64 FR 31179, June 10, 1999
DEPARTMENT OF COMMERCE
International Trade Administration
[A-834-802]
Final Determination of Sales at Less Than Fair Value: Uranium
From the Republic of Kazakhstan
AGENCY: Import Administration, International Trade Administration, U.S.
Department of Commerce.
EFFECTIVE DATE: June 10, 1999.
FOR FURTHER INFORMATION CONTACT: James C. Doyle, Sally C. Gannon or
Juanita H. Chen, Enforcement Group III, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street & Constitution Avenue, N.W., Washington, DC 20230; telephone:
202-482-3793.
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SUMMARY: After the Republic of Kazakhstan (``Kazakhstan'') terminated
the suspension agreement on uranium from Kazakhstan, the U.S.
Department of Commerce (``Department'') resumed its antidumping
investigation on uranium from Kazakhstan. The Department determines
that imports of uranium from Kazakhstan are being sold, or are likely
to be sold, in the United States at less than fair value, as provided
in Section 735 of the Tariff Act of 1930, as amended (1994) (``the
Act'').
SUPPLEMENTARY INFORMATION:
The Applicable Statute
Unless otherwise indicated, all citations to the Act are references
to the provisions effective in 1994. In addition, unless otherwise
indicated, all citations to the Department's regulations are citations
to the regulations at 19 CFR Part 353 (1994).
Case History
On November 29, 1991, the Department initiated an antidumping
investigation on uranium from the Union of Soviet Socialist Republics
(``Soviet Union''). See Initiation of Antidumping Duty Investigation:
Uranium from the Union of Soviet Socialist Republics, 56 FR 63711
(December 5, 1991). On December 25, 1991, the Soviet Union dissolved
and the United States subsequently recognized the twelve newly
independent states (``NIS'') which emerged, one of which was the
Republic of Kazakhstan. On January 16, 1992, the Department presented
an antidumping duty questionnaire to the Embassy of the Russian
Federation, the only NIS which had a diplomatic facility in the United
States at that time, for service on Kazakhstan. On January 30, 1992,
the Department sent questionnaires to the
[[Page 31180]]
United States Embassy in Moscow, which served copies of the
questionnaire on the permanent representative to the Russian Federation
of each NIS. The questionnaires were served on February 10 and 11,
1992. On March 25, 1992, the Department stated that it intended to
continue its antidumping duty investigation with respect to the NIS of
the former Soviet Union. See Postponement of Preliminary Antidumping
Duty Determination: Uranium from the Former Union of Soviet Socialist
Republics (USSR), 57 FR 11064 (April 1, 1992).
On June 3, 1992, the Department issued its preliminary
determination, in its antidumping duty investigation on uranium from
Kazakhstan, that imports of uranium from Kazakhstan were being, or were
likely to be, sold in the United States at less than fair value, as
provided for in the Act. 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, Moldova and Turkmenistan, 57 FR 23380 (June 3,
1992). On October 16, 1992, the Department amended the preliminary
determination to include highly enriched uranium (``HEU'') in the scope
of the investigation. See Antidumping; Uranium from Kazakhstan,
Kyrgyzstan, Russia, Tajikistan, Ukraine, and Uzbekistan; Suspension of
Investigations and Amendment of Preliminary Determinations, 57 FR 49221
(October 30, 1992). Also on this date, the Department also signed an
agreement suspending the InvestigationInvestigation investigation. See
Agreement Suspending the Antidumping Investigation on Uranium from
Kazakhstan, 57 FR 49222 (October 30, 1992) (``Suspension Agreement'').
The basis for the Suspension Agreement was an agreement by Kazakhstan
to restrict exports of uranium to the United States.
On November 10, 1998, the Department received notice from
Kazakhstan of its intent to terminate the Suspension Agreement. Section
XII of the Suspension Agreement provides that Kazakhstan may terminate
the Suspension Agreement at any time upon notice to the Department, and
termination would be effective 60 days after such notice. Accordingly,
on January 11, 1999, the Department terminated the Suspension
Agreement, as requested by Kazakhstan, and resumed the
iInvestigationnvestigation. See Termination of Suspension Agreement,
Resumption of Antidumping Investigation, and Termination of
Administrative Review on Uranium From Kazakhstan, 64 FR 2877 (January
19, 1999). On January 13, 1999, the Department issued a supplemental
questionnaire for the original period of investigation (``POI'') to
Kazakhstan. The supplemental questionnaire was issued to Kazakhstan as
requests for separate rates were not submitted to the Department. On
January 28, 1999, Kazakhstan requested a 60-day postponement of the
date of the Department's final determination. On February 1, 1999,
Kazakhstan submitted its response to Section A of the supplemental
questionnaire. On February 3, 1999, Kazakhstan submitted minor
corrections to its Section A response. On February 17, 1999, Kazakhstan
submitted its response to Sections C and D of the supplemental
questionnaire.
In reviewing Kazakhstan's response, the Department determined that
Kazakhstan's response required significant additional information.
Therefore, on March 5, 1999, the Department issued a second
supplemental questionnaire. On March 12, 1999, the Department published
a notice in the Federal Register postponing the final determination
date to June 3, 1999 and postponing the hearing date to May 12, 1999.
See Notice of Postponement of Final Antidumping Determination: Uranium
From Kazakhstan, 64 FR 12287 (March 12, 1999). On March 17, 1999,
Kazakhstan responded to the Department's second supplemental
questionnaire. Kazakhstan stated that it has endeavored to the best of
its ability to assemble the information, but complete data no longer
exists for the POI. Kazakhstan argued that it should not be penalized
for actions taken by parties, such as the Russian Federation Ministry
for Atomic Energy (``MINATOM''), prior to the existence of Kazakhstan.
Instead, Kazakhstan provided information from 1994, which it claimed
was the earliest available data, and provided no translations for the
documents previously submitted. On April 19, 1999, Kazakhstan submitted
additional information to supplement its Section D response.
The Department conducted verification of the provided information.
The Department conducted verification in Almaty, Kazakhstan, from May
4, 1999 through May 8, 1999. On May 5, 1999, the Department published a
notice in the Federal Register extending the deadline for case briefs
until May 17, 1999, rebuttal briefs until May 21, 1999, and extending
the hearing date to May 25, 1999. See Antidumping Investigation on
Uranium from the Republic of Kazakhstan: Notice of Extension of Time
for Briefs and Hearing, 64 FR 24137 (May 5, 1999).
On May 17, 1999, the Department received case briefs from
Kazakhstan and from the uranium coalition consisting of the Ad Hoc
Committee of Domestic Uranium Producers (a petitioner), the Paper,
Allied-Industrial-Chemical and Energy Workers International Union (the
successor to petitioner Oil, Chemical, and Atomic Workers' Union), and
USEC, Inc. (hereinafter collectively ``Uranium Coalition''). On May 21,
1999, the Department received rebuttal briefs from Kazakhstan and the
Uranium Coalition. On May 26, 1999, the Department conducted a hearing
on the issues.
Scope of the Investigation
The merchandise covered by this investigation constitutes one class
or kind of merchandise. The merchandise covered by this investigation
includes natural uranium in the form of uranium ores and concentrates;
natural uranium metal and natural uranium compounds; alloys,
dispersions (including cermets), ceramic products and mixtures
containing natural uranium or natural uranium compounds; uranium
enriched in U235 and its compounds; alloys, dispersions
(including cermets), ceramic products, and mixtures containing uranium
enriched in U235 or compounds of uranium enriched in
U235. Both low enriched uranium (``LEU'') and HEU are
included within the scope of this investigation. LEU is uranium
enriched in U235 to a level of up to 20 percent, while HEU
is uranium enriched in U235 to a level of 20 percent or
more. The uranium subject to this investigation is provided for under
subheadings 2612.10.00.00, 2844.10.10.00, 2844.10.20.10, 2844.10.20.25,
2844.10.20.50, 2844.10.20.55, 2844.10.50.00, 2844.20.00.10,
2844.20.00.20, 2844.20.00.30, and 2844.20.00.50, of the Harmonized
Tariff Schedule (``HTS''). Although the HTS subheadings are provided
for convenience and customs purposes, our written description of the
scope of these proceedings is dispositive. HEU is also included in the
scope of this investigation. ``Milling'' or ``conversion'' performed in
a third country does not confer origin for purposes of this
investigation. Milling consists of processing uranium ore into uranium
concentrate. Conversion consists of transforming uranium concentrate
into natural uranium hexafluoride (UF6).
[[Page 31181]]
Since milling or conversion does not confer origin, uranium ore or
concentrate of Kazakhstan origin that is subsequently milled and/or
converted in a third country will be considered of Kazakhstan origin.
The Department continues to regard enrichment of uranium as conferring
origin.
Period of the Investigation
The POI is June 1, 1991 through November 30, 1991.
Verification
As provided in Section 776(b) of the Act, the Department conducted
a verification of the information provided by Kazakhstan using standard
verification procedures including, where possible, the examination of
relevant sales and financial records and attempts to trace back to
original source documentation containing relevant information, as well
as the examination of 1994 documentation and other available
information.
Best Information Available
The Department has determined, in accordance with Section 776(c) of
the Act, that the use of best information available (``BIA'') is
appropriate in this investigation. In deciding whether to use BIA,
Section 776(c) provides that the Department may take into account
whether the respondent provided a complete, accurate, and timely
response to the Department's request for factual information. The
Department requires a response which provides complete and accurate
information on U.S. sales and factors of production in order to
consider the response in its final determination. The responses which
Kazakhstan submitted were severely deficient on their face: no U.S.
sales data was provided, and factors of production information from the
POI was so incomplete as to render the data useless for the
Department's purposes. Furthermore, the Department was unable to verify
the information which Kazakhstan did provide. Accordingly, the
incomplete nature of Kazakhstan's responses and the failure of the data
to verify requires the Department to use BIA. BIA is based on
information submitted in the petition, detailed in the Department's
initiation notice, and analyzed in the preliminary determination. See
Comment 2, below.
Fair Value Comparisons
To determine whether sales of uranium from Kazakhstan to the United
States were made at less than fair value, the Department sought to
compare the United States prices to the foreign market value. See
Comment 2, below.
Interested Party Comments
Comment 1: The Uranium Coalition argues that the Department's
decision to issue a new questionnaire to Kazakhstan after termination
of the Suspension Agreement, because Kazakhstan may not have had a full
opportunity to respond to the original antidumping questionnaire, was
inconsistent with the factual record and established legal precedent.
The Uranium Coalition contends that record evidence indicates the
Department gave Kazakhstan ample opportunity to respond in the
preliminary segment of this Investigationinvestigation. The Uranium
Coalition states that the Department exceeded the minimum requirements
of delivering a public version of the petition to the Embassy for the
Soviet Union in Washington, D.C., notifying Kazakhstan of the deadline
for its response, providing Kazakhstan an opportunity to extend the
deadline for its response, and ensuring Kazakhstan had adequate
opportunity to comment on information submitted by other parties. See
19 C.F.R. Sections 353.12(g), 353.31(b)(2), and 353.31(c)(3). The
Uranium Coalition notes that the Department delivered two copies of the
petition, two copies of the questionnaire, extended the deadline for
responses three times, issued a new service list, and remained in
constant contact with the Deputy Trade Representative of the Trade
Representation of the Russian Federation. The Uranium Coalition further
notes that in the Department's cable requesting the Foreign Commercial
Service deliver the questionnaire, the Department stated that its
efforts in serving the questionnaires is to give each republic the
opportunity to fully participate. The Uranium Coalition goes on to
state that its arguments concerning the Department's efforts are
supported by the findings of the court in the Techsnabexport, Ltd. v.
United States proceedings (hereinafter collectively ``Tenex''
proceedings). See 795 F. Supp. 428 (Ct. Int'l Trade Ct. Int'l
Trade1992) (``Tenex I''); 802 F. Supp. 469 (Ct.t. Int'lnt'l Traderade
1992) (``Tenex II''). The Uranium Coalition points out that it had been
argued in the Tenex proceedings that the Department had violated the
parties' procedural due process rights to notice and opportunity to
participate, and the Court of International Trade (``CIT'') determined
that the actions taken by the Department provided adequate process and
the opportunity to participate in the Investigationinvestigation to the
fullest extent, thus, the Department should not have been concerned
about Kazakhstan's opportunity to respond to the questionnaire upon
resumption of the Investigationinvestigation.
The Uranium Coalition notes that the Department's preliminary
determination was based on BIA because Kazakhstan did not supply any
requested information. The Uranium Coalition argues that the Department
has consistently refused to accept new information submitted to remedy
deficiencies that led to a BIA preliminary determination, citing
Certain Fresh Cut Flowers from Columbia; Final Results of Antidumping
Duty Administrative Reviews, 61 FR 42833, 42855 (August 19, 1995); and
Final Determination of Sales at Less Than Fair Value: Certain Cold-
Rolled Carbon Steel Flat Products and Certain Cut-to-Length Carbon
Steel Plate From Italy, 58 FR 37152, 37153 (July 9, 1993). The Uranium
Coalition also argues that 19 U.S.C. Section 1673c(i)(1)(B) directs the
Department to treat the date on which the Suspension Agreement is
terminated as the day on which the preliminary determination is issued.
The Uranium Coalition argues that allowing submission of information
after the preliminary determination will lead to abuse of the statutory
provision for suspension agreements, in that initially non-cooperative
parties could be afforded an additional opportunity to provide the
required information, perhaps years later.
Finally, the Uranium Coalition argues that due process is
compromised by the collection of new information after the preliminary
determination, as the Department is left insufficient time to properly
analyze the information, conduct verification, and interested parties
are left insufficient time to review and comment on the information.
The Uranium Coalition notes that due process concerns are particularly
serious if the Department issues a final determination based on a data
set different from that used in the preliminary determination.
Kazakhstan argues that the Department's decision to provide
Kazakhstan an opportunity to submit information in the resumed
Investigationinvestigation was correct and proper. Kazakhstan notes
that the Department ``may request any person to submit factual
information at any time during a proceeding.'' 19 CFR. Section
353.31(b)(1). Kazakhstan agrees that the Department made a valiant
effort to serve the initial questionnaire, but argues that it was
unable, not unwilling, to respond to the questionnaire. Kazakhstan
argues that at the time of the initial questionnaire, Kazakhstan was
[[Page 31182]]
undergoing its creation and restructuring, including establishing a
system to oversee uranium production in its territory. Kazakhstan notes
that the National Joint-Stock Company of Atomic Energy and Industry
(``KATEP'') was not created until after the questionnaires were served
on the NIS. Kazakhstan notes that its willingness to respond is
demonstrated by its full cooperation with the Department during the
seven years of the suspension agreement. Kazakhstan argues that this
indicates that it would have provided the information requested by the
Department in the original Investigationinvestigation had it been in a
position to do so at the time.
Kazakhstan disagrees with the Uranium Coalition's claim that the
Department is creating bad precedent in suspension agreements by
allowing Kazakhstan the opportunity to submit sales and factor
information in the resumed investigation. Kazakhstan argues that
because the circumstances in this investigation are exceptional, the
only ``precedent'' established is that the Department has the
discretion, under extreme circumstances and in the interest of
fairness, to determine whether it is appropriate to provide an
opportunity to submit information in a resumed investigation.
Kazakhstan notes that the Department's decision to provide such an
opportunity is in accordance with the Tenex proceedings, where the CIT
stated that if presented with the question, it would ``decide in
conjunction with review of the final determination whether the
opportunity given [to provide republic-specific data] was statutorily
sufficient.'' See 802 F. Supp. at 473
Kazakhstan also disagrees with the Uranium Coalition's claim that
the domestic interested parties may not have had an adequate
opportunity to review and comment on the information submitted in the
resumed investigation. Kazakhstan notes that the Uranium Coalition had
over three months to examine Kazakhstan's sales and factor information,
none of which has materially changed since the date of initial filing.
Accordingly, Kazakhstan argues that the Uranium Coalition cannot
contend it had no opportunity to comment on the submitted information.
Kazakhstan further notes that the Uranium Coalition has never offered
material comments or submitted any sales or factor information specific
to Kazakhstan during any point in the investigation.
In light of the circumstances, Kazakhstan argues that the
Department appropriately provided Kazakhstan the opportunity to submit
information in the resumed investigation. Kazakhstan argues that the
supplemental questionnaires were all the more appropriate considering
there was no republic-specific information on the record which would
allow the Department to make a proper analysis of dumping in the
resumed investigation.
Department's Position: The Department recognizes that the court in
the Tenex proceedings determined that the actions taken by the
Department provided adequate opportunity to participate in the
investigation to the fullest extent. In discussing notice and
opportunity to be heard and participate in the investigation, the CIT
stated that the ``petition gave notice of intent to reach exports from
the republics as well as the USSR, and the proceedings have been
sufficiently delayed so that the plaintiffs have had adequate notice
and opportunity to participate.'' Tenex I at 437. The Court further
stated that ``although unionwide data was used at the outset,
presumably the republics have been given the opportunity to provide
republic-specific data. If presented with the question, the court will
decide in conjunction with review of the final determination whether
the opportunity given was statutorily sufficient.'' Tenex II at 473.
Given the unique circumstances of this case and the lapse of time
since the original questionnaires were presented, Kazakhstan may have
gained access to the data the Department originally requested. The
Department determined that it was appropriate to give such additional
opportunity to Kazakhstan to provide the originally-requested
information at this time. The CIT noted that the ``[due process] test
is one of fundamental fairness in light of the total circumstances.''
Tenex I at 436. Therefore, while the Department fulfilled its due
process obligation given the circumstances at the beginning of this
proceeding, the circumstances have changed, calling for a more
accommodating opportunity to respond to the original questionnaire.
In essence, the Uranium Coalition argues that the Department gave
Kazakhstan too much due process; yet fails to indicate a maximum limit
on due process measures. The Department took such measures in light of
the unique circumstances of this investigation. At the time of the
preliminary investigation and issuance of the original questionnaire,
the Soviet Union had just collapsed and the resulting NIS, including
Kazakhstan, were struggling to establish themselves. Taking this into
consideration, along with the fact that eight years have elapsed since
initiation of the investigation, the Department considers it reasonable
to have afforded Kazakhstan an additional opportunity to fully
participate in the investigation.
Comment 2: The Uranium Coalition argues that the Department should
use BIA and apply the 177.87 percent margin calculated for natural
uranium in the preliminary determination. The Uranium Coalition notes
that Section 776(c) of the Act mandates the Department to use BIA
``whenever a party * * * refuses or is unable to produce information
requested in a timely manner and in the form required, or otherwise
significantly impedes an investigation * * *'' See also 19 U.S.C.
Section1677e(c). The Uranium Coalition argues that application of BIA
furthers the purpose of encouraging full disclosure by respondents, so
that the Department can compute margins as accurately as possible. The
Uranium Coalition argues that the Department must apply BIA even when a
respondent's inability to provide requested information is due to
circumstances outside the respondent's control. See Final Determination
of Sales at Less Than Fair Value; Sweaters Wholly or in Chief Weight of
Man-Made Fiber From Taiwan, 55 F.R. 34585 (August 23, 1990) (documents
destroyed by fire); NSK Ltd. v. United States, 794 F. Supp. 1156, 1160
(Ct. Int'l Trade 1992) (corporate policy to destroy data after five
years). The Uranium Coalition argues that the CIT has rejected a ``best
efforts'' exception to the application of BIA. See Tai Yang Metal
Industrial Co., Ltd. v. United States, 712 F. Supp. 973, 977-78 (Ct.
Int'l Trade 1989); Uddeholm Corp. v. United States, 676 F. Supp. 1234,
1237 (Ct. Int'l Trade 1987). The Uranium Coalition further argues that
Kazakhstan's inability to obtain information from third parties
1 is no exception to the requirement of a BIA determination.
The Uranium Coalition argues that the Department has consistently
applied BIA when information held by a third party has not been
submitted. See Fresh and Chilled Atlantic Salmon from Norway; Final
Results from Antidumping Duty Administrative Review, 58 FR 37912, 37915
(July 14, 1993); see also Tapered Roller Bearings and Parts Thereof,
Finished and Unfinished, from the People's Republic of China; Final
Results of Antidumping Duty Administrative Reviews, 61 FR 65527, 65538
(December 13, 1996). The Uranium Coalition also notes that the
[[Page 31183]]
Department has determined that the fact that a third party might have
incentive not to provide information is no exception to the application
of BIA. See Notice of Final Determination of Sales at Less Than Fair
Value: Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Japan,
64 FR 24329, 24368 (May 6, 1999) 2.
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\1\ The Uranium Coalition notes that it is uncertain from the
evidence whether Kazakhstan expended sufficient effort in obtaining
information from third parties.
\2\ The Uranium Coalition states that while that determination
was made under the current antidumping statute, the principle of
making an adverse inference when information is not provided applies
to the pre-URAA use of BIA. See Rhone Poulenc v. United States, 899
F.2d 1185, 1190-91 (Fed. Cir. 1990).
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The Uranium Coalition argues that the Department should apply
total, not partial, BIA in calculating the final margin. The Uranium
Coalition first argues that the Department should have proceeded to a
final determination based on BIA due to Kazakhstan's failure to answer
the original questionnaire. Disagreeing with the Department's decision
to issue a supplemental questionnaire instead, the Uranium Coalition
argues that, nevertheless, the Department should apply total BIA in its
final determination as Kazakhstan's subsequent response is inadequate,
untimely and not verifiable. The Uranium Coalition points to numerous
deficiencies in Kazakhstan's response, including: (1) No U.S. sales
information provided for its Section C response, which is necessary to
calculate prices; (2) information based on 1994 and 1998 data, instead
of 1991 data; (3) factors of production reported only for the in situ
leaching production processes, despite the use of other processes
during both 1991 and 1994; (4) incomplete factors of production data
provided; (5) no financial or government documents provided; (6) no
quantity and value of sales data provided for its Section A response;
and (7) no supporting documentation for Section D provided, as
requested by the Department. The Uranium Coalition argues that
Kazakhstan should not be allowed to benefit from submitting self-
selected information. While 1991 information may no longer be
available, the Uranium Coalition argues that regardless of the passage
of time, change in personnel, and destruction of relevant records, the
Department should base its final determination on BIA. See Koyo Seiko
Co. Ltd. v. United States, 796 F. Supp. 517, 525 (Ct. Int'l Trade 1992)
(applying BIA where respondent was unable to provide 1974 information
in 1986). The Uranium Coalition argues that not only is the Department
unable to calculate foreign market value without factors of production
data, overall, the submitted data is insufficient for the Department to
calculate a margin.
As Kazakhstan is the sole respondent and a non-market economy, the
Uranium Coalition argues the only rate the Department should use is the
rate from the preliminary determination. The rate established in the
preliminary determination was based upon the petition and information
submitted by Petitioners and two parties from which the Department
solicited information. See Preliminary Determination of Sales at Less
Than Fair Value: Uranium from Kazakhstan, et al. 57 FR at 23382.
The Uranium Coalition argues that Kazakhstan has not cooperated
with the investigation from the start, beginning with its failure to
respond to the original questionnaire. The Uranium Coalition notes that
while Kazakhstan had 60 days to prepare for the resumed investigation
after providing notice of its intent to terminate the Suspension
Agreement, it nevertheless provided no information. Furthermore, the
Uranium Coalition notes that the data untimely provided by Kazakhstan
during verification could have been reviewed prior to the date its
questionnaire responses were due. The Uranium Coalition argues that
this demonstrates Kazakhstan's failure to cooperate; the Department
should consider Kazakhstan's lack of cooperation in its final
determination and apply the rate established in the preliminary
determination.
While Kazakhstan disagrees with the continuation of the
investigation, it argues that if the investigation is not terminated,
the Department should use 1994 factor information in its final
determination. Kazakhstan argues that it cooperated to the best of its
ability, again noting that the original respondent named in the
petition, the Soviet Union, no longer exists. Kazakhstan states that
several third parties control the POI data on sales and production for
the area in the Soviet Union now known as Kazakhstan. Kazakhstan notes
that it attempted to obtain data from these third parties. Within
MINATOM, Kazakhstan states that it contacted and requested information
from the First Department, Atomredmetzoloto, which oversaw mining and
milling in the Soviet Union during the POI, and Techsnabexport, which
oversaw all uranium sales from the Soviet Union during the POI.
Kazakhstan states that it received no information from these requests.
Kazakhstan also states that while the regional departments that
reported to Atomredmetzoloto (Uzhpolymetal, Vostokredmet, Tselliny and
Prikaspiysky (a.k.a. Kaskor)) are possible sources of POI sales and
production information, it is unclear what records they created and
retained in the ordinary course of business as each followed different
standards then. Furthermore, Kazakhstan notes that none of these
records are under its control; Uzhpolymetal is in Kyrgyzstan and
Vostokredmet is located in Tajikistan. As for Tselliny and Kaskor,
Kazakhstan states that it explained during verification that neither
regional department was under the direct control of KATEP or of
Kazatomprom. Finally, Kazakhstan notes that because many of the third
parties now compete with Kazakhstan in the uranium market, they have an
incentive not to respond to requests for information.
Kazakhstan also argues that after the dissolution of the Soviet
Union on December 25, 1991, there was no formal centralized management
of uranium activities in Kazakhstan until the establishment of KATEP on
February 12, 1992. Kazakhstan notes that while KATEP was created to
take sole responsibility for all sales of subject merchandise from
Kazakhstan, KATEP did not have full day-to-day management
responsibility over all uranium production in Kazakhstan. Kazakhstan
asserts that Kazatomprom, created on July 12, 1997, was the first
entity with sole responsibility for the mining and marketing of uranium
from Kazakhstan. Kazakhstan argues that the lack of formal oversight
contributed to the incomplete nature of the 1991 and 1994 records.
Kazakhstan argues that the passage of time is another constraint on
the availability of information. Kazakhstan notes that the individuals
who recorded information during the POI are not the same individuals
who helped prepare the questionnaire responses. Without the personal
recollection of these individuals, Kazakhstan argues that
reconstruction of the archived files was difficult. Kazakhstan also
argues that because the POI is eight years ago, much of the 1991 (as
well as the 1994) information has been destroyed in the ordinary course
of business pursuant to document destruction policies, referencing the
certificate of destruction produced during verification as examples of
the policies. See May 13, 1999 Verification Report (``Verification
Report''), at 13 and 26. Kazakhstan was also hindered in its efforts to
locate data as much of the information on uranium was, and still is,
considered state secrets. Kazakhstan states that knowledge on the
material was limited and circulation of information was restricted.
Only a limited number of
[[Page 31184]]
documents on uranium were made and circulated among a small circle of
officials. Accordingly, Kazakhstan argues that this made locating
complete sets of documents difficult.
Kazakhstan argues that its efforts in light of the unusual and
difficult situation indicates it cooperated to the best of its ability
and, thus, the Department should use the 1994 factors information
submitted by Kazakhstan in the final determination. Kazakhstan argues
that the 1994 information it produced, despite the described obstacles,
is as complete as possible, as well as verifiable. Kazakhstan states
that it submitted 1994 factors information for four of the seven
facilities operating during the POI. Kazakhstan argues that the
Department has complete information on the total uranium output at
these four facilities, and the inputs needed to produce one kilogram of
uranium at each of those facilities. Kazakhstan argues that the main
source documents provided for 1994, the technical reports, tied to
other information available for 1994, such as the unit reports, monthly
cost of production reports and the annual report filed with government
authorities. Kazakhstan concedes that the Department was generally
unable to trace the 1994 technical reports to a level of detail lower
than the unit reports but argues that this was because more detailed
information did not exist, and was not because of any inconsistency in
the information.
Kazakhstan argues that the 1994 factors information is as
representative of uranium production during the POI as any other
source. Kazakhstan also argues that the 1994 factors information
accurately represents possible uranium production today. Accordingly,
Kazakhstan argues that an antidumping duty based on the provided 1994
factors information would be superior to one based on other sources. In
comparing the 1994 information with the limited information available
for 1991, Kazakhstan claims that similar inputs were consumed at
similar levels and facility production levels were comparable. In fact,
Kazakhstan suggests that 1994 data may be preferred over 1991 data as
Kazakhstan controlled the 1994 facilities, whereas MINATOM controlled
the 1991 facilities. Furthermore, Kazakhstan argues that the 1994
factors are based on actual production information in Kazakhstan at the
same facilities operating in 1991, whereas the factors submitted by
petitioners and used in the preliminary determination were estimates
for Canadian facilities, where actual source documents were not used.
Kazakhstan notes that the Department has substantial discretion in
selecting the source of BIA to use in its calculations. See Magnesium
Corp. v. United States, 938 F. Supp. 885, 902 (Ct. Int'l Trade 1996).
Kazakhstan asserts that the Uranium Coalition incorrectly contends that
the Department must use information submitted in the petition as BIA.
Kazakhstan notes that the Department may consider any and all
information on the record in selecting BIA and argues that the final
determination should be based on republic-specific data. Accordingly,
Kazakhstan argues that the data it has submitted is far superior to the
information submitted by the petitioners.
Department's Position: The Department continues to apply the
overall rate of 115.82 percent as the BIA rate for the final
determination. The Department notes that at verification none of the
information provided, timely or otherwise, could be traced to annual
report information at verification. Further, the Department was unable
to check original well-site and factory information to tie to the few
technical reports available for review. As a result, the record data
can only be considered fragmentary. Without any verifiable data, the
Department must resort to the rate established at preliminary
determination. Additionally, while Kazakhstan asserts that it should
not be held responsible for the failure of Tenex to provide data
regarding U.S. shipments of subject merchandise during the POI, the
Department notes that precedent to the contrary exists. Even where
another party controls the information, the Department may rely on BIA
if the information is not provided by the respondent. See Helmerich &
Payne, Inc. v. United States, 24 F. Supp. 2d 304, n. 6 (Ct. Int'l Trade
1998).
The Department's practice is to base BIA on a simple average of the
margins based on petition data, as opposed to the highest margin based
on petition data, when the Department determines that the respondent
has attempted to cooperate with the Department's
Investigationinvestigation. In this instance, the Department calculated
a natural and enriched uranium rate, modifying the original petition
rates. Therefore, the Department considers it appropriate to apply the
average rate of 115.82%. See e.g., Preliminary Determination of Sales
at Less Than Fair Value: Circular Welded Non-Alloy Steel Pipe from
Taiwan, 57 FR 17892 (April 28, 1992). The Department believes that
Kazakhstan attempted to cooperate in this proceeding because, while the
response lacks sufficient data to use in the calculation of a dumping
margin, it nevertheless contains sufficient data for the Department to
conclude that a serious and sustained effort was undertaken by
Kazakhstan to provide data responsive to the Department's
questionnaires for the POI. Therefore, the Department is basing the
final margin on an average of the margins for uranium concentrate and
enriched uranium derived from the petition. In this instance, the
petition included margins for natural and enriched uranium, which the
Department adjusted for purposes of the preliminary determination See
Preliminary Determination of Sales at Less Than Fair Value: Circular
Welded Non-Alloy Steel Pipe from Taiwan, 57 FR 17892 (April 28, 1992).
The average of those rates, as adjusted, is 115.82 percent.
Comment 3: The Uranium Coalition asserts that the Department has
the authority to clarify the scope of this Investigationinvestigation
to include Kazakhstan origin natural uranium enriched in third
countries in order to prevent the potential circumvention of any future
antidumping duty order. The Uranium Coalition further asserts that such
a clarification would be in accordance with the Department's
substantial transformation analysis, the intent of the petition, and
the purpose of the antidumping law. Regarding their circumvention
concerns, the Uranium Coalition cites the potential cost savings for
utilities purchasing Kazakhstan origin uranium at the unrestricted
market price and claim that contracts permitting the foreign enrichment
of Kazakhstan origin uranium are already in place. The Uranium
Coalition notes that the Department's need to address potential
circumvention in its substantial transformation analyses may result in
a determination which differs from that of the United States Customs
Service (``U.S. Customs'') and that, in this case, the elements of the
Department's substantial transformation analysis require a
determination that third-country enrichment does not change the country
of origin of Kazakhstan uranium.
The Uranium Coalition asserts that, while the petition's scope did
not specifically include uranium enriched in third countries, its
intent was clearly to cover all forms of uranium products and to
prevent circumvention. The Uranium Coalition argues that there was no
reasonable basis in 1991 to foresee the increasing use of foreign
enrichment by U.S. utilities and that the Suspension Agreement was
subsequently modified to cover these third-country enrichment
transactions. Finally, the Uranium
[[Page 31185]]
Coalition notes that the Department must clarify the scope of this
Investigationinvestigation in order to achieve the antidumping law's
purpose of remedying the negative impact on a U.S. industry of unfairly
traded imports. The Uranium Coalition argues that, when the unfairly-
priced Kazakhstan uranium is enriched abroad rather than in the United
States, the injurious effect on the mining sector of the U.S. industry
is not altered and that the adverse effects are in fact exacerbated
because the enrichment sector of the U.S. industry is damaged.
Kazakhstan contends that the Uranium Coalition's request represents
an untimely attempt to improperly expand the scope of the investigation
and any resulting antidumping duty order to cover uranium produced in
countries not subject to this Investigationinvestigation. Kazakhstan
argues that all of the factors normally considered by the Department in
its substantial transformation analysis confirm that enrichment does
substantially transform and confer a new country of origin on enriched
uranium. Thus, Kazakhstan asserts the Department does not have the
authority to expand the scope of this proceeding. Kazakhstan further
asserts that including uranium enriched, and therefore produced, in
third countries in the scope of this case would violate the World Trade
Organization's Agreement on Rules of Origin as well as ``circumvent''
the standards for circumvention established in the U.S. statute.
Department's Position: The Department agrees with Kazakhstan, in
part. As an initial matter, there is no evidence on the record to
indicate that there were any entries into the United States during the
POI of Kazakhstan uranium enriched in a third country. In fact, the
Uranium Coalition notes in its brief that the practice about which they
are concerned evolved after the POI. The Uranium Coalition's concern
clearly centers on current and future contracts involving third-country
enrichment and, therefore, is unrelated to the calculation of a dumping
margin on uranium from Kazakhstan during the POI. Thus, the Department
need not decide in this final determination whether uranium from
Kazakhstan enriched in a third country was sold at less than fair value
during the POI.
With respect to the third-country enrichment issue, its importance
and complexity is illustrated by the extensive argument contained in
the Uranium Coalition's and Kazakhstan's briefs and in the time devoted
to this issue at the hearing. However, Kazakhstan argues that the
Uranium Coalition raised the third-country enrichment issue so late in
the proceeding that its due process rights were prejudiced. The
Department finds that neither the Department nor Kazakhstan could
effectively examine the issue prior to issuance of the final
determination. A review of the case schedule on and after the date of
the Uranium Coalition's filing illustrates the point. The Uranium
Coalition's submission was filed on April 26, 1999, one week prior to
the beginning of verification. The Department conducted verification in
Kazakhstan during the week of May 4, 1999 through May 8, 1999, and
issued a verification report on May 13, 1999. Parties filed case briefs
on May 17, 1999, and rebuttal briefs on May 21, 1999. The hearing was
held on May 26, 1999, just eight days before the date of the final
determination. This schedule simply did not permit the Department
sufficient time to issue supplemental questionnaires, pose questions to
the Uranium Coalition or engage in the other activities necessary to
properly evaluate the law, arguments, and facts surrounding this issue.
Additionally, the Uranium Coalition's filing on this issue was made in
the context of an investigation resumed after an almost eight-year
hiatus, during which the Government of Kazakhstan began rationalizing
its uranium production. Furthermore, during the initial investigation,
the respondent country became independent, further complicating the
link between the initial 1991-92 phase of the investigation, the 1999
resumed investigation, and the third-country enrichment issue.
As a result of the above considerations, and to provide sufficient
opportunity for full analysis of the law, argument and facts regarding
this issue, the Department will initiate a scope inquiry on Kazakhstan
uranium enriched in a third country simultaneously with the issuance of
any antidumping order in this proceeding.
Comment 4: The Uranium Coalition contends that the Department
should include uranium imported under a U.S. Customs temporary import
bond (``TIB'') within the scope of this Investigationinvestigation in
order to prevent certain ``swap'' transactions which may otherwise be
used to circumvent a future antidumping duty order. The Uranium
Coalition argues that, in this case, the Department has clear evidence,
based on the past conduct of importers and domestic parties during the
administration of the Suspension Agreement, that temporarily-imported
merchandise can be, and has been, used to introduce dumped merchandise
into U.S. commerce. The Uranium Coalition asserts that the Department
has the authority to inform U.S. Customs that, due to the fungibility
of the product and the nature of commercial activities in this
particular industry, all Kazakhstan uranium entries, including TIB
entries, must be subject to antidumping duty assessment to prevent
circumvention of an order.
Alternatively, the Uranium Coalition urges the Department, at a
minimum, to direct U.S. Customs to consider any entry of Kazakhstan
uranium as a consumption entry subject to the antidumping order unless
the TIB ``statement of use'' accompanying the TIB application under 19
CFR 10.31 includes a statement that the uranium to be imported under
TIB will not be, and has not been, used as part of any swap, loan, or
exchange transaction.
Kazakhstan argues that the Uranium Coalition's request to include
Kazakhstan uranium entered under TIB in the scope of this proceeding is
both untimely and improper and should be rejected by the Department.
Kazakhstan notes that this issue was first raised in the Uranium
Coalition's case brief, disallowing the Department the opportunity to
make use of proper notice and comment procedures before departing from
a prior practice with such broad implications. Furthermore, Kazakhstan
notes the Uranium Coalition's concession that the Department has
previously held, and the CIT upheld, that antidumping duty orders do
not apply to merchandise entered under TIB.
Department's Position: The Department agrees with Kazakhstan. As
noted by the Uranium Coalition, the Department has previously rejected
a request to apply antidumping duties to merchandise imported under TIB
procedures. See Remand Determination: Titanium Metals Corp. v. United
States, Court No. 94-04-00236 (Apr. 17, 1995). The CIT then upheld this
decision. See Titanium Metals Corp. v. United States, 901 F. Supp. 362
(Ct. Int'l Trade 1995). While the Department recognizes the Uranium
Coalition's concerns regarding the atypical characteristics of uranium
and the uranium industry, the Department reaffirms its prior finding
that merchandise entered pursuant to TIB is not entered for
consumption. As a result, antidumping duties cannot apply to TIB
entries. In addition, the Department has no legal authority to instruct
U.S. Customs to require an additional certification for such Kazakhstan
TIB entries, as alternatively requested by the Uranium Coalition.
[[Page 31186]]
Comment 5: Kazakhstan notes that the respondent named in the
original antidumping petition, the Soviet Union, was dissolved less
than one month after initiation of the Investigationinvestigation and
no longer exists. Kazakhstan stresses that while the courts sustained
the determination to continue the Investigationinvestigation despite
the dissolution of the Soviet Union, the final determination of the
Investigationinvestigation must be based on facts involving Kazakhstan,
not the Soviet Union. Kazakhstan argues that the distinction between
Kazakhstan and the Soviet Union is critical to the Department's
analyses of: (1) Whether the petition was filed on behalf of the
domestic industry against Kazakhstan in particular; (2) whether there
were sales of subject merchandise from Kazakhstan to the United States
during the POI; and (3) the selection of surrogate values for
Kazakhstan.
According to the Uranium Coalition, the fact that Kazakhstan is no
longer a part of the Soviet Union does not change the Department's
obligation to conduct an antidumping investigation of uranium produced
during the POI in the territory which is now Kazakhstan. The Uranium
Coalition argues that the Department reasonably construed the
antidumping statute as authorizing continuation of this
Investigationinvestigation, despite the fact that the petition leading
to this Investigationinvestigation was filed against subject
merchandise from the Soviet Union.
According to the Uranium Coalition, Section 731 of the Act
instructs the Department to impose antidumping duties whenever foreign
merchandise is sold at less than fair value in the United States, where
the International Trade Commission determines that such imported
merchandise causes injury to a domestic industry. The Uranium Coalition
further argues that this statutory provision contains no requirement
that the Department take changes in the political landscape of a
foreign territory into account when determining whether the imposition
of antidumping duties is warranted. According to the Uranium Coalition,
it is the foreign merchandise--not the particular political
configuration of the territory in which the merchandise originated--
which is the critical aspect of the antidumping analysis. Thus, the
Uranium Coalition concludes, changes in the geopolitical territory of
the former Soviet Union are not relevant for purposes of determining
whether uranium produced in any region of the former Soviet Union was
traded unfairly in the United States.
In support of its conclusion, the Uranium Coalition cites to Tenex
II. See 802 F. Supp. 469. According to the Uranium Coalition, the CIT
held that the Department had full legal authority to continue its
uranium investigation against the former Soviet republics,
notwithstanding dissolution of the Soviet Union, because the
antidumping statute did not require the Department to take into account
changes in political structures in the course of its investigation.
Further, according to the Uranium Coalition, since the Tenex
proceedings, this rationale has been applied consistently by the
Department. See Transfer of the Antidumping Order on Solid Urea from
the Union of Soviet Socialist Republics to the Commonwealth of
Independent States and the Baltic States and Opportunity to Comment, 57
Fed. Reg. 28828 (Jun. 29, 1992); Application of U.S. Antidumping and
Countervailing Duty Laws to Hong Kong, 62 Fed. Reg. 42965 (Aug. 11,
1997); Solid Urea from the German Democratic Republic, 63 Fed. Reg.
7122, 7122-23 (Feb. 12, 1998); Certain Cut-to-Length Carbon-Quality
Steel Plate from the Former Yugoslav Republic of Macedonia, 64 Fed.
Reg. 12993 (Mar. 16, 1999).
Department's Position: The Department agrees with Kazakhstan, in
part. The Department agrees that Kazakhstan is a different entity from
the Soviet Union. In recognition of that fact, the Department attempted
to collect and verify separate Kazakhstan-specific information.
However, Kazakhstan failed to provide sufficient verifiable data which
the Department could use in its analysis. As a result, the Department
must use BIA, for the reasons discussed in Comment 2, above. The
Department notes that the continuation of this investigation against
Kazakhstan was challenged at the CIT, where the Department's decision
to continue was upheld. See Tenex proceedings.
Comment 6: Kazakhstan argues that the investigation should be
terminated as the Uranium Coalition does not have the support of the
domestic industry and, thus, lacks standing to represent the industry
in the resumed investigation. Kazakhstan claims that two of the
original petitioners, Power Resources, Inc. (``PRI'') and Cogema, Inc.
(``Cogema''), currently account for over half the production of uranium
in the United States. Kazakhstan states that PRI expressed its
opposition to the investigation in an April 15, 1999 letter and Cogema
expressed its opposition in a May 5, 1999 letter. Kazakhstan argues
that their opposition indicates that the investigation is not ``on
behalf of'' the domestic uranium industry.
Kazakhstan argues that the Department has the power to rescind its
decision to initiate an antidumping investigation where it is
discovered that the petition is not being maintained on behalf of the
industry. See Gilmore Steel Corp. versus United States, 585 F. Supp.
670, 674 (Ct. Int'l Trade 1984). Kazakhstan argues that when members of
the domestic industry provide grounds to doubt a petitioner's standing,
the Department should evaluate whether those parties which oppose the
investigation represent a majority of the domestic industry, to
determine whether the petition is properly filed on behalf of the
domestic industry. See Suramerica de Aleaciones Laminadas, C.A. v.
United States, 966 F.2d 660, 662-63 (Fed. Cir. 1992). Kazakhstan claims
that PRI and Cogema account for a majority of the domestic industry
and, since this majority of the domestic industry opposes the
investigation, Kazakhstan argues that the Department should terminate
the investigation immediately.\3\
---------------------------------------------------------------------------
\3\ As an alternative, Kazakhstan suggest that the Department
survey all uranium producers in the United States to determine the
producers' stance on the investigation.
---------------------------------------------------------------------------
The Uranium Coalition also states that the letters from PRI and
Cogema were not properly filed, are therefore not on the record of this
investigation and thus cannot be considered by the Department.
Moreover, even if the letters had been properly placed on the record,
the Uranium Coalition continues, Cogema and PRI are parties that are
related to the producer through their joint ventures in Kazakhstan.
Hence, neither PRI nor Cogema would be considered part of the domestic
industry.
Department's Position: The Department agrees with the Uranium
Coalition. The Department notes that the letters submitted by PRI and
Cogema, as domestic uranium producers opposed to the investigation,
were improperly submitted and cannot be considered. First, the letter
from PRI, to which Kazakhstan refers, does not appear on the record for
this investigation. Second, the courtesy copies of the PRI and Cogema
letters provided separately to Department analysts show no certificate
of service, and thus it appears that the parties were never properly
served the letters. Pursuant to 19 CFR 353.31(g)(2), the Department
``will not accept any document that is not accompanied by a certificate
of service listing the parties served, the type of document served,
[[Page 31187]]
and, for each, indicating the date and method of service.'' Third,
neither letter contains a certification as to the contents of the
letter, as required under 19 CFR 353.31(i).\4\
---------------------------------------------------------------------------
\4\ The Department notes that even had the letters been
certified, the contents fail to substantiate Kazakhstan's claim that
PRI and Cogema represent a majority of the domestic uranium industry
by providing the evidence stipulated in the Department's
regulations. Accordingly, the Department cannot assume that PRI and
Cogema represent a majority of the domestic uranium industry.
---------------------------------------------------------------------------
The PRI and Cogema letters were also untimely submitted. Pursuant
to 19 CFR 353.31(c)(2), the Department ``will not consider any
allegation in an investigation that the petitioner lacks standing
unless the allegation is submitted, together with supporting factual
information, not later than 10 days before the scheduled date for the
Secretary's preliminary determination.'' The Department notes that
while Pathfinder Mines Corporation (``Pathfinder''), a Cogema
subsidiary, properly submitted a letter to the record in furtherance of
Cogema's opposition, Pathfinder's letter was dated May 17, 1999, which
is clearly past the regulatory deadline.
Finally, even if PRI and Cogema had properly expressed their
opposition to this investigation, publicly available information
indicates that PRI, a wholly owned subsidiary of Cameco, and Cogema, a
foreign-owned producer, have certain joint ventures with Kazakhstan
that mandate the Department to disregard their opposition to the
investigation. See the Uranium Coalition's rebuttal brief, at Exhibit 3
(``The Reconstruction of the Uranium Industry in Kazakhstan''). Section
771(4)(A) defines the term industry to mean ``the domestic producers as
a whole of a like product.'' Section 771(4)(B) provides that ``when
some producers are related to the exporters * * * of the allegedly * *
* dumped merchandise, the term ``industry'' may be applied in
appropriate circumstances by excluding such producers from those
included in that industry.'' As both PRI and Cogema have business
relations with the foreign producer in this investigation, the
Department is disregarding their positions for purposes of standing.
For these aforementioned reasons, even if the objections had been
properly and timely filed, the Department would continue this
investigation.
Comment 7: Kazakhstan argues that it made no sales of subject
merchandise to the United States during the POI as it did not exist
during the POI. Kazakhstan argues that as part of the Soviet Union, the
region's economy was under the guidance and control of Soviet
authorities and companies existing in the region had no independent
production or sales activities. Kazakhstan argues that during the POI,
Tenex had sole authority for making sales of uranium produced in the
Soviet Union, noting that Tenex is a wholly-owned and controlled
subsidiary of MINATOM. Kazakhstan further notes that, pursuant to
contracts between Tenex and the uranium producers for the region during
the POI, the manner in which the uranium producers were compensated for
uranium provided to Tenex reveal that the uranium producers had no
control over sales. Accordingly, Kazakhstan states that even if there
was any evidence of sales from Kazakhstan to the United States during
the POI, and Kazakhstan asserts there is no such evidence, under the
circumstances it is not reasonable to conclude that Kazakhstan or its
uranium producers bore any responsibility for those sales.
Kazakhstan insists that ``where parties in the territory that is
now the Republic of Kazakhstan were not even responsible for the sales
of their merchandise at the time, proving the negative is virtually
impossible.'' See Kazakhstan's Rebuttal Brief, at 17. Kazakhstan states
that the Uranium Coalition has not disputed that no sales of subject
merchandise produced in Kazakhstan were made to the United States
during the POI. Kazakhstan argues that without sales, the Department
has previously held that ``there are no United States prices with which
to compare foreign market value, and, thus, no dumping margins.'' See
Final Determination of No Sales at Less Than Fair Value: Ferrosilicon
from Argentina, 58 FR 27534, 27535 (May 10, 1993). Kazakhstan argues
that this conclusion flows directly from the definition of U.S. price.
See 19 CFR 353.41(a). Kazakhstan argues there is no evidence of any
sales, thus, the Department has no reasonable basis to conclude that
there were any dumping margins and the investigation should be
terminated.
The Uranium Coalition argues that Kazakhstan's assertion, that it
made no sales of subject merchandise to the United States during the
POI, is based on the incorrect assumption that the investigation covers
material sold by Kazakhstan or by a ``Kazakh entity.'' The Uranium
Coalition argues that Kazakhstan should properly be considering
material from Kazakhstan that is sold in the United States, and not
considering the party that controlled production or sold the uranium,
noting that the Department's instructions to U.S. Customs was ``for all
manufacturers, producers, and exporters of uranium from Kazakhstan.''
The Uranium Coalition notes that the burden of proof is on Kazakhstan
to produce evidence that there were no sales of subject merchandise to
the United States during the POI. See Electrolytic Manganese Dioxide
from Ireland; Final Determination of No Sales at Less Than Fair Value,
54 FR 8776 (March 2, 1989); see also, Final Determination of No Sales
at Less Than Fair Value: Ferrosilicon from Argentina, 58 FR 27534,
27535 (May 10, 1993). The Uranium Coalition argues that Kazakhstan has
failed to meet its burden by failing to provide verified evidence,
noting that the Department's verification report states that Kazakhstan
did not provide any evidence that could have resolved whether there
were any shipments to the United States during the POI. Furthermore,
the Uranium Coalition contends that it is highly likely that there were
sales of uranium from Kazakhstan to the United States during the POI as
the region now known as Kazakhstan accounted for 50 percent of all
uranium production by the former Soviet republics in 1991. See the
Uranium Coalition's Rebuttal Brief at 32.
Department's Position: The Department agrees with the Uranium
Coalition. The issue of continuing this proceeding with respect to the
individual Republic was previously settled in court. See Tenex
proceedings. Thus, the claim that Kazakhstan itself did not make any
sales of uranium to the U.S. during the POI is irrelevant to this
investigation. As the Uranium Coalition points out, Kazakhstan
accounted for 50 percent of all uranium production of the Soviet Union.
Furthermore, at verification, the Department found that Tenex and the
Tselliny combinat had signed a commission agreement in 1990. See
Verification Report at 3. This commission contract supports the
contention that a regular channel of trade of natural uranium from
Kazakhstan through Tenex to foreign locations had been established. The
Department noted at verification that Kazakhstan's responses ``included
shipping documents indicating that uranium produced in Kazakhstan may
have been shipped to the United States by Tenex both before and during
the POI.'' See Verification Report at 10-11. At verification, given
this evidence, the Department attempted to confirm whether there were
sales of subject merchandise to the United States during
[[Page 31188]]
the POI. While the Department requested additional data from Kazakhstan
regarding U.S. sales, Kazakhstan failed to provide any data to clarify
the existing evidence. Similarly, when the Department attempted to
follow up on the Tenex-Tselliny combinat contract, Kazakhstan did not
provide any supporting documentation, such as receipts or other
documentation indicating payments received from Tenex pursuant to the
contract. As a result, the Department was unable to examine key source
data which could have supported Kazakhstan's claim of no shipments to
the United States of subject merchandise during the POI. Evidence on
the record indicates that uranium from what is now known as Kazakhstan
was most likely shipped to the United States during the POI. Kazakhstan
was unable to provide information countering this evidence.
Accordingly, the Department must conclude as BIA that there were sales
of subject merchandise to the United States during the POI and
Kazakhstan did not provide data on those sales.
Comment 8: Kazakhstan argues that the Department should use South
Africa as the primary surrogate country. Kazakhstan argues that its
surrogate value submission to the record, dated April 28, 1999,
demonstrates that South Africa satisfies the statutory criteria for
selection as the primary surrogate country, pursuant to Section
773(c)(4) of the Act. Kazakhstan argues that the Department is
permitted to select a different surrogate country in the final
determination than selected in the preliminary determination, citing
Tehnoimportexport v. United States, 766 F. Supp. 1169, 1175 (Ct. Int'l
Trade 1991); and Kerr McGee Chemical Corp. v. United States, 985 F.
Supp. 1166, 1180 (Ct. Int'l Trade 1997). Kazakhstan argues that in the
preliminary determination, the Department used a single surrogate based
on Soviet Union economic data because, lacking accurate or detailed
information, the Department mistakenly assumed that the level of
economic development of the former Soviet Union republics was
essentially the same. However, Kazakhstan argues there is now enough
information available to show the former republics' different levels of
economic development, thus, the Department should not make the same
assumption at the final determination. Kazakhstan argues that the
Department has generally preferred using publicly available pricing
information as the source of surrogate values as opposed to using
proprietary information. Kazakhstan asserts that the only publicly
available information on the record to value virtually every input used
to produce subject merchandise is from South Africa. Accordingly,
Kazakhstan argues that the Department should select South Africa as the
primary surrogate country in the interest of calculating a fair and
accurate margin in the final determination. Finally, Kazakhstan argues
that the Department should not add freight charges to the valuation of
any input for which freight-inclusive import values are used as
surrogate values.
The Uranium Coalition rebuts Kazakhstan's contention that South
Africa should be the primary surrogate country by stating that the
Department does not change surrogate countries after the preliminary
determination unless it finds compelling reasons to do so. The Uranium
Coalition argues that, to date, Kazakhstan has not provided such
information. Further, the Uranium Coalition cites to the Addendum to
Memorandum Regarding Choice of Surrogate Countries, Antidumping
Investigation of Uranium from the Former Soviet Union (March 24, 1992),
where the Department determined that the most appropriate course of
action was to use the surrogate countries decided upon for the Soviet
Union, for the NIS. The Uranium Coalition also contends that
Kazakhstan's premise that the Department did not perform a surrogate
country analysis is incorrect. Furthermore, the Uranium Coalition
states that Kazakhstan's assertion that because Kazakhstan is not the
Soviet Union that the Department's prior analysis is incorrect.
Finally, the Uranium Coalition argues that the information on the
record for South Africa is incomplete and unreliable in many respects.
Department's Position: As the Department is relying on BIA for its
calculation of the antidumping duty margin in this proceeding, this
issue is moot. See Comment 2.
Suspension of Liquidation
In accordance with Section 735(d) of the Act, the Department is
instructing U.S. Customs to continue suspending liquidation of all
unliquidated entries of uranium from Kazakhstan, as defined in the
Scope of the Investigation section of this notice, that are entered or
withdrawn from warehouse for consumption on or after January 11, 1999
(the effective date of the termination of the Suspension Agreement).
U.S. Customs shall continue to require a cash deposit or bond equal to
115.82 percent ad valorem, the estimated weighted-average amount by
which the foreign market value of the subject merchandise exceeds the
United States price, for all manufacturers, producers and exporters of
uranium from Kazakhstan. These suspension of liquidation instructions
will remain in effect until further notice.
International Trade Commission Notification
In accordance with Section 735(b)(2) of the Act, the Department has
notified the International Trade Commission (``ITC'') of its final
determination. The ITC will determine whether these imports are
materially injuring, or threaten material injury to, the United States
uranium industry. The ITC shall make this determination before the
latter of: (1) 120 days after the effective date of the preliminary
determination; or (2) 45 days after publication of the Department's
final determination. If the ITC determines that such injury does not
exist with respect to uranium, this proceeding will be terminated and
all securities will be refunded or canceled. If the ITC determines that
such injury exists with respect to uranium, the Department will issue
an antidumping duty order directing U.S. Customs officials to assess
antidumping duties on all imports of uranium from Kazakhstan for the
period discussed above in the Suspension of Liquidation section of this
notice.
This determination is issued and published in accordance with
Section 735(d) of the Act (19 U.S.C. 1673(d)) and 19 C.F.R.
353.20(a)(4).
Dated: June 3, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-14782 Filed 6-9-99; 8:45 am]
BILLING CODE 3510-DS-U