[Federal Register Volume 71, Number 31 (Wednesday, February 15, 2006)]
[Notices]
[Pages 7924-7927]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-2166]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-427-819]


Notice of 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 (CVD) order on low 
enriched uranium (LEU) from France for the period January 1, 2004, 
through December 31, 2004. For information on the net subsidy for the 
reviewed company, please see the ``Preliminary Results of Review'' 
section, infra. If the final results remain the same as the preliminary 
results of this review, we will instruct U.S. Customs and Border 
Protection (CBP) to assess countervailing duties as detailed in the 
``Preliminary Results of Administrative Review'' section, infra. 
Interested parties are invited to comment on these preliminary results. 
(See the ``Public Comment'' section, infra).

DATES: Effective February 15, 2006.

FOR FURTHER INFORMATION CONTACT: Kristen Johnson, 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; telephone: (202) 482-4793.

SUPPLEMENTARY INFORMATION:

Background

    On February 13, 2002, the Department published in the Federal 
Register the CVD order on LEU 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 1, 2005, the Department published an 
opportunity to request an administrative review of this CVD order. See 
Antidumping or Countervailing Duty Order, Finding, or Suspended 
Investigation; Opportunity to Request Administrative Review, 70 FR 5136 
(February 1, 2005). On February 1, 2005, we received a timely request 
for review from Eurodif S.A. (Eurodif)/Compagnie Generale Des Matieres 
Nucleaires (COGEMA), the French producer/exporter of subject 
merchandise covered under this review, and on February 25, 2005, we 
received a timely request for review from petitioners.\1\ On March 23, 
2005, the Department published the initiation of the administrative 
review of the CVD order on LEU from France, covering the January 1, 
2004, through December 31, 2004, period of review (POR). See Initiation 
of Antidumping and Countervailing Duty Administrative Reviews and 
Requests for Revocation in Part, 70 FR 14643 (March 23, 2005).
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    \1\ Petitioners are USEC Inc. and its wholly owned subsidiary, 
United States Enrichment Corporation.
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    On April 5, 2005, the Department issued a questionnaire to Eurodif/
COGEMA and the Government of France (GOF), collectively ``the 
respondents.'' On May 31, 2005, the Department received questionnaire 
responses from Eurodif/COGEMA and the GOF. On August 3, 2005, the 
Department issued a supplemental questionnaire to respondents and 
received their questionnaire responses on August 19, 2005. A second 
supplemental questionnaire was issued to respondents on September 14, 
2005. On October 17, 2005, the Department published in the Federal 
Register a notice of extension of the deadline for the preliminary 
results of this administrative review. See Notice of Extension of Time 
Limit for Preliminary Results of Countervailing Duty Administrative 
Reviews: Low Enriched Uranium from France, Germany, the Netherlands, 
and the United Kingdom, 70 FR 60284 (October 17, 2005). The Department 
received a response to the September 14, 2005, supplemental 
questionnaire from Eurodif/COGEMA on December 20, 2005, and from the 
GOF on December 21, 2005.

[[Page 7925]]

    In accordance with 19 CFR 351.213(b), this review covers only those 
producers or exporters for which a review was specifically requested. 
The only company subject to this review is Eurodif/COGEMA. This review 
covers two programs.

Scope of the Order

    The product covered by this order is all 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 this order. 
Specifically, this order does 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 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 
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 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, 2004, 
through December 31, 2004.

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 is 
wholly owned by AREVA, a corporation principally owned by 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 Be Countervailable

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. Since 1979, when Eurodif began enrichment at its Georges-Besse 
gaseous diffusion facility, Eurodif and EdF have entered into long-term 
supply contracts. All deliveries of the subject merchandise to EdF 
during the POR were made pursuant to the 1995 contract.
    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, 70 FR 39998 
(July 12, 2005) (LEU 2003 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 of Eurodif's 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 LEU for EdF. Operational costs associated with the 
production of the LEU, however, are charged to EdF by Eurodif.
    Conversely, EdF does not supply electricity to its other LEU 
suppliers. As such, these other suppliers charge EdF a single price per 
separative work unit (SWU).\2\ Therefore, in order to make a proper 
comparison between the benchmark price (i.e., the single price per-SWU) 
and the actual price (i.e., the price paid by EdF to Eurodif), we have 
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 of the concentration of ``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 
goes into the LEU they are purchasing. The record, however, 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,''

[[Page 7926]]

dated December 13, 2001, we assumed that the value of all natural 
uranium is the same (see discussion at page 5). Therefore, 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 8, 2006, Memorandum concerning the 
Calculations for the Notice of Preliminary Countervailing Duty Results: 
Low Enriched Uranium from France.\3\ After adding these two components 
together, we compared the per-SWU price paid to Eurodif by EdF in 2004 
with the per-SWU price paid by EdF to its other LEU suppliers in 2004. 
Based on our analysis, we preliminarily determine that prices paid by 
EdF to Eurodif were higher than prices EdF paid to its other suppliers. 
Therefore, in accordance with section 771(5)(E)(iv) of the Act, we 
preliminarily determine that this program conferred countervailable 
benefits to Eurodif in 2004. Because EdF's purchases from Eurodif are 
not exceptional but, rather, are made on an ongoing basis from year to 
year, we determine that the benefit conferred under this program is 
recurring under 19 CFR 351.524(c). Therefore, we have expensed the 
benefit in the year of receipt, i.e., calendar year 2004.
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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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    To determine the program rate for the POR, we first multiplied the 
benefit amount by the sales of subject merchandise to the United States 
divided by total sales, and then divided the result by the sales that 
entered U.S. customs territory during calendar year 2004. Specifically, 
we calculated the ad valorem rate for this program using the following 
formula:
[GRAPHIC] [TIFF OMITTED] TN15FE06.002

Where:

A = Ad Valorem Rate
B = Subsidy Benefit
C = Sales of Subject Merchandise to the United States during Calendar 
Year 2004
D = Total Sales during Calendar Year 2004 (including COGEMA sales on 
behalf of Eurodif)
E = Sales that Entered U.S. customs territory during Calendar Year 2004

    On this basis, we preliminarily determine the net countervailable 
subsidy from this program to be 1.53 percent ad valorem.

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 2003 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 2004), Eurodif filed its 2003 
corporate income tax return. Based on the governmental tax agreement, 
Eurodif was exonerated from a portion of its 2003 income taxes filed 
during the POR. Eurodif was also reimbursed that portion of its 2003 
income taxes attributable to the 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 are 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. 
Consistent with the methodology that we employed in the ``Purchase at 
Prices that Constitute `More Than Adequate Remuneration' '' section 
above, we multiplied the total 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 
2004. On this basis, we preliminarily determine a net countervailable 
subsidy of 3.53 percent ad valorem for this tax program.

Preliminary Results of Review

    In accordance with section 703(d)(1)(A)(i) of the Act, we have 
calculated a subsidy rate for Eurodif/COGEMA for calendar year 2004. We 
preliminarily determine that the total estimated net countervailable 
subsidy rate is 5.06 percent ad valorem.
    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. 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.
    If the final results of this review remain the same as these 
preliminary results, the Department, however, intends to instruct CBP 
to collect cash deposits of estimated countervailing duties at 5.06 
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 administrative review. We will also 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 are those established in 
the most recently completed administrative proceeding conducted under 
the URAA. See Amended LEU Final Determination. These 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 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

[[Page 7927]]

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 section 751(a)(1) and 777(i)(1) of the Act.

    Dated: February 8, 2006.
David M. Spooner,
Assistant Secretary for Import Administration.
 [FR Doc. E6-2166 Filed 2-14-06; 8:45 am]
BILLING CODE 3510-DS-P