Low Enriched Uranium from France: Preliminary Results of Antidumping Duty Administrative Review, 11386-11389 [E6-3176]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 71, Number 44 (Tuesday, March 7, 2006)]
[Notices]
[Pages 11386-11389]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-3176]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-427-818


Low Enriched Uranium from France: Preliminary Results of 
Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, U.S. 
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on Low Enriched 
Uranium (LEU) from France in response to requests by USEC Inc. and the 
United States Enrichment Corporation (collectively, petitioners) and by 
Eurodif, S.A.(Eurodif), Compagnie G[eacute]n[eacute]rale Des 
Mati[egrave]res Nucl[eacute]aires (COGEMA) and COGEMA, Inc. 
(collectively, Eurodif/COGEMA or the respondent). This review covers 
sales of subject merchandise to the United States during the period 
February 1, 2004 through January 31, 2005.
    We preliminarily determine that U.S. sales have been made below 
normal value (NV). If these preliminary results are adopted in our 
final results, we will instruct U.S. Customs and Border Protection 
(CBP) to assess antidumping duties based on the difference between the 
constructed export price (CEP) and the NV. Interested parties are 
invited to

[[Page 11387]]

comment on these preliminary results. See the Preliminary Results of 
Review section of this notice.

EFFECTIVE DATE: March 7, 2006.

FOR FURTHER INFORMATION CONTACT: Mark Hoadley or Myrna Lobo, AD/CVD 
Operations, Office 6, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
3148 or (202) 482-2371, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On February 13, 2002, the Department published the antidumping duty 
order on LEU from France in the Federal Register (67 FR 6680). On 
February 1, 2005, the Department published a notice of opportunity to 
request an administrative review of this order (70 FR 5136). On 
February 1, 2005 and February 25, 2005, the Department received timely 
requests for review from Eurodif/COGEMA and from petitioners, 
respectively. On March 23, 2005, we published a notice initiating an 
administrative review of the antidumping order on LEU from France 
covering one respondent, Eurodif/COGEMA. See Initiation of Antidumping 
and Countervailing Duty Administrative Reviews and Requests for 
Revocation in Part, 70 FR 14643 (March 23, 2005).
    The Department issued its original questionnaire, sections A 
through C, on May 2, 2005, and received timely responses. On September 
29, 2005, the Department extended the deadline for the preliminary 
results of this antidumping duty administrative review until February 
28, 2006. See Low Enriched Uranium from France; Extension of Time Limit 
for the Preliminary Results of the Antidumping Duty Administrative 
Review, 70 FR 58381 (October 6, 2005). On October 11, 2005, the 
Department issued a section D and supplemental sections A through C 
questionnaire and received timely responses, after granting deadline 
extensions, on December 8, 2005. The Department issued further 
supplemental questionnaires on January 12, 2006 and February 3, 2006 
and received timely responses.
    On January 25, 2006, pursuant to an allegation filed by 
petitioners, the Department initiated an investigation to determine 
whether Eurodif/COGEMA's purchases of electricity from 
[Eacute]lectricit[eacute] de France (EdF), an affiliated supplier, 
during the period of review (POR), were made at prices below the cost 
of production (COP). The Department also issued a questionnaire\1\ to 
obtain EdF's COP for electricity on the same date and received a timely 
response on February 6, 2006. For purposes of these preliminary results 
the Department has used the information reported for EdF. However, the 
Department may solicit some clarifying information from respondent 
regarding EdF's COP after the issuance of the preliminary results, and 
we will take such information into account in its cost calculation for 
the final results of this review.
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    \1\ Section A of the questionnaire requests general information 
concerning a company's corporate structure and business practices, 
the merchandise under investigation that it sells, and the manner in 
which it sells that merchandise in all of its markets. Section B 
requests a complete listing of all home market sales, or, if the 
home market is not viable, of sales in the most appropriate third-
country market (this section is not applicable to respondents in 
non-market economy (NME) cases). Section C requests a complete 
listing of U.S. sales. Section D requests information on the cost of 
production (COP) of the foreign like product and the constructed 
value (CV) of the merchandise under investigation. Section E 
requests information on further manufacturing.
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Period of Review

    This review covers the period February 1, 2004, through January 31, 
2005.

Scope of the Order

    The product covered by this order is all low enriched uranium. 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 
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 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 this order is classified 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.

Analysis

Home Market Viability

    In accordance with sections 773(a)(1)(B) and (C) of the Tariff Act 
of 1930, as amended (the Act), to determine whether there was a 
sufficient volume of sales in the home market and/or in third country 
markets to serve as a viable basis for calculating NV, we compared 
Eurodif/COGEMA's volume of home market sales of the foreign like 
product to the volume of U.S. sales of the subject merchandise. 
Pursuant to sections 773(a)(1)(B) and (C) of the Act and section 
351.404 (b) of the Department's regulations, because Eurodif/COGEMA's 
home market sales were greater than five percent of the aggregate 
volume of U.S. sales of the subject merchandise, we determine the home 
market to be viable. However, because all sales were to a single 
affiliated customer and the Department was unable to confirm these 
sales to be at arm's length, we have used constructed value (CV) as NV, 
for purposes of these preliminary results. We have consistently used CV 
as the basis for NV in past segments of this proceeding, see, e.g. 
Notice of Preliminary Results of Antidumping Duty Administrative 
Review: Low Enriched Uranium from France, 69 FR 3883 (January 27, 
2004).

Fair Value Comparisons

    To determine whether sales of LEU from France were made in the 
United States at less-than-fair value (LTFV), we compared the CEP to 
CV, as described in the Constructed Export Price and

[[Page 11388]]

Calculation of Normal Value Based on Constructed Value sections of this 
notice. In accordance with section 777A(d)(2) of the Act, we calculated 
CEPs and compared them to CV.
    We note that during the POR, the respondent sold LEU in the United 
States pursuant to contracts in which the respondent undertook to 
manufacture and deliver LEU for a cash payment covering only the value 
of the enrichment component; for the natural uranium feedstock 
component, the respondent received an amount of natural uranium 
equivalent to the amount used to produce the LEU shipped under 
contracts referred to as separative work unit (SWU)\2\ contracts. 
However, the product manufactured and delivered by the respondent was 
LEU. For purposes of our antidumping analysis, we have translated 
prices and costs involved in SWU contracts into an LEU basis, 
increasing those values to account for the cost of the uranium 
feedstock involved. These adjustments are described in greater detail 
below.
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    \2\ A SWU is a unit of measurement of the effort required to 
separate the U235 and U238 atoms in uranium feed in order to create 
a final product richer in U235 atoms.
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Constructed Export Price

    In accordance with section 772(b) of the Act, CEP is the price at 
which the subject merchandise is first sold (or agreed to be sold) in 
the United States before or after the date of importation by or for the 
account of the producer or exporter of such merchandise, or by a seller 
affiliated with the producer or exporter, to a purchaser not affiliated 
with the producer or exporter. During the POR, Eurodif/COGEMA's U.S. 
sales were made to its U.S. affiliate, COGEMA Inc., which then resold 
the merchandise to unaffiliated customers. Therefore, Eurodif/COGEMA 
classified all of its U.S. export sales of LEU as CEP sales.
    As stated in section 351.401(i) of the Department's regulations, 
the Department will use the respondent's invoice date as the date of 
sale unless another date better reflects the date upon which the 
exporter or producer establishes the material terms of sale. In this 
review, we find that the material terms of sale are established by the 
contract between COGEMA Inc. and the U.S. customer. Therefore, as in 
prior reviews, we have used the contract date as the date of sale. See 
Notice of Final Results of Antidumping Duty Administrative Review: Low 
Enriched Uranium from France, 70 FR 54359 (September 14, 2005).
    The Department calculated CEP for Eurodif/COGEMA based on packed 
prices to the first unaffiliated customer in the United States. For all 
sales involving payments on a SWU basis, we translated the prices to an 
LEU basis, as indicated above, by adding a value for the uranium 
feedstock used in the production of the LEU. This value was derived 
from the respondent's reported entered value of feed, which was based 
on publicly available information used for customs entry purposes. We 
made deductions from the starting price, net of discounts, for movement 
expenses (foreign and U.S. movement expenses, expenses associated with 
shipment of sample assays, and movement of customer feed from North 
America to France, marine insurance, merchandise processing and U.S. 
harbor maintenance fees, and brokerage) in accordance with section 
772(c)(2) of the Act and section 351.401(e) of the Department's 
regulations. In addition, in accordance with section 772(d)(1) of the 
Act, we also deducted credit expenses and indirect selling expenses, 
including inventory carrying costs, incurred in the United States and 
France and associated with economic activities in the United States.
    Furthermore, in accordance with sections 772(d)(3) and 772(f) of 
the Act, we made a deduction for CEP profit. The CEP profit rate is 
normally calculated on the basis of total revenue and total expenses 
related to sales in the comparison market and the U.S. market. In this 
case, all home market sales were to an affiliate; consequently, we 
based CEP profit on the costs and revenues reported for AREVA's front 
end division, which is COGEMA's parent company and represents the 
highest level of consolidation for Eurodif. See CV section below and 
Memorandum to the File from Mark Hoadley and Myrna Lobo, ``Analysis of 
Eurodif/COGEMA for the Preliminary Results of the Third Administrative 
Review of Low Enriched Uranium (LEU) from France,'' dated February 28, 
2006 (Prelim Analysis Memo).

Calculation of Normal Value Based on Constructed Value

    Section 773(e) of the Act provides that CV shall be based on the 
sum of the costs of materials and fabrication of the foreign like 
product, plus amounts for selling, general, and administrative expenses 
(SG&A), profit, and U.S. packing costs. In accordance with section 
773(e)(2)(B)(iii) of the Act, we based general and administrative (G&A) 
expenses on amounts derived from Eurodif's financial statements. In our 
calculation of the interest expense, we based financial expenses on the 
financial statements of AREVA. For selling expenses, we used 
information on indirect selling expenses in third countries provided in 
the questionnaire response. Where appropriate, we made circumstance of 
sale (COS) adjustments to CV, in accordance with section 773(a)(8) of 
the Act and section 351.410 of the Department's regulations.
    Electricity is considered a major input in the production of LEU. 
Eurodif obtained electricity from its affiliated supplier, EdF. On 
December 19, 2005, petitioners alleged that Eurodif purchased 
electricity from EdF at prices less than the affiliated suppliers' COP 
during the POR. After reviewing petitioners' major input allegation, 
the Department determined that it provided a reasonable basis on which 
to initiate an investigation of Eurodif's purchases of electricity from 
EdF. See Memorandum from Mark Hoadley to Barbara E. Tillman, Director, 
Office 6, ``Antidumping Duty Administrative Review of Low Enriched 
Uranium from France (2/1/04-1/31/05), Petitioners' Allegation of 
Purchases of a Major Input From Electricit[eacute] de France (EdF), an 
Affiliated Party, at Prices Below the Affiliated Party's Cost of 
Production,'' dated January 25, 2006.
    Section 773(f)(3) of the Act states that ``{i{time} f, in the case 
of a transaction between affiliated persons involving the production by 
one of such persons of a major input to the merchandise, the 
administering authority has reasonable grounds to believe or suspect 
that an amount represented as the value of such input is less than the 
cost of production of such input, then the administering authority may 
determine the value of the major input on the basis of the information 
available regarding such cost of production, if such cost is greater 
than the amount that would be determined for such input under paragraph 
(2).'' In applying the major input rule under section 351.407(b) of the 
Department's regulations, the Department will normally compare the 
transfer price between affiliates to the market price for the input to 
ensure that the transfer price is at least reflective of the market 
price. For major inputs, the Department then compares the transfer 
price and the market price to the COP to ensure that the transfer price 
charged recovers the producer's costs of production. We evaluated the 
affiliated supplier's reported electricity COP accordingly.
    On January 25, 2006, the Department solicited information from the 
respondent regarding the calculation of EdF's COP. Based on the 
response received on February 6, 2006, we have calculated the average 
cost of electricity for EdF. For details on calculations of

[[Page 11389]]

EdF's cost of electricity see Prelim Analysis Memo. Because the 
calculated COP for electricity exceeded the transfer price Eurodif paid 
to EdF for the electricity purchased, we calculated CV based on EdF's 
COP for electricity, in accordance with section 773(f)(3) of the Act.
    In addition, the Department requested that Eurodif/COGEMA provide 
details on certain research and development (R&D) projects undertaken 
by its affiliate, the Commissariat [agrave] l'Energie Atomique (CEA). 
Because Eurodif/COGEMA did not provide the requested information and 
the Department does not have any data on the record regarding CEA's R&D 
expenditures, we must rely on secondary information. As facts available 
and pursuant to sections 776(a) and (c) of the Act, we are relying on 
USEC's R&D expenditures on centrifuge technology as a surrogate for 
CEA's R&D expenditure because it is the only information on the record 
relating to R&D. Section 776(c) of the Act provides that the Department 
shall, to the extent practicable, corroborate secondary information 
used for facts available by reviewing independent sources reasonably at 
its disposal. The Statement of Administrative Action accompanying the 
Uruguay Round Agreements Act, H.R. Doc. 103-316 (SAA), at 870 (1994), 
explains that the word ``corroborate'' means that the Department will 
satisfy itself that the secondary information to be used has probative 
value. Because USEC's R&D appears to be for the very same technology 
and it is conducted by a company in the same industry, we consider the 
information relevant and corroborated. We have therefore added an 
amount for R&D based on an average of USEC's costs over five years as 
done in the previous review. See Issues and Decision Memorandum for 
Final Results of the Administrative Review of the Antidumping Duty 
Order on Low Enriched Uranium from France (2003-2004) dated September 
6, 2005, at Comment 7.
    In addition to the adjustments described above, in calculating CV 
we recalculated the reported defluorination cost. For a full discussion 
of the adjustments in calculating CV see Prelim Analysis Memo.
    We calculated profit in accordance with section 773(e)(2)(B)(iii) 
of the Act as explained in the SAA at 841. We used a CV profit rate 
based on AREVA's front end division as reported by respondent. See 
Prelim Analysis Memo.

Currency Conversion

    We made currency conversions pursuant to section 351.415 of the 
Department's regulations based on rates certified by the Federal 
Reserve Bank.

Preliminary Results of Review

    We preliminarily determine that the following dumping margin 
exists:

------------------------------------------------------------------------
                Manufacturer/Exporter                  Margin (percent)
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Eurodif/COGEMA......................................                7.70
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Duty Assessment

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. Pursuant to section 351.212(b) of 
the Department's regulations, the Department calculates an assessment 
rate for each importer of the subject merchandise for each respondent. 
Liquidation of the entries of LEU under review remains enjoined; 
however, if the injunction is lifted, the Department will promptly 
issue appropriate assessment instructions directly to CBP.

Cash Deposit Requirements

    The following cash deposit rates will be effective with respect to 
all shipments of LEU from France entered, or withdrawn from warehouse, 
for consumption on or after the publication date of the final results, 
as provided for by section 751(a)(1) of the Act: (1) For Eurodif/
COGEMA, the cash deposit rate will be the rate established in the final 
results of this review; (2) for previously reviewed or investigated 
companies not listed above, the cash deposit rate will be the company-
specific rate established for the most recent period; (3) if the 
exporter is not a firm covered in this review, a prior review, or the 
LTFV investigation, but the manufacturer is, the cash deposit rate will 
be the rate established for the most recent period for the manufacturer 
of the subject merchandise; and (4) if neither the exporter nor the 
manufacturer is a firm covered by this review, a prior review, or the 
LTFV investigation, the cash deposit rate shall be the ``all other'' 
rate established in the LTFV investigation, which is 19.95 percent. See 
Notice of Amended Final Determination of Sales at Less Than Fair Value 
and Antidumping Duty Order: Low Enriched Uranium from France, 67 FR 
6680 (February 13, 2002). These deposit rates, when imposed, shall 
remain in effect until publication of the final results of the next 
administrative review.

Public Comment

    Pursuant to section 351.224(b) of the Department's regulations, 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 publication of this notice. Pursuant to section 
351.309 of the Department's regulations, interested parties may submit 
written comments in response to these preliminary results. Unless 
extended by the Department, case briefs are to be submitted within 30 
days after the date of publication of this notice, and rebuttal briefs, 
limited to arguments raised in case briefs, are to be submitted no 
later than five days after the time limit for filing case briefs. 
Parties who submit arguments in this proceeding are requested to submit 
with the argument: (1) a statement of the issues, and (2) a brief 
summary of the argument. Case and rebuttal briefs must be served on 
interested parties in accordance with section 351.303(f) of the 
Department's regulations.
    Also, pursuant to section 351.310 (c) of the Department's 
regulations, within 30 days of the date of publication of this notice, 
interested parties may request a public hearing on arguments 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. Parties will be notified of the time and 
location.
    The Department will publish the final results of this 
administrative review, including the results of its analysis of issues 
raised in any case or rebuttal brief, no later than 120 days after 
publication of these preliminary results, unless extended. See section 
351.213(h) of the Department's regulations.

Notification to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under section 351.402(f) of the Department's regulations 
to file a certificate regarding the reimbursement of antidumping duties 
prior to liquidation of the relevant entries during this review period. 
Failure to comply with this requirement could result in the Secretary's 
presumption that reimbursement of antidumping duties occurred and the 
subsequent assessment of double antidumping duties.
    This administrative review and notice are issued and published in 
accordance with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: February 28, 2006.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E6-3176 Filed 3-6-06; 8:45 am]
BILLING CODE 3510-DS-S