with the question, the court will 
decide in conjunction with review of the final determination whether 
the opportunity given was statutorily sufficient.'' Tenex II at 473.
    Given the unique circumstances of this case and the lapse of time 
since the original questionnaires were presented, Kazakhstan may have 
gained access to the data the Department originally requested. The 
Department determined that it was appropriate to give such additional 
opportunity to Kazakhstan to provide the originally-requested 
information at this time. The CIT noted that the ``[due process] test 
is one of fundamental fairness in light of the total circumstances.'' 
Tenex I at 436. Therefore, while the Department fulfilled its due 
process obligation given the circumstances at the beginning of this 
proceeding, the circumstances have changed, calling for a more 
accommodating opportunity to respond to the original questionnaire.
    In essence, the Uranium Coalition argues that the Department gave 
Kazakhstan too much due process; yet fails to indicate a maximum limit 
on due process measures. The Department took such measures in light of 
the unique circumstances of this investigation. At the time of the 
preliminary investigation and issuance of the original questionnaire, 
the Soviet Union had just collapsed and the resulting NIS, including 
Kazakhstan, were struggling to establish themselves. Taking this into 
consideration, along with the fact that eight years have elapsed since 
initiation of the investigation, the Department considers it reasonable 
to have afforded Kazakhstan an additional opportunity to fully 
participate in the investigation.
    Comment 2: The Uranium Coalition argues that the Department should 
use BIA and apply the 177.87 percent margin calculated for natural 
uranium in the preliminary determination. The Uranium Coalition notes 
that Section 776(c) of the Act mandates the Department to use BIA 
``whenever a party * * * refuses or is unable to produce information 
requested in a timely manner and in the form required, or otherwise 
significantly impedes an investigation * * *'' See also 19 U.S.C. 
Section1677e(c). The Uranium Coalition argues that application of BIA 
furthers the purpose of encouraging full disclosure by respondents, so 
that the Department can compute margins as accurately as possible. The 
Uranium Coalition argues that the Department must apply BIA even when a 
respondent's inability to provide requested information is due to 
circumstances outside the respondent's control. See Final Determination 
of Sales at Less Than Fair Value; Sweaters Wholly or in Chief Weight of 
Man-Made Fiber From Taiwan, 55 F.R. 34585 (August 23, 1990) (documents 
destroyed by fire); NSK Ltd. v. United States, 794 F. Supp. 1156, 1160 
(Ct. Int'l Trade 1992) (corporate policy to destroy data after five 
years). The Uranium Coalition argues that the CIT has rejected a ``best 
efforts'' exception to the application of BIA. See Tai Yang Metal 
Industrial Co., Ltd. v. United States, 712 F. Supp. 973, 977-78 (Ct. 
Int'l Trade 1989); Uddeholm Corp. v. United States, 676 F. Supp. 1234, 
1237 (Ct. Int'l Trade 1987). The Uranium Coalition further argues that 
Kazakhstan's inability to obtain information from third parties 
1 is no exception to the requirement of a BIA determination. 
The Uranium Coalition argues that the Department has consistently 
applied BIA when information held by a third party has not been 
submitted. See Fresh and Chilled Atlantic Salmon from Norway; Final 
Results from Antidumping Duty Administrative Review, 58 FR 37912, 37915 
(July 14, 1993); see also Tapered Roller Bearings and Parts Thereof, 
Finished and Unfinished, from the People's Republic of China; Final 
Results of Antidumping Duty Administrative Reviews, 61 FR 65527, 65538 
(December 13, 1996). The Uranium Coalition also notes that the

[[Page 31183]]

Department has determined that the fact that a third party might have 
incentive not to provide information is no exception to the application 
of BIA. See Notice of Final Determination of Sales at Less Than Fair 
Value: Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Japan, 
64 FR 24329, 24368 (May 6, 1999) 2.
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    \1\ The Uranium Coalition notes that it is uncertain from the 
evidence whether Kazakhstan expended sufficient effort in obtaining 
information from third parties.
    \2\ The Uranium Coalition states that while that determination 
was made under the current antidumping statute, the principle of 
making an adverse inference when information is not provided applies 
to the pre-URAA use of BIA. See Rhone Poulenc v. United States, 899 
F.2d 1185, 1190-91 (Fed. Cir. 1990).
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    The Uranium Coalition argues that the Department should apply 
total, not partial, BIA in calculating the final margin. The Uranium 
Coalition first argues that the Department should have proceeded to a 
final determination based on BIA due to Kazakhstan's failure to answer 
the original questionnaire. Disagreeing with the Department's decision 
to issue a supplemental questionnaire instead, the Uranium Coalition 
argues that, nevertheless, the Department should apply total BIA in its 
final determination as Kazakhstan's subsequent response is inadequate, 
untimely and not verifiable. The Uranium Coalition points to numerous 
deficiencies in Kazakhstan's response, including: (1) No U.S. sales 
information provided for its Section C response, which is necessary to 
calculate prices; (2) information based on 1994 and 1998 data, instead 
of 1991 data; (3) factors of production reported only for the in situ 
leaching production processes, despite the use of other processes 
during both 1991 and 1994; (4) incomplete factors of production data 
provided; (5) no financial or government documents provided; (6) no 
quantity and value of sales data provided for its Section A response; 
and (7) no supporting documentation for Section D provided, as 
requested by the Department. The Uranium Coalition argues that 
Kazakhstan should not be allowed to benefit from submitting self-
selected information. While 1991 information may no longer be 
available, the Uranium Coalition argues that regardless of the passage 
of time, change in personnel, and destruction of relevant records, the 
Department should base its final determination on BIA. See Koyo Seiko 
Co. Ltd. v. United States, 796 F. Supp. 517, 525 (Ct. Int'l Trade 1992) 
(applying BIA where respondent was unable to provide 1974 information 
in 1986). The Uranium Coalition argues that not only is the Department 
unable to calculate foreign market value without factors of production 
data, overall, the submitted data is insufficient for the Department to 
calculate a margin.
    As Kazakhstan is the sole respondent and a non-market economy, the 
Uranium Coalition argues the only rate the Department should use is the 
rate from the preliminary determination. The rate established in the 
preliminary determination was based upon the petition and information 
submitted by Petitioners and two parties from which the Department 
solicited information. See Preliminary Determination of Sales at Less 
Than Fair Value: Uranium from Kazakhstan, et al. 57 FR at 23382.
    The Uranium Coalition argues that Kazakhstan has not cooperated 
with the investigation from the start, beginning with its failure to 
respond to the original questionnaire. The Uranium Coalition notes that 
while Kazakhstan had 60 days to prepare for the resumed investigation 
after providing notice of its intent to terminate the Suspension 
Agreement, it nevertheless provided no information. Furthermore, the 
Uranium Coalition notes that the data untimely provided by Kazakhstan 
during verification could have been reviewed prior to the date its 
questionnaire responses were due. The Uranium Coalition argues that 
this demonstrates Kazakhstan's failure to cooperate; the Department 
should consider Kazakhstan's lack of cooperation in its final 
determination and apply the rate established in the preliminary 
determination.
    While Kazakhstan disagrees with the continuation of the 
investigation, it argues that if the investigation is not terminated, 
the Department should use 1994 factor information in its final 
determination. Kazakhstan argues that it cooperated to the best of its 
ability, again noting that the original respondent named in the 
petition, the Soviet Union, no longer exists. Kazakhstan states that 
several third parties control the POI data on sales and production for 
the area in the Soviet Union now known as Kazakhstan. Kazakhstan notes 
that it attempted to obtain data from these third parties. Within 
MINATOM, Kazakhstan states that it contacted and requested information 
from the First Department, Atomredmetzoloto, which oversaw mining and 
milling in the Soviet Union during the POI, and Techsnabexport, which 
oversaw all uranium sales from the Soviet Union during the POI. 
Kazakhstan states that it received no information from these requests. 
Kazakhstan also states that while the regional departments that 
reported to Atomredmetzoloto (Uzhpolymetal, Vostokredmet, Tselliny and 
Prikaspiysky (a.k.a. Kaskor)) are possible sources of POI sales and 
production information, it is unclear what records they created and 
retained in the ordinary course of business as each followed different 
standards then. Furthermore, Kazakhstan notes that none of these 
records are under its control; Uzhpolymetal is in Kyrgyzstan and 
Vostokredmet is located in Tajikistan. As for Tselliny and Kaskor, 
Kazakhstan states that it explained during verification that neither 
regional department was under the direct control of KATEP or of 
Kazatomprom. Finally, Kazakhstan notes that because many of the third 
parties now compete with Kazakhstan in the uranium market, they have an 
incentive not to respond to requests for information.
    Kazakhstan also argues that after the dissolution of the Soviet 
Union on December 25, 1991, there was no formal centralized management 
of uranium activities in Kazakhstan until the establishment of KATEP on 
February 12, 1992. Kazakhstan notes that while KATEP was created to 
take sole responsibility for all sales of subject merchandise from 
Kazakhstan, KATEP did not have full day-to-day management 
responsibility over all uranium production in Kazakhstan. Kazakhstan 
asserts that Kazatomprom, created on July 12, 1997, was the first 
entity with sole responsibility for the mining and marketing of uranium 
from Kazakhstan. Kazakhstan argues that the lack of formal oversight 
contributed to the incomplete nature of the 1991 and 1994 records.
    Kazakhstan argues that the passage of time is another constraint on 
the availability of information. Kazakhstan notes that the individuals 
who recorded information during the POI are not the same individuals 
who helped prepare the questionnaire responses. Without the personal 
recollection of these individuals, Kazakhstan argues that 
reconstruction of the archived files was difficult. Kazakhstan also 
argues that because the POI is eight years ago, much of the 1991 (as 
well as the 1994) information has been destroyed in the ordinary course 
of business pursuant to document destruction policies, referencing the 
certificate of destruction produced during verification as examples of 
the policies. See May 13, 1999 Verification Report (``Verification 
Report''), at 13 and 26. Kazakhstan was also hindered in its efforts to 
locate data as much of the information on uranium was, and still is, 
considered state secrets. Kazakhstan states that knowledge on the 
material was limited and circulation of information was restricted. 
Only a limited number of

[[Page 31184]]

documents on uranium were made and circulated among a small circle of 
officials. Accordingly, Kazakhstan argues that this made locating 
complete sets of documents difficult.
    Kazakhstan argues that its efforts in light of the unusual and 
difficult situation indicates it cooperated to the best of its ability 
and, thus, the Department should use the 1994 factors information 
submitted by Kazakhstan in the final determination. Kazakhstan argues 
that the 1994 information it produced, despite the described obstacles, 
is as complete as possible, as well as verifiable. Kazakhstan states 
that it submitted 1994 factors information for four of the seven 
facilities operating during the POI. Kazakhstan argues that the 
Department has complete information on the total uranium output at 
these four facilities, and the inputs needed to produce one kilogram of 
uranium at each of those facilities. Kazakhstan argues that the main 
source documents provided for 1994, the technical reports, tied to 
other information available for 1994, such as the unit reports, monthly 
cost of production reports and the annual report filed with government 
authorities. Kazakhstan concedes that the Department was generally 
unable to trace the 1994 technical reports to a level of detail lower 
than the unit reports but argues that this was because more detailed 
information did not exist, and was not because of any inconsistency in 
the information.
    Kazakhstan argues that the 1994 factors information is as 
representative of uranium production during the POI as any other 
source. Kazakhstan also argues that the 1994 factors information 
accurately represents possible uranium production today. Accordingly, 
Kazakhstan argues that an antidumping duty based on the provided 1994 
factors information would be superior to one based on other sources. In 
comparing the 1994 information with the limited information available 
for 1991, Kazakhstan claims that similar inputs were consumed at 
similar levels and facility production levels were comparable. In fact, 
Kazakhstan suggests that 1994 data may be preferred over 1991 data as 
Kazakhstan controlled the 1994 facilities, whereas MINATOM controlled 
the 1991 facilities. Furthermore, Kazakhstan argues that the 1994 
factors are based on actual production information in Kazakhstan at the 
same facilities operating in 1991, whereas the factors submitted by 
petitioners and used in the preliminary determination were estimates 
for Canadian facilities, where actual source documents were not used.
    Kazakhstan notes that the Department has substantial discretion in 
selecting the source of BIA to use in its calculations. See Magnesium 
Corp. v. United States, 938 F. Supp. 885, 902 (Ct. Int'l Trade 1996). 
Kazakhstan asserts that the Uranium Coalition incorrectly contends that 
the Department must use information submitted in the petition as BIA. 
Kazakhstan notes that the Department may consider any and all 
information on the record in selecting BIA and argues that the final 
determination should be based on republic-specific data. Accordingly, 
Kazakhstan argues that the data it has submitted is far superior to the 
information submitted by the petitioners.
    Department's Position: The Department continues to apply the 
overall rate of 115.82 percent as the BIA rate for the final 
determination. The Department notes that at verification none of the 
information provided, timely or otherwise, could be traced to annual 
report information at verification. Further, the Department was unable 
to check original well-site and factory information to tie to the few 
technical reports available for review. As a result, the record data 
can only be considered fragmentary. Without any verifiable data, the 
Department must resort to the rate established at preliminary 
determination. Additionally, while Kazakhstan asserts that it should 
not be held responsible for the failure of Tenex to provide data 
regarding U.S. shipments of subject merchandise during the POI, the 
Department notes that precedent to the contrary exists. Even where 
another party controls the information, the Department may rely on BIA 
if the information is not provided by the respondent. See Helmerich & 
Payne, Inc. v. United States, 24 F. Supp. 2d 304, n. 6 (Ct. Int'l Trade 
1998).
    The Department's practice is to base BIA on a simple average of the 
margins based on petition data, as opposed to the highest margin based 
on petition data, when the Department determines that the respondent 
has attempted to cooperate with the Department's 
Investigationinvestigation. In this instance, the Department calculated 
a natural and enriched uranium rate, modifying the original petition 
rates. Therefore, the Department considers it appropriate to apply the 
average rate of 115.82%. See e.g., Preliminary Determination of Sales 
at Less Than Fair Value: Circular Welded Non-Alloy Steel Pipe from 
Taiwan, 57 FR 17892 (April 28, 1992). The Department believes that 
Kazakhstan attempted to cooperate in this proceeding because, while the 
response lacks sufficient data to use in the calculation of a dumping 
margin, it nevertheless contains sufficient data for the Department to 
conclude that a serious and sustained effort was undertaken by 
Kazakhstan to provide data responsive to the Department's 
questionnaires for the POI. Therefore, the Department is basing the 
final margin on an average of the margins for uranium concentrate and 
enriched uranium derived from the petition. In this instance, the 
petition included margins for natural and enriched uranium, which the 
Department adjusted for purposes of the preliminary determination See 
Preliminary Determination of Sales at Less Than Fair Value: Circular 
Welded Non-Alloy Steel Pipe from Taiwan, 57 FR 17892 (April 28, 1992). 
The average of those rates, as adjusted, is 115.82 percent.
    Comment 3: The Uranium Coalition asserts that the Department has 
the authority to clarify the scope of this Investigationinvestigation 
to include Kazakhstan origin natural uranium enriched in third 
countries in order to prevent the potential circumvention of any future 
antidumping duty order. The Uranium Coalition further asserts that such 
a clarification would be in accordance with the Department's 
substantial transformation analysis, the intent of the petition, and 
the purpose of the antidumping law. Regarding their circumvention 
concerns, the Uranium Coalition cites the potential cost savings for 
utilities purchasing Kazakhstan origin uranium at the unrestricted 
market price and claim that contracts permitting the foreign enrichment 
of Kazakhstan origin uranium are already in place. The Uranium 
Coalition notes that the Department's need to address potential 
circumvention in its substantial transformation analyses may result in 
a determination which differs from that of the United States Customs 
Service (``U.S. Customs'') and that, in this case, the elements of the 
Department's substantial transformation analysis require a 
determination that third-country enrichment does not change the country 
of origin of Kazakhstan uranium.
    The Uranium Coalition asserts that, while the petition's scope did 
not specifically include uranium enriched in third countries, its 
intent was clearly to cover all forms of uranium products and to 
prevent circumvention. The Uranium Coalition argues that there was no 
reasonable basis in 1991 to foresee the increasing use of foreign 
enrichment by U.S. utilities and that the Suspension Agreement was 
subsequently modified to cover these third-country enrichment 
transactions. Finally, the Uranium

[[Page 31185]]

Coalition notes that the Department must clarify the scope of this 
Investigationinvestigation in order to achieve the antidumping law's 
purpose of remedying the negative impact on a U.S. industry of unfairly 
traded imports. The Uranium Coalition argues that, when the unfairly-
priced Kazakhstan uranium is enriched abroad rather than in the United 
States, the injurious effect on the mining sector of the U.S. industry 
is not altered and that the adverse effects are in fact exacerbated 
because the enrichment sector of the U.S. industry is damaged.
    Kazakhstan contends that the Uranium Coalition's request represents 
an untimely attempt to improperly expand the scope of the investigation 
and any resulting antidumping duty order to cover uranium produced in 
countries not subject to this Investigationinvestigation. Kazakhstan 
argues that all of the factors normally considered by the Department in 
its substantial transformation analysis confirm that enrichment does 
substantially transform and confer a new country of origin on enriched 
uranium. Thus, Kazakhstan asserts the Department does not have the 
authority to expand the scope of this proceeding. Kazakhstan further 
asserts that including uranium enriched, and therefore produced, in 
third countries in the scope of this case would violate the World Trade 
Organization's Agreement on Rules of Origin as well as ``circumvent'' 
the standards for circumvention established in the U.S. statute.
    Department's Position: The Department agrees with Kazakhstan, in 
part. As an initial matter, there is no evidence on the record to 
indicate that there were any entries into the United States during the 
POI of Kazakhstan uranium enriched in a third country. In fact, the 
Uranium Coalition notes in its brief that the practice about which they 
are concerned evolved after the POI. The Uranium Coalition's concern 
clearly centers on current and future contracts involving third-country 
enrichment and, therefore, is unrelated to the calculation of a dumping 
margin on uranium from Kazakhstan during the POI. Thus, the Department 
need not decide in this final determination whether uranium from 
Kazakhstan enriched in a third country was sold at less than fair value 
during the POI.
    With respect to the third-country enrichment issue, its importance 
and complexity is illustrated by the extensive argument contained in 
the Uranium Coalition's and Kazakhstan's briefs and in the time devoted 
to this issue at the hearing. However, Kazakhstan argues that the 
Uranium Coalition raised the third-country enrichment issue so late in 
the proceeding that its due process rights were prejudiced. The 
Department finds that neither the Department nor Kazakhstan could 
effectively examine the issue prior to issuance of the final 
determination. A review of the case schedule on and after the date of 
the Uranium Coalition's filing illustrates the point. The Uranium 
Coalition's submission was filed on April 26, 1999, one week prior to 
the beginning of verification. The Department conducted verification in 
Kazakhstan during the week of May 4, 1999 through May 8, 1999, and 
issued a verification report on May 13, 1999. Parties filed case briefs 
on May 17, 1999, and rebuttal briefs on May 21, 1999. The hearing was 
held on May 26, 1999, just eight days before the date of the final 
determination. This schedule simply did not permit the Department 
sufficient time to issue supplemental questionnaires, pose questions to 
the Uranium Coalition or engage in the other activities necessary to 
properly evaluate the law, arguments, and facts surrounding this issue. 
Additionally, the Uranium Coalition's filing on this issue was made in 
the context of an investigation resumed after an almost eight-year 
hiatus, during which the Government of Kazakhstan began rationalizing 
its uranium production. Furthermore, during the initial investigation, 
the respondent country became independent, further complicating the 
link between the initial 1991-92 phase of the investigation, the 1999 
resumed investigation, and the third-country enrichment issue.
    As a result of the above considerations, and to provide sufficient 
opportunity for full analysis of the law, argument and facts regarding 
this issue, the Department will initiate a scope inquiry on Kazakhstan 
uranium enriched in a third country simultaneously with the issuance of 
any antidumping order in this proceeding.
    Comment 4: The Uranium Coalition contends that the Department 
should include uranium imported under a U.S. Customs temporary import 
bond (``TIB'') within the scope of this Investigationinvestigation in 
order to prevent certain ``swap'' transactions which may otherwise be 
used to circumvent a future antidumping duty order. The Uranium 
Coalition argues that, in this case, the Department has clear evidence, 
based on the past conduct of importers and domestic parties during the 
administration of the Suspension Agreement, that temporarily-imported 
merchandise can be, and has been, used to introduce dumped merchandise 
into U.S. commerce. The Uranium Coalition asserts that the Department 
has the authority to inform U.S. Customs that, due to the fungibility 
of the product and the nature of commercial activities in this 
particular industry, all Kazakhstan uranium entries, including TIB 
entries, must be subject to antidumping duty assessment to prevent 
circumvention of an order.
    Alternatively, the Uranium Coalition urges the Department, at a 
minimum, to direct U.S. Customs to consider any entry of Kazakhstan 
uranium as a consumption entry subject to the antidumping order unless 
the TIB ``statement of use'' accompanying the TIB application under 19 
CFR 10.31 includes a statement that the uranium to be imported under 
TIB will not be, and has not been, used as part of any swap, loan, or 
exchange transaction.
    Kazakhstan argues that the Uranium Coalition's request to include 
Kazakhstan uranium entered under TIB in the scope of this proceeding is 
both untimely and improper and should be rejected by the Department. 
Kazakhstan notes that this issue was first raised in the Uranium 
Coalition's case brief, disallowing the Department the opportunity to 
make use of proper notice and comment procedures before departing from 
a prior practice with such broad implications. Furthermore, Kazakhstan 
notes the Uranium Coalition's concession that the Department has 
previously held, and the CIT upheld, that antidumping duty orders do 
not apply to merchandise entered under TIB.
    Department's Position: The Department agrees with Kazakhstan. As 
noted by the Uranium Coalition, the Department has previously rejected 
a request to apply antidumping duties to merchandise imported under TIB 
procedures. See Remand Determination: Titanium Metals Corp. v. United 
States, Court No. 94-04-00236 (Apr. 17, 1995). The CIT then upheld this 
decision. See Titanium Metals Corp. v. United States, 901 F. Supp. 362 
(Ct. Int'l Trade 1995). While the Department recognizes the Uranium 
Coalition's concerns regarding the atypical characteristics of uranium 
and the uranium industry, the Department reaffirms its prior finding 
that merchandise entered pursuant to TIB is not entered for 
consumption. As a result, antidumping duties cannot apply to TIB 
entries. In addition, the Department has no legal authority to instruct 
U.S. Customs to require an additional certification for such Kazakhstan 
TIB entries, as alternatively requested by the Uranium Coalition.

[[Page 31186]]

    Comment 5: Kazakhstan notes that the respondent named in the 
original antidumping petition, the Soviet Union, was dissolved less 
than one month after initiation of the Investigationinvestigation and 
no longer exists. Kazakhstan stresses that while the courts sustained 
the determination to continue the Investigationinvestigation despite 
the dissolution of the Soviet Union, the final determination of the 
Investigationinvestigation must be based on facts involving Kazakhstan, 
not the Soviet Union. Kazakhstan argues that the distinction between 
Kazakhstan and the Soviet Union is critical to the Department's 
analyses of: (1) Whether the petition was filed on behalf of the 
domestic industry against Kazakhstan in particular; (2) whether there 
were sales of subject merchandise from Kazakhstan to the United States 
during the POI; and (3) the selection of surrogate values for 
Kazakhstan.
    According to the Uranium Coalition, the fact that Kazakhstan is no 
longer a part of the Soviet Union does not change the Department's 
obligation to conduct an antidumping investigation of uranium produced 
during the POI in the territory which is now Kazakhstan. The Uranium 
Coalition argues that the Department reasonably construed the 
antidumping statute as authorizing continuation of this 
Investigationinvestigation, despite the fact that the petition leading 
to this Investigationinvestigation was filed against subject 
merchandise from the Soviet Union.
    According to the Uranium Coalition, Section 731 of the Act 
instructs the Department to impose antidumping duties whenever foreign 
merchandise is sold at less than fair value in the United States, where 
the International Trade Commission determines that such imported 
merchandise causes injury to a domestic industry. The Uranium Coalition 
further argues that this statutory provision contains no requirement 
that the Department take changes in the political landscape of a 
foreign territory into account when determining whether the imposition 
of antidumping duties is warranted. According to the Uranium Coalition, 
it is the foreign merchandise--not the particular political 
configuration of the territory in which the merchandise originated--
which is the critical aspect of the antidumping analysis. Thus, the 
Uranium Coalition concludes, changes in the geopolitical territory of 
the former Soviet Union are not relevant for purposes of determining 
whether uranium produced in any region of the former Soviet Union was 
traded unfairly in the United States.
    In support of its conclusion, the Uranium Coalition cites to Tenex 
II. See 802 F. Supp. 469. According to the Uranium Coalition, the CIT 
held that the Department had full legal authority to continue its 
uranium investigation against the former Soviet republics, 
notwithstanding dissolution of the Soviet Union, because the 
antidumping statute did not require the Department to take into account 
changes in political structures in the course of its investigation. 
Further, according to the Uranium Coalition, since the Tenex 
proceedings, this rationale has been applied consistently by the 
Department. See Transfer of the Antidumping Order on Solid Urea from 
the Union of Soviet Socialist Republics to the Commonwealth of 
Independent States and the Baltic States and Opportunity to Comment, 57 
Fed. Reg. 28828 (Jun. 29, 1992); Application of U.S. Antidumping and 
Countervailing Duty Laws to Hong Kong, 62 Fed. Reg. 42965 (Aug. 11, 
1997); Solid Urea from the German Democratic Republic, 63 Fed. Reg. 
7122, 7122-23 (Feb. 12, 1998); Certain Cut-to-Length Carbon-Quality 
Steel Plate from the Former Yugoslav Republic of Macedonia, 64 Fed. 
Reg. 12993 (Mar. 16, 1999).
    Department's Position: The Department agrees with Kazakhstan, in 
part. The Department agrees that Kazakhstan is a different entity from 
the Soviet Union. In recognition of that fact, the Department attempted 
to collect and verify separate Kazakhstan-specific information. 
However, Kazakhstan failed to provide sufficient verifiable data which 
the Department could use in its analysis. As a result, the Department 
must use BIA, for the reasons discussed in Comment 2, above. The 
Department notes that the continuation of this investigation against 
Kazakhstan was challenged at the CIT, where the Department's decision 
to continue was upheld. See Tenex proceedings.
    Comment 6: Kazakhstan argues that the investigation should be 
terminated as the Uranium Coalition does not have the support of the 
domestic industry and, thus, lacks standing to represent the industry 
in the resumed investigation. Kazakhstan claims that two of the 
original petitioners, Power Resources, Inc. (``PRI'') and Cogema, Inc. 
(``Cogema''), currently account for over half the production of uranium 
in the United States. Kazakhstan states that PRI expressed its 
opposition to the investigation in an April 15, 1999 letter and Cogema 
expressed its opposition in a May 5, 1999 letter. Kazakhstan argues 
that their opposition indicates that the investigation is not ``on 
behalf of'' the domestic uranium industry.
    Kazakhstan argues that the Department has the power to rescind its 
decision to initiate an antidumping investigation where it is 
discovered that the petition is not being maintained on behalf of the 
industry. See Gilmore Steel Corp. versus United States, 585 F. Supp. 
670, 674 (Ct. Int'l Trade 1984). Kazakhstan argues that when members of 
the domestic industry provide grounds to doubt a petitioner's standing, 
the Department should evaluate whether those parties which oppose the 
investigation represent a majority of the domestic industry, to 
determine whether the petition is properly filed on behalf of the 
domestic industry. See Suramerica de Aleaciones Laminadas, C.A. v. 
United States, 966 F.2d 660, 662-63 (Fed. Cir. 1992). Kazakhstan claims 
that PRI and Cogema account for a majority of the domestic industry 
and, since this majority of the domestic industry opposes the 
investigation, Kazakhstan argues that the Department should terminate 
the investigation immediately.\3\
---------------------------------------------------------------------------

    \3\ As an alternative, Kazakhstan suggest that the Department 
survey all uranium producers in the United States to determine the 
producers' stance on the investigation.
---------------------------------------------------------------------------

    The Uranium Coalition also states that the letters from PRI and 
Cogema were not properly filed, are therefore not on the record of this 
investigation and thus cannot be considered by the Department. 
Moreover, even if the letters had been properly placed on the record, 
the Uranium Coalition continues, Cogema and PRI are parties that are 
related to the producer through their joint ventures in Kazakhstan. 
Hence, neither PRI nor Cogema would be considered part of the domestic 
industry.
    Department's Position: The Department agrees with the Uranium 
Coalition. The Department notes that the letters submitted by PRI and 
Cogema, as domestic uranium producers opposed to the investigation, 
were improperly submitted and cannot be considered. First, the letter 
from PRI, to which Kazakhstan refers, does not appear on the record for 
this investigation. Second, the courtesy copies of the PRI and Cogema 
letters provided separately to Department analysts show no certificate 
of service, and thus it appears that the parties were never properly 
served the letters. Pursuant to 19 CFR 353.31(g)(2), the Department 
``will not accept any document that is not accompanied by a certificate 
of service listing the parties served, the type of document served,

[[Page 31187]]

and, for each, indicating the date and method of service.'' Third, 
neither letter contains a certification as to the contents of the 
letter, as required under 19 CFR 353.31(i).\4\
---------------------------------------------------------------------------

    \4\ The Department notes that even had the letters been 
certified, the contents fail to substantiate Kazakhstan's claim that 
PRI and Cogema represent a majority of the domestic uranium industry 
by providing the evidence stipulated in the Department's 
regulations. Accordingly, the Department cannot assume that PRI and 
Cogema represent a majority of the domestic uranium industry.
---------------------------------------------------------------------------

    The PRI and Cogema letters were also untimely submitted. Pursuant 
to 19 CFR 353.31(c)(2), the Department ``will not consider any 
allegation in an investigation that the petitioner lacks standing 
unless the allegation is submitted, together with supporting factual 
information, not later than 10 days before the scheduled date for the 
Secretary's preliminary determination.'' The Department notes that 
while Pathfinder Mines Corporation (``Pathfinder''), a Cogema 
subsidiary, properly submitted a letter to the record in furtherance of 
Cogema's opposition, Pathfinder's letter was dated May 17, 1999, which 
is clearly past the regulatory deadline.
    Finally, even if PRI and Cogema had properly expressed their 
opposition to this investigation, publicly available information 
indicates that PRI, a wholly owned subsidiary of Cameco, and Cogema, a 
foreign-owned producer, have certain joint ventures with Kazakhstan 
that mandate the Department to disregard their opposition to the 
investigation. See the Uranium Coalition's rebuttal brief, at Exhibit 3 
(``The Reconstruction of the Uranium Industry in Kazakhstan''). Section 
771(4)(A) defines the term industry to mean ``the domestic producers as 
a whole of a like product.'' Section 771(4)(B) provides that ``when 
some producers are related to the exporters * * * of the allegedly * * 
* dumped merchandise, the term ``industry'' may be applied in 
appropriate circumstances by excluding such producers from those 
included in that industry.'' As both PRI and Cogema have business 
relations with the foreign producer in this investigation, the 
Department is disregarding their positions for purposes of standing. 
For these aforementioned reasons, even if the objections had been 
properly and timely filed, the Department would continue this 
investigation.
    Comment 7: Kazakhstan argues that it made no sales of subject 
merchandise to the United States during the POI as it did not exist 
during the POI. Kazakhstan argues that as part of the Soviet Union, the 
region's economy was under the guidance and control of Soviet 
authorities and companies existing in the region had no independent 
production or sales activities. Kazakhstan argues that during the POI, 
Tenex had sole authority for making sales of uranium produced in the 
Soviet Union, noting that Tenex is a wholly-owned and controlled 
subsidiary of MINATOM. Kazakhstan further notes that, pursuant to 
contracts between Tenex and the uranium producers for the region during 
the POI, the manner in which the uranium producers were compensated for 
uranium provided to Tenex reveal that the uranium producers had no 
control over sales. Accordingly, Kazakhstan states that even if there 
was any evidence of sales from Kazakhstan to the United States during 
the POI, and Kazakhstan asserts there is no such evidence, under the 
circumstances it is not reasonable to conclude that Kazakhstan or its 
uranium producers bore any responsibility for those sales.
    Kazakhstan insists that ``where parties in the territory that is 
now the Republic of Kazakhstan were not even responsible for the sales 
of their merchandise at the time, proving the negative is virtually 
impossible.'' See Kazakhstan's Rebuttal Brief, at 17. Kazakhstan states 
that the Uranium Coalition has not disputed that no sales of subject 
merchandise produced in Kazakhstan were made to the United States 
during the POI. Kazakhstan argues that without sales, the Department 
has previously held that ``there are no United States prices with which 
to compare foreign market value, and, thus, no dumping margins.'' See 
Final Determination of No Sales at Less Than Fair Value: Ferrosilicon 
from Argentina, 58 FR 27534, 27535 (May 10, 1993). Kazakhstan argues 
that this conclusion flows directly from the definition of U.S. price. 
See 19 CFR 353.41(a). Kazakhstan argues there is no evidence of any 
sales, thus, the Department has no reasonable basis to conclude that 
there were any dumping margins and the investigation should be 
terminated.
    The Uranium Coalition argues that Kazakhstan's assertion, that it 
made no sales of subject merchandise to the United States during the 
POI, is based on the incorrect assumption that the investigation covers 
material sold by Kazakhstan or by a ``Kazakh entity.'' The Uranium 
Coalition argues that Kazakhstan should properly be considering 
material from Kazakhstan that is sold in the United States, and not 
considering the party that controlled production or sold the uranium, 
noting that the Department's instructions to U.S. Customs was ``for all 
manufacturers, producers, and exporters of uranium from Kazakhstan.'' 
The Uranium Coalition notes that the burden of proof is on Kazakhstan 
to produce evidence that there were no sales of subject merchandise to 
the United States during the POI. See Electrolytic Manganese Dioxide 
from Ireland; Final Determination of No Sales at Less Than Fair Value, 
54 FR 8776 (March 2, 1989); see also, Final Determination of No Sales 
at Less Than Fair Value: Ferrosilicon from Argentina, 58 FR 27534, 
27535 (May 10, 1993). The Uranium Coalition argues that Kazakhstan has 
failed to meet its burden by failing to provide verified evidence, 
noting that the Department's verification report states that Kazakhstan 
did not provide any evidence that could have resolved whether there 
were any shipments to the United States during the POI. Furthermore, 
the Uranium Coalition contends that it is highly likely that there were 
sales of uranium from Kazakhstan to the United States during the POI as 
the region now known as Kazakhstan accounted for 50 percent of all 
uranium production by the former Soviet republics in 1991. See the 
Uranium Coalition's Rebuttal Brief at 32.
    Department's Position: The Department agrees with the Uranium 
Coalition. The issue of continuing this proceeding with respect to the 
individual Republic was previously settled in court. See Tenex 
proceedings. Thus, the claim that Kazakhstan itself did not make any 
sales of uranium to the U.S. during the POI is irrelevant to this 
investigation. As the Uranium Coalition points out, Kazakhstan 
accounted for 50 percent of all uranium production of the Soviet Union. 
Furthermore, at verification, the Department found that Tenex and the 
Tselliny combinat had signed a commission agreement in 1990. See 
Verification Report at 3. This commission contract supports the 
contention that a regular channel of trade of natural uranium from 
Kazakhstan through Tenex to foreign locations had been established. The 
Department noted at verification that Kazakhstan's responses ``included 
shipping documents indicating that uranium produced in Kazakhstan may 
have been shipped to the United States by Tenex both before and during 
the POI.'' See Verification Report at 10-11. At verification, given 
this evidence, the Department attempted to confirm whether there were 
sales of subject merchandise to the United States during

[[Page 31188]]

the POI. While the Department requested additional data from Kazakhstan 
regarding U.S. sales, Kazakhstan failed to provide any data to clarify 
the existing evidence. Similarly, when the Department attempted to 
follow up on the Tenex-Tselliny combinat contract, Kazakhstan did not 
provide any supporting documentation, such as receipts or other 
documentation indicating payments received from Tenex pursuant to the 
contract. As a result, the Department was unable to examine key source 
data which could have supported Kazakhstan's claim of no shipments to 
the United States of subject merchandise during the POI. Evidence on 
the record indicates that uranium from what is now known as Kazakhstan 
was most likely shipped to the United States during the POI. Kazakhstan 
was unable to provide information countering this evidence. 
Accordingly, the Department must conclude as BIA that there were sales 
of subject merchandise to the United States during the POI and 
Kazakhstan did not provide data on those sales.
    Comment 8: Kazakhstan argues that the Department should use South 
Africa as the primary surrogate country. Kazakhstan argues that its 
surrogate value submission to the record, dated April 28, 1999, 
demonstrates that South Africa satisfies the statutory criteria for 
selection as the primary surrogate country, pursuant to Section 
773(c)(4) of the Act. Kazakhstan argues that the Department is 
permitted to select a different surrogate country in the final 
determination than selected in the preliminary determination, citing 
Tehnoimportexport v. United States, 766 F. Supp. 1169, 1175 (Ct. Int'l 
Trade 1991); and Kerr McGee Chemical Corp. v. United States, 985 F. 
Supp. 1166, 1180 (Ct. Int'l Trade 1997). Kazakhstan argues that in the 
preliminary determination, the Department used a single surrogate based 
on Soviet Union economic data because, lacking accurate or detailed 
information, the Department mistakenly assumed that the level of 
economic development of the former Soviet Union republics was 
essentially the same. However, Kazakhstan argues there is now enough 
information available to show the former republics' different levels of 
economic development, thus, the Department should not make the same 
assumption at the final determination. Kazakhstan argues that the 
Department has generally preferred using publicly available pricing 
information as the source of surrogate values as opposed to using 
proprietary information. Kazakhstan asserts that the only publicly 
available information on the record to value virtually every input used 
to produce subject merchandise is from South Africa. Accordingly, 
Kazakhstan argues that the Department should select South Africa as the 
primary surrogate country in the interest of calculating a fair and 
accurate margin in the final determination. Finally, Kazakhstan argues 
that the Department should not add freight charges to the valuation of 
any input for which freight-inclusive import values are used as 
surrogate values.
    The Uranium Coalition rebuts Kazakhstan's contention that South 
Africa should be the primary surrogate country by stating that the 
Department does not change surrogate countries after the preliminary 
determination unless it finds compelling reasons to do so. The Uranium 
Coalition argues that, to date, Kazakhstan has not provided such 
information. Further, the Uranium Coalition cites to the Addendum to 
Memorandum Regarding Choice of Surrogate Countries, Antidumping 
Investigation of Uranium from the Former Soviet Union (March 24, 1992), 
where the Department determined that the most appropriate course of 
action was to use the surrogate countries decided upon for the Soviet 
Union, for the NIS. The Uranium Coalition also contends that 
Kazakhstan's premise that the Department did not perform a surrogate 
country analysis is incorrect. Furthermore, the Uranium Coalition 
states that Kazakhstan's assertion that because Kazakhstan is not the 
Soviet Union that the Department's prior analysis is incorrect. 
Finally, the Uranium Coalition argues that the information on the 
record for South Africa is incomplete and unreliable in many respects.
    Department's Position: As the Department is relying on BIA for its 
calculation of the antidumping duty margin in this proceeding, this 
issue is moot. See Comment 2.

Suspension of Liquidation

    In accordance with Section 735(d) of the Act, the Department is 
instructing U.S. Customs to continue suspending liquidation of all 
unliquidated entries of uranium from Kazakhstan, as defined in the 
Scope of the Investigation section of this notice, that are entered or 
withdrawn from warehouse for consumption on or after January 11, 1999 
(the effective date of the termination of the Suspension Agreement). 
U.S. Customs shall continue to require a cash deposit or bond equal to 
115.82 percent ad valorem, the estimated weighted-average amount by 
which the foreign market value of the subject merchandise exceeds the 
United States price, for all manufacturers, producers and exporters of 
uranium from Kazakhstan. These suspension of liquidation instructions 
will remain in effect until further notice.

International Trade Commission Notification

    In accordance with Section 735(b)(2) of the Act, the Department has 
notified the International Trade Commission (``ITC'') of its final 
determination. The ITC will determine whether these imports are 
materially injuring, or threaten material injury to, the United States 
uranium industry. The ITC shall make this determination before the 
latter of: (1) 120 days after the effective date of the preliminary 
determination; or (2) 45 days after publication of the Department's 
final determination. If the ITC determines that such injury does not 
exist with respect to uranium, this proceeding will be terminated and 
all securities will be refunded or canceled. If the ITC determines that 
such injury exists with respect to uranium, the Department will issue 
an antidumping duty order directing U.S. Customs officials to assess 
antidumping duties on all imports of uranium from Kazakhstan for the 
period discussed above in the Suspension of Liquidation section of this 
notice.
    This determination is issued and published in accordance with 
Section 735(d) of the Act (19 U.S.C. 1673(d)) and 19 C.F.R. 
353.20(a)(4).

    Dated: June 3, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-14782 Filed 6-9-99; 8:45 am]
BILLING CODE 3510-DS-U