[Federal Register Volume 70, Number 43 (Monday, March 7, 2005)]
[Notices]
[Pages 10989-10992]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-927]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-427-819]


Preliminary Results of Countervailing Duty Administrative Review: 
Low Enriched Uranium From France

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

SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the countervailing duty order on low enriched 
uranium from France for the period January 1, 2003, through December 
31, 2003. For information on the net subsidy for the reviewed company, 
please see the ``Preliminary Results of Review'' section of this 
notice. Interested parties are invited to comment on these preliminary 
results. (See the ``Public Comment'' section of this notice).

EFFECTIVE DATE: March 7, 2005.

FOR FURTHER INFORMATION CONTACT: Kristen Johnson at (202) 482-4793, AD/
CVD Operations, Office 3, Import Administration, International Trade 
Administration, U.S. Department of Commerce, Room 4014, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

    On February 13, 2002, the Department published in the Federal 
Register the countervailing duty order on low enriched uranium from 
France. See Amended Final Determination and Notice of Countervailing 
Duty Order: Low Enriched Uranium from France, 67 FR 6689 (February 13, 
2002) (Amended LEU Final Determination). On February 3, 2004, the 
Department published an opportunity to request an administrative review 
of this countervailing duty order. See Antidumping or Countervailing 
Duty Order, Finding, or Suspended Investigation: Opportunity to Request 
an Administrative Review, 69 FR 5125 (February 3, 2004). We received a 
timely request for review of Eurodif S.A. (Eurodif)/Compagnie Generale 
Des Matieres Nucleaires (COGEMA), the producer/exporter of subject 
merchandise covered under this review by both respondents and 
petitioners.\1\ On March 26, 2004, the Department published the 
initiation of the administrative review of the countervailing duty 
order on low enriched uranium from France, covering the January 1, 
2003, through December 31, 2003 period of review (POR). See Initiation 
of Antidumping and Countervailing Duty Administrative Reviews and 
Revocation in Part, 68 FR 15788 (March 26, 2004).
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    \1\ Petitioners are USEC Inc. and its wholly owned subsidiary, 
United States Enrichment Corporation.
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    On April 21, 2004, the Department issued a questionnaire to the 
Government of France (GOF) and Eurodif/COGEMA. On June 1, 2004, the 
Department received questionnaire responses from the GOF and Eurodif/
COGEMA. On October 19, 2004, the Department published in the Federal 
Register an extension of the deadline for the preliminary results. See 
Low Enriched Uranium From France, Germany, the Netherlands, and the 
United Kingdom: Extension of Time Limit for Preliminary Results of 
Countervailing Duty Administrative Reviews, 69 FR 61470 (October 19, 
2004). On October 4, 2004, and January 13, 2005, we issued supplemental 
questionnaires to respondents. On November 1, 2004, and January 28, 
2005, we received supplemental responses from respondents.
    In accordance with 19 CFR 351.213(b), this review covers only those 
producers or exporters for which a review was specifically requested. 
The company subject to this review is Eurodif/COGEMA. This review 
covers two programs.

Scope of Order

    The product covered by this order is all low enriched uranium 
(LEU). LEU is enriched uranium hexafluoride (UF6) with a U\235\ product 
assay of less than 20 percent that has not been converted into another 
chemical form, such as UO2, or fabricated into nuclear fuel 
assemblies, regardless of the means by which the LEU is produced 
(including LEU produced through the down-blending of highly enriched 
uranium).
    Certain merchandise is outside the scope of this order. 
Specifically, this order does not cover enriched uranium hexafluoride 
with a U\235\ assay of 20 percent or greater, also known as highly 
enriched uranium. In addition, fabricated LEU is not covered by the 
scope of this order. For purposes of this order, fabricated uranium is 
defined as enriched uranium dioxide (UO2), whether or not 
contained in nuclear fuel rods or assemblies. Natural uranium

[[Page 10990]]

concentrates (U3O8) with a U\235\ concentration of no greater than 
0.711 percent and natural uranium concentrates converted into uranium 
hexafluoride with a U\235\ concentration of no greater than 0.711 
percent are not covered by the scope of this order.
    Also excluded from this order is LEU owned by a foreign utility 
end-user and imported into the United States by or for such end-user 
solely for purposes of conversion by a U.S. fabricator into uranium 
dioxide (UO2) and/or fabrication into fuel assemblies so 
long as the uranium dioxide and/or fuel assemblies deemed to 
incorporate such imported LEU (I) remain in the possession and control 
of the U.S. fabricator, the foreign end-user, or their designated 
transporter(s) while in U.S. customs territory, and (ii) are re-
exported within eighteen (18) months of entry of the LEU for 
consumption by the end-user in a nuclear reactor outside the United 
States. Such entries must be accompanied by the certifications of the 
importer and end user.
    The merchandise subject to this order is currently classifiable in 
the Harmonized Tariff Schedule of the United States (HTSUS) at 
subheading 2844.20.0020. Subject merchandise may also enter under 
2844.20.0030, 2844.20.0050, and 2844.40.00. Although the HTSUS 
subheadings are provided for convenience and customs purposes, the 
written description of the merchandise is dispositive.

Period of Review

    The POR for which we are measuring subsidies is January 1, 2003, 
through December 31, 2003.

Company History

    Eurodif was formed in 1973, by French and foreign government 
agencies to provide a secure source of LEU in order to facilitate the 
development of nuclear energy programs in participating countries. 
During the POR, Eurodif was 44.65 percent-owned by COGEMA, which itself 
is principally owned by a subsidiary of the Commissariat d'Energie 
Atomique, an agency of the GOF. Further, Eurodif was 25 percent-owned 
by SOFIDIF, a French company that is 60 percent-owned by COGEMA, 
thereby effectively placing COGEMA's ownership of Eurodif at 
approximately 60 percent during the POR. The remaining major 
shareholders of Eurodif during the POR were ENUSA, an entity of the 
Spanish government, SYNATOM, an entity of the Belgian government, and 
ENEA, an entity of the Italian government.

Programs Preliminarily Determined To Confer Subsidies

1. Purchases at Prices That Constitute ``More Than Adequate 
Remuneration''

    Eurodif provides LEU to Electricite de France (EdF), a wholly owned 
French government agency that supplies, imports, and exports 
electricity. EdF is the major supplier of electricity in France, and is 
regulated by the Gas, Electricity, and Coal Department of the Ministry 
of Industry and the Budget and Treasury Departments of the Ministry of 
Finance. To date, EdF has entered into three long-term contracts with 
Eurodif to secure LEU. The first contract was negotiated in 1975; 
Eurodif began enrichment at its Georges-Besse gaseous diffusion 
facility in 1979. Eurodif and EdF entered into a subsequent contract in 
1995, under which the POR purchases were made.
    In the Final Affirmative Countervailing Duty Determination: Low 
Enriched Uranium from France, 66 FR 65901 (December 21, 2001) (LEU 
Final Determination), and the Final Results of Countervailing Duty 
Administrative Review: Low Enriched Uranium from France, 69 FR 40871 
(July 7, 2004) (LEU Final Results), we found this program to be 
countervailable. The facts on which this determination was made have 
not changed. EdF is still owned by the GOF, and because EdF is 
purchasing a good from Eurodif, a financial contribution is being 
provided under section 771(5)(D)(iv) of the Tariff Act of 1930, as 
amended (the Act). The program is specific under section 771(5A)(D)(i) 
of the Act because it is available only to Eurodif.
    Under section 771(5)(E)(iv) of the Act, a countervailable benefit 
may be provided by a government's purchase of a good for ``more than 
adequate remuneration.'' Pursuant to section 771(5)(E)(iv) of the Act, 
the adequacy of remuneration will be determined in relation to the 
prevailing market conditions for the good being purchased in the 
country which is subject to the review. Therefore, in order to 
determine whether the prices paid by EdF constitute ``more than 
adequate remuneration,'' we compared the prices paid by EdF to Eurodif 
with the prices paid by EdF to its other suppliers.
    Due to the difference in the pricing structure between EdF and 
Eurodif, as compared with the pricing structure between EdF and its 
other suppliers, it is necessary to make certain adjustments for the 
comparison. Unlike most other customers, EdF provides its own energy 
for Eurodif to use when producing LEU. Beginning in 2002, EdF started 
to pay Eurodif in energy for the energy that Eurodif uses to produce 
EdF's LEU. Eurodif charges EdF, however, for the operational costs 
associated with the production of the LEU. As EdF does not supply 
electricity to its other LEU suppliers, these suppliers charge EdF a 
single price per separative work unit (SWU).\2\ Thus, we have used this 
single price per-SWU as our benchmark price. In order to make a proper 
comparison between the benchmark price and the actual price (i.e., the 
price paid by EdF to Eurodif), we included both an operational and 
energy price paid by EdF to Eurodif.
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    \2\ The ``separative work unit'' or (SWU) is the unit of measure 
of effort required to carry out isotopic separation of the uranium 
from its natural state to the concentration or ``assay'' required 
for power plant use.
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    As part of the arrangement for obtaining LEU, customers often 
provide an amount of natural uranium equal to that which theoretically 
went into the LEU they are purchasing. The record does not contain 
information on the value of the natural uranium provided by EdF or 
other customers to Eurodif. In the ``Issues and Decision Memorandum 
from Bernard T. Carreau, Deputy Assistant Secretary for AD/CVD 
Enforcement II to Faryar Shirzad, Assistant Secretary for Import 
Administration concerning the Final Affirmative Countervailing Duty 
Determination: Low Enriched Uranium from France--Calendar Year 1999'' 
(Final Determination Decision Memorandum) dated December 13, 2001, we 
assumed that the value of all natural uranium is the same (see 
discussion at page 5). In making purchase comparisons in this review, 
we continue to assume that the value of all natural uranium is the same 
in instances where EdF supplied its own feed material for enrichment. 
Thus, we have not included a value for the natural uranium component of 
the LEU delivered to EdF by Eurodif.
    In order to determine whether a benefit was provided to Eurodif/
COGEMA during the POR, we calculated a per-SWU price for both the 
energy and operational components of the LEU purchased by EdF from 
Eurodif. See the February 28, 2005, Memorandum concerning the 
Calculations for the Notice of Preliminary Countervailing Duty Results: 
Low Enriched Uranium from France (Preliminary Calculations 
Memorandum).\3\ After adding these two components together, we compared 
the per-SWU price paid to Eurodif by EdF

[[Page 10991]]

in 2003, with the per-SWU price paid by EdF to its other LEU suppliers 
in 2003. Based on our analysis, we preliminarily determine that the 
per-SWU price paid by EdF to Eurodif was not higher than the per-SWU 
price paid by EdF to its other suppliers and, therefore, EdF's LEU 
purchases from Eurodif did not confer a countervailable benefit during 
the POR.
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    \3\ A public version of the document is available on the public 
record in the Central Records Unit (CRU) located in the main 
Commerce Building in room B-099.
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    We, however, did calculate a countervailable benefit from a sale 
pursuant to the contract listed in Exhibit 21 of Eurodif/COGEMA's June 
1, 2004, questionnaire response.\4\ Consistent with our approach in the 
LEU Final Results, we expensed the benefit in the year of receipt. For 
a further discussion, see the Preliminary Calculations Memorandum. We 
then multiplied the benefit amount by the sales of subject merchandise 
to the United States divided by total sales, and then divided that 
result by sales that entered U.S. customs territory during 2003. Thus, 
we calculated the ad valorem rate for this program using the following 
formula:
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    \4\ The details of this transaction are business proprietary.
    [GRAPHIC] [TIFF OMITTED] TN07MR05.000
    
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Where:

A = Ad Valorem Rate
B = Subsidy Benefit
C = Sales of Subject Merchandise to the United States during the 
Calendar Year
D = Total Sales during the Calendar Year (including COGEMA sales on 
behalf of Eurodif)
E = Sales that Entered U.S. customs territory during the Calendar Year

    On this basis, we preliminarily determine the countervailable 
subsidy from this program to be less than 0.005 percent ad valorem.\5\
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    \5\ Where the countervailable subsidy rate for a program is less 
than 0.005 percent, the program is not included in the total 
countervailing duty rate. See, e.g., the Other Programs Determined 
to Confer Subsidies section of the Issues and Decision Memorandum 
that accompanied the Final Results of Administrative Review: Certain 
Softwood Lumber Products from Canada, 69 FR 75917 (December 20, 
2004).
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2. Exoneration/Reimbursement of Corporate Income Taxes

    Under a specific governmental agreement entered into upon Eurodif's 
creation, Eurodif is only liable for income taxes on the portion of its 
income relating to the percentage of its private ownership. Eurodif is 
fully exonerated from payment of corporate income taxes corresponding 
to the percentage of its foreign government ownership and is eligible 
for a reimbursement of the amount of corporate income taxes 
corresponding to the percentage of its French government ownership. In 
the LEU Final Determination and LEU Final Results, we found this 
program to be countervailable. No new information has been provided in 
this review to warrant reconsideration of our determination.
    During the POR, (i.e., calendar year 2003), Eurodif filed its 2002 
corporate income tax return. Based on the governmental tax agreement, 
Eurodif was exonerated from a portion of its 2002 income taxes filed 
during the POR. Eurodif was also reimbursed that portion of its 2002 
income taxes attributable to its percentage of French government 
ownership during the POR. This tax exemption and reimbursement 
constitute a financial contribution within the meaning of section 
771(5)(D)(ii) of the Act. Further, because the tax exemption and 
reimbursement is limited to Eurodif, the benefit is specific in 
accordance with section 771(5A)(D)(i) of the Act.
    In accordance with 19 CFR 351.509(b), we calculated the benefit 
under this program by determining the amount of corporate income taxes 
that Eurodif would have otherwise paid, absent the program, on the tax 
return it filed during the POR. Specifically, we added the amount of 
exonerated taxes and the amount of reimbursable taxes during the POR. 
We then divided the total benefit amount by Eurodif's total sales for 
calendar year 2003. We adjusted Eurodif's sales denominator using the 
methodology described in the ``Purchases at Prices that Constitute 
`More Than Adequate Remuneration' '' section, above. This methodology 
is consistent with our approach in the LEU Final Results. On this 
basis, we preliminarily determine a net countervailable subsidy of 1.23 
percent ad valorem under this tax program.

Preliminary Results of Review

    In accordance with section 703(d)(1)(A)(i) of the Act, we have 
calculated an individual rate for Eurodif/COGEMA for 2003. We 
preliminarily determine that the total countervailable subsidy rate is 
1.23 percent ad valorem.
    If the final results of this review remain the same as these 
preliminary results, the Department intends to instruct the U.S. 
Customs and Border Protection (CBP), within 15 days of publication of 
the final results of this review, to liquidate shipments of LEU from 
France by Eurodif/COGEMA entered, or withdrawn from warehouse, for 
consumption from January 1, 2003, through December 31, 2003, at 1.23 
percent ad valorem of the f.o.b. invoice price. The Department also 
intends to instruct CBP to collect cash deposits of estimated 
countervailing duties at 1.23 percent ad valorem of the f.o.b. invoice 
price on all shipments of the subject merchandise from Eurodif/COGEMA 
entered, or withdrawn from warehouse, for consumption on or after the 
date of publication of the final results of this review.
    Because the URAA replaced the general rule in favor of a country-
wide rate with a general rule in favor of individual rates for 
investigated and reviewed companies, the procedures for establishing 
countervailing duty rates, including those for non-reviewed companies, 
are now essentially the same as those in antidumping cases, except as 
provided for in section 777A(e)(2)(B) of the Act. The requested review 
will normally cover only those companies specifically named. See 19 CFR 
351.213(b). Pursuant to 19 CFR 351.212(c), for all companies for which 
a review was not requested, duties must be assessed, and cash deposits 
must continue to be collected, at the cash deposit rate previously 
ordered. As such, the countervailing duty cash deposit rate applicable 
to a company can no longer change, except pursuant to a request for a 
review of that company. See Federal-Mogul Corporation and The 
Torrington Company v. United States, 822 F.Supp. 782 (CIT 1993) and 
Floral Trade Council v. United States, 822 F.Supp. 766 (CIT 1993) 
(interpreting 19 CFR 353.22(e), the antidumping regulation on automatic 
assessment, which is identical to 19 CFR 351.212(c)(ii)(2). Therefore, 
the cash deposit rates for all companies except those covered by this 
review will be unchanged by the results of this review.
    We will instruct CBP to continue to collect cash deposits for non-
reviewed companies at the most recent company-specific or country-wide 
rate applicable to the company. Accordingly, the cash deposit rates 
that will be applied to non-reviewed companies covered by this order 
will be the rate for that company established in the most recently 
completed administrative proceeding. See Amended LEU Final 
Determination, 67 FR 6689 (February 13, 2002). These rates shall apply 
to all non-reviewed companies until a review of a company assigned 
these rates is requested.
    While the countervailing duty deposit rate for Eurodif/COGEMA may 
change as a result of this administrative review, we have been enjoined 
from liquidating any entries of the subject merchandise.

[[Page 10992]]

Consequently, we do not intend to issue liquidation instructions for 
these entries until such time as the injunctions, issued on June 24, 
2002, and November 1, 2004, are lifted.

Public Comment

    Pursuant to 19 CFR 351.224(b), the Department will disclose to 
parties to the proceeding any calculations performed in connection with 
these preliminary results within five days after the date of the public 
announcement of this notice. Pursuant to 19 CFR 351.309, interested 
parties may submit written comments in response to these preliminary 
results. Unless otherwise indicated by the Department, case briefs must 
be submitted within 30 days after the date of publication of this 
notice. Rebuttal briefs, limited to arguments raised in case briefs, 
must be submitted no later than five days after the time limit for 
filing case briefs, unless otherwise specified by the Department. 
Parties who submit argument in this proceeding are requested to submit 
with the argument: (1) A statement of the issue, and (2) a brief 
summary of the argument. Parties submitting case and/or rebuttal briefs 
are requested to provide the Department copies of the public version on 
disk. Case and rebuttal briefs must be served on interested parties in 
accordance with 19 CFR 351.303(f). Also, pursuant to 19 CFR 351.310, 
within 30 days of the date of publication of this notice, interested 
parties may request a public hearing on arguments to be raised in the 
case and rebuttal briefs. Unless the Secretary specifies otherwise, the 
hearing, if requested, will be held two days after the date for 
submission of rebuttal briefs, that is, 37 days after the date of 
publication of these preliminary results.
    Representatives of parties to the proceeding may request disclosure 
of proprietary information under administrative protective order no 
later than 10 days after the representative's client or employer 
becomes a party to the proceeding, but in no event later than the date 
the case briefs, under 19 CFR 351.309(c)(ii), are due. The Department 
will publish the final results of this administrative review, including 
the results of its analysis of arguments made in any case or rebuttal 
briefs.
    This administrative review is issued and published in accordance 
with sections 751(a)(1) and 777(I)(1) of the Act (19 U.S.C. 1675(a)(1) 
and 19 U.S.C. 1677f(I)(1)).

    Dated: February 28, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-927 Filed 3-4-05; 8:45 am]
BILLING CODE 3510-DS-P