71 FR 10062, February 28, 2006
DEPARTMENT OF COMMERCE
International Trade Administration
[(C-428-829); (C-421-809); (C-412-821)]
Low Enriched Uranium From Germany, the Netherlands, and the
United Kingdom: Preliminary Results of Countervailing Duty
Administrative Reviews and Intent To Revoke the Countervailing Duty
Orders
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 (LEU) from Germany, the Netherlands, and the United
Kingdom (UK) for the period January 1, 2004, through December 31, 2004.
For information on the net subsidy for the reviewed companies, please
see the ``Preliminary Results of Reviews'' section of this notice. In
addition, we preliminarily determine that the Governments of Germany,
the Netherlands, and the UK have met the requirements for revocation of
these CVD orders. For further information, please refer to the
``Revocation of the Orders'' section of this notice. Interested parties
are invited to comment on these preliminary results. See the ``Public
Comment'' section of this notice.
EFFECTIVE DATE: February 28, 2006.
FOR FURTHER INFORMATION CONTACT: Darla Brown, 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; telephone: 202-482-2786.
SUPPLEMENTARY INFORMATION:
Background
On February 13, 2002, the Department published in the Federal
Register the CVD orders on LEU from Germany, the Netherlands, and the
UK. 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 1, 2005, 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, 70 FR 5136
(February 1, 2005). On February 23, 2005, we received timely requests
for review from Urenco Deutschland GmbH of Germany (UD), Urenco
Nederland B.V. of the Netherlands (UNL), Urenco (Capenhurst) Limited
(UCL) of the UK, Urenco Ltd., Urenco Inc., and Urenco Enrichment
Company Ltd. (UEC) (collectively, the Urenco Group or Urenco), the
producers and exporters of the subject merchandise. We note that this
request covered all subject merchandise produced by Urenco in Germany,
the Netherlands, and the UK. On February 25, 2005, we received a timely
request for review from petitioners.\1\ On February 25, 2005, we
received timely requests for revocation of the CVD orders from the
Governments of Germany, the Netherlands, and the UK.
---------------------------------------------------------------------------
\1\ Petitioners are the United States Enrichment Corporation
(USEC) and USEC Inc.
---------------------------------------------------------------------------
On March 23, 2005, the Department initiated administrative reviews
of the CVD orders on LEU from Germany, the Netherlands, and the UK. See
Initiation of Antidumping and Countervailing Duty Administrative
Reviews and Requests for Revocation in Part, 70 FR 14643 (March 23,
2005).
On April 13, 2005, the Department issued a questionnaire to the
Government of the United Kingdom (UKG) and UCL, Urenco's producer of
subject merchandise in the UK. On May 2, 2005, the Department issued a
separate questionnaire to the Government of the Netherlands (GON) and
UNL, Urenco's producer of subject merchandise in the Netherlands. On
June 13, 2005, the Department issued a questionnaire to the Government
of Germany (GOG) and UD, Urenco's producer of subject merchandise in
Germany.
We received questionnaire responses from the UKG and UCL on May 20,
2005, from the GON and UNL on June 8, 2005, from the GOG on July 18,
2005, and from UD on July 20, 2005.
On October 17, 2005, we extended the due date for these preliminary
results from October 31, 2005, to February 28, 2006. See Low Enriched
Uranium from France, Germany, the Netherlands, and the United Kingdom:
Extension of Preliminary Results of Countervailing Duty Administrative
Reviews, 70 FR 60284 (October 17, 2005) (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 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 these orders.
Specifically, these orders do 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 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 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 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,
[[Page 10063]]
the written description of the merchandise is dispositive.
Period of Review
The period of review (POR) for these administrative reviews is
January 1, 2004, through December 31, 2004.
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 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.
Revocation of the Orders
On February 25, 2005, we received requests for revocation of the
CVD orders on LEU from the GOG, the GON, and the UKG. Their requests
were filed in accordance with 19 CFR 351.222(c). The Department may
revoke, in whole or in part, a CVD order upon completion of one or more
reviews under section 751 of the Act. While Congress has not specified
the procedures that the Department must follow in revoking an order,
the Department has developed a procedure for revocation that is
described in 19 CFR 351.222, which was amended on September 22, 1999.
See Amended Regulation Concerning the Revocation of Antidumping and
Countervailing Duty Orders, 64 FR 51236 (September 22, 1999).
Pursuant to 19 CFR 351.222(e)(2)(i), during the third and
subsequent annual anniversary months of the publication of the CVD
order, the government of the affected country may request in writing
that the Department revoke an order under 351.222(c)(1) if the
government submits with the request its certification that it has
satisfied, during the period of review, the requirements set out in
351.222(c)(1)(i) and that it will not reinstate for the subject
merchandise those programs or substitute other countervailable subsidy
programs. The GOG, the GON, and the UKG provided the certifications
required by 19 CFR 351.222(e)(2)(i).
Upon receipt of such a request, the Department, pursuant to 19 CFR
351.222(c), will consider the following in determining whether to
revoke the order: (1) whether the government of the affected country
has eliminated all countervailable subsidies on the subject merchandise
by abolishing for the subject merchandise, for a period of at least
three consecutive years, all programs previously found countervailable;
(2) whether exporters and producers of the subject merchandise are
continuing to receive any net countervailable subsidy from an abolished
program; and (3) whether the continued application of the CVD order is
otherwise necessary to offset subsidization.
In the instant reviews, we preliminarily determine, in accordance
with 19 CFR 351.222(c)(1)(i)(A), that all programs found by the
Department to have provided countervailable subsidies on LEU from
Germany, the Netherlands, and the UK have been abolished for at least
three consecutive years. Specifically, in the underlying
investigations, the Department found that the GOG provided measurable
countervailable benefits to Urenco through agreements between the GOG
and Uranitisotopentrennungsgeselleschaft mbH (Uranit)\2\ for (1)
enrichment technology research and development and (2) forgiveness of
centrifuge enrichment capacity subsidies. Under the enrichment
technology program, the GOG provided grants to Uranit from 1980 through
1993. Under the forgiveness program, the GOG waived the contingent
liability associated with monies provided from 1975 to 1993. These
agreements ended with the September 1993 formation of Urenco Ltd., thus
effectively abolishing all the subsidy programs within the meaning of
19 CFR 351.222(c)(1)(i)(A). Since the issuance of the order, the
Department has not initiated a review of, nor identified, any
additional or replacement subsidies.
---------------------------------------------------------------------------
\2\ The predecessor German company.
---------------------------------------------------------------------------
We also preliminarily determine that the net countervailable
subsidy rate during the POR of the instant reviews is zero, and,
therefore, that the exporters and producers are no longer receiving any
net countervailable subsidy from the abolished programs within the
meaning of 19 CFR 351.222(c)(1)(i)(B). Because we have allocated all
non-recurring subsidies over a 10-year AUL, the benefit streams from
these agreements were fully allocated at the end of 2002, i.e., prior
to the POR of these reviews. Finally, we preliminarily determine that
there is no evidence currently on the record of the instant reviews
indicating that these CVD orders are necessary to offset subsidization.
For these reasons, we preliminarily find, in accordance with 19 CFR
351.222(c)(1)(i)(C), that the continued application of these CVD orders
is not necessary to offset subsidization. Therefore, if the final
results of these reviews remain unchanged from these preliminary
results, the Department intends to revoke these CVD orders pursuant to
19 CFR 351.222(c)(1)(ii).
Analysis of Programs
I. Programs Preliminarily Determined Not to Confer a Benefit From the
Government of Germany
1. Enrichment Technology Research and Development Program
In the first administrative reviews, we determined that grant
disbursements made under this program prior to 1992,
[[Page 10064]]
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 the
second administrative reviews, we continued to find that each of these
grants has been fully allocated prior to the POR. See Final Results of
Countervailing Duty Administrative Reviews: Low Enriched Uranium From
Germany, the Netherlands, and the United Kingdom, 70 FR 40000 (July 12,
2005) (2003 LEU).
In 2001-2002 LEU and 2003 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 2001-2002 LEU and 2003 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.
II. Programs Preliminarily Determined To Be Not Used From the
Government of the Netherlands
1. Wet Investeringsrekening Law (WIR)
In the 2003 LEU, 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. In its June 8, 2005,
questionnaire response, 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 in its June 8, 2005,
questionnaire response 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.
III. 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 2004. 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. Moreover, 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.
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 the Department alters this time limit.
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 Department specifies otherwise,
the hearing, if requested, will be held two days after the date for
submission of rebuttal briefs. See 19 CFR 351.310(d).
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), 751(a)(3) and
777(i)(1) of the Act and 19 CFR 351.221(b)(4).
[[Page 10065]]
Dated: February 22, 2006.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E6-2781 Filed 2-27-03; 8:45 am]
BILLING CODE 3510-DS-S