AMENDMENT TO THE AGREEMENT SUSPENDING THE ANTIDUMPING INVESTIGATION ON URANIUM FROM THE RUSSIAN FEDERATION

DEPARTMENT OF COMMERCE

[A-821-802]

Amendment to the Agreement Suspending the Antidumping

Investigation on Uranium From the Russian Federation

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: March 11, 1994.

FOR FURTHER INFORMATION CONTACT: Sally C. Gannon, Eric Hassman, or

Melissa Skinner, Office of Agreements Compliance, Import

Administration, International Trade Administration, U.S. Department of

Commerce, 14th Street and Constitution Avenue, NW, Washington, DC

20230; telephone: (202) 482-1391, (202) 482-1382, or (202) 482-0159,

respectively.

SUMMARY: The Department of Commerce (the Department) and the Government

of the Russian Federation (GRF) have signed an Amendment (the

Amendment) to the Agreement Suspending the Antidumping Investigation on

Uranium from the Russian Federation (the Agreement). The parties signed

the Amendment recognizing that the Agreement to date had not generated

the anticipated increase in the price of U.S.-origin natural uranium

that would have permitted renewed sales of Russian uranium under the

price-tied quota mechanism nor increased sales of U.S.-origin natural

uranium or employment in the U.S. uranium industry.

SUPPLEMENTARY INFORMATION:

Background

On October 16, 1992, the Department and the GRF signed the

suspension agreement on uranium and, on October 30, 1992, the Agreement

was published in the Federal Register (57 FR 49220, 49235). The

Department's latest price calculation, under the terms of the

Agreement, on October 1, 1993, did not reach the threshold price of

$13.00 per pound which would allow for Russian Federation imports of

uranium into the U.S. market under the price-tied quota mechanism

(Appendix A of the Agreement). Thus, the GRF requested consultations

with the Department, as specified in Section X.C of the Agreement, in

order to review the market situation and consider adjustments to the

quota.

As a result of these consultations, a proposed amendment to the

Russian suspension agreement, based on the concept of joint sales

between U.S. and Russian producers, was initialled on December 15,

1993, by the Department and the GRF. The Department subsequently

released the proposed amendment to interested parties for comment.

After careful consideration by the Department of the comments submitted

and further consultations between the two parties, the Department and

the GRF signed the final amendment on March 11, 1994. The text of the

Amendment follows in Annex 1 to this notice.

Information on the amount of annual matched imports remaining

available for the year, as noted in Section IV.E of the Amendment, may

be obtained from the above-noted contacts in the Office of Agreements

Compliance. Confirmation requests should be submitted, in accordance

with 19 CFR 353.31 and 353.32, to: Secretary of Commerce, Attention:

Import Administration (Office of Agreements Compliance), Central

Records Unit, Room B-099, U.S. Department of Commerce, Pennsylvania

Avenue and 14th St. NW., Washington, DC 20230.

Dated: March 25, 1994.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

Annex 1--Amendment to the Agreement Suspending the Antidumping

Investigation on Uranium From the Russian Federation

The parties recognize that the Agreement Suspending the Antidumping

Investigation on Uranium from the Russian Federation (``the

Agreement'') has not generated the anticipated increase in the price of

U.S.-origin natural uranium that would have permitted renewed sales of

Russian uranium under the price-tied quota mechanism; nor has the

Agreement increased sales of U.S.-origin natural uranium or employment

in the U.S. uranium industry. Because an objective of this Agreement is

to restore the competitive position of the U.S. industry, the parties

agree as follows.

The Agreement is hereby extended until March 31, 2004. Consistent

with the requirement of Section 734(l) of the U.S. Tariff Act of 1930,

as amended (the Act) to prevent the suppression or undercutting of

price levels of domestic products in the United States, Sections II,

IV, VIII and XIV are amended as set forth below. Appendix A of the

Agreement is suspended until March 31, 2004, in accordance with amended

Section XIV. All other provisions of the Agreement, particularly

Section VII, remain in force and apply to this Amendment.

The following definitions are added to Section II.

II. Definitions

(e) For purposes of this Agreement, ``United States'' shall

comprise the customs territory of the United States of America (the 50

States, the District of Columbia and Puerto Rico) and foreign trade

zones located in the territory of the United States of America. (f)

Separative work unit, or SWU, means the standard measure of enrichment

services. The effort expended in separating a mass F of feed of assay

x<INF>f into a mass P of product of assay x<INF>p and waste of mass W

and assay x<INF>w is expressed in terms of the number of separative

work units needed, given by the expression

SWU=WV(x<INF>w)+PV(x<INF>p)-FV(x<INF>f), where V(x) is the ``value

function,'' defined as V(x)=(1-2x)ln[(1-x)/x].

(g) ``U.S. producer'' means: (1) a company that owns a production

interest in a licensed or permitted mine capable of producing uranium

with sufficient economically recoverable reserves to justify production

or (2) a U.S. converter or enricher.

(h) ``For consumption'' means for further processing (as necessary)

and use as nuclear fuel. Consumption may include such uses as swaps or

exchanges of material, only where such swaps or exchanges are

documented to be conducted solely for the purpose of facilitating the

further processing and use as nuclear fuel by the end-user. The

material shall not be loaned. The material shall not be resold except

as a result of force majeure.

(i) ``End-user'' means an entity, such as an electric utility,

hospital, or scientific institution, which consumes uranium.

(j) A ``Spot Contract'' means any contract for natural uranium and/

or SWU that specifies that all deliveries must be completed within 12

months of contract execution. A ``Long-Term'' contract means any

contract that is not a spot contract.

(k) ``Newly-produced'' natural uranium in the form of

U<INF>3O<INF>8 means uranium produced, on or after the effective date

of this Amendment, by conventional mining, in-situ leaching (``ISL'')

production, co-product or by-product production, or mine water recovery

production. Newly-produced natural uranium in the form of UF<INF>6

means UF<INF>6 containing newly-produced U<INF>3O<INF>8. If the Russian

Federation Ministry of Atomic Energy (MINATOM) has not concluded sales

of at least 2,204,620 pounds U<INF>3O<INF>8 equivalent during the first

six months of this Amendment, up to 1,000,000 pounds U<INF>3O<INF>8

equivalent mined prior, and milled subsequent to, the effective date of

the Amendment, may be used for the purpose of matched sales for the

remainder of that year.

Section IV.A., IV.B., and IV.C.1., and to the extent that they

relate to Appendix A, other portions of Section IV, are replaced with:

IV. Matched Imports. Matched imports are imports of Russian-origin

natural uranium or SWU that are matched with U.S.-origin natural

uranium or SWU for delivery to end-users for consumption in the United

States in accordance with the terms of this Amendment. Russian-origin

natural uranium or SWU may be imported into the United States under

this Amendment only if they qualify as matched imports as described

below. The importer must document that the United States Department of

Commerce (``the Department'') has issued a confirmation under which the

shipment may be imported and any prior imports under that confirmation.

Notwithstanding other provisions of this Amendment, matched imports are

authorized up to the limits, and subject to the conditions, set forth

below.

To qualify as a matched import under this section, ``Russian-

origin'' natural uranium (i.e. U<INF>3O<INF>8 or UF<INF>6) or SWU must

be matched with an equal portion of ``newly-produced'' U.S.-origin

natural uranium (i.e. U<INF>3O<INF>8 or UF<INF>6) or SWU, subject to

adjustment under Section D. For purposes of this Section, Russian-

origin means natural uranium (i.e. U<INF>3O<INF>8 or UF<INF>6) or SWU

which is produced in Russia, and which is exported from Russia for the

first time after the effective date of this Amendment. Matched imports

are subject to the following conditions:

(a) The U.S.-origin natural uranium must be mined in the United

States, and/or the U.S.-produced SWU must be or have been performed in

the United States, subsequent to the effective date of this Amendment

and must be delivered pursuant to a new contract, or a new extension or

modification of a contract, to supply the needs of an end-user which

are uncommitted as of the date of the Amendment;

(b) In the case of SWU, prior to the presentation of the matched

sale to the Department for confirmation, the U.S. producer must be

informed of all material terms of the matched sale to the end-user and

must consent to the matching of its SWU in that sale with the imported

Russian SWU;

(c) In the case of natural uranium, if the U.S. producer is not the

contracting party with the end-user, then, prior to the presentation of

the matched sale to the Department for confirmation, the U.S. producer

must consent to the matching of its uranium in that sale with the

imported Russian uranium; and

(d) Prior to the presentation of the matched sales contract to the

Department for confirmation, the U.S. producer and the Russian producer

must agree to the schedule of deliveries to the end-user of the

imported Russian uranium or SWU and of the U.S. uranium or SWU.

Matched sales may be made only by matching spot contracts to spot

contracts and long-term contracts to long-term contracts, as defined in

Section II, and uranium-type to uranium-type (i.e., U<INF>3O<INF>8 or

UF<INF>6). Consistent with Section III of the Agreement, conversion

does not change the country-of-origin of uranium ore, and, thus, U.S.-

origin UF<INF>6 is U.S-origin U<INF>3O<INF>8 converted at any

converter.

A. Limits for Matched Imports

For 1994 (April 1, 1994-March 31, 1995) and 1995 (April 1, 1995-

March 31, 1996), this Amendment authorizes annual matched sales of up

to 3,000 metric tons (6,613,860 pounds U<INF>3O<INF>8 equivalent) per

year of Russian-origin natural uranium and up to 2 million Russian-

origin SWU per year from the Russian Federation to the United States.

The matching natural uranium must be sold during 1994 and 1995 but may

be imported for delivery at any time during the life of the Amendment,

subject to the conditions contained herein. For the years 1996 through

2003, this Amendment authorizes additional matching deliveries of

natural uranium up to, but not exceeding, the levels listed in

Attachment 1. Deliveries pursuant to the 3,000 metric ton matched

natural uranium quotas, confirmed in 1994 and 1995 and delivered in

subsequent years, shall not be counted against the quota limitations

listed in Attachment 1 for the years 1996 through 2003. Because the

annual matching SWU quota expires two years from the effective date of

this Amendment, no additional matched SWU sales, or corresponding

imports of SWU, will be allowed. However, the matching SWU sold during

1994 and 1995 may be delivered at any time during the life of the

matched sales contract.

For purposes of counting against the 1994 and 1995 sales quota

limitations for both natural uranium and SWU, the date of the

Department's confirmation (see Section IV.E) shall determine whether a

matched import comes within the annual limit. However, for purposes of

counting against the natural uranium delivery quota limitations for the

years 1996 through 2003, the date of delivery of the Russian component

of the confirmed matched sale (see Section IV.E) shall determine

whether a matched import comes within the annual limit. The sales

quotas in the first two years and the delivery quotas in subsequent

years of the Amendment for natural uranium are separate and distinct.

Enriched uranium from Russia may be imported only if there is a

matched sale for the SWU component of such enriched uranium. When

Russian enriched UF<INF>6 is imported pursuant to a matching SWU sale,

an equivalent amount of natural uranium (based on the U<INF>235 assay

of the product assuming a 0.3 tails assay) must be deposited with,

exchanged, or returned to the seller's account on, before, or up to

five days after the date of delivery of the imported enriched UF<INF>6

to the buyer or the buyer's account. The feed component shall be

counted against the natural uranium matched sales quota, through use in

a matched sale, unless the feed material or its equivalent that is

returned to the seller is either exported or quarantined from the U.S.

market. Regardless of the ultimate disposition of the natural feed

component associated with a sale of Russian-origin SWU, from the time

any uranium products are delivered or returned to the seller or for the

seller's account until the time such material is disposed of in

accordance with the terms of this Section of the Amendment, the seller

agrees to the following:

<bullet> To maintain the material in a separate account exclusively

for the accounting of this material at the converter, enricher, or

fabricator;

<bullet> To make available to the Department, quarterly, a full

accounting of all deliveries into and out of this account at the

converter, enricher, or fabricator including delivery from the account,

to whom delivery was made, pursuant to which contract, in what

quantity, and confirmation of the status of any transaction that

occurred from the account; and

<bullet> To certify not to use the imported uranium for loans,

swaps, or use as loan repayment or any purpose other than delivery in

accordance with this Section of the Amendment, unless: (i) The amount

is destined for consumption as defined in Section II(h); (ii) the

amount is counted against the quota in connection with a confirmed

matched sale; and (iii) the Department is notified of the transaction.

Any natural uranium deposited with, exchanged, or returned to the

seller or the seller's account as a result of sales of Russian SWU

under matched contracts shall be deemed to be of Russian origin at the

time of deposit, exchange or return, and, if re-exported, shall clearly

be identified as Russian origin in all accompanying documentation and

packaging.

MINATOM will restrict the volume of direct or indirect exports to

the United States of the merchandise subject to this Amendment on or

after the effective date of this Amendment, and will continue to

restrict the transfer or withdrawal from inventory (consistent with the

provisions of this Section) of the merchandise subject to this

Amendment.

MINATOM will ensure that all exports of merchandise made under this

provision qualify as matched imports made in conjunction with a U.S.

producer or enricher, composed of equal parts Russian and newly-

produced U.S.-origin natural uranium (subject to adjustment under

Section D) or SWU.

B. Per Company Limits for Matched Imports

For each calendar year's quantity of confirmed matched imports, no

more than 20 percent of the total allowable limit of matched imports of

uranium may be matched with uranium sourced from any single U.S.

producer. Nor may more than fifty (50) percent of the total allowable

limit be matched with uranium from any single group of producers under

common ownership or control. For purposes of this section, ``ownership

or control'' shall be defined consistent with Section 771(13) of the

Act.

C. Price Limits for Matched Imports

The unit price paid to the U.S. producer for the U.S. component for

each sale involving matched imports must be greater than the unit price

paid by the end-user for consumption in the United States. (If the

producer is the seller to the end-user, there may be no separate

payment for the U.S. component.)

D. Monitoring of U.S. Production

Given that a goal of this Amendment is to stimulate the production

of natural uranium in the United States, the Department will monitor

the level of uranium production in the United States through

information obtained from the U.S. Energy Information Administration.

Regardless of the level of U.S. production, matched imports during

the first year of this Amendment will be on a 50-50 basis. Depending on

the level of U.S. uranium production achieved in the first year, the

matching requirements for matched imports in the second year may be

modified as described below.

The Department will determine the annualized level of U.S.

production of natural uranium in 1994 using data from April 1, 1994,

through March 31, 1995. On April 30, 1995, the Department will announce

the level of U.S. production for 1994 for the purpose of possible

adjustment to the matching requirement ratio for the following year. If

the annualized level of U.S. production in the first year is less than

9 million pounds or more than 10 million pounds, then the ratio

required for matched import limits during the second year of this

Amendment will be adjusted in accordance with the following schedule:

Matching

requirement for

second year

U.S. production for first year (millions of lbs.) (percentages)

-------------------

U.S. Russian

------------------------------------------------------------------------

4-5................................................. 55 45

5-6................................................. 54 46

6-7................................................. 53 47

7-8................................................. 52 48

8-9................................................. 51 49

9-10................................................ (<SUP>1) (<SUP>1)

10-11............................................... 49 51

11-12............................................... 48 52

12-13............................................... 47 53

13-14............................................... 46 54

14-15............................................... 45 55

------------------------------------------------------------------------

<SUP>1No change.

Any changes in the ratio required for matched imports during the

second year of this Amendment will not affect matched imports confirmed

by the Department during the first year of this Amendment.

Such a ratio adjustment will only be in force during 1995. For all

subsequent years of the Amendment, the ratio for matching sales will

remain at 50-50.

E. Department Confirmation of Matched Imports.

Any matched sales contract to the end-user to be used in a matched

sale under this Amendment must be submitted to and confirmed by the

Department in accordance with this Section. To be confirmed as a

matched contract, the party submitting the contract must provide the

following information:

<bullet> The date and terms, including price, of the contract with

the end-user pursuant to which the matched import(s) will be made;

<bullet> A description of the physical material being imported;

<bullet> Identification of the Russian supplier of the matched

import(s);

<bullet> The estimated date on which the matched import(s) will

enter the customs territory of the United States;

<bullet> The export license number under which the import(s) will

be exported;

<bullet> The U.S. producer and specific production facility from

which the matched material was or will be sourced;

<bullet> Explanation of the U.S. producer's relation to any other

enterprise involved in the production and/or sale of uranium in the

United States;

<bullet> A copy of the contract with the end-user pursuant to which

the matched import(s) are to be made;

<bullet> A copy of any separate contract or agreement made for the

U.S. material;

<bullet> Certification from the U.S. producer that its production

will be ``newly-produced'' (within the meaning of this Amendment) to

fulfill the contract, and its ability and commitment to provide, at the

time specified in the contract, the contracted volume of natural

uranium and/or SWU;

<bullet> Certification from the U.S. producer that it consents to

the matching of its material and the estimated delivery schedule;

<bullet> An estimated delivery schedule;

<bullet> Certification from the end-user that it will consume the

matched product in the United States in accordance with Section II(h)

of this Amendment;

<bullet> All documentation relating to the escrow account set up

for the matched sale; and

<bullet> Any other information that the Department, after

consultation with MINATOM, determines necessary to confirm that the

requirements of this Amendment have been met.

Within 15 days of filing with the Import Administration's Central

Records Unit a complete confirmation request, the Department will

confirm that the matched sales contract qualifies for matching under

this Amendment or will state specifically why it does not qualify. In

making such a determination, the Department will limit its review to

determining (i) whether the contract under review comes within total

annual limits remaining available for the year in which the request was

submitted; (ii) whether the U.S. uranium matched under the matched

sales contract exceeds the per company limitations set forth in Section

IV.B; and (iii) whether the sales price for the newly-produced U.S.

uranium, if there is such a separate sale, meets the requirements set

forth in Section IV.C. Further, in the process of confirmation request

and approval, the Department will review the specific terms of the

escrow account documentation.

The end-user must pay a blended price for all deliveries. When

deliveries of Russian uranium are made prior to deliveries of the

matching U.S. product, either:

a. The U.S. product must be delivered to the end-user within 1

month of delivery of the Russian component to the end-user, or

b. The difference between the price paid to the Russian producer

and the blended price will be paid into a properly drawn escrow account

specified in the contract. However, the amount deposited in the escrow

account shall in no case be less than 10 percent of the total

contracted value of the U.S. component of the matched sale. The escrow

funds will be forfeited if the U.S. producer fails to deliver any

portion of the U.S. component of the matched sale. The Department and

MINATOM will develop a way to dispose of any forfeited escrow funds,

but in no event will such funds be returned to any matched sales

participant, e.g., the U.S. or Russian producer, the end-user, or the

importer.

If the Department determines upon review that any party has failed

to deliver or cancelled delivery of uranium or SWU in a matched sale

contract for any reason other than force majeure, or has otherwise not

complied with the terms of the Amendment, that party shall be precluded

from participation in any further matched sales.

Upon confirmation, the Department will subtract the total amount of

contracted Russian-origin matched-import uranium and/or SWU from the

remaining quota for that year. The Department shall also make available

on a current and continuous basis the amount of annual matched imports

that remain available for the year. The Department will publish the

contact office (and telephone number) for obtaining such information

and the office to which confirmation requests should be sent. If the

Department fails to respond to a confirmation request for a matched

import within 15 days, the request shall be deemed to be approved

notwithstanding any other provisions of this Amendment.

Russian natural uranium or SWU may be imported into the United

States prior to the scheduled time for delivery pursuant to a confirmed

matched sales contract only if:

(1) The material is placed in a dedicated account for the approved

contract;

(2) The importer (if the owner of material, or the person for whom

or on whose behalf the material is imported) or his consignee,

certifies to the Department that such material will not be sold,

loaned, swapped, or utilized other than for delivery to the U.S. end-

user for consumption in accordance with Section II(h) of this

Amendment; and

(3) The material enters the U.S. but is not liquidated until such

time as it is delivered to the end-user.

Prior to U.S. Customs clearance of the Russian-origin uranium, the

importer (if the owner of material, or the person for whom or on whose

behalf the uranium is imported) will notify the Department of the date

of import, the quantity and declared value of the shipment, the vessel

name, the port of entry, and the pre-confirmed individual contract

pursuant to which the shipment is entering. If such information is

consistent with a pre-confirmed contract and the notice of request for

delivery from the end-user, the Department will notify the U.S. Customs

Service within five business days. The importer will provide

certification to U.S. Customs at time of import that the material will

be used only for a matched sale subject to the conditions of this

Amendment and will be consumed in accordance with Section II(h) of this

Amendment. Once the U.S. Customs Service has received the foregoing

notification and certification, it will promptly release the shipment.

The following paragraph constitutes an addendum to Section VIII of

the Agreement:

MINATOM agrees to adhere to all reporting requirements specified in

Section VIII.A. of the Agreement. Appendix B data will be submitted to

the Department according to the reporting requirements specified in

Section VIII.A. of the Agreement, and will be treated and verified in

accordance with the Letter of Administration exchanged between the

Department and MINATOM simultaneously with the signing of this

Amendment. The Department and MINATOM agree that the Letter of

Administration constitutes an integral part of this Amendment.

Section XIV of the Agreement is amended by adding the following:

C. Miscellaneous

The parties agree to consult on a regular basis during the term of

this Agreement on Russia being treated as a market economy or the

Russian uranium industry being treated as a market-oriented industry

under U.S. antidumping laws. During such consultations the Department

will identify the criteria that Russia or the Russian uranium industry

would need to satisfy to be accorded such treatment by the Department.

The parties further agree that their intention is, consistent with

Section IV.J of the Agreement, that Russia be accorded treatment no

less favorable than any other Republic of the former Soviet Union that

also has a suspension agreement with the United States with respect to

trade in uranium. Accordingly, if U.S. law, regulation, administrative

practice, or policy should change in any manner that would result in

relatively less favorable treatment for Russia, or if the United States

should enter into any agreement or understanding or take any action

that would cause that result, the parties will promptly enter into

consultations with a view to amending this Agreement so as to eliminate

such less favorable treatment.

The Parties agree that this Amendment constitutes an integral part

of the Agreement.

The English language version of this Amendment shall be

controlling.

Signed on this 11th day of March, 1994.

For the Ministry of Atomic Energy of the Russian Federation:

Nikolai Yegorov.

For the United States Department of Commerce:

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

Attachment 1

------------------------------------------------------------------------

Natural

uranium

Year (lbs U<INF>3O<INF>8e) SWU

------------------------------------------------------------------------

19941....................................... 6,613,860 2,000,000

19951....................................... 6,613,860 2,000,000

1996.......................................... 1,930,000 n/a

1997.......................................... 2,710,000 n/a

1998.......................................... 3,600,000 n/a

1999.......................................... 4,040,000 n/a

2000.......................................... 4,230,000 n/a

2001.......................................... 4,040,000 n/a

2002.......................................... 4,890,000 n/a

2003.......................................... 4,300,000 n/a

------------------------------------------------------------------------

1The quota volume in these years apply to sales. Deliveries pursuant

to these contracts may be delivered in subsequent years.

[FR Doc. 94-7849 Filed 3-31-94; 8:45 am]