Usec, Inc. v. U.S., Slip op. 01-08.
| Citation | 132 F.Supp.2d 1 |
| Decision Date | 24 January 2001 |
| Docket Number | Court No. 99-08-00547.,Slip op. 01-08. |
| Parties | USEC, INC. and United States Enrichment Corporation, Plaintiffs, and Ad Hoc Committee of Domestic Uranium Producers, Plaintiff, v. The UNITED STATES, Defendant, and The Government of Kazakhstan, National Atomic Company Kazatomprom, and NUKEM, Inc., Defendant-Intervenors. |
| Court | U.S. Court of International Trade |
Akin, Gump, Strauss, Hauer & Feld, LLP, Valerie A. Slater, Karen L Bland, Catherine J. Finnegan, Nathan J. Oleson, (Stephen J. Claeys), for Plaintiff Ad Hoc Committee of Domestic Uranium Producers.
Steptoe & Johnson LLP, Washington, DC, Richard O. Cunningham, Sheldon E. Hochberg, (Eric C. Emerson)., Shannon P. MacMichael, Amy Howe, for Plaintiffs USEC Inc., and United States Enrichment Corporation.
(Lyn M. Schlitt), General Counsel, James A. Toupin, Assistant General Counsel, Michael K. Haldenstein, Michael Diehl, Office of the General Counsel, U.S. International Trade Commission, Washington, DC, for Defendant.
Shearman & Sterling, Washington, DC, (Thomas B. Wilner), for Defendant-Intervenors the Republic of Kazakhstan and the National Atomic Company Kazatomprom.
White & Case, LLP, Washington, DC, Carolyn B. Lamm, Adams C. Lee, Christina C. Benson, (David L. Elmont), for Defendant-Intervenor NUKEM, Inc.
Plaintiffs in this case are domestic uranium producers challenging the United States International Trade Commission's ("ITC" or "Commission") final negative determination in Uranium from Kazakhstan, 64 Fed.Reg. 40897 (July 28, 1999), in which the Commission ascertained that uranium imported from Kazakhstan caused neither material injury nor threat of material injury to the domestic uranium industry. Before the court are Plaintiffs' USCIT R. 56.2 Motions for Judgment Upon the Agency Record ( ). Plaintiffs bring this action pursuant to 19 U.S.C. §§ 1516a(a)(1)(c) and 1516a(a)(2)(B)(ii) (1994); the ITC opposes Plaintiffs' motions. Defendant-Intervenors NUKEM, Inc., ("NUKEM") and the Republic of Kazakstan and the National Atomic Company Kazatomprom ("Kazatomprom") also filed briefs opposing Plaintiffs' motions. The court exercises jurisdiction pursuant to 28 U.S.C. § 1581(c)(1994).1 For the reasons set out in the following opinion, the court denies Plaintiffs' Motions for Judgment Upon the Agency Record.
On November 8, 1991, Plaintiffs filed with the U.S. Department of Commerce ("Commerce" or "ITA") and the ITC a petition alleging that imports of uranium from the Union of Soviet Socialist Republics ("Soviet Union" or "USSR") had been sold at less than fair value ("LTFV") and seeking the imposition of antidumping duties. See Pl. Ad Hoc Committee of Domestic Uranium Producers' Mem. in Supp. of Its Rule 56.2 Mot. for J. on the Agency R. ("Ad Hoc Br.") at 5.
On November 12, 1991, the ITC initiated a preliminary investigation to determine whether the domestic industry was materially injured, threatened with material injury, or materially retarded due to uranium from the USSR, and on November 29, 1991, Commerce initiated an investigation to determine whether imports of Soviet uranium were likely to be sold in the United States at LTFV.2 The Commission issued a preliminary injury determination on December 23, 1991, concluding that uranium imports from the Soviet Union materially injured the U.S. uranium industry. Id.
On December 25, 1991, the Soviet Union dissolved into twelve independent states; on March 25, 1992, Commerce opted to continue the antidumping investigation against each of the twelve states. Id. at 6. The Government of Kazakstan ("GOK"), a non-market economy ("NME"), and Commerce signed a suspension agreement on October 16, 1992, pursuant to 19 U.S.C. § 1673c(1) (1993).3 Following acceptance of the Kazakh Suspension Agreement, the ITC suspended its investigation of uranium from Kazakhstan. Id. at 7. Under the terms of the agreement, Kazakstan was permitted to: (a) ship limited amounts of uranium pursuant to pre-existing contracts; (b) bring uranium into the United States temporarily for processing and then re-export the uranium to third countries; and (c) export a limited quantity of uranium to the United States under a price-tiered quota.4
In 1998, the suspension agreement became economically unsound for Kazakhstan. Following dissolution of the Soviet Union, Kazakh supplies dropped, making Kazakhstan unable to meet the quota terms of the suspension agreement in both 1996 and 1997. In 1998, uranium prices fell to below $12.00 per pound, which prevented Kazakhstan from exporting uranium to the United States. After attempting to negotiate an amendment to the suspension agreement, Kazakhstan filed its termination request, which became effective on January 11, 1999. Commerce and the ITC then resumed their investigations of imports of Kazakh uranium. On June 10, 1999, Commerce published its Final LTFV Determination, affirming that sales of uranium from Kazakhstan had been made at LTFV at a margin of 115.82 percent. See Final Determination of Sales at Less Than Fair Value: Uranium from the Republic of Kazakhstan, 64 Fed.Reg. 31179, 31188 (June 10, 1999) ("Final LTFV Determination"). The margin rate was derived from the average of the underselling alleged in the petition. Id. at 31184. On July 23, the ITC issued its negative final material injury and threat of material injury determination. See Uranium from Kazakhstan, USITC Pub. 3213, Inv. No. 731-TA-539-A (Final) (July 1999) ("Final Determination").5
When the Soviet Union dissolved in 1991, there was an inventory in Kazakstan of uranium (UF6 and UO2), that was enriched in facilities located in the Soviet Union in territory controlled by what is now Russia or the Russian Federation ("Kazakh Stockpile").6 While the suspension agreement was in effect, interested parties, including Plaintiffs and Defendant-Intervenors GOK and NUKEM, submitted comments to Commerce regarding the country of origin of the Kazakh Stockpile. Plaintiffs argued that the stockpile should be treated as subject to the Russian suspension agreement because it was enriched in Russian territory, while Defendant-Intervenors contended that it should be subject to the Kazakh suspension agreement because it was located in Kazakh territory at the time of the Soviet Union's dissolution. While not addressing the issue directly, Commerce authorized several shipments of uranium material from the Kazakh Stockpile into the U.S. during the pendency of the suspension agreement on condition that it be re-exported after processing in the United States.
In its Final Determination, the ITC excluded potential imports of uranium from the Kazakh Stockpile from its material injury analysis, following Commerce's pronouncement that enrichment confers origin, and reasoning that because the uranium in the Kazakh Stockpile was enriched in the Russian Federation, it was not a product of Kazakhstan for purposes of the determination. See Final Determination at 21.7
On June 3, 1992, Commerce issued affirmative preliminary determinations that the uranium imported from Kazakhstan, Kyrgyzstan, Russia, Turkmenistan, the Ukraine, and Uzbekistan was being sold or was likely to be sold in the United States at LTFV. See Preliminary Determinations of Sales at Less Than Fair Value: Uranium From Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Ukraine and Uzbekistan; and Preliminary Determinations of Sales at Not Less Than Fair Value; Uranium From Armenia, Azerbaijan, Byelarus, Georgia, Moldava and Turkmenistan, 57 Fed.Reg. 23380 (June 3, 1992). Commerce terminated its investigations of the remaining six independent states because they neither produced uranium nor made LTFV sales to the United States. When Commerce entered into the suspension agreement with Kazakhstan, it also signed suspension agreements with Kyrgyzstan, Russia, Turkmenistan, the Ukraine, and Uzbekistan.
The pre-Uruguary Round Agreements Act ("URAA") cumulation provision of the antidumping statute provides that the ITC must cumulatively assess the volume and effects of imports from two or more countries of articles "subject to investigation" if the imports compete with one another and the like product in the United States market.8 In its Final Determination regarding Kazakh uranium, the ITC did not cumulate imports of uranium from Russian, Kyrgyzstan and Uzbekistan, reasoning that they were still subject to suspension agreements and therefore not subject to ongoing investigations by either the ITA or the ITC.
Two domestic uranium producers, Cogema and Power Resources, Inc. ("PRI"), have parent companies with investments in the Kazakh uranium industry. Cogema S.A., which owns Cogema, has a 45 percent stake in a uranium deposit located in Kazakhstan and is partners with Kazatomprom, a GOK entity and a Defendant-Intervenor in this case. PRI's parent, Cameco Corp., owns a 60 percent share in a Kazakh uranium mining project, in which Kazatomprom is a partner. However, during the period of investigation ("POI"), neither Cogema's nor PRI's investments in Kazakh uranium resulted in the production, export or import of Kazakh uranium. Therefore in its final injury determination, the ITC found that Cogema and PRI were not related to Kazakh uranium producers or exporters within the meaning of the statute. See Final Determination at 10-11.
Uranium is a radioactive metal used as fuel in nuclear reactors. Before it can be used as fuel, it must pass through the four stages of the "uranium fuel cycle." During the first stage, uranium ore is mined and processed to increase the level of uranium oxide (U3O8) from between .1 percent and 15 percent to at least 70 percent. The resulting product is natural uranium concentrate, which represents...
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