|The Suspension Agreement
Russian uranium imports to the US have been subject to strict trade controls since 1992, under the terms of the US-Russia Antidumping Suspension Agreement. The agreement remained in place despite undergoing regular reviews. However, its approach to uranium enrichment services was reviewed following a court ruling. The latest amendment to the agreement allows Russia to supply nuclear fuel direct to US utilities.
The Antidumping Suspension Agreement: What, Why and When?
The Agreement Suspending the Antidumping Investigation on Uranium from the Russian Federation – commonly referred to as the US-Russia Antidumping Suspension Agreement or just the Russian Suspension Agreement – has a long history.
Uranium exports from the then Soviet Union to the USA began in 1990. In November 1991, just prior to the break up of the Soviet Union, a group of US uranium producers, together with the Oil, Chemical and Atomic Workers Union, lodged a complaint with the US Department of Commerce (DoC) and the US International Trade Commission (ITC) alleging that uranium from the former Soviet Union was being "dumped" - that is, sold in the USA at less than fair value - and as a result threatening or injuring domestic industry.
As required by US law, the DoC duly launched an investigation into whether uranium from those countries was being "dumped" and the ITC began an investigation to determine if the imports were causing injury to US industry. The DOC investigation found that uranium was indeed being "dumped" and the ITC ruled that there was a reasonable indication of injury or threat to US producers. The DOC set an antidumping tariff on uranium imports from the republics involved: Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Ukraine and Uzbekistan.
In October 1992 each of the six republics signed a separate suspension agreement with the DoC. Under these agreements, the DoC agreed to suspend further investigations of the alleged dumping, in exchange for the countries accepting price-tied quotas for uranium exports for end-use in the USA.
All agreements suspending antidumping investigations are required by law to be reviewed every five years to determine whether dumping would still occur if restrictions were removed. These reviews, known as "Sunset Reviews", can in principle lead to three possible outcomes: the ending of the antidumping case and removal of import restrictions; the imposition of different tariffs on uranium imports; or the continuation of the existing or re-negotiated suspension agreement. The suspension agreements against all the republics except Russia had all been terminated by the end of 2001. However, successive Sunset Reviews of the US-Russia antidumping suspension agreement have concluded that dumping, with likely injury to the US industry, would occur if the agreement was terminated. The US-Russia antidumping suspension agreement has therefore remained in force.
The US-Russia agreement has been amended several times, but Russian uranium and enrichment services can only be sold in the US under the restrictions of the agreements. The last Sunset Review was concluded in 2006.
A changing world
The world uranium market has seen many changes over the fifteen years since the Russian Suspension Agreement was first signed. In 1993, the governments of the two countries signed an agreement for the purchase over a 20-year period of 500 tonnes of Russian surplus weapons-grade high-enriched uranium from nuclear disarmament and military stockpiles to be bought by the USA for use in civil nuclear reactors. Known as the HEU Agreement, and sometimes referred to as the Megatons to Megawatts programme, it was implemented through a 1994 contract between the US Enrichment Corporation and Russia's Technabexport (Tenex) acting as executive agents for the US and Russian governments. After the HEU Agreement was signed the US Enrichment Corporation was later privatized, becoming USEC Inc.
In practice, the main source of Russian uranium entering the US under the Suspension Agreement as it currently stands (before the amendment enters force in 2011) is that from the HEU Agreement. Russian uranium can also enter the US for re-export.
Russia has the largest uranium enrichment capacity of any country in the world, far more than is needed to meet its domestic enrichment requirements, leading to US fears that Russian enrichment services could also be "dumped" on the US market to the detriment of its domestic industry. Enrichment is thus also covered under the US-Russia Suspension Agreement, although the enrichment component of HEU under the HEU agreement was excluded from the Suspension Agreement under a 1994 amendment.
In September 2007, Tenex and a group of American electricity generators - the Ad Hoc Utilities Group (AHUG) – launched a legal challenge against the Suspension Agreement’s inclusion of enrichment after a separate uranium antidumping case against European enrichers led to a ruling that uranium enrichment is a service and not a product.
Antidumping duties only apply to the sale of goods, not services. The US Court of International Trade (CIT) ruled that the DOC must re-examine its determination in the second (2006) Sunset Review in the light of the ruling, with final comments due by the end of December 2007.
Russia would be allowed to export uranium products to the USA in accordance with export limits and other terms under a the amendment to signed by Carlos Gutierrez of the DoC and Sergei Kiriyenko, head of Russia's Federal Atomic Energy Agency (Rosatom), on 1 February 2008.
The amendment was published in the Federal Register on 4 December and went out for a 30-day comment period which was subsequently extended at the request of two US uranium producers, Power Resources and Crow Butte Resources. The DoC said it reviewed the comments it received and decided to retain the text.
The amendment will allow Russia to export uranium products to the USA in accordance with the export limits and other terms detailed in the amendment. The amendment details export limits expressed in kgU as low-enriched uranium (LEU), at a product assay of 4.4% and a tails assay of 0.3%. Quantities would initially be small, increasing steadily from 16,559 kgU in 2011 to 41,398 kgU in 2013 when the 'Megatons to Megawatts' program is due to expire. Quantities will rise after 2013, increasing from 485,279 kgU in 2014 to 514,754 kgU in 2020. The amendment exempts Russian uranium imported for US initial cores (the first fuel loaded into a new reactor) from the annual export limits.
These limits were derived from the reference data in the World Nuclear Association's (WNA's) publication Global Nuclear Fuel Market Supply and Demand, 2005-2030 and will be adjusted in 2016 and 2019 to match the projected reactor demand for subsequent years.