Trade complaint ruling favours USEC

30 May 2001

USEC of Bethesda, Maryland, is claiming another victory in its trade complaint against Eurodif and Urenco over sales of enriched uranium in the United States (See NEI March 2001, p10 and January 2001, p3).

Last month the US Department of Commerce (DoC) issued a preliminary ruling that Eurodif, the French company, and Urenco, the British-Dutch-German consortium, have benefited unfairly from government subsidies and should be required to pay countervailing duties on future exports to the US. The DoC set preliminary countervailing duty rates of 13.94% for Eurodif, and 3.72% for Urenco.

Although USEC had alleged subsidies of more than 20%, USEC senior vice president and general counsel Robert J Moore lauded the ruling. Moore said DoC has “taken another step toward confirming our assertions [that] European government subsidies have helped facilitate the sale of enriched uranium into the United States at unfair prices.” Klaus Messer, ceo of Urenco, sharply criticised the DoC ruling and predicted it will be reversed once DoC reviews all the evidence in the case. “This case is about a competitor trying to protect itself from competition with the best technology,” he said.

The European Union, meanwhile, is considering filing a counter-complaint with the World Trade Organisation if DoC does not reverse the ruling later this year.

Pending a final DoC determination, the European companies must post a bond or pay a cash deposit in the amount of the preliminary countervailing duty rates.

The latest ruling applies only to the subsidy, or countervailing duty, investigation of USEC’s trade complaint. On 5 July, the DoC will issue a preliminary determination as to whether Eurodif and Urenco have also illegally dumped enriched uranium in the United States at prices below their production costs. The anti-dumping complaint could result in DoC imposing additional duties.

USEC filed the two-part complaint in December 2000 with both DoC and the International Trade Commission (ITC) after watching its profits decline and the price of its stock drop below $5 a share, from $14.25 a share when the company first went public in July 1998. Since December, USEC’s stock has climbed back above $8 a share, owing partly to rising prices for enriched uranium and partly to the company’s preliminary success in pursuing trade complaints against its European competitors.

The ITC paved the way for the DoC investigation on 22 January 2001 when it found a reasonable indication that imports of enriched uranium from Eurodif and Urenco threaten to materially injure the US enrichment industry.

DoC will issue a final ruling on both the countervailing duty and antidumping investigations in mid-September, and ITC will make a final injury determination in early November. If both rulings are also favourable to USEC, DoC would then impose final duties.

The latest ruling came a few days before USEC officially notified the Department of Energy that its Portsmouth Gaseous Diffusion Plant in Ohio ceased production of enriched uranium. The company’s plant in Paducah, Kentucky is now the only uranium enrichment facility in the US.
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