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Notice

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

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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.

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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.

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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.

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 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 these orders. Specifically, these orders do 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 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 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 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, Start Printed Page 10063the 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.

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, Start Printed Page 10064including 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).

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Dated: February 22, 2006.

David M. Spooner,

Assistant Secretary for Import Administration.

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Footnotes

1.  Petitioners are the United States Enrichment Corporation (USEC) and USEC Inc.

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2.  The predecessor German company.

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[FR Doc. E6-2781 Filed 2-27-03; 8:45 am]

BILLING CODE 3510-DS-S