US Supreme Court overturns SWU trade ruling

Tuesday, 27 January 2009

An earlier version of this story described Louisiana Enrichment Services (LES) as a partnership comprising Urenco, Exelon, Duke Power, Entergy, and Westinghouse, but this is no longer the case. LES has been a 100%-owned subsidiary of Urenco since March 2006.

 

The US Supreme Court has reopened the door for antidumping action against imports of low enriched uranium (LEU) by reversing a ruling classing enrichment as a 'service' rather than 'goods'.

In response to an appeal against a 2005 Federal Circuit court ruling, the Supreme Court ruled unanimously that "(w)here a domestic buyer’s cash and an untracked, fungible commodity are exchanged with a foreign contractor for a substantially transformed version of the same commodity, the Commerce Department may reasonably treat the transaction as the sale of a good…We therefore reverse the judgment of the Federal Circuit and remand the cases for further proceedings consistent with this opinion." The Supreme Court's decision gives the Department of Commerce the ability to enforce dumping findings against all LEU imports, whether or not they are part of an enrichment contract.

The 2005 Federal Circuit court decision ruled that LEU sold under contracts for enrichment services could not be subject to antidumping legislation as enrichment constituted a service, not merchandise. The decision was the culmination of a case brought by the US Department of Commerce against European enrichment company Eurodif SA in 2001. US antidumping laws, which aim to ensure that domestic products are not undercut by low-cost foreign imports being "dumped" on the market, only cover goods, not services. The Solicitor General of the USA, along with the general counsels of US Departments of Commerce, Defense, Energy and State, requested Supreme Court review of the Federal Circuit decision and was granted an appeal in 2008.

John K Welch, president and CEO of US enrichment company USEC, hailed the Supreme Court ruling as "an important step in supporting the continued health of the US nuclear fuel industry."

USEC is the only current supplier of commercial enrichment services in the USA, and is in the process of building the American Centrifuge Plant at Piketon, Ohio. However, USECs position as the only domestic uranium enricher is under threat, with European-led consortia also in the process of setting up enrichment plants in the USA. Louisiana Energy Services (LES), a subsidiary of Urenco, is in the process of building a new centrifuge plant at Eunice, New Mexico, while French nuclear company Areva has applied to build a centrifuge plant, the Eagle Rock Enrichment Facility, in Idaho, with a view to operation in 2014.