Procedures for Delivery of HEU Natural Uranium Component in the United States

DEPARTMENT OF COMMERCE

International Trade Administration

Procedures for Delivery of HEU Natural Uranium Component in the

United States

AGENCY: Import Administration, International Trade Administration, U.S.

Department of Commerce.

ACTION: Notice.

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SUMMARY: The Department of Commerce is announcing procedures and

required certifications pursuant to the USEC Privatization Act.

EFFECTIVE DATE: March 20, 1998.

FOR FURTHER INFORMATION CONTACT: James Doyle, Karla Whalen, or Letitia

Kress, AD/CVD Enforcement Group III, Office VII, Import Administration,

International Trade Administration, U.S. Department of Commerce, 14th

Street and Constitution Avenue, N.W., Washington, DC 20230, telephone:

(202) 482-0159, (202) 482-1386, or (202) 482-6412, respectively.

Background

On April 25, 1996, Congress passed the United States Enrichment

Corporation Privatization Act (The USEC Privatization Act), 42 U.S.C.

2297h et seq. The USEC Privatization Act required the U.S. Department

of Commerce (the Department) to administer and enforce the limitations

set forth in Section 42 U.S.C. 2297h-10(b)(5) of the USEC Privatization

Act. On January 7, 1998, the Department issued Procedures for Delivery

of HEU Natural Uranium Component in the United States (The HEU

Procedures).

On March 20, 1998, the Department issued Annex 1 to the HEU

Procedures to clarify certain requirements detailed in the HEU

Procedures. This announcement provides public notification of the HEU

Procedures and their Annex 1. Annex 1 details required certification

language and includes two additional certification requirements in

items A and C. Item A is an amendment to the certifications currently

required of all importers of uranium, regardless of national origin.

Item B is the designated agent's certification referred to Section B of

the HEU Procedures. Item C lists all the certifications which must

accompany all quarterly reports submitted to the Department in

accordance with section C of the HEU Procedures.

The following Attachment 1 provides the Procedures for the Delivery

of HEU Natural Uranium Component in the United States and Attachment 2

provides Annex 1 to the HEU Procedures.

Dated: June 25, 1998.

Joseph A. Spetrini,

Deputy Assistant Secretary, AD/CVD Enforcement Group III, Import

Administration.

Attachment 1--Procedures for Delivery of HEU Natural Uranium Component

in the United States

A. Annual Maximum Deliveries

The United States Department of Commerce (``the Department'')

designates the Ministry of Atomic Energy of the Russian Federation

(``MINATOM''), or its designated agent, to allocate the annual

maximum deliveries of HEU natural uranium component among any

marketing agent(s) authorized by MINATOM to sell the HEU natural

uranium component in the United States. The annual maximum

deliveries which may be allocated by MINATOM are set forth in the

United States Enrichment Corporation (USEC) Privatization Act, 42

U.S.C. 2297h-10(b)(5) (``Delivery Schedule'').

For each agent receiving a delivery allocation, MINATOM will

issue a certificate identifying such agent, the duration of the

allocation, and the maximum annual amount to be delivered under that

certificate. The certificate(s) will also contain a statement that

the material to be delivered to the agent for sale in the United

States will be delivered for consumption only. MINATOM will provide

a copy of all such certificates to the Department within 10 days of

issuance.

The cumulative amount of the deliveries authorized by such

certificates each year may not exceed the annual maximum deliveries

set forth in the Delivery Schedule. Annual deliveries allocated to

any given agent may be re-allocated to any other agent(s) or to

MINATOM within the same annual period subject to the annual maximum

deliveries under the following conditions:

--The Department is notified of the re-allocation no later than

December 1 of the affected annual period;

--MINATOM provides the Department with a copy of the amended and/or

terminated certificate(s) from which delivery allocation is to be

withdrawn and a copy of the new certificate(s) re-allocating such

deliveries.

New contracts entered into by any agent(s) as a result of re-

allocation will be subject to the approval process outlined in

paragraph B.

If, in any given annual period, an agent delivers less than the

maximum flexibility(ies) under an approved contract(s), such agent

may enter into a new contract(s) for the difference between its

actual deliveries during that year and the maximum flexibilities

under the contract(s) for that same year, provided that the agent's

total annual deliveries under all contracts do not exceed the

agent's delivery allocation or the annual maximum deliveries and

provided that the following conditions are met:

--The Department is notified of the agent's intention to re-direct

deliveries by December 1;

[[Page 36392]]

--All new contracts entered into by agents resulting from re-

direction of deliveries must be approved under paragraph B.

On December 31 of each year, any portion of the annual maximum

deliveries not so delivered in that year will be forfeited.

B. Contract Monitoring and Approval

The Department will require all authorized agents to submit for

approval all contracts related to the sale of the HEU natural

uranium component to end-users for consumption in the United States.

Contract approval will be contingent on the following requirements:

--A certificate as provided for in paragraph A confirming that the

relevant agent has been allowed sufficient amounts for deliveries by

MINATOM to fulfill its obligations under the submitted contract;

--A schedule of deliveries indicating the date, amount, and point of

each delivery;

--A statement in the contract that the material to be sold is of

Russian origin;

--A statement in the contract that the sale is for consumption

only.1

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\1\ For consumption means for use as nuclear fuel. Swaps,

exchanges or loans of material may be conducted solely for the

purpose of facilitating further processing and use as nuclear fuel.

All such permitted swaps, exchanges or loans must be documented to

the Department prior to each such transaction. The Department

considers swaps, exchanges or loans that will result in significant

disruptions to the uranium production market and in the depression

of market prices to be a circumvention of Section 3112(b) of the

USEC Privatization Act. The material may be re-sold as a result of a

force majeure.

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--A certification from the relevant agent that the deliveries

pursuant to the contract submitted for approval, when combined with

deliveries pursuant to other approved contracts entered into by that

agent, do not exceed that agent's delivery allocation for any given

annual period. In addition, each agent shall certify to the

Department that such agent's sales of Russian uranium are solely for

consumption and do not circumvent, directly or indirectly, the

limitations set forth in Section 3112(b) of the USEC Privatization

Act and the procedures set forth in this document.

The Department will officially notify the relevant agent of

contract approval/rejection within 10 business days of contract

submission. If an approved contract is subsequently terminated as a

result of force majeure, the Department will allow the affected

agent to replace such contract with a newly executed contract,

subject to the approval process outlined above, provided that the

agent's delivery allocation and the annual maximum deliveries are

not exceeded.

The Department will develop a separate record for actions

undertaken pursuant to the USEC Privatization Act and will announce

filing procedures consistent with existing antidumping procedures

during January 1998.

C. Quarterly Reports/Verification

The Department will require quarterly reports from all

authorized agents of HEU natural uranium component detailing all

activity relating to the movement of HEU natural uranium component

into and out of their respective accounts. In addition, the

Department will require similar quarterly reports from the

administrator of the account holding the HEU natural uranium

component prior to sale, e.g., USEC. These reports will be submitted

on May 1, August 1, November 1, and February 1 of each year for the

quarters ending March 31, June 30, September 30, and December 31.

The Department reserves the right to verify quarterly reports

and to restrict future deliveries from any account in which the

reported activity appears to be in violation of these procedures

and/or the annual maximum deliveries if such potential violations

are not rectified to the satisfaction of the Department and MINATOM.

MINATOM and the Department will hold annual consultations

subsequent to the filing of the quarterly report due February 1 of

each year for the purpose of exchanging/reviewing all data

pertaining to deliveries of HEU natural uranium component under

these procedures.

D. Re-importation

The Department will outline documentary requirements for re-

entry of HEU natural uranium component which has been exported from

the United States for further processing and re-imported for

consumption.

E. Enforcement

If the Department finds that an agent has exceeded its delivery

allocation and/or the annual maximum deliveries set forth in the

Delivery Schedule, the Department will require USEC or the

appropriate entity to withhold any further release of HEU natural

uranium component from the agent's account, until the problem has

been satisfactorily resolved among the Department, MINATOM, and the

agent.

In accordance with Section 3112(b)(9) of the USEC Privatization

Act (42 USC 2297h-10(b)(9)), the Department reserves the right to

require any other certifications, information, or take any other

action necessary to enforce the annual maximum deliveries provided

for therein.

F. Review of Procedures

By September 1998, the Department will initiate a review of

these procedures to ensure that its statutory obligations are being

met. Comments by interested parties regarding necessary/desirable

changes to these procedures will be solicited and fully considered.

If the department determines that changes are warranted, new

procedures will be implemented effective January 1, 1999.

Attachment 2--Procedures for Delivery of HEU Natural Uranium Component

in the United States, Annex #1 Required Certifications

On January 7, 1998, the Department of Commerce (the Department)

issued the Procedures for Delivery of HEU Natural Uranium Component

in the United States (the HEU Procedures), pursuant to the United

States Enrichment Corporation Privatization Act (The USEC

Privatization Act), 42 U.S.C. 2297h-10(b)(9). In order to further

clarify certain requirements of the HEU Procedures, the Department

will periodically issue supplemental statements. This annex sets

forth certification language required under the HEU Procedures and

includes two new certification requirements in items A and C. The

certification stated in item A is required of all importers of

uranium, regardless of origin. The certifications stated in item C

must accompany all quarterly reports submitted to the Department in

accordance with paragraph C of the HEU Procedures.

A. Importer Certifications

The importer of record must certify the following to the United

States Customs Service (and provide a copy of such certification to

the Department):

(Importer name) hereby certifies that the material being

imported was not obtained under any arrangement, swap, exchange, or

other transaction designed to circumvent the agreements with

Kazakhstan, Kyrgyzstan, the Russian Federation and Uzbekistan, as

amended, the antidumping duty order on Ukraine, or the delivery

limitation set forth in Section 3112(b) of the USEC Privatization

Act, 42 U.S.C. 2297h et seq., and the Procedures for Delivery of HEU

Natural Uranium Component in the United States.

B. Contract Approval Certifications

(Designated agent) certifies that the total annual deliveries

under the contract between (seller) and (purchaser), contract number

(insert #), and executed on (insert date), when added to annual

delivery quantities of other contracts approved in accordance with

the HEU Procedures for Delivery of HEU Natural Uranium Component in

the United States, will not exceed the maximum annual delivery

quantity allocated to (designated agent) by (MINATOM) for that given

year, or the annual maximum delivery quantity established in Section

3112(b)(5) of the USEC Privatization Act for the year in which

deliveries under this contract will be made.

(Designated agent) further certifies that the sale of the HEU

Natural Uranium Component is solely for consumption and does not

circumvent, directly or indirectly, the limitations set for in

Section 3112(b) of the USEC Privatization Act or the Procedures for

Delivery of HEU Natural Uranium Component in the United States.

C. Quarterly Report Certifications

(Certifying party) certifies that it holds an HEU Natural

Uranium Component account(s) at (state name of entity(ies)), and

that all HEU Natural Uranium Component transferred from or into this

(these) account(s) during calendar quarter (indicated dates) has

been transferred in accordance with only the following: (1) an

approved matched sale under 3112(b)(6) of the USEC Privatization Act

and Section IV of the Agreement Suspending the Antidumping

Investigation on Uranium from the Russian Federation, as amended,

(2) for use in overfeeding in U.S. enrichment facilities pursuant to

Section 3112(b)(7) of the USEC Act; (3) for delivery to a United

States end-user for consumption, within the delivery limits of the

USEC Privatization Act Section 3112(b)(5); (4) for export out of the

United States; (5) for further processing on behalf of (name of

entity); or (6) to another designated agent.

[[Page 36393]]

(Certifying party) further certifies that none of the HEU

Natural Uranium Component transferred from or into this (these)

account(s) during calendar quarter (indicate dates) has been loaned,

swapped, exchanged or used in any arrangement which directly or

indirectly circumvents the limitations set forth in section 3112(b)

of the USEC Privatization Act, the Agreement Suspending the

Antidumping Investigation on Uranium from the Russian Federation, as

amended, or the Procedures for Delivery of HEU Natural Uranium

Component in the United States.

[FR Doc. 98-17787 Filed 7-2-98; 8:45 am]

BILLING CODE 3510-DS-P