Soviet Union/CIS Uranium Antidumping Case

Background

In November 1991, a coalition representing the US uranium industry comprised of uranium mining companies and a labor union (referred to as the “Ad Hoc Committee) filed an antidumping petition with the US Department of Commerce (DOC) and the International Trade Commission (ITC) alleging that imports of uranium products from the then-Soviet Union were being dumped in the US market and were materially injuring the domestic uranium industry. (Dumping is selling a good at prices below “fair value”—generally the prices charged in the producer’s home country, or its cost of production plus a reasonable profit.)

DOC began an antidumping investigation of such products on December 5, 1991, and on December 23, the ITC made the preliminary determination that such products were causing material injury to the US uranium industry. Two days later, the Soviet Union formally dissolved, which gave rise to the issue of whether the investigation should begin anew. (The antidumping law requires the investigation of dumping on a country-by-country basis.) Because the antidumping petition did not contain country-specific information about production, pricing, or other relevant matters, an investigation of each newly independent CIS (Commonwealth of Independent States) country was not possible. Nonetheless, DOC decided to continue the investigation against the 12 countries that had emerged from the breakup of the Soviet Union without requiring a new petition.

DOC issues its preliminary findings in June 1992, determining that uranium from six CIS countries was being sold in the USA at less than fair value. These countries were Kazakhstan, Krygyzstan, Russia, Tajikistan, Ukraine, and Uzbekistan. As a result, DOC set a preliminary antidumping duty rate of 115.82 percent on uranium from each of these republics.

Suspension Agreements

On October 16, 1992, the governments of the six uranium-producing CIS countries signed quota-based suspension agreements. Under these agreements, DOC suspended further investigations of the alleged dumping. In exchange, the countries agreed to price-tied quotas on US imports of CIS uranium, effectively prohibiting imports of such products unless and until DOC determined that the US price of uranium oxide (U3O8) rose to a level of US$13.00 per pound. However, the agreements provided for other avenues of imports, including “grandfathered” contracts, and a special one-time importation of low-enriched uranium (LEU) from Russia.

Not long after the agreements were concluded, the governments of Tajikistan and Ukraine terminated their respective suspension agreements with DOC. As provided in the antidumping law, DOC resumed its antidumping investigation of uranium products from these two countries, calculating a final dumping margin of 129 percent each. In its final determinations, the ITC unanimously found that imports of Tajik uranium were not materially injuring the US uranium industry and that, while imports of natural uranium and LEU from Ukraine were materially injuring the US industry, imports of highly enriched uranium (HEU) from Ukraine were not causing material injury. Accordingly, DOC issued an antidumping duty order covering only natural uranium and LEU products from Ukraine. In addition, DOC determined that Ukrainian uranium enriched in a third country was not subject to the antidumping duty order.

Matched Sales Amendment - Russia

Because the US uranium price did not rise to $13.00 per pound by September 30, 1993, DOC began consultations for a tentative amendment to the Russian suspension agreement, known as the “matched sales” amendment, which was announced in December 1993. The amendment to the Russian agreement was finalized in March 1994, which eliminated the price-tied quota for Russia and replaced it with specific limits based on sales of equal amounts of Russian and US uranium. Both natural uranium and SWU are covered by the amendment, although the SWU provisions were only in place for the first two years of the agreement. The first year of the matched uranium sales program was quite successful, with about 73 percent of the quota realized.

Since the antidumping petition was initiated, many filings, agreements, amendments, bills, measures, and deals have emerged over several years. By September 1, 2001, all US restrictions were terminated against all but Russian-origin uranium.

On December 7, 2000, the USEC Inc. petitioned the US Department of Commerce (DOC) to conduct an investigation into dumping into the USA of enriched uranium imports from Europe. On December 27, 2000, DOC announced it would initiate such an investigation.

In petitions filed with DOC and the US International Trade Commission (ITC), USEC charged that its European competitors—France’s Eurodif S.A., through its US sales agent COGEMA, and Urenco Ltd., a British-Dutch-German consortium, were selling enriched uranium into the US market below their cost of production and benefiting from unfair government subsidies in their home markets.

Unfair Government Subsidies

On December 31, 2001, after a year-long investigation, DOC found that the two European enrichers were receiving unfair subsidies and, in the case of Eurodif, dumping low-enriched uranium (LEU) in the US market. The department determined that subsidies in the amount of 12.15 percent had been provided on LEU imports from the French-government owned Eurodif and 2.23 percent on imports from Urenco. The department also found a dumping margin of 19.95 percent with regard to Eurodif imports.

On July 1, 2004, DOC calculated final countervailing duty rates for subsidized LEU imports entering the USA during the period May 14, 2001-December 31, 2002, subsequent to that covered by the original investigation. For the case involving Eurodif, DOC calculated a countervailing duty rate of 3.63 percent for 2001 and 0.71 percent for 2002. The 2002 rate serves as the new estimated countervailing duty rate on future imports.

For Urenco, DOC calculated a countervailing duty rate of 1.57 percent for the 2001 period and 1.47 percent for 2002. The department did not establish a new countervailing duty rate for future Urenco imports based on its conclusion that the subsidies identified ended in 2002. However, the existing countervailing duty order remains in force, and Urenco could again face duties if found to have received unfair subsidies in the future.

Unfair Trade Practices

Final results of a follow-up trade proceeding issued on July 8, 2004 by DOC found that Eurodif has curtailed its unfair pricing of LEU imports in the US market. Antidumping duties had been in effect against Eurodif since July 2001, when DOC made its first dumping finding in the case. This review determined the magnitude of dumping during the 19-month period (July 13, 2001-January 31, 2003) since DOC made its first dumping determination.

In its ruling, DOC calculated a final antidumping duty rate of 5.43 percent on imported LEU produced by Eurodif. The rate reflects the actual margin of dumping that occurred on imports made during the 19-month review period. It will serve as the new estimated antidumping duty rate on future imports, in place of the existing 19.95 percent estimated rate that had applied since the antidumping order was imposed.