Commerce Department: Unfair Subsidies To European Enrichers Curtailed; -USEC Says Government Investigation Is Restoring Fair Trade-.

BETHESDA, Md. -- The results of a follow-up trade investigation released today by the U.S. Department of Commerce show reduced foreign government subsidization of European uranium enrichers in the review period after duties were first imposed in 2002. The results were issued in connection with the department's ongoing administrative reviews of duty orders issued on European low-enriched uranium (LEU) imports. The government earlier determined those imports injured the domestic enrichment industry.

U.S. uranium enricher USEC Inc. (NYSE:USU) said today's rulings clearly indicate that unfair subsidies to foreign competitors have been curtailed since the U.S. government began its investigation in 2000. The department's action has helped restore fair trade and stability to the enrichment market, which benefits all participants and helps ensure a long-term supply of competitive and reliable fuel.

In 2002, after a yearlong investigation, the department found that two European enrichers were receiving unfair subsidies and, in the case of the French enricher, dumping LEU in the U.S. market. The department determined that subsidies in the amount of 12.15 percent had been provided on LEU imports from the French-government owned Eurodif, S.A. and 2.23 percent on imports from the British-Dutch-German consortium Urenco, Ltd. The department also found a dumping margin of 19.95 percent with regard to Eurodif imports.

In today's follow-up rulings, the department calculated final countervailing duty rates for subsidized LEU imports entering the United States during the period (May 14, 2001-December 31, 2002) subsequent to that covered by the original investigation (1999). For the case involving Eurodif, the department calculated a countervailing duty rate of 3.63 percent for 2001 and 0.71 percent for 2002. The 2002 rate serves as the new estimated countervailing duty rate on future imports.

For Urenco, the department calculated a countervailing duty rate of 1.57 percent for the 2001 period and 1.47 percent for 2002. The department did not establish a new countervailing duty rate for future Urenco imports based on its conclusion that the subsidies identified ended in 2002. However, the existing countervailing duty order remains in force, and Urenco could again face duties if found to have received unfair subsidies in the future.

The results released today focused only on subsidization. On July 26, the department is expected to issue the final results of its follow-up administrative review of antidumping duties on French LEU imported from July 31, 2001 through January 31, 2003. Any antidumping duties calculated in that review will be combined with the duties on French imports announced today.

USEC Inc., a global energy company, is the world's leading supplier of enriched uranium fuel for commercial nuclear power plants.