Eurodif s.a. v. United States

Error: Bad annotation destination
United States Court of Appeals for the Federal Circuit

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EURODIF S.A.,
COMPAGNIE GENERALE DES MATIERES NUCLEAIRES,
and COGEMA, INC.,

Plaintiffs-Appellants,
and

AD HOC UTILITIES GROUP,

Plaintiff-Appellant,

v.

UNITED STATES

Defendant-Cross Appellant,
and

USEC INC. and UNITED STATES ENRICHMENT CORPORATION,

Defendants-Cross Appellants.

Stuart M. Rosen, Weil, Gotshal & Manges LLP, of New York, New York, argued for
plaintiffs-appellants Eurodif S.A., et al. With him on the brief were Gregory Husisian, of
Washington, DC, and Jennifer J. Rhodes, of New York, New York.

Nancy A. Fischer, Shaw Pittman LLP, of Washington, DC, argued for plaintiff-appellant
AD HOC Utilities Group. With her on the brief were Stephan E. Becker, Sanjay J. Mullick, and
Joshua D. Fitzhugh.

Stephen C. Tosini, Attorney, Commercial Litigation Branch, Civil Division, United States
Department of Justice, of Washington, DC, argued for defendant-cross appellant United States.
On the brief were Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, and
Jeanne E. Davidson, Deputy Director. Of counsel on the brief were John D. McInerney, Chief
Counsel, Berniece A. Browne, Senior Counsel, and Robert L. Lafrankie, Senior Attorney, Office
of Chief Counsel for Import Administration, United States Department of Commerce, of
Washington, DC.
 Sheldon E. Hochberg, Steptoe & Johnson LLP, of Washington, DC, argued for
defendants-cross appellants USEC Inc., et al. With him on the brief were Richard O.
Cunningham, Eric C. Emerson, Matthew S. Yeo, Evangeline D. Keenan, and Alexandra E.P.
Baj.

Appealed from: United States Court of International Trade

Judge Donald Pogue
 United States Court of Appeals for the Federal Circuit

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EURODIF S.A.,
COMPAGNIE GENERALE DES MATIERES NUCLEAIRES,
and COGEMA, INC.,

Plaintiffs-Appellants,

and

AD HOC UTILITIES GROUP,

Plaintiff-Appellant,

v.

UNITED STATES,

Defendant-Cross Appellant,

and

USEC INC. and UNITED STATES ENRICHMENT CORPORATION,

Defendants-Cross Appellants.
__________________________

DECIDED: March 3, 2005
__________________________

Before BRYSON, Circuit Judge, PLAGER, Senior Circuit Judge, and PROST, Circuit
Judge.

PROST, Circuit Judge.

This interlocutory appeal comes to us from the United States Court of

International Trade, which certified four separate questions for appeal to this court. The

Ad Hoc Utilities Group (“AHUG”), Eurodif S.A. (“Eurodif”), Compagnie Generale des

Matieres Nucleaires (“CGMN”) and Cogema, Inc. appeal two issues from the Court of
International Trade. The United States, USEC, Inc. and the United States Enrichment

Corporation (the latter two collectively referred to as “USEC” in this opinion) cross-

appeal two issues. We affirm the Court of International Trade’s decision affirming the

Department of Commerce’s (“Commerce”) industry support determination. We also

affirm the court’s decision that uranium enrichment contracts constitute a provision of

services, rather than a sale of goods. Finally we reverse the court’s decision regarding

subsidies, and hold that overpayment for uranium enrichment services by foreign

government entities cannot constitute a countervailable subsidy. Because we need not

review the court’s decision regarding Commerce’s application of the tolling regulation in

the context of export price determination, we decline to do so.

BACKGROUND

Enriched uranium fuel rods are used by the utility industry to generate nuclear

power. The process of producing those rods involves multiple steps. First, uranium ore

must be mined. Second, the ore must be milled or refined into concentrated uranium.

Third, that concentrated uranium must be converted into uranium hexafluoride. Fourth,

that uranium hexafluoride must be enriched into low enriched uranium (“LEU”). Fifth,

and finally, LEU is used to fabricate uranium rods. This case involves the fourth step in

the process of creating uranium rods—the enrichment of uranium hexafluoride into LEU.

Many utilities in the United States contract to buy uranium from a third-party

seller and then contract to have that uranium enriched by a uranium enricher. Only one

entity in the United States enriches uranium into LEU—USEC, formerly an arm of the

federal government. A variety of foreign enrichers, including Eurodif, CGMN and

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Cogema, compete with USEC and also enrich the uranium of American utility

companies.1

Contracts for enriched uranium come mainly in two different forms. The first form

involves contracts that provide money for the sale of enriched uranium, otherwise

known as enriched uranium product, or EUP, contracts. The second form, the form

relevant to this appeal, involves the transfer of unenriched uranium by a buyer to an

enricher and the purchase of separative work units (“SWU”) from the enricher. In these

SWU contracts, the enricher enriches the unenriched uranium and delivers LEU to the

purchaser. Although the enricher may not necessarily produce a particular utility’s LEU

from the uranium that utility provides to the enricher, the utility retains title, during the

enrichment process, to the quantity of unenriched uranium that it supplies to the

enricher.

In most of the transactions relevant to this case, AHUG and American utilities

entered into SWU contracts with European enrichers. These utilities compensated

enrichers to process unenriched uranium into LEU. In another critical transaction, a

partially public French utility, Electricite de France (“EdF”), entered into an SWU

contract with French enricher Eurodif. In that contract, EdF allegedly paid Eurodif

greater than adequate compensation for the enrichment of uranium.

On December 7, 2000, USEC petitioned Commerce to undertake an antidumping

and countervailing duty investigation focusing on LEU coming from France, Germany,

the Netherlands, and the United Kingdom. On December 21, 2001, Commerce issued

1
The Court of International Trade thoroughly documented the factual
background to this case in its opinion. See USEC Inc. v. United States, 281 F. Supp. 2d
1334 (Ct. Int’l Trade 2003) (“USEC II”).

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its final determinations in that investigation. Those determinations focused on two main

issues: (1) whether SWU contracts were contracts for the sale of goods and not

services and, therefore, subject to U.S. antidumping and countervailing duty statutes,

and (2) whether domestic utilities or foreign enrichers were “producers” of LEU for the

purposes of determining whether or not there was sufficient industry support to begin an

antidumping and countervailing duty investigation in the first place. In its final

determinations, Commerce concluded that SWU contracts are contracts for the sale of

goods and not services. It also decided that the foreign enrichers of uranium, and not

the domestic utilities, were “producers” of LEU.

AHUG and the foreign enrichers party to this case appealed Commerce’s

determination to the Court of International Trade, arguing that a uranium enrichment

contract is a contract for the provision of services and not the sale of goods and,

therefore, not subject to federal antidumping and countervailable subsidy statutes.

AHUG also disputed Commerce’s contention that only the foreign enrichers are

“producers” for domestic industry support determination purposes, arguing that

Commerce’s determination that foreign enrichers were “producers” of LEU was

inconsistent with its prior decisions. AHUG further contended that if the domestic

utilities are considered producers of LEU, Commerce would not have sufficient domestic

industry support to commence an investigation pursuant to 19 U.S.C. § 1673a(c)(4).

The Court of International Trade agreed with AHUG and determined that

Commerce’s characterization of the enrichment contracts between AHUG and foreign

enrichers as contracts for the sale of goods was not sustainable. USEC Inc. v. United

States, 259 F. Supp. 2d 1310, 1324-26 (Ct. Int’l Trade 2003) (“USEC I”). It also found

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that Commerce’s determination that the foreign enrichers were “producers” of LEU was

against the weight of the evidence and inconsistent with prior Commerce decisions. Id.

at 1317-26. As a result, the court remanded the case to allow Commerce to reconsider

its determinations.

In its remand determination, Commerce reiterated its original positions. Final

Remand Determination, USEC Inc. and United States Enrichment Corp. v. United

States (June 23, 2003) (“Remand Determination”). AHUG and the foreign enrichers

then appealed that remand determination to the Court of International Trade. In its

second consideration of Commerce’s determinations, the court concluded that (1)

Commerce’s interpretation of the word “producer” in the context of making an industry

support determination was reasonable and in accordance with law; (2) uranium

enrichment contracts were contracts for services and not for goods; (3) payment by a

foreign government entity of more than adequate remuneration to a foreign enricher for

enrichment services qualified as a countervailable subsidy; and (4) Commerce’s

interpretation of the word “producer” for the purposes of making an export price

determination was inconsistent with its previous determinations in other cases and thus

not in accordance with law. USEC Inc. v. United States, 281 F. Supp. 2d 1334 (Ct. Int’l

Trade 2003) (“USEC II”).

Because the resolution of the issues decided by the court in USEC II are

potentially dispositive of this entire case, the Court of International Trade certified four

specific questions for appeal to this court. The four certified questions are:

(1) Whether Commerce’s decision not to apply its tolling regulation to determine

whether American utilities should be considered “producers” of low enriched uranium

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(LEU) for the purposes of determining whether there was enough domestic industry

support to proceed with an investigation is in accordance with law. (Commerce

determined that foreign enrichers and not domestic utilities were “producers” of LEU for

the purposes of determining domestic industry support. Remand Determination at 6-

36.)

(2) Whether Commerce’s decision that the enrichment of uranium feedstock

pursuant to separative work unit (SWU) contracts constitutes a sale of goods instead of

services is supported by substantial evidence and in accordance with law. (Commerce

determined that SWU contracts like EUP contracts are contracts for the sale of goods.

Remand Determination at 70-81.)

(3) Whether Commerce’s decision that payment of more than adequate

remuneration for enrichment services by partially public foreign entities to foreign

enrichers constitutes a countervailable subsidy is in accordance with law. (Commerce

determined that the transaction between EdF and Eurodif was a sale of goods to a

government entity for more than adequate remuneration and, therefore, subject to the

countervailing duty statute. Remand Determination at 82-99.)

(4) Whether Commerce’s decision to apply a definition of “producer” in the

context of export price determination that is different from the definition it used in the

industry support determination is reasonable and therefore in accordance with law.

(Commerce determined that foreign enrichers were “producers” of LEU for the purposes

of determining LEU export price. Remand Determination at 69-70.)

We have jurisdiction to hear this appeal under 28 U.S.C. § 1292(d)(1).

DISCUSSION

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 In reviewing the Court of International Trade’s decisions in this case, we apply

the same standard used by that court in evaluating Commerce’s determinations,

findings and conclusions and hold unlawful any decisions found to be unsupported by

substantial evidence or otherwise not in accordance with law. 19 U.S.C.

§ 1516a(b)(1)(B)(i) (2000).

A. The Tolling Regulation and Commerce’s Industry Support Determination

Before an antidumping and countervailing duty investigation can be initiated, the

petition on which that investigation is based must meet certain industry support

requirements. A petition is considered to be filed on behalf of an industry if:

(i) the domestic producers or workers who support the
petition account for at least 25 percent of the total
production of the domestic like product, and

(ii) the domestic producers or workers who support the
petition account for more than 50 percent of the
production of the domestic like product produced by that
portion of the industry expressing support for or
opposition to the petition.

19 U.S.C. § 1673a(c)(4)(A) (2000).

Commerce determined that in order to be a producer, an entity must have a

“stake” in the domestic industry in question. Commerce then defined having a “stake”

as undertaking the “actual production of the domestic like product” within the United

States. Remand Determination at 13. Commerce’s industry support determination

considered USEC to be the only domestic producer of LEU. Accordingly, Commerce

found that there was sufficient domestic industry support to begin an antidumping and

countervailing subsidy investigation. The Court of International Trade affirmed

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Commerce’s determination that foreign uranium enrichers were “producers” for the

purposes of § 1673a(c)(4)(A).

On appeal, appellants AHUG, Eurodif, CGMN and Cogema argue that American

utility companies should be considered “producers” for the purposes of determining

whether USEC’s petition has sufficient industry support to trigger Commerce’s

antidumping and countervailing duty investigation. In support, they note that

Commerce’s tolling regulation orders Commerce not “to consider a toller or

subcontractor to be a manufacturer or producer where the toller or subcontractor does

not acquire ownership, and does not control the relevant sale, of the subject

merchandise or foreign like product.” 19 C.F.R. § 351.401(h) (2004). According to the

appellants, if the tolling regulation were applied in this case, Commerce could not initiate

any antidumping or countervailing duty investigation because the domestic utilities

would be considered “producers” for the purposes of an industry support

determination—and given such a definition of “producer,” the dictates of

§ 1673a(c)(4)(A) would not be satisfied. They draw further support for their argument

from prior Commerce determinations that held that control of the aspects of

manufacture is sufficient to qualify an entity as a “producer.” Finally, they buttress their

argument by alleging that Commerce improperly and inconsistently applied the tolling

regulation by using it to determine the export price of LEU but declining to apply it in its

industry support determination.

The Court of International Trade rejected AHUG’s argument and sustained

Commerce’s interpretation of the term “producer” for the purpose of an industry support

determination as well as its refusal to apply the tolling regulation to encompass

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American utilities within the definition of the term “producer.” USEC II, 281 F. Supp. 2d

at 1346. The court supported its holding by determining that Commerce’s use of the

tolling regulation was in keeping with the purposes of the industry support statute and

that Commerce’s interpretation of the word “producer” was reasonable and, thus, in

accordance with law. Id. On this issue, we agree with the Court of International Trade

and affirm Commerce’s initial industry support determination.

Commerce’s determination that domestic utilities were not “producers” of LEU is

consistent foreign enrichers, and not domestic utilities, were “producers” of LEU is

consistent with the purpose of § 1673a(c)(4)(A). Section 1673a(c)(4) speaks of

“industry support” and, as expressed in legislative history, Congress intended the

industry support statute “to provide an opportunity for relief for an adversely affected

industry and to prohibit petitions filed by persons with no stake in the result of the

investigation.” S. Rep. No. 249, 96th Cong., 1st Sess. 47 (1979). This view was

echoed by the Court of International Trade when it noted that “[t]he language in the

legislative history is broad and unqualified. It contrasts industries suffering adverse

effect with those having no stake: the former have standing, the latter do not.” Brother

Indus. (USA), Inc. v. United States, 801 F. Supp. 751, 757 (Ct. Int’l Trade 1992).

Commerce interpreted having a “stake” as requiring that a company “perform some

important or substantial manufacturing operation.” Remand Determination at 14

(internal quotations and citations omitted). There is no basis to conclude that

Commerce’s interpretation in this context is unreasonable or not in accordance with law.

Further, determining the export price of a good and determining whether a

petition has enough support for an investigation to be initiated are two different tasks

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that were delegated to Commerce for different purposes. Thus, using the tolling

regulation in one context but not using it in another is a clearly insufficient basis upon

which to conclude that Commerce’s action was not in accordance with law.

B. The Characterization of Enrichment Contracts

Under the statutory scheme adopted by Congress, the sale of goods (or

“merchandise”) is covered by the antidumping duty statute. See 19 U.S.C. § 1673. The

provision of services, however, is not covered by that statute.

In a previous case dealing with SWU contracts and the Contract Disputes Act

(“CDA”), we agreed with the government’s argument that an SWU contract for the

enrichment of uranium is a service contract and, thus, not covered by the CDA. See

Fla. Power & Light Co. v. United States, 307 F.3d 1364 (Fed. Cir. 2002). The parties

dispute the relevance of Florida Power to this case.

On appeal, the government and USEC submit that Commerce’s finding that SWU

contracts are contracts for the sale of goods is supported by substantial evidence and in

accordance with law and that the Court of International Trade’s holding to the contrary

should be reversed. They rely on three principal contentions.

First, they argue that this court’s precedents in NTN Bearing Corp. of Am. v.

United States, 368 F.3d 1369 (Fed. Cir 2004), AK Steel Corp. v. United States, 226

F.3d 1361 (Fed. Cir. 2000), and NSK Ltd. v. United States, 115 F.3d 965 (Fed. Cir.

1997) support their argument that the SWU contracts in question were sales of

merchandise and not arrangements for services. They point to this court’s construction

of the word “sold” in NSK as supporting the view that a sale requires “both a transfer of

ownership to an unrelated party and consideration.” See NSK, 115 F.3d at 975. They

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also cite to our opinions in AK Steel and NTN as supporting this construction.

According to the government and USEC, this straightforward interpretation should cover

the SWU contracts because those contracts involved a transfer of title to LEU from the

enricher to the utilities upon sampling and weighing of the LEU and consideration paid

by the utilities to the enrichers.

Second, the government and USEC assert that Commerce’s characterization of

the SWU contracts as contracts for the sale of goods is in keeping with the general

purpose of the antidumping statute, which they articulate as “provid[ing] domestic

producers protection from all dumped imports.”

Third, the government and USEC point to the deferential standard of review

under which we review Commerce determinations as precluding a reversal of

Commerce’s determination on this issue. They argue that because Commerce’s

determination that SWU contracts are contracts for the sale of goods is, in their eyes,

supported by substantial evidence and in accordance with law, we should affirm it.

It is on these grounds, according to the appellants, that Florida Power is

inapposite to this case. Because Florida Power dealt with a contractual dispute under

the CDA and not an antidumping investigation, it is not, in their view, applicable here.

Moreover, they argue that Florida Power stands for the proposition that “SWU contracts

[fall] into neither [the category of sales of goods nor the category of contracts for

services].” As support, they point to language in our opinion in Florida Power that

indicates that an SWU contract “does not fall neatly into” either side of the goods-

services divide. See Fla. Power, 307 F.3d at 1373. The government and USEC

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consider this language sufficient to support Commerce’s determination given the

deferential standard of review to be applied in this case.

The Court of International Trade rejected Commerce’s determination that the

SWU contracts in this case were contracts for the sale of goods and not services,

resting its decision on the fact that the enrichers never obtained ownership of either the

feed (unenriched) uranium during enrichment or the final LEU product. USEC II, 281

F. Supp. 2d at 1339. Furthermore, according to the court, the SWU contracts between

the utilities and the enrichers demonstrated “an intention to establish a continuous chain

of ownership in the utility while maintaining the enricher’s ability to cover its obligations

under the contract should it encounter difficulties in producing or providing LEU for a

customer.” Id. The court also found that “nothing in the evidentiary record supports a

determination that the enricher has any ownership rights [under the SWU contracts].”

Id. at 1340. Agreeing with the Court of International Trade, we reject Commerce’s

determination that the SWU contracts in this case are contracts for the sale of goods.

In reviewing the contracts in this case, it is clear that ownership of either the

unenriched uranium or the LEU is not meant to be vested in the enricher during the

relevant time periods that the uranium is being enriched. While it is correct that a utility

may not receive the LEU that was enriched from the exact unenriched uranium that it

delivered to the enricher, it is nevertheless true that up until the sampling and weighing

of the LEU before delivery, the utility retains title to the quantity of unenriched uranium

that is supplies to the enricher. The utility’s title to that uranium is only extinguished

upon the receipt of title in the LEU for which it contracted. Therefore, the SWU

contracts in this case do not evidence any intention by the parties to vest the enrichers

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with ownership rights in the delivered unenriched uranium or the finished LEU. As a

result, the “transfer of ownership” required for a sale under NSK is not present here.

As previously noted, we explicitly dealt with whether or not SWU contracts were

contracts for services or goods in Florida Power (albeit in the context of a CDA claim

and not in the context of an antidumping investigation). In that case, the government

argued that SWU contracts were contracts for services and not goods. There, the

government pointed out in its briefs that the SWU contracts in that case consistently

referred to “enrichment services” and that the “fundamental purpose” of those contracts

was “the provision of enrichment services.” The government further declared that the

utilities’ argument in that case that the SWU contracts arranged for the sale of goods

because title passed between utilities and enrichers “rest[ed] on [a] technicality.”2

The relevant SWU contract terms in that case are identical to the contract terms

in this case. Indeed, the government successfully defeated the CDA claim of the

utilities in Florida Power solely on the ground that the SWU contract in that case was a

contract for services and not for goods. And while Florida Power is not binding

precedent for this case because of the different statutory scheme involved, we find its

reasoning and its conclusion persuasive.

2
The title argument that “rest[ed] on [a] technicality” in that case is strikingly
similar to the title argument that the government advances in this case. There, the
government argued that despite the temporary transfer of title of uranium from the utility
to the enricher, the fact that the utilities were entitled to claim any leftover material from
uranium enrichment (also known as “tails”) showed that the SWU contract was a
contract for services. Here, the utilities were likewise contractually entitled to reclaim
the uranium “tails” and title to the quantity of unenriched uranium transferred by the
utility only passed to the enricher once the utilities received title to the LEU from the
enrichers.

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 In addition, while it is true that we stated that SWU contracts “[do] not fall neatly

into either [a sale of goods or a contract for services],” our opinion definitively held that

the SWU contract in that case was a contract for the provision of services. Fla. Power,

307 F.3d at 1373.3 Holdings of this court are no less decisive because they may have

been difficult to develop. Indeed, our characterization of the SWU contract in Florida

Power, however we may have arrived at it, created the sole basis for denying the

utilities in that case relief under the CDA. And even under the deferential standard of

review that we apply in this case, we choose not to ignore our previous holdings,

particularly where the circumstances in a previous case are nearly identical to the case

at hand.

Moreover, while the statutory schemes involved in Florida Power and those

involved in this case are different, they do not change the essential nature of the

transaction involved in this case. Even though the government is correct in arguing that

3
In regards to the contracts between utilities and the government for
enrichment of uranium, we stated in Florida Power:
It seems clear that if the government purchased
natural uranium directly from a third party, enriched the
uranium, and sold it to the customer utilities, the contracts
would be for the disposal of personal property and would be
covered by the CDA. It seems equally clear that if the
government simply enriched each utility's uranium for a fee,
it would be providing a service, not disposing of personal
property.
In light of the evidence that DOE used feed material
from other customers, and sometimes its own feed material,
to fulfill a particular enriched customer’s order of enriched
uranium, this case does not fall neatly into either the above
categories, but it is closer to the latter. The nature of the
contractual pricing scheme, in particular, persuades us that
the transaction is properly characterized as a service rather
than a sale.
307 F.3d at 1373.

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the general purpose of the antidumping statute is not the same as the general purpose

of the CDA, it is incorrect in asserting that this dissimilarity of purposes is sufficient to

compel a different result in this case. A contract for services of the kind that we discuss

here entails a certain set of obligations on the part of contracting parties that do not

change with the statutory scheme. Thus, unless Congress specifically gave guidance in

the statutory text that certain contracts normally considered service contracts should be

considered contracts for the sale of goods in the antidumping context, the different

overall purposes of the CDA and antidumping statute are insufficient to alter our

analysis here. And nothing in the text of the antidumping statute or its legislative history

evidences such a Congressional intent to re-characterize contracts like the SWU

contracts at issue in this case for the purposes of antidumping investigations by

Commerce.

The persuasive power of Florida Power might be mitigated if the government

were capable of showing that the contract in that case differed in relevant part from the

contracts in this case. No such showing has been made. In Florida Power, we held

that an SWU contract was not a contract for “the procurement of property” under the

CDA. 307 F.3d at 1373-74. Though we did say that SWU contracts do “not fall neatly”

either into the category of contracts for services or the category of contracts for the sale

of goods, we found that “the nature of the contractual pricing scheme . . . persuade[d]

us that the [SWU] transaction is properly characterized as a service rather than a sale.”

Id. The pricing scheme in the Florida Power SWU contracts is the same as the pricing

scheme in the contracts at issue in this case. In both cases, utilities bought separative

work units from enrichers. In both cases, they delivered unenriched uranium and

04-1209, -1210 15
monetary compensation to enrichers in return for enrichment services. In both cases,

there were similar title and transfer provisions. And in both cases, the contracts

explicitly contemplated the rendering of “enrichment services.”

We therefore conclude that the SWU contracts at issue in this case were

contracts for the provision of services and not for the sale of goods. Accordingly, we

find that the LEU produced as a result of those contracts is not subject to the

antidumping statute and hold that Commerce’s contentions to the contrary are not in

accordance with law.

C. EdF, Eurodif and Countervailable Subsidies

In order to be subject to a countervailing duty (or subsidy) investigation, an arm

of a foreign government must make a “financial contribution” to a manufacturer that can

take one of four forms:

(i) the direct transfer of funds, such as grants, loans, and
equity infusions, or the potential direct transfer of funds
or liabilities, such as loan guarantees,

(ii) foregoing or not collecting revenue that is otherwise
due, such as granting tax credits or deductions from
taxable income,

(iii) providing goods or services, other than general
infrastructure, or

(iv) purchasing goods.

19 U.S.C. § 1677(5)(D) (2000). A public entity can provide a subsidy if it provides

goods or services to a manufacturer for less than adequate remuneration or if it buys

goods from the manufacturer for more than adequate remuneration. 19 U.S.C.

§ 1677(5)(E). The statute does not contemplate the purchase of services for more than

adequate remuneration to be a subsidy.

04-1209, -1210 16
 The government and USEC assert that EdF, a partially public French utility,

entered into a uranium enrichment contract with Eurodif that paid Eurodif more than

adequate remuneration. In their view, the contract was also for the sale of goods

(instead of services) and thus covered by 19 U.S.C. § 1677(5)(E). In the alternative,

they argue that the contract between EdF and Eurodif provided more than adequate

remuneration to one step (enrichment) in the manufacture of a good (LEU in this case)

and was thus covered by § 1677(5). As a result, the transaction between EdF and

Eurodif was subject to a countervailing duty investigation.

The Court of International Trade rejected the government’s principal theory but

agreed with its alternative theory. The court found that “Commerce’s distinction

between manufacturing processes that lead to the production of subject merchandise

and other services that do not produce tangible goods is consistent with the language

and purpose of the countervailing duty statute.” USEC II, 281 F. Supp. 2d at 1350. The

court further elaborated that this theory was in keeping with the statutory language

“because it preserves a real distinction between ‘goods’ and ‘services.’” Id. We must

disagree.

Section 1677(5) is clear as to what constitutes a subsidy—and the purchase of a

service by a foreign public entity, however related to the manufacture of a good, is not

contemplated in the statute as being a subsidy.4 While the provision of services by a

government entity to another entity for less than adequate compensation may be

considered a subsidy, the plain language of § 1677(5) does not allow for the purchase

4
Section 1677(5)(B) defines a subsidy as including the case in which an
authority “provides a financial contribution . . . to a person and a benefit is thereby
conferred.” Section 1677(5)(D), quoted supra, defines “financial contribution.”

04-1209, -1210 17
of services by a government entity from another entity to be considered a subsidy.

Thus, to the extent that the government argues that Commerce is owed deference

under Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43

(1984), we reject that argument because we find that the plain meaning of the statute is

unambiguous.

Furthermore, § 1677(5)(D)(iii) clearly shows that Congress was aware of the

distinction between contracts for services and contracts for goods. Aware of the

distinction, Congress could have easily included the purchase of services by public

entities in the statutory definition of a subsidy. Because it did not, we must assume that

the omission was intentional. See Clay v. United States, 537 U.S. 522, 528 (2003)

(“When Congress includes particular language in one section of a statute but omits it in

another section of the same Act, we have recognized, it is generally presumed that

Congress acts intentionally and purposely in the disparate inclusion or exclusion.”

(internal quotations and citations omitted)).

While the Court of International Trade, the government and USEC are correct

that the purpose of the subsidy statute is to defeat unfair competitive advantage, that

purpose cannot exceed the metes and bounds of the subsidy statute as established by

its text. See Negonsott v. Samuels, 507 U.S. 99, 105 (1993) (“[A court’s] task is to give

effect to the will of Congress, and where it has been expressed in reasonably plain

terms, that language must ordinarily be regarded as conclusive.” (quoting Griffin v.

Oceanic Contractors, Inc., 458 U.S. 564, 570 (1982))).

Given that we have already concluded that the SWU contracts in this case were

contracts for the provision of services and not for the sale of goods, we hold that 19

04-1209, -1210 18
U.S.C. § 1677(5) is inapplicable in this case. Accordingly, Commerce’s determination to

the contrary is not in accordance with law.

D. Commerce’s Tolling Regulation and Its Determination of Export Price

Because our holdings regarding the previous three issues obviate the need for us

to reach the issue of whether Commerce properly employed its tolling regulation in its

determination of export price, we decline to do so.

CONCLUSION

For the reasons stated above, we hold that:

(1) Commerce’s determination that USEC’s petition had sufficient industry

support to trigger an antidumping and countervailing subsidy investigation was in

accordance with law;

(2) Commerce’s finding that the SWU contracts in this case were contracts for

the sale of goods was neither supported by substantial evidence nor in accordance with

law; and

(3) Commerce’s application of 19 U.S.C. § 1677 to the SWU transaction between

EdF and Eurodif was not in accordance with law.

Therefore, we affirm the Court of International Trade’s decision regarding

Commerce’s industry support determination. We likewise affirm the court’s finding that

the SWU contracts in this case were contracts for services and not for goods or

merchandise. We reverse the court’s holding that EdF’s SWU contract with Eurodif

made the LEU produced by Eurodif subject to the countervailing subsidy statute.

AFFIRMED-IN-PART and REVERSED-IN-PART

04-1209, -1210 19