DEPARTMENT OF COMMERCE

International Trade Administration

[A-821-802; A-834-802; A-844-802]

Suspension Agreements on Uranium from the Russian Federation,

Kazakstan, and Uzbekistan

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of final decision.

SUMMARY: The Department of Commerce's final decision regarding natural

uranium from the Russian Federation, Kazakstan, and Uzbekistan which is

enriched in a third country prior to importation into the United

States.

EFFECTIVE DATE: August 7, 1996.

FOR FURTHER INFORMATION CONTACT: James Doyle or Alexander Braier,

Office of Agreements Compliance, Import Administration, International

Trade Administration, U.S. Department of Commerce, 14th Street and

Constitution Avenue, N.W., Washington, DC 20230, telephone: (202) 482-

0172 or (202) 482-1324, respectively.

Background

On March 27, 1995, the Department of Commerce (the Department) and

the Republic of Kazakstan signed an amendment to the Kazakstani uranium

suspension agreement. In part, this amendment provided that the

quantitative restraints on Kazakstani-origin uranium include all

uranium ore from Kazakstan that is milled into U<INF>3O<INF>8 and/or

converted into UF<INF>6 and/or enriched in U235 in another country

prior to direct and/or indirect importation into the United States (60

FR 25692, 25693 (May 12, 1995)). In light of the fact that similar

amendments were being considered for Uzbekistan and the Russian

Federation, on September 22, 1995, the Department solicited contract-

specific information from U.S. utilities which hold contracts for

Kazakstani, Uzbek, or Russian uranium in order to assess the effect

such an amendment has on importations pursuant to such contracts (60 FR

49259). The Department received five responses to its Federal Register

notice.

On October 13, 1995, the Department and the Government of

Uzbekistan signed an amendment providing the same quantitative

restraints on Uzbek-origin uranium as those contained in the Kazakstani

amendment (60 FR 55004 (October 27, 1995)). From January 22 to 26,

1996, and from February 19 to 23, 1996, the Department and the Ministry

of Atomic Energy of the Russian Federation (MINATOM) held the fourth

and fifth rounds of consultations regarding, among other issues, the

enrichment of Russian-origin uranium in third countries. Consultations

between MINATOM and the Department are ongoing.

On March 19, 1996, the Department published a proposed solution on

the third country enrichment issue and solicited comments on this

proposal by April 8, 1996 (61 FR 11185). The Department received 13

responses to its Federal Register notice. Based upon analysis of the

parties' comments, discussion with the Petitioners and representatives

for the affected utilities, and significant internal consideration, the

Department detailed certain adjustments to the March 19, 1996, Federal

Register proposed solution in its May 14, 1996, memorandum of Final

Department Action on the Grandfathering of Third Country Enrichment of

Subject Natural Uranium from Joseph A. Spetrini to Paul L. Joffe.

[[Page 41127]]

In this memorandum, the Department requested that all eligible

contracts (as defined in the Department's March 19, 1996, Federal

Register notice) be submitted in their entirety within 10 days in order

to establish an upper limit to the volume of annual deliveries. The

Department further requested that the utilities with eligible contracts

provide the following information to the Department within 10 days: all

prior deliveries made pursuant to their eligible contracts; the country

of origin of the natural uranium concentrates for past and future

permitted deliveries; and a certification that they permit Department

verification of all information related to this matter, including, for

example, requests for delivery and contracts signed with the enricher.

In response to its request, the Department received five eligible

contracts accompanied by the requested information and certifications.

The Department's March 19, 1996, Federal Register notice and May

14, 1996, memorandum and the eligible contracts and information

received from the affected utilities, contributed to the Department's

final decision regarding natural uranium from the Russian Federation,

Kazakstan, and Uzbekistan which is enriched in a third country prior to

importation into the United States. The specific elements of this

decision are included in the attached Annex.

Dated: August 1, 1996.

Joseph A. Spetrini,

Deputy Assistant Secretary for Compliance.

Annex--Third Country Enrichment of Subject Uranium Decision

The Department of Commerce's decision regarding the issue of the

importation of subject uranium enriched in third countries permits the

entry of portions of the volume specified in certain contracts. The

contracts must have been signed by March 27, 1995, which was the

effective date of the first amendment to a uranium suspension agreement

which addressed this issue. The Department will divide the volume of

eligible contracts into two portions: (1) 75% of the volume will be

permitted entry without the requirement of matching with an equal

amount of newly-produced U.S. uranium; and (2) the remaining 25% will

be permitted entry only if matched with an equal amount of newly-

produced U.S. uranium. The decision also establishes certain procedures

necessary for its efficient administration within the auspices of the

suspension agreements and the Tariff Act of 1930, as amended.

Eligible Contracts and Permitted Volumes

<bullet> An eligible contract is defined as a natural uranium

supply contract signed before March 27, 1995, that was identified in

response to, and within the deadlines established by, the Department's

September 22, 1995, Federal Register notice. No other natural uranium

contracts, regardless of origin, shall be eligible for inclusion within

the terms of the third country enrichment decision;

<bullet> The permitted volume for each contract is the nominal

volume contained in each eligible contract.<SUP>1 If there is no

specific nominal volume identified in the contract, the permitted

volume shall be the midpoint between the highest and lowest volumes

stipulated in the contract. For any contract containing an option for

an additional volume which was exercised prior to March 27, 1995, the

permitted volume shall be the nominal/midpoint volume of the eligible

contract plus the volume of the exercised option. Similarly, for any

contract which was amended prior to March 27, 1995, to provide for an

additional volume, the permitted volume shall be the nominal/midpoint

volume plus the volume specified in such amendment. For any contract

containing an option for an additional volume which was exercised prior

to March 27, 1995, and which was amended prior to March 27, 1995, to

provide for an additional volume, the permitted volume shall be the sum

of the nominal/midpoint volume, the optional volume, and the volume

specified in the amendment;

1 Most natural uranium supply contracts specify a nominal

volume around which buyers and sellers expectations converge.

Typically these contracts also bracket the target volume with

minimum and/or maximum volumes.

<bullet> For each eligible contract, 75 percent of the permitted

volume will be allowed entry with no documents required beyond those

identified below;

<bullet> For each eligible contract, up to 25 percent of the

remaining permitted volume will be allowed entry only if such

importation is pursuant to a matching sale contract for an equal amount

of newly produced U.S. uranium that is presented, along with complete

supporting documentation, to the Department by September 3, 1996;

<bullet> Upon completion of all required actions and notification

to the Department on or before September 3, 1996, a utility may

increase the permitted volume of its pre-March 17, 1995, eligible

contract to the contract's maximum only if the utility also presents a

matching contract(s) and complete supporting documentation for 25

percent of the contract's maximum volume to the Department by September

3, 1996; and

<bullet> All prior deliveries of uranium made pursuant to eligible

contracts will be deducted from the contract's permitted volume.

Administrative Procedures

<bullet> All eligible contracts must have been submitted to the

Department by May 24, 1996, and are releasable in their entirety only

to qualified representatives of those interested parties which

specifically request and are granted access under administrative

protective order;

<bullet> By May 24, 1996, all holders of eligible contracts must

have notified the Department of all prior deliveries made pursuant to

their eligible contracts, specified the country of origin of the

natural uranium concentrates for past and future permitted deliveries,

and provided a certification that they permit Department verification

of all information related to this matter, including, for example,

requests for delivery and contracts signed with the enricher. Pursuant

to the March 19, 1996, Federal Register notice, all holders of eligible

contracts must have agreed to permit Department verification of

information regarding shipment of the permitted volumes, including, but

not limited to, analyses of the tails assays and enrichment percentages

to derive feed-to-product ratios;

<bullet> In order to facilitate Customs clearance of shipments of

permitted volumes, holders of eligible contracts shall provide the

Department with appropriate shipping information at least 10 days in

advance of the date the shipment is due to reach the United States.

Upon receipt of complete and accurate shipping information, the

Department will provide Customs with clearance within five days.

Certifications or licenses from the appropriate suspension agreement

countries shall not be required (see document requirements below);

<bullet> The Department will administer each eligible contract on a

contract-by-contract basis, directly with the utility which is a party

to the eligible contract; and

<bullet> The Department will administer any such matching sales

consistent with the Department's existing practice, as specified in

Section IV of the Amendment to the Agreement Suspending the Antidumping

Investigation on Uranium from the Russian Federation (the Amended

Russian Agreement), and appropriate

[[Page 41128]]

Statements of Administrative Intent, and any subsequent amendments

incorporating such practice.

Documents Required for Shipment Clearance

For both unmatched and matched shipments under eligible contracts,

the information identified below must be provided to the Department as

early as possible, but in no case later than ten days, prior to

importation into the United States:

1. Contract information, including the holder of the grandfathered

contract (company's name), the particular eligible contract, whether

the shipment volume is matched or unmatched, and, if matched, the

applicable matched sale;

2. The following shipment information regarding the uranium to be

imported: volume, value, port of export, port of entry, exporter and

importer of the merchandise, party for whose account the material is

being imported, shipment date, vessel name and estimated date of

arrival;

3. Bills of lading, airway bills or other documentation from a

third party showing the amount, type and value of the shipment;

4. Packing lists/shipping specifications;

5. Request(s) for delivery from the utility(ies)/customer(s) to the

natural uranium supplier(s) and enricher(s); if not otherwise included

in these requests for delivery, the enrichment percentage and tails

assay must be provided;

6. Entry number from Customs (if available); and

7. Certification(s) from the party for whose account the uranium is

being imported addressed to Customs which state the following:

a. The uranium being imported was not obtained under any

arrangement, swap, exchange or other transaction designed to circumvent

the agreements with Kazakstan, Kyrgyzstan, the Russian Federation, and/

or Uzbekistan and/or the antidumping duty on Ukraine and/or the export

limits for uranium pursuant to the March 27, 1995, amendment to the

Kazakstani agreement and the October 13, 1995, amendment to the Uzbek

agreement;

b. The country of origin of the mining and, if applicable,

conversion, enrichment and/or fabrication; and

c. The imported material will not be sold, loaned, swapped or

utilized other than for delivery to the United States end-user for

consumption in accordance with Section II(h) of the amended Russian

suspension agreement, Section II(e) of the amended Kazakstani

suspension amendment or Section II(f) of the amended Uzbek suspension

agreement, as appropriate.

Total Volumes

The total volume of all eligible contracts submitted to the

Department in response to its May 14, 1996, memorandum is 11,531,154

pounds U<INF>3O<INF>8 equivalent on the basis of maximum values;

correspondingly, 25 percent of this maximum value total is 2,882,789

pounds U<INF>3O<INF>8 equivalent. In accordance with Section IV.B ``Per

Company Limits for Matched Imports'' of the Amended Russian Agreement,

a U.S. producer may match up to 20 percent of the available material

under these eligible contracts. Therefore, U.S. producers intending to

enter into matching sales with holders of eligible contracts may match

up to 576,558 pounds U<INF>3O<INF>8 equivalent of uranium.

[FR Doc. 96-20124 Filed 8-6-96; 8:45 am]