High court to hear case on duties

April 22, 2008|By Bloomberg News

The U.S. Supreme Court agreed yesterday to hear arguments from the Bush administration and USEC Inc. in a fight over anti-dumping duties imposed on enriched uranium imported by France's Areva SA.

The justices said they will review a federal appeals court decision that said Areva in at least some cases provides a service, not a product. The U.S. anti-dumping law doesn't apply to services.

A high court decision allowing the duties would be a boon for USEC, the only U.S. company that enriches uranium. U.S. Solicitor General Paul Clement contended in his appeal that the lower court ruling "threatened the ongoing economic viability of USEC."

USEC said in a statement that elimination of duties "could adversely affect the financing and deployment" of its planned centrifuge facility in Ohio and "undermine the economics" of its existing plant in Kentucky.

The dispute also might have ramifications for Russia's ability to sell enriched uranium directly to U.S. utilities. Under an agreement between the two countries, the U.S. now buys low-enriched uranium that has been converted from highly enriched uranium taken from nuclear weapons.

The U.S. used the prospect of duties to persuade Russia to sign the accord in 1993. Clement said in his appeal that Russia, freed from the prospect of paying duties, might withdraw from the agreement and instead focus on enriching natural uranium and selling it to American utilities.

Areva, along with a group of 15 U.S. utilities, urged the Supreme Court not to hear the case. They said concerns about USEC's viability and the implications for Russia weren't valid considerations in a dispute over the application of the U.S. anti-dumping law.

"The anti-dumping statute is an instrument of trade policy with general implications for all industries and not a tool for the implementation of national security or energy policies," the utilities argued in a court filing.

The Commerce Department concluded in 2001 that Areva, the world's biggest atomic plant builder, was selling enriched uranium in the U.S. at less than fair value. The following year, the U.S. International Trade Commission said that Areva's actions were harming USEC, clearing the way for the Commerce Department to impose an import duty.

The Court of International Trade then overturned the ITC ruling, and in September the U.S. Court of Appeals for the Federal Circuit in Washington agreed with that conclusion.

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