[Federal Register Volume 70, Number 43 (Monday, March 7, 2005)]
[Notices]
[Pages 10986-10989]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-926]



[[Page 10986]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[(C-428-829); (C-421-809); (C-412-821)]


Preliminary Results of Countervailing Duty Administrative 
Reviews: Low Enriched Uranium From Germany, the Netherlands, and the 
United Kingdom

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

SUMMARY: The Department of Commerce (the Department) is conducting 
administrative reviews of the countervailing duty (CVD) orders on low 
enriched uranium from Germany, the Netherlands, and the United Kingdom 
for the period January 1, 2003, through December 31, 2003. For 
information on the net subsidy for the reviewed companies, please see 
the ``Preliminary Results of Reviews'' section of this notice. 
Interested parties are invited to comment on these preliminary results. 
(See the ``Public Comment'' section of this notice).

EFFECTIVE DATE: March 7, 2005.

FOR FURTHER INFORMATION CONTACT: Darla Brown or Robert Copyak at (202) 
482-2786, AD/CVD Operations, Office 3, Import Administration, 
International Trade Administration, U.S. Department of Commerce, Room 
4012, 14th Street and Constitution Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

    On February 13, 2002, the Department published in the Federal 
Register the CVD orders on low enriched uranium from Germany, the 
Netherlands, and the United Kingdom. See Notice of Amended Final 
Determinations and Notice of Countervailing Duty Orders: Low Enriched 
Uranium from Germany, the Netherlands and the United Kingdom, 67 FR 
6688 (February 13, 2002) (Amended Final). On February 3, 2004, the 
Department published a notice of opportunity to request an 
administrative review of these CVD orders. See Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation; 
Opportunity To Request Administrative Review, 69 FR 5125 (February 3, 
2004). On February 25, 2004, we received a timely request for review 
from Urenco Ltd. (Urenco), the producer and exporter of subject 
merchandise. We note that this request covered all subject merchandise 
produced by Urenco in Germany, the Netherlands, and the United Kingdom. 
On February 26, 2004, we received a timely request for review from 
petitioners.\1\ On March 26, 2004, the Department initiated 
administrative reviews of the CVD orders on low enriched uranium from 
Germany, the Netherlands, and the United Kingdom. See Initiation of 
Antidumping and Countervailing Duty Administrative Reviews and Requests 
for Revocation in Part, 69 FR 15788 (March 26, 2004).
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    \1\ Petitioners are the United States Enrichment Corporation 
(USEC) and USEC Inc.
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    On April 13, 2004, the Department issued a questionnaire to the 
Government of the United Kingdom (UKG) and Urenco (Capenhurst) Ltd. 
(UCL), Urenco's producer of subject merchandise in the United Kingdom. 
Also on April 13, 2004, the Department issued a separate questionnaire 
to the Government of the Netherlands (GON) and Urenco Nederland B.V. 
(UNL), Urenco's producer of subject merchandise in the Netherlands. On 
April 16, 2004, the Department issued a questionnaire to the Government 
of Germany (GOG) and Urenco Deutschland GmbH (UD), Urenco's producer of 
subject merchandise in Germany.
    We received questionnaire responses from the GON, the UKG, UCL, and 
UNL on May 20, 2004, from the GOG on May 14, 2004, and from UD on May 
24, 2004.
    On October 19, 2004, we issued an extension of the due date for 
these preliminary results from October 31, 2004, to February 28, 2005. 
See Low Enriched Uranium from France, Germany, the Netherlands, and the 
United Kingdom: Extension of Preliminary Results of Countervailing Duty 
Administrative Reviews, 69 FR 61470 (October 19, 2004) (Extension 
Notice).
    In accordance with 19 CFR 351.213(b), these reviews cover only 
those producers or exporters for which a review was specifically 
requested. The companies subject to these reviews are UD, UNL, UCL, 
Urenco Ltd., and Urenco Inc. These reviews cover four programs.

Scope of the Order

    The product covered by these orders is all low enriched uranium 
(LEU). LEU is enriched uranium hexafluoride (UF6) with a 
U235 product assay of less than 20 percent that has not been 
converted into another chemical form, such as UO2, or 
fabricated into nuclear fuel assemblies, regardless of the means by 
which the LEU is produced (including LEU produced through the down-
blending of highly enriched uranium).
    Certain merchandise is outside the scope of these orders. 
Specifically, these orders do not cover enriched uranium hexafluoride 
with a U235 assay of 20 percent or greater, also known as 
highly enriched uranium. In addition, fabricated LEU is not covered by 
the scope of these orders. For purposes of these orders, fabricated 
uranium is defined as enriched uranium dioxide (UO2), 
whether or not contained in nuclear fuel rods or assemblies. Natural 
uranium concentrates (U3O8) with a 
U235 concentration of no greater than 0.711 percent and 
natural uranium concentrates converted into uranium hexafluoride with a 
U235 concentration of no greater than 0.711 percent are not 
covered by the scope of these orders.
    Also excluded from these orders is LEU owned by a foreign utility 
end-user and imported into the United States by or for such end-user 
solely for purposes of conversion by a U.S. fabricator into uranium 
dioxide (UO2) and/or fabrication into fuel assemblies so 
long as the uranium dioxide and/or fuel assemblies deemed to 
incorporate such imported LEU (i) remain in the possession and control 
of the U.S. fabricator, the foreign end-user, or their designed 
transporter(s) while in U.S. customs territory, and (ii) are re-
exported within eighteen (18) months of entry of the LEU for 
consumption by the end-user in a nuclear reactor outside the United 
States. Such entries must be accompanied by the certifications of the 
importer and end-user.
    The merchandise subject to these orders is currently classifiable 
in the Harmonized Tariff Schedule of the United States (HTSUS) at 
subheading 2844.20.0020. Subject merchandise may also enter under 
2844.20.0030, 2844.20.0050, and 2844.40.00. Although the HTSUS 
subheadings are provided for convenience and customs purposes, the 
written description of the merchandise is dispositive.

Period of Review

    The period of review (POR) for these administrative reviews is 
January 1, 2003, through December 31, 2003.

International Consortium

    In our Notice of Final Affirmative Countervailing Duty 
Determinations: Low Enriched Uranium From Germany, the Netherlands, and 
the United Kingdom, 66 FR 65903 (December 21, 2001) (LEU Final) and 
accompanying Issues and Decision Memorandum (LEU Decision Memo) at 
Comment 2: International Consortium Provision, we found that the Urenco 
Group operates as an international consortium within the meaning of 
section 701(d) of the Tariff Act of 1930, as amended (the Act). No new 
information or evidence of changed circumstances has been presented 
since

[[Page 10987]]

the LEU Final which would persuade us to reconsider this conclusion. 
Therefore, we continue to find that the Urenco Group of companies 
constitutes an international consortium. Accordingly, we have continued 
to cumulate all countervailable subsidies received by the member 
companies from the GOG, the GON, and the UKG, pursuant to section 
701(d) of the Act.

Subsidies Valuation Information

Allocation Period

    Under section 351.524(d)(2) of the Department's regulations, we 
will presume the allocation period for non-recurring subsidies to be 
the average useful life (AUL) of renewable physical assets for the 
industry concerned, as listed in the Internal Revenue Service's (IRS) 
1977 Class Life Asset Depreciation Range System (IRS Tables), as 
updated by the Department of the Treasury. The presumption will apply 
unless a party claims and establishes that these tables do not 
reasonably reflect the AUL of the renewable physical assets for the 
company or industry under investigation, and the party can establish 
that the difference between the company-specific or country-wide AUL 
for the industry under investigation is significant. In this instance, 
however, the IRS Tables do not provide a specific asset guideline class 
for the uranium enrichment industry.
    In the LEU Final, we derived an AUL of 10 years for the Urenco 
Group (see LEU Decision Memo at Comment 3: Average Useful Life). The 
AUL issue is currently subject to litigation related to the 
investigation. Because there has been no final and conclusive court 
decision changing the AUL, and no new information or evidence of 
changed circumstances has been submitted, for these reviews, we 
continue to apply the 10-year AUL that was calculated in the LEU Final.

Programs Preliminarily Determined Not To Confer a Benefit From the 
Government of Germany

1. Enrichment Technology Research and Development Program

    In the LEU Final, we determined that, under this program, the GOG 
promoted the research and development (R&D) of uranium enrichment 
technologies. The Federal Ministry for Research and Technology provided 
Uranitisotopentrennungsgeselleschaft mbH (Uranit) (the privately-held 
German arm of the Urenco Group) a series of grant disbursements for the 
funding of R&D projects. The funds were provided to encourage 
continuous improvements of centrifuge technologies and to fund the 
research of lasers and other advanced technologies. The grant 
disbursements under this program were made during the years 1980 
through 1993.
    Assistance under this program was provided for in two agreements 
and two sets of guidelines: the ``Financing Agreement,'' the 
``Operating Agreement,'' the ``Terms and Conditions for Allocations on 
a Cost Basis to Companies in Industry for Research and Development 
Projects'' (BKFT75), and the ``Auxiliary Terms and Conditions for 
Grants on a Cost Basis from the Federal Ministry for Research and 
Development to Companies in Industry for Research and Development 
Projects'' (NKFT88), respectively. According to Article 4, Section 6, 
of the ``Financing Agreement,'' the funds provided to Uranit under this 
agreement had contingent repayment obligations. The funds were 
repayable within five years of disbursement, contingent upon the 
company's earnings. If the funds were not repaid within five years, 
then the repayment obligation lapsed. The funds provided under the 
``Operating Agreement'' were not repayable. Uranit also received funds 
for laser R&D pursuant to the terms and conditions of the BKFT75 and 
NKFT88.
    In the LEU Final, we determined that the assistance provided under 
this program constitutes countervailable subsidies within the meaning 
of section 771(5) of the Act. Specifically, we found that the grant 
disbursements constitute a financial contribution and confer a benefit, 
as described in sections 771(5)(B) and 771(5)(D)(i) of the Act. We 
further found that this program is specific under section 771(5A)(D)(i) 
of the Act because the provision of assistance under this program was 
limited to one company. In addition, we found that the program provided 
non-recurring benefits under section 351.524(c)(2) of the Department's 
regulations because the assistance was made pursuant to specific 
government agreements and was not provided under a program that would 
provide assistance on an ongoing basis from year to year. See LEU 
Decision Memo at the ``Enrichment Technology Research and Development 
Program'' section. No new information or evidence of changed 
circumstances has been presented to warrant reconsideration of this 
determination; therefore, for these preliminary results, we continue to 
determine that this program is countervailable.
    In the first administrative reviews, we determined that grant 
disbursements made under this program prior to 1992, including the 1985 
disbursement made under the ``Financing Agreement,'' no longer provided 
a benefit during those reviews'' POR, i.e., January 14, 2001, through 
December 31, 2002. We also determined that only the grant disbursements 
made in 1992 and 1993 continued to provide benefits during the 2001-
2002 POR. See Final Results of Countervailing Duty Administrative 
Reviews: Low Enriched Uranium From Germany, the Netherlands, and the 
United Kingdom, 69 FR 40869 (July 7, 2004) (2001-2002 LEU) and the 
accompanying Issues and Decision Memorandum (2001-2002 LEU Decision 
Memo) at the ``Analysis of Programs'' section.
    In 2001-2002 LEU, we determined that Urenco would not benefit from 
Enrichment Technology Research and Development Program subsidies from 
the GOG after 2002 because the grants were fully allocated at the end 
of 2002. See 2001-2002 LEU Decision Memo at Comment 3: Cash Deposit 
Rate for Future Urenco Imports.
    Because the grant disbursements under this program were made 
between 1980 and 1993, the 10-year allocation period for each grant 
disbursement expired prior to the POR. Therefore, we preliminarily 
determine that each of these grants has been fully allocated prior to 
the POR, and, therefore, no benefit was received under this program 
during the POR.

2. Forgiveness of Centrifuge Enrichment Capacity Subsidies

    In accordance with the ``Risk Sharing Agreement'' (RSA) and the 
``Profit Sharing Agreement'' (PSA) signed between the GOG and Uranit, 
the GOG agreed to provide funds to UD to support the promotion of an 
uranium enrichment industry. These two agreements were signed on July 
18, 1975, and the GOG provided a total of DM 338.3 million from 1975 to 
1993 to Uranit in support of the Treaty of Almelo's goal of creating 
and promoting the enrichment industry.\2\ Under the terms of the 
agreements, repayment of the funds was conditional and based upon the 
financial performance of the company. However, in no case was the 
amount of the total repayments to exceed twice the amount of the funds 
provided to UD by the GOG.
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    \2\ In March 1970, the GOG, the GON, and the UKG signed the 
Treaty of Amelo, which became effective in July 1971. The purpose of 
the treaty was for the three governments to collaborate in the 
development and exploitation of the gas centrifuge process for 
producing enriched uranium. Prior to 1971, the centrifuge R&D 
programs in each country were independent.
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    In 1987, Uranit signed a new agreement with the GOG. This

[[Page 10988]]

``Adjustment Agreement'' stipulated that Uranit would repay the GOG for 
the DM 333.8 million in centrifuge capacity assistance and an 
additional agreed-upon DM 31.7 million which was not related to the 
centrifuge subsidies. Prior to the 1993 merger of the Urenco Group, the 
GOG and Uranit negotiated a basis to terminate the repayment 
obligations of the RSA and the PSA. Based upon these negotiations, a 
``Termination Agreement'' was signed on July 13, 1993, and amended on 
October 27, 1993. Prior to the Termination Agreement, Uranit had made 
repayments totaling DM 5.6 million. Under the terms of the Termination 
Agreement, Uranit was to pay the GOG DM 101.1 million, thus terminating 
the repayment obligations stipulated in the Adjustment Agreement. 
Uranit made this DM 101.1 million payment on July 1, 1994.
    In the LEU Final, we determined this program to be countervailable. 
We found that assistance provided under this program to Uranit was 
specific under section 771(5A)(D)(i) of the Act because the program was 
limited to one company. In addition, we determined that a financial 
contribution was provided under section 771(5)(D)(i) of the Act. We 
also determined that a benefit was provided to the company, within the 
meaning of section 771(5)(E) of the Act to the extent that the 
repayments made to the GOG were less than the amount of assistance 
provided to the company under this program. See LEU Decision Memo at 
the ``Forgiveness of Centrifuge Enrichment Capacity Subsidies'' 
section. No new information or evidence of changed circumstances has 
been presented to warrant reconsideration of this determination; 
therefore, for these preliminary results, we continue to determine that 
this program is countervailable.
    In the LEU Final, we determined that this program provided a grant 
under 19 CFR 351.505(d)(2) because there was a waiver of a contingent 
liability. We determined the adjusted grant amount to be equal to the 
difference between the original amount of centrifuge subsidies (DM 
338.3 million) and the total amount of repayment attributable to those 
centrifuge subsidies (DM 97.556 million), which we calculated to be DM 
240.744 million. We also determined that the first year of allocation 
was 1993, the year in which the repayment obligation stipulated in the 
Adjustment Agreement was waived. No new information or evidence of 
changed circumstances has been presented to warrant reconsideration of 
this determination.
    In 2001-2002 LEU, we determined that Urenco would not benefit from 
Forgiveness of Centrifuge Enrichment Capacity subsidies from the GOG 
after 2002 because the grants were fully allocated at the end of 2002. 
See 2001-2002 LEU Decision Memo at Comment 3: Cash Deposit Rate for 
Future Urenco Imports. Therefore, we preliminarily determine that the 
grant has been fully allocated prior to the POR, and, therefore, no 
benefit was received under this program during the POR.

Programs Preliminarily Determined To Be Not Used From the Government of 
the Netherlands

1. Wet Investeringsrekening Law (WIR)

    In the LEU Final, we found that the WIR program was not used. In 
the instant administrative reviews, we asked UNL if it received or used 
benefits under this program during the POR. UNL responded that it did 
not apply for, use, or receive benefits from the WIR program during the 
POR. Furthermore, UNL reported that the WIR program ended in 1988 and 
investment credits could only be claimed through the 1989 tax year. 
Therefore, we preliminarily find that the WIR was not used during the 
POR.

2. Regional Investment Premium

    In the Amended Final, we found that, after correcting for a 
ministerial error in the LEU Final, the subsidy from the Regional 
Investment Program (IPR) was less than 0.5 percent of the Urenco 
Group's combined sales and, in accordance with 19 CFR 351.524(b)(2), 
was allocable to the year of receipt (1985). As a result of this 
revision, the net subsidy for this program decreased from 0.03 percent 
ad valorem to 0.00 percent ad valorem. See Amended Final, 67 FR 6688. 
Moreover, in the instant reviews, UNL reported that it did not apply 
for nor did it use the IPR program during the POR. Therefore, we 
preliminarily determine that UNL did not use the IPR program during the 
POR.

Programs From the Government of the United Kingdom

    We preliminarily determine that UCL neither received any subsidies 
nor benefitted from any subsides during the POR.

Preliminary Results of Reviews

    In accordance with 19 CFR 351.221(b)(4)(i), we calculated an 
individual subsidy rate for UD, UNL, UCL, Urenco Ltd., and Urenco Inc, 
the only producers/exporters subject to these administrative reviews, 
for the POR, i.e., calendar year 2003. We preliminarily determine that 
the total estimated net countervailable subsidy rate is 0.00 percent ad 
valorem.
    If the final results of these reviews remain the same as these 
preliminary results, the Department intends to instruct U.S. Customs 
and Border Protection (CBP), within 15 days of publication of the final 
results of these reviews, to liquidate without regard to countervailing 
duties all shipments of subject merchandise from the producers/
exporters under review, entered, or withdrawn from warehouse, for 
consumption during the POR. Should the final results of these reviews 
remain the same as these preliminary results, the Department also will 
instruct CBP not to collect cash deposits of estimated countervailing 
duties on all shipments of the subject merchandise from the reviewed 
entity, entered, or withdrawn from warehouse, for consumption on or 
after the date of publication of the final results of these reviews.
    Because the Uruguay Round Agreements Act (URAA) replaced the 
general rule in favor of a country-wide rate with a general rule in 
favor of individual rates for investigated and reviewed companies, the 
procedures for establishing countervailing duty rates, including those 
for non-reviewed companies, are now essentially the same as those in 
antidumping cases, except as provided for in section 777A(e)(2)(B) of 
the Act. The requested review will normally cover only those companies 
specifically named. See 19 CFR 351.213(b). Pursuant to 19 CFR 
351.212(c), for all companies for which a review was not requested, 
duties must be assessed at the cash deposit rate, and cash deposits 
must continue to be collected, at the rate previously ordered. As such, 
the countervailing duty cash deposit rate applicable to a company can 
no longer change, except pursuant to a request for a review of that 
company. See Federal-Mogul Corporation and The Torrington Company v. 
United States, 822 F. Supp. 782 (CIT 1993), and Floral Trade Council v. 
United States, 822 F. Supp. 766 (CIT 1993) (interpreting 19 CFR 
353.22(e), the old antidumping regulation on automatic assessment, 
which is identical to the current regulation, 19 CFR 
351.212(c)(1)(ii)). Therefore, the cash deposit rates for all companies 
except those covered by these reviews will be unchanged by the results 
of these reviews.
    We will instruct CBP to continue to collect cash deposits for non-
reviewed companies at the most recent company-specific or country-wide 
rate applicable to the company. Accordingly, the cash

[[Page 10989]]

deposit rate that will be applied to a non-reviewed company covered by 
these orders will be the rate for that company established in the most 
recently completed administrative proceeding. See Amended Final, 67 FR 
6688. These cash deposit rates shall apply to all non-reviewed 
companies until a review of a company assigned these rates is 
requested.

Public Comment

    Pursuant to 19 CFR 351.224(b), the Department will disclose to 
parties to the proceeding any calculations performed in connection with 
these preliminary results within five days after the date of the public 
announcement of this notice. Pursuant to 19 CFR 351.309, interested 
parties may submit written comments in response to these preliminary 
results. Unless otherwise indicated by the Department, case briefs must 
be submitted within 30 days after the publication of these preliminary 
results. Rebuttal briefs, which are limited to arguments raised in case 
briefs, must be submitted no later than five days after the time limit 
for filing case briefs, unless otherwise specified by the Department. 
Parties who submit argument in this proceeding are requested to submit 
with the argument: (1) A statement of the issue, and (2) a brief 
summary of the argument. Parties submitting case and/or rebuttal briefs 
are requested to provide the Department copies of the public version on 
disk. Case and rebuttal briefs must be served on interested parties in 
accordance with 19 CFR 351.303(f). Also, pursuant to 19 CFR 351.310, 
within 30 days of the date of publication of this notice, interested 
parties may request a public hearing on arguments to be raised in the 
case and rebuttal briefs. Unless the Secretary specifies otherwise, the 
hearing, if requested, will be held two days after the date for 
submission of rebuttal briefs.
    Representatives of parties to the proceeding may request disclosure 
of proprietary information under administrative protective order no 
later than 10 days after the representative's client or employer 
becomes a party to the proceeding, but in no event later than the date 
the case briefs, under 19 CFR 351.309(c)(ii), are due. The Department 
will publish the final results of these administrative reviews, 
including the results of its analysis of issues raised in any case or 
rebuttal brief or at a hearing.
    These administrative reviews and this notice are issued and 
published in accordance with sections 751(a)(1) and 777(i)(1) of the 
Act.

    Dated: February 28, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-926 Filed 3-4-05; 8:45 am]
BILLING CODE 3510-DS-P