59 FR 15373, April 1, 1994 DEPARTMENT OF COMMERCE (A-821-802) Amendment to the Agreement Suspending the Antidumping Investigation on Uranium From the Russian Federation AGENCY: Import Administration, International Trade Administration, Department of Commerce. EFFECTIVE DATE: March 11, 1994. FOR FURTHER INFORMATION CONTACT: Sally C. Gannon, Eric Hassman, or Melissa Skinner, Office of Agreements Compliance, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-1391, (202) 482-1382, or (202) 482-0159, respectively. SUMMARY: The Department of Commerce (the Department) and the Government of the Russian Federation (GRF) have signed an Amendment (the Amendment) to the Agreement Suspending the Antidumping Investigation on Uranium from the Russian Federation (the Agreement). The parties signed the Amendment recognizing that the Agreement to date had not generated the anticipated increase in the price of U.S.-origin natural uranium that would have permitted renewed sales of Russian uranium under the price-tied quota mechanism nor increased sales of U.S.-origin natural uranium or employment in the U.S. uranium industry. *15374 SUPPLEMENTARY INFORMATION: Background On October 16, 1992, the Department and the GRF signed the suspension agreement on uranium and, on October 30, 1992, the Agreement was published in the Federal Register (57 FR 49220, 49235). The Department's latest price calculation, under the terms of the Agreement, on October 1, 1993, did not reach the threshold price of $13.00 per pound which would allow for Russian Federation imports of uranium into the U.S. market under the price- tied quota mechanism (Appendix A of the Agreement). Thus, the GRF requested consultations with the Department, as specified in Section X.C of the Agreement, in order to review the market situation and consider adjustments to the quota. As a result of these consultations, a proposed amendment to the Russian suspension agreement, based on the concept of joint sales between U.S. and Russian producers, was initialled on December 15, 1993, by the Department and the GRF. The Department subsequently released the proposed amendment to interested parties for comment. After careful consideration by the Department of the comments submitted and further consultations between the two parties, the Department and the GRF signed the final amendment on March 11, 1994. The text of the Amendment follows in Annex 1 to this notice. Information on the amount of annual matched imports remaining available for the year, as noted in Section IV.E of the Amendment, may be obtained from the above-noted contacts in the Office of Agreements Compliance. Confirmation requests should be submitted, in accordance with 19 CFR 353.31 and 353.32, to: Secretary of Commerce, Attention: Import Administration (Office of Agreements Compliance), Central Records Unit, Room B-099, U.S. Department of Commerce, Pennsylvania Avenue and 14th St. NW., Washington, DC 20230. Dated: March 25, 1994. Joseph A. Spetrini, Acting Assistant Secretary for Import Administration. Annex 1--Amendment to the Agreement Suspending the Antidumping Investigation on Uranium From the Russian Federation The parties recognize that the Agreement Suspending the Antidumping Investigation on Uranium from the Russian Federation ("the Agreement") has not generated the anticipated increase in the price of U.S.-origin natural uranium that would have permitted renewed sales of Russian uranium under the price-tied quota mechanism; nor has the Agreement increased sales of U.S.-origin natural uranium or employment in the U.S. uranium industry. Because an objective of this Agreement is to restore the competitive position of the U.S. industry, the parties agree as follows. The Agreement is hereby extended until March 31, 2004. Consistent with the requirement of Section 734(l) of the U.S. Tariff Act of 1930, as amended (the Act) to prevent the suppression or undercutting of price levels of domestic products in the United States, Sections II, IV, VIII and XIV are amended as set forth below. Appendix A of the Agreement is suspended until March 31, 2004, in accordance with amended Section XIV. All other provisions of the Agreement, particularly Section VII, remain in force and apply to this Amendment. The following definitions are added to Section II. II. Definitions (e) For purposes of this Agreement, "United States" shall comprise the customs territory of the United States of America (the 50 States, the District of Columbia and Puerto Rico) and foreign trade zones located in the territory of the United States of America. (f) Separative work unit, or SWU, means the standard measure of enrichment services. The effort expended in separating a mass F of feed of assay x subf into a mass P of product of assay x subp and waste of mass W and assay x subw is expressed in terms of the number of separative work units needed, given by the expression SWU=WV(x subw )+PV(x subp )FV(x subf ), where V(x) is the "value function," defined as V(x)=(1-2x)ln ((1- x)/x). (g) "U.S. producer" means: (1) a company that owns a production interest in a licensed or permitted mine capable of producing uranium with sufficient economically recoverable reserves to justify production or (2) a U.S. converter or enricher. (h) "For consumption" means for further processing (as necessary) and use as nuclear fuel. Consumption may include such uses as swaps or exchanges of material, only where such swaps or exchanges are documented to be conducted solely for the purpose of facilitating the further processing and use as nuclear fuel by the end-user. The material shall not be loaned. The material shall not be resold except as a result of force majeure. (i) "End-user" means an entity, such as an electric utility, hospital, or scientific institution, which consumes uranium. (j) A "Spot Contract" means any contract for natural uranium and/or SWU that specifies that all deliveries must be completed within 12 months of contract execution. A "Long-Term" contract means any contract that is not a spot contract. (k) "Newly-produced" natural uranium in the form of U sub3 O sub8 means uranium produced, on or after the effective date of this Amendment, by conventional mining, in-situ leaching ("ISL") production, co-product or by- product production, or mine water recovery production. Newly-produced natural uranium in the form of UF sub6 means UF sub6 containing newly-produced U sub3 O sub8 . If the Russian Federation Ministry of Atomic Energy (MINATOM) has not concluded sales of at least 2,204,620 pounds U sub3 O sub8 equivalent during the first six months of this Amendment, up to 1,000,000 pounds U sub3 O sub8 equivalent mined prior, and milled subsequent to, the effective date of the Amendment, may be used for the purpose of matched sales for the remainder of that year. Section IV.A., IV.B., and IV.C.1., and to the extent that they relate to Appendix A, other portions of Section IV, are replaced with: IV. Matched Imports. Matched imports are imports of Russian- origin natural uranium or SWU that are matched with U.S.-origin natural uranium or SWU for delivery to end-users for consumption in the United States in accordance with the terms of this Amendment. Russian-origin natural uranium or SWU may be imported into the United States under this Amendment only if they qualify as matched imports as described below. The importer must document that the United States Department of Commerce ("the Department") has issued a confirmation under which the shipment may be imported and any prior imports under that confirmation. Notwithstanding other provisions of this Amendment, matched imports are authorized up to the limits, and subject to the conditions, set forth below. To qualify as a matched import under this section, "Russian-origin" natural uranium (i.e. U sub3 O sub8 or UF sub6 ) or SWU must be matched with an equal portion of "newly-produced" U.S.-origin natural uranium (i.e. U sub3 O sub8 or UF sub6 ) or SWU, subject to adjustment under Section D. For purposes of this Section, Russian-origin means natural uranium (i.e. U sub3 O sub8 or UF sub6 ) or SWU which is produced in Russia, and which is exported from Russia for the first time after the effective date of this Amendment. *15375 Matched imports are subject to the following conditions: (a) The U.S.-origin natural uranium must be mined in the United States, and/or the U.S.-produced SWU must be or have been performed in the United States, subsequent to the effective date of this Amendment and must be delivered pursuant to a new contract, or a new extension or modification of a contract, to supply the needs of an end-user which are uncommitted as of the date of the Amendment; (b) In the case of SWU, prior to the presentation of the matched sale to the Department for confirmation, the U.S. producer must be informed of all material terms of the matched sale to the end-user and must consent to the matching of its SWU in that sale with the imported Russian SWU; (c) In the case of natural uranium, if the U.S. producer is not the contracting party with the end-user, then, prior to the presentation of the matched sale to the Department for confirmation, the U.S. producer must consent to the matching of its uranium in that sale with the imported Russian uranium; and (d) Prior to the presentation of the matched sales contract to the Department for confirmation, the U.S. producer and the Russian producer must agree to the schedule of deliveries to the end-user of the imported Russian uranium or SWU and of the U.S. uranium or SWU. Matched sales may be made only by matching spot contracts to spot contracts and long-term contracts to long-term contracts, as defined in Section II, and uranium-type to uranium-type (i.e., U sub3 O sub8 or UF sub6 ). Consistent with Section III of the Agreement, conversion does not change the country-of- origin of uranium ore, and, thus, U.S.-origin UF sub6 is U.S-origin U sub3 O sub8 converted at any converter. A. Limits for Matched Imports For 1994 (April 1, 1994-March 31, 1995) and 1995 (April 1, 1995-March 31, 1996), this Amendment authorizes annual matched sales of up to 3,000 metric tons (6,613,860 pounds U sub3 O sub8 equivalent) per year of Russian-origin natural uranium and up to 2 million Russian-origin SWU per year from the Russian Federation to the United States. The matching natural uranium must be sold during 1994 and 1995 but may be imported for delivery at any time during the life of the Amendment, subject to the conditions contained herein. For the years 1996 through 2003, this Amendment authorizes additional matching deliveries of natural uranium up to, but not exceeding, the levels listed in Attachment 1. Deliveries pursuant to the 3,000 metric ton matched natural uranium quotas, confirmed in 1994 and 1995 and delivered in subsequent years, shall not be counted against the quota limitations listed in Attachment 1 for the years 1996 through 2003. Because the annual matching SWU quota expires two years from the effective date of this Amendment, no additional matched SWU sales, or corresponding imports of SWU, will be allowed. However, the matching SWU sold during 1994 and 1995 may be delivered at any time during the life of the matched sales contract. For purposes of counting against the 1994 and 1995 sales quota limitations for both natural uranium and SWU, the date of the Department's confirmation (see Section IV.E) shall determine whether a matched import comes within the annual limit. However, for purposes of counting against the natural uranium delivery quota limitations for the years 1996 through 2003, the date of delivery of the Russian component of the confirmed matched sale (see Section IV.E) shall determine whether a matched import comes within the annual limit. The sales quotas in the first two years and the delivery quotas in subsequent years of the Amendment for natural uranium are separate and distinct. Enriched uranium from Russia may be imported only if there is a matched sale for the SWU component of such enriched uranium. When Russian enriched UF sub6 is imported pursuant to a matching SWU sale, an equivalent amount of natural uranium (based on the U sub235 assay of the product assuming a 0.3 tails assay) must be deposited with, exchanged, or returned to the seller's account on, before, or up to five days after the date of delivery of the imported enriched UF sub6 to the buyer or the buyer's account. The feed component shall be counted against the natural uranium matched sales quota, through use in a matched sale, unless the feed material or its equivalent that is returned to the seller is either exported or quarantined from the U.S. market. Regardless of the ultimate disposition of the natural feed component associated with a sale of Russian-origin SWU, from the time any uranium products are delivered or returned to the seller or for the seller's account until the time such material is disposed of in accordance with the terms of this Section of the Amendment, the seller agrees to the following: - To maintain the material in a separate account exclusively for the accounting of this material at the converter, enricher, or fabricator; - To make available to the Department, quarterly, a full accounting of all deliveries into and out of this account at the converter, enricher, or fabricator including delivery from the account, to whom delivery was made, pursuant to which contract, in what quantity, and confirmation of the status of any transaction that occurred from the account; and - To certify not to use the imported uranium for loans, swaps, or use as loan repayment or any purpose other than delivery in accordance with this Section of the Amendment, unless: (i) The amount is destined for consumption as defined in Section II(h); (ii) the amount is counted against the quota in connection with a confirmed matched sale; and (iii) the Department is notified of the transaction. Any natural uranium deposited with, exchanged, or returned to the seller or the seller's account as a result of sales of Russian SWU under matched contracts shall be deemed to be of Russian origin at the time of deposit, exchange or return, and, if re-exported, shall clearly be identified as Russian origin in all accompanying documentation and packaging. MINATOM will restrict the volume of direct or indirect exports to the United States of the merchandise subject to this Amendment on or after the effective date of this Amendment, and will continue to restrict the transfer or withdrawal from inventory (consistent with the provisions of this Section) of the merchandise subject to this Amendment. MINATOM will ensure that all exports of merchandise made under this provision qualify as matched imports made in conjunction with a U.S. producer or enricher, composed of equal parts Russian and newly-produced U.S.-origin natural uranium (subject to adjustment under Section D) or SWU. B. Per Company Limits for Matched Imports For each calendar year's quantity of confirmed matched imports, no more than 20 percent of the total allowable limit of matched imports of uranium may be matched with uranium sourced from any single U.S. producer. Nor may more than fifty (50) percent of the total allowable limit be matched with uranium from any single group of producers under common ownership or control. For purposes of this section, "ownership or control" shall be defined consistent with Section 771(13) of the Act. *15376 C. Price Limits for Matched Imports The unit price paid to the U.S. producer for the U.S. component for each sale involving matched imports must be greater than the unit price paid by the end- user for consumption in the United States. (If the producer is the seller to the end-user, there may be no separate payment for the U.S. component.) D. Monitoring of U.S. Production Given that a goal of this Amendment is to stimulate the production of natural uranium in the United States, the Department will monitor the level of uranium production in the United States through information obtained from the U.S. Energy Information Administration. Regardless of the level of U.S. production, matched imports during the first year of this Amendment will be on a 50-50 basis. Depending on the level of U.S. uranium production achieved in the first year, the matching requirements for matched imports in the second year may be modified as described below. The Department will determine the annualized level of U.S. production of natural uranium in 1994 using data from April 1, 1994, through March 31, 1995. On April 30, 1995, the Department will announce the level of U.S. production for 1994 for the purpose of possible adjustment to the matching requirement ratio for the following year. If the annualized level of U.S. production in the first year is less than 9 million pounds or more than 10 million pounds, then the ratio required for matched import limits during the second year of this Amendment will be adjusted in accordance with the following schedule: ------------------------------------------------------------------------------ U.S. production for first year Matching requirement for second year (millions of lbs.) (percentages) ------------------------------------------------------------------------------ U.S. Russian ------------------------------------------------------------------------------ 4-5 .............................................. 55 45 5-6 .............................................. 54 46 6-7 .............................................. 53 47 7-8 .............................................. 52 48 8-9 .............................................. 51 49 9-10 ............................ ( [FN1]) ............ ( [FN1]) 10-11 ............................................. 49 51 11-12 ............................................. 48 52 12-13 ............................................. 47 53 13-14 ............................................. 46 54 14-15 ............................................. 45 55 ------------------------------------------------------------------------------ FN1 No change. Any changes in the ratio required for matched imports during the second year of this Amendment will not affect matched imports confirmed by the Department during the first year of this Amendment. Such a ratio adjustment will only be in force during 1995. For all subsequent years of the Amendment, the ratio for matching sales will remain at 50-50. E. Department Confirmation of Matched Imports. Any matched sales contract to the end-user to be used in a matched sale under this Amendment must be submitted to and confirmed by the Department in accordance with this Section. To be confirmed as a matched contract, the party submitting the contract must provide the following information: - The date and terms, including price, of the contract with the end-user pursuant to which the matched import(s) will be made; - A description of the physical material being imported; - Identification of the Russian supplier of the matched import(s); - The estimated date on which the matched import(s) will enter the customs territory of the United States; - The export license number under which the import(s) will be exported; - The U.S. producer and specific production facility from which the matched material was or will be sourced; - Explanation of the U.S. producer's relation to any other enterprise involved in the production and/or sale of uranium in the United States; - A copy of the contract with the end-user pursuant to which the matched import(s) are to be made; - A copy of any separate contract or agreement made for the U.S. material; - Certification from the U.S. producer that its production will be "newly- produced" (within the meaning of this Amendment) to fulfill the contract, and its ability and commitment to provide, at the time specified in the contract, the contracted volume of natural uranium and/or SWU; - Certification from the U.S. producer that it consents to the matching of its material and the estimated delivery schedule; - An estimated delivery schedule; - Certification from the end-user that it will consume the matched product in the United States in accordance with Section II(h) of this Amendment; - All documentation relating to the escrow account set up for the matched sale; and - Any other information that the Department, after consultation with MINATOM, determines necessary to confirm that the requirements of this Amendment have been met. Within 15 days of filing with the Import Administration's Central Records Unit a complete confirmation request, the Department will confirm that the matched sales contract qualifies for matching under this Amendment or will state specifically why it does not qualify. In making such a determination, the Department will limit its review to determining (i) whether the contract under review comes within total annual limits remaining available for the year in which the request was submitted; (ii) whether the U.S. uranium matched under the matched sales contract exceeds the per company limitations set forth in Section IV.B; and (iii) whether the sales price for the newly-produced U.S. uranium, if there is such a separate sale, meets the requirements set forth in Section IV.C. Further, in the process of confirmation request and approval, the Department will review the specific terms of the escrow account documentation. The end-user must pay a blended price for all deliveries. When deliveries of Russian uranium are made prior to deliveries of the matching U.S. product, either: a. The U.S. product must be delivered to the end-user within 1 month of delivery of the Russian component to the end-user, or b. The difference between the price paid to the Russian producer and the blended price will be paid into a properly drawn escrow account specified in the contract. However, the amount deposited in the escrow account shall in no case be less than 10 percent of the total contracted value of the U.S. component of the matched sale. The escrow funds will be forfeited if the U.S. producer fails to deliver any portion of the U.S. component of the matched sale. The Department and MINATOM will develop a way to dispose of any forfeited escrow funds, but in no event will such funds be returned to any matched sales participant, e.g., the U.S. or Russian producer, the end-user, or the importer. If the Department determines upon review that any party has failed to deliver or cancelled delivery of uranium or SWU in a matched sale contract for any reason other than force majeure, or has otherwise not complied with the terms of the Amendment, that party shall be precluded from participation in any further matched sales. Upon confirmation, the Department will subtract the total amount of contracted Russian-origin matched- import uranium and/or SWU from the remaining quota for that year. The Department shall also make available on a current and continuous basis the amount of annual matched imports that remain available for the year. The *15377 Department will publish the contact office (and telephone number) for obtaining such information and the office to which confirmation requests should be sent. If the Department fails to respond to a confirmation request for a matched import within 15 days, the request shall be deemed to be approved notwithstanding any other provisions of this Amendment. Russian natural uranium or SWU may be imported into the United States prior to the scheduled time for delivery pursuant to a confirmed matched sales contract only if: (1) The material is placed in a dedicated account for the approved contract; (2) The importer (if the owner of material, or the person for whom or on whose behalf the material is imported) or his consignee, certifies to the Department that such material will not be sold, loaned, swapped, or utilized other than for delivery to the U.S. end-user for consumption in accordance with Section II(h) of this Amendment; and (3) The material enters the U.S. but is not liquidated until such time as it is delivered to the end-user. Prior to U.S. Customs clearance of the Russian-origin uranium, the importer (if the owner of material, or the person for whom or on whose behalf the uranium is imported) will notify the Department of the date of import, the quantity and declared value of the shipment, the vessel name, the port of entry, and the pre-confirmed individual contract pursuant to which the shipment is entering. If such information is consistent with a pre-confirmed contract and the notice of request for delivery from the end-user, the Department will notify the U.S. Customs Service within five business days. The importer will provide certification to U.S. Customs at time of import that the material will be used only for a matched sale subject to the conditions of this Amendment and will be consumed in accordance with Section II(h) of this Amendment. Once the U.S. Customs Service has received the foregoing notification and certification, it will promptly release the shipment. The following paragraph constitutes an addendum to Section VIII of the Agreement: MINATOM agrees to adhere to all reporting requirements specified in Section VIII.A. of the Agreement. Appendix B data will be submitted to the Department according to the reporting requirements specified in Section VIII.A. of the Agreement, and will be treated and verified in accordance with the Letter of Administration exchanged between the Department and MINATOM simultaneously with the signing of this Amendment. The Department and MINATOM agree that the Letter of Administration constitutes an integral part of this Amendment. Section XIV of the Agreement is amended by adding the following: C. Miscellaneous The parties agree to consult on a regular basis during the term of this Agreement on Russia being treated as a market economy or the Russian uranium industry being treated as a market-oriented industry under U.S. antidumping laws. During such consultations the Department will identify the criteria that Russia or the Russian uranium industry would need to satisfy to be accorded such treatment by the Department. The parties further agree that their intention is, consistent with Section IV.J of the Agreement, that Russia be accorded treatment no less favorable than any other Republic of the former Soviet Union that also has a suspension agreement with the United States with respect to trade in uranium. Accordingly, if U.S. law, regulation, administrative practice, or policy should change in any manner that would result in relatively less favorable treatment for Russia, or if the United States should enter into any agreement or understanding or take any action that would cause that result, the parties will promptly enter into consultations with a view to amending this Agreement so as to eliminate such less favorable treatment. The Parties agree that this Amendment constitutes an integral part of the Agreement. The English language version of this Amendment shall be controlling. Signed on this 11th day of March, 1994. For the Ministry of Atomic Energy of the Russian Federation: Nikolai Yegorov. For the United States Department of Commerce: Joseph A. Spetrini, Acting Assistant Secretary for Import Administration. Attachment 1 ------------------------------------------------------------------------------ Year Natural uranium (lbs U sub3 O sub8 SWU e) ------------------------------------------------------------------------------ 1994 [FN1] ..................................... 6,613,860 2,000,000 1995 [FN1] ..................................... 6,613,860 2,000,000 1996 ........................................... 1,930,000 n/a 1997 ........................................... 2,710,000 n/a 1998 ........................................... 3,600,000 n/a 1999 ........................................... 4,040,000 n/a 2000 ........................................... 4,230,000 n/a 2001 ........................................... 4,040,000 n/a 2002 ........................................... 4,890,000 n/a 2003 ........................................... 4,300,000 n/a ------------------------------------------------------------------------------ FN The quota volume in these years apply to sales. Deliveries pursuant to these contracts may be delivered in subsequent years. (FR Doc. 94-7849 Filed 3-31-94; 8:45 am) BILLING CODE 3510-DS-P END OF DOCUMENT