Commerce rules on USEC case

1 January 2002

The US Department of Commerce (DoC) has ruled not to impose anti-dumping duties on imports of Urenco low-enriched uranium (LEU) to the USA. The DoC also said that Urenco LEU imports would be subject to a countervailing duty rate of 2.26%, down from the initial 3.72% proposed in a preliminary ruling last May.

In contrast to the findings on the British-Dutch-German consortium Urenco, the DoC raised proposed penalties against French-based Eurodif. Last July, the DoC proposed anti-dumping duties with a rate equal to 17.52% of the value of any Eurodif LEU imports to the USA, but increased that to 19.57% in December's ruling. In a separate ruling last May the DoC proposed countervailing duty rates against Eurodif equal to 13.94% for imports from France, but last month this figure was only slightly lowered to 13.21%.

Sources said that the DoC's contrasting treatment of the two Europe-based companies results from the difference in enrichment processes — Urenco uses gas centrifuge technology whereas Eurodif uses gaseous diffusion technology.

The DoC determination arises out of investigations initiated by USEC in December 2000 when USEC sought countervailing duties at a rate in excess of 20% and anti-dumping duties at rates between 15 and 21%.

USEC spokesman Charles Yulish said: "The investigation's decision confirms our contentions in the petition [and] the duties have been imposed to ensure fair pricing in the US market." The European Commission (EC) said it may file a complaint with the World Trade Organisation (WTO) against the duties. Pascal Lamy, European competition commissioner said: "The EC will now examine this decision closely and reserves itself the right to take the matter before the WTO if the dispute is not settled amicably." The EC questions the methodology used by the DoC, and maintains that the data submitted to it by the Union and the European industrial sector were not properly considered. Its main contention is that, as it considers USEC to be a provider of enrichment services, the DoC ruling is incompatible with WTO rules, which apply to producers and not service providers.

Klaus Messer, chief executive of Urenco, said: "We are pleased that the DoC confirmed that Urenco is not dumping with imports from our three countries. Regarding the countervailing duty assessment, we shall study the DoC's determination and consider our options to appeal." Messer maintained: "Urenco's centrifuge technology has allowed it to utilise the world's most efficient and economic enrichment process to stay well ahead of its competitors." He stressed: "It is this technology — not government grants made many years ago — that has fuelled Urenco's competitiveness and consistent profitability." The USEC trade case, Dr Messer said, "is about a competitor trying to protect itself from competition with the best technology." Later this month the International Trade Commission (ITC) is due to rule on whether the European LEU imports have materially injured USEC, or threaten to do so. If the ITC believes this to be the case, the DoC will then issue final anti-dumping and countervailing duty orders on the imports. Last month congressman Donald Manzullo, chairman of the House small business committee, appeared before the ITC warning that higher enrichment costs, resulting from the imposition of anti-dumping duties, would raise the price of electricity from nuclear plants. He claimed that USEC "has always struggled, even when it was a government corporation." Urenco's plans to set up in the USA as another domestic producer will invalidate any duties that may be applied against the company.

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