OPINION
DONALD C. POGUE, Judge.
These consolidated actions, which are part of a long line of uranium cases, arise from a decision made by the Department of Commerce (“Commerce” or “the government”) to include sales of uranium enrichment services in an antidumping investigation. Plaintiffs Techsnabexport (“Tenex”) and Ad Hoc Utilities Group (“AHUG”)
(collectively “Plaintiffs”) challenge the final results (or “determination”) in the second five-year sunset review (“the Review”) of the suspended antidumping duty investigation of uranium from Rus-sia.
Uranium from the Russian Federation,
71 Fed.Reg. 32,517 (Dep’t Commerce June 6, 2006)(final results of five-year sunset review of suspended antidumping duty investigation)(“Fmai
Results
”) and the accompanying Issues and Decision Memorandum
(“Decision Mem.”).
Plaintiffs claim that Commerce’s inclusion of and reliance upon service transactions for uranium enrichment renders unlawful its findings and conclusions with regard to the products subject to investigation, or scope of the proceeding, the volume of subject imports, the likelihood of dumping, and the magnitude of the margin likely to prevail.
Pursuant to USCIT R. 56.2, Plaintiffs move for judgment on the agency record. The court has jurisdiction pursuant to 19 U.S.C. § 1516a (a)(2)(B)(iii) and 28 U.S.C. § 1581(c).
For the reasons stated below, Commerce’s determination is remanded.
BACKGROUND
Tenex is the Russian executive agent responsible for the export of uranium and uranium enrichment services from Russia.
AHUG is a group of utility companies that use enriched uranium.
The Plaintiffs participated in Commerce’s sunset review pro
ceedings, the results of which are challenged here. Defendanh-Intervenor, USEC, Inc., and its wholly-owned subsidiary, United States Enrichment Company (collective!y, “USEC”) is a domestic provider of enrichment services. USEC also participated in Commerce’s sunset review.
Commerce conducts a five-year sunset review of a suspended antidumping duty investigation pursuant to Sections 751 and 752 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1675.
The original suspended antidumping duty investigation reviewed here was initiated in December of 1991, just before the dissolution of the Soviet Union.
Commerce continued the investigation against the Soviet republics individually, as newly
independent states, and, using best information available data, came to preliminary affirmative dumping determinations with regard to uranium products and services from Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Ukraine, and Uzbekistan.
Uranium from Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Ukraine, and Uzbekistan,
57 Fed.Reg. 23,380 (Dep’t Commerce June 3, 1992)(preliminary determinations of sales at less than fair value). However, before Commerce issued final results in that original investigation, the investigation was suspended, when the government entered into an agreement restricting the volume of imports to the United States.
Uranium from Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Ukraine, and Uzbekistan,
57 Fed.Reg. 49,220 (Dep’t Commerce Oct. 30, 1992)(suspension of investigations and amendment of preliminary determina
tions)(‘‘Suspension Agreement
”).
As noted above, the action at issue here is a challenge to the results of the second five-year sunset review of the suspended investigation.
In this matter, both Tenex and AHUG challenge Commerce’s scope determination in the Review and its finding of a likelihood of continued or recurring dumping if the Suspension Agreement is terminated, together with other subsidiary findings upon which Commerce’s decision is based. Specifically, Plaintiffs challenge Commerce’s inclusion of low-enriched uranium (LEU) obtained pursuant to uranium enrichment services contracts both in the scope of the Review and in the “likelihood” determination.
In addition, Tenex alleges
that if Commerce’s decision is interpreted as having made the statutorily required finding of a likelihood of dumping if the investigation were terminated, in accordance with 19 U.S.C. §§ 1675(c) and 1675a(c), then such a determination was neither in accordance with law nor supported by substantial evidence because,
inter alia,
the determination failed to exclude SWU transactions.
Lastly, Tenex challenges as unsupported by substantial evidence Commerce’s reliance upon the 115.82% margin set in Commerce’s original preliminary determination, and adopted in the Final Results here as the margin likely to prevail in and after the Review. This last challenge, according to Tenex, is based on the alleged “extraordinary circumstances” that have occurred since the commencement of the investigation and preliminary determination, such as the decline of the Soviet Union and Russia’s emerging status as a market economy country,
exacerbated by the fact that in the preliminary determination, Commerce relied upon the “best information available” in making its determination. Tenex argues that Commerce, in conducting its sunset review, should not rely on USSR information but rather should look to Russia-specific information and take into account the changed economy of the country as well. In addition, Tenex challenges the connection between Commerce’s finding that prices were likely to be depressed if the Suspension Agreement was lifted and its conclusion that uranium would be sold at less than fair value, noting that there is no necessary, logical connection between prices which may be low and prices which are less than normal value and therefore constitute dumping.
STANDARD OF REVIEW
The court will uphold Commerce’s determination unless it is unsupported by substantial evidence on the record, or otherwise not in accordance with law. 19 U.S.C. § 1516a(b)(l)(B)(i).
DISCUSSION
It is settled law that LEU processed pursuant to uranium enrichment services transactions is not a “good” or “merchandise” subject to the antidumping duty statute and that such transactions do not constitute a “sale” subject to those statutory provisions.
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OPINION
DONALD C. POGUE, Judge.
These consolidated actions, which are part of a long line of uranium cases, arise from a decision made by the Department of Commerce (“Commerce” or “the government”) to include sales of uranium enrichment services in an antidumping investigation. Plaintiffs Techsnabexport (“Tenex”) and Ad Hoc Utilities Group (“AHUG”)
(collectively “Plaintiffs”) challenge the final results (or “determination”) in the second five-year sunset review (“the Review”) of the suspended antidumping duty investigation of uranium from Rus-sia.
Uranium from the Russian Federation,
71 Fed.Reg. 32,517 (Dep’t Commerce June 6, 2006)(final results of five-year sunset review of suspended antidumping duty investigation)(“Fmai
Results
”) and the accompanying Issues and Decision Memorandum
(“Decision Mem.”).
Plaintiffs claim that Commerce’s inclusion of and reliance upon service transactions for uranium enrichment renders unlawful its findings and conclusions with regard to the products subject to investigation, or scope of the proceeding, the volume of subject imports, the likelihood of dumping, and the magnitude of the margin likely to prevail.
Pursuant to USCIT R. 56.2, Plaintiffs move for judgment on the agency record. The court has jurisdiction pursuant to 19 U.S.C. § 1516a (a)(2)(B)(iii) and 28 U.S.C. § 1581(c).
For the reasons stated below, Commerce’s determination is remanded.
BACKGROUND
Tenex is the Russian executive agent responsible for the export of uranium and uranium enrichment services from Russia.
AHUG is a group of utility companies that use enriched uranium.
The Plaintiffs participated in Commerce’s sunset review pro
ceedings, the results of which are challenged here. Defendanh-Intervenor, USEC, Inc., and its wholly-owned subsidiary, United States Enrichment Company (collective!y, “USEC”) is a domestic provider of enrichment services. USEC also participated in Commerce’s sunset review.
Commerce conducts a five-year sunset review of a suspended antidumping duty investigation pursuant to Sections 751 and 752 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1675.
The original suspended antidumping duty investigation reviewed here was initiated in December of 1991, just before the dissolution of the Soviet Union.
Commerce continued the investigation against the Soviet republics individually, as newly
independent states, and, using best information available data, came to preliminary affirmative dumping determinations with regard to uranium products and services from Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Ukraine, and Uzbekistan.
Uranium from Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Ukraine, and Uzbekistan,
57 Fed.Reg. 23,380 (Dep’t Commerce June 3, 1992)(preliminary determinations of sales at less than fair value). However, before Commerce issued final results in that original investigation, the investigation was suspended, when the government entered into an agreement restricting the volume of imports to the United States.
Uranium from Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Ukraine, and Uzbekistan,
57 Fed.Reg. 49,220 (Dep’t Commerce Oct. 30, 1992)(suspension of investigations and amendment of preliminary determina
tions)(‘‘Suspension Agreement
”).
As noted above, the action at issue here is a challenge to the results of the second five-year sunset review of the suspended investigation.
In this matter, both Tenex and AHUG challenge Commerce’s scope determination in the Review and its finding of a likelihood of continued or recurring dumping if the Suspension Agreement is terminated, together with other subsidiary findings upon which Commerce’s decision is based. Specifically, Plaintiffs challenge Commerce’s inclusion of low-enriched uranium (LEU) obtained pursuant to uranium enrichment services contracts both in the scope of the Review and in the “likelihood” determination.
In addition, Tenex alleges
that if Commerce’s decision is interpreted as having made the statutorily required finding of a likelihood of dumping if the investigation were terminated, in accordance with 19 U.S.C. §§ 1675(c) and 1675a(c), then such a determination was neither in accordance with law nor supported by substantial evidence because,
inter alia,
the determination failed to exclude SWU transactions.
Lastly, Tenex challenges as unsupported by substantial evidence Commerce’s reliance upon the 115.82% margin set in Commerce’s original preliminary determination, and adopted in the Final Results here as the margin likely to prevail in and after the Review. This last challenge, according to Tenex, is based on the alleged “extraordinary circumstances” that have occurred since the commencement of the investigation and preliminary determination, such as the decline of the Soviet Union and Russia’s emerging status as a market economy country,
exacerbated by the fact that in the preliminary determination, Commerce relied upon the “best information available” in making its determination. Tenex argues that Commerce, in conducting its sunset review, should not rely on USSR information but rather should look to Russia-specific information and take into account the changed economy of the country as well. In addition, Tenex challenges the connection between Commerce’s finding that prices were likely to be depressed if the Suspension Agreement was lifted and its conclusion that uranium would be sold at less than fair value, noting that there is no necessary, logical connection between prices which may be low and prices which are less than normal value and therefore constitute dumping.
STANDARD OF REVIEW
The court will uphold Commerce’s determination unless it is unsupported by substantial evidence on the record, or otherwise not in accordance with law. 19 U.S.C. § 1516a(b)(l)(B)(i).
DISCUSSION
It is settled law that LEU processed pursuant to uranium enrichment services transactions is not a “good” or “merchandise” subject to the antidumping duty statute and that such transactions do not constitute a “sale” subject to those statutory provisions.
See
19 U.S.C. § 1673;
see also, Eurodif I,
411 F.3d 1355;
Eurodif II,
423 F.3d 1275. The Federal Circuit’s holdings were based primarily on the utilities’ retention, in a SWU transaction, of ownership of the uranium.
Eurodif I,
411 F.3d at 1362 (explaining that “the utility retains title to the quantity of unenriched uranium that is [sic] 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.”). The utility thus maintains title to its feed uranium until it receives the enriched uranium, at which time it pays for the SWU necessary to enrich the relevant amount of feed uranium into the
LEU it receives. As a result, there is no “transfer of ownership,” as required for a sale, because the utility has ownership of the relevant uranium at all times during the transaction.
Id.
citing
NSK Ltd. v. United States,
115 F.3d 965 (Fed.Cir.1997). The court in
EurodifI
also pointed to the “fundamental purpose” of the transaction, which was “the provision of enrichment services” as opposed to the sale of enriched uranium.
Eurodif I,
411 F.3d at 1362-63. In
Eurodif II,
the court clarified its earlier holding “by stating expressly that the antidumping duty statute unambiguously applies to the sale of goods and not services” and that “Commerce’s characterization of the SWU contracts [as contracts for the sale of goods] ... would contradict ... the statute’s unambiguous meaning because it is clear that those contracts are contracts for services and not goods.”
Eurodif II,
423 F.3d at 1278.
As a result of these holdings, the Federal Circuit has determined that Commerce’s claim that LEU produced as a result of SWU contracts or transactions is subject to antidumping duties is not in accordance with law.
Id.
Together,
Eurodif I
and
Eurodif II
make it clear that contracts for enrichment services are contracts for services, not goods, and that as such, they are not subject to the antidumping laws.
See also Eurodif S.A. v. United States,
506 F.3d 1070, 1072 (Fed.Cir.2007)(identifymg the “SWU contract exception” established by
EurodifI
and
Eurodif II).
In the Review at issue here, Commerce continued to include, within the scope of the investigation, LEU obtained pursuant to enrichment services transactions. Commerce also made a determination that there was a likelihood of continued or recurring dumping, based at least in part on data that included SWU transactions.
Commerce defended its scope position in the Review, in part, by claiming that the
Eurodif
“litigation ... has not been completed, and [Commerce] is continuing to actively pursue all avenues in the litigation process ... [therefore, this litigation has no effect on the Suspension Agreement or this sunset review,” and by asserting that it would follow its policy not to “evaluate scope issues or revise the scope of a proceeding in the context of a sunset review.”
Decision Mem.
at 14-15 (Cmt.2), citing
Uranium from Russia,
65 Fed.Reg. 41,439 (Dep’t Commerce July 5, 2000)(final results of full sunset review of suspended antidumping duty investigation) and the accompanying Issues & Decision Mem. (Cmt.l)(noting that a scope determination was currently before Commerce, and that it was “not appropriate to evaluate scope
issues or revise the scope language in the course of this sunset proceeding.”). Commerce further determined that because the
Eurodif I
and
Eurodif II
decisions covered an investigation with a scope that was limited to LEU, the decisions were not necessarily applicable to the investigation at hand, which covered LEU in addition to other uranium products.
Id.
Plaintiffs argue that Commerce is bound by
stare decisis
to follow the binding precedent in the
Eurodif
cases by excluding SWU transactions from the scope of the investigation.
See
Pl.’s Mot. J. Agency R., Court No. 06-00228 at 12-14
(“Tenex Br.”); see also
Initial Br. of Ad Hoc Utilities Group in Supp. R. 56.2 Mot. J. Agency R., Court No. 06-00229 at 19-20
(“AHUG Br.”).
AHUG further argues that Commerce cannot decline to follow precedent based on its “policy” of not reviewing scope determinations during a sunset review, because ignoring controlling law (here, the
Eurodif
cases) is not acting in accordance with law.
AHUG Br.
21-22, citing
Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.,
467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Tenex also argues that
Commerce
must depart from its policy where, as here, the policy is in conflict with Commerce’s obligation to comply with the law.
Tenex Br.
13-14. Plaintiffs further note that although the scope of the review in this action is broader than that in the
Eurodif
cases, in that it covers uranium other than LEU, the
Eurodif
holdings were not limited to LEU. Rather, the
Eurodif
cases are applicable to all transactions pursuant to SWU contracts, and stand for the proposition that those transactions are not subject to antidumping duty law.
Tenex Br.
at 16;
AHUG Br.
at 21. Thus, Plaintiffs contend — correctly—that the
Eurodif
cases are both controlling and applicable here.
Commerce’s inclusion of uranium enrichment services in the scope of the review at issue here also undermines its decision with regard to the likelihood of continued or recurring dumping. During the sunset review, Commerce stated its conclusion that there was a likelihood of continued or recurring dumping of uranium products from the countries of the former Soviet Union on the American market. In making this statement, Commerce relied on uranium enrichment services transactions in addition to the importation of goods, stating that “absent the Suspension Agreement, imports of Russian uranium
and SWU
would likely undercut and depress or suppress U.S. market prices for uranium products.”
Decision Mem.
at 8 (Cmt.1) (emphasis added). Plaintiffs argue that SWU transactions cannot be included in the determination of recurrence of dumping, as such transactions are not subject to the antidumping laws.
Tenex Br.
at 14-15;
AHUG Br.
at 28-30.
The government has indicated that it does not oppose a remand to exclude from the scope of its review LEU obtained pursuant to uranium enrichment services contracts, and to redetermine the likelihood of future dumping, again excluding from its findings LEU that will be obtained pursuant to enrichment services transactions.
See Restated Mot. to Dismiss No. 06-00229 & Response to Pis.’ Mots, for J. Upon the Admin. R.
14 (consenting to a remand to implement the
Eurodif
cases because “Commerce based its determination upon an analysis of the domestic and world market in uranium in all forms,
including sales of SWU.”
(emphasis add
ed))(“Def.’s
Br.”).
The government’s consent to remand is well-founded because Commerce must abide by the
Eurodif
decisions in both its scope determination and its determination of the likelihood of continued or recurring dumping. The court will therefore remand the matter to Commerce for a determination of the correct scope of the investigation, excluding all sales pursuant to enrichment services transactions, as outlined in the
Eurodif
cases, and a re-determination of the likelihood of continued or recurring dumping without reliance on such transactions.
Plaintiffs also argue that Commerce’s reliance on information from the original, preliminary determination in the anti-dumping investigation renders Commerce’s final determination unsupported by substantial evidence because of the extraordinary changes in circumstance since the time of the original determination.
Tenex
Br. 28, citing
Government of Uzbekistan v. United States,
25 CIT 1084 (2001)(remanding sunset review results to Commerce to gather new data and make new findings of dumping margin, because using best information available was inappropriate given the extraordinary circumstances of the dissolution of the U.S.S.R.). These issues were raised by Tenex during the Review. The government has not responded to this argument.
As noted above, Commerce is charged with making a likelihood determination that is in accordance with law. 19 U.S.C. § 1675(c). It has not done so here, and it therefore must do so on remand. The requirement that Commerce follow the precedent by which it is bound, articulated in the
Eurodif
cases, will necessitate a reconsideration of relevant economic factors, in accordance with 19 U.S.C. § 1675a(c)(directing Commerce to consider other relevant factors where the record provides an appropriate, “good cause” basis for it to do so). Therefore, on remand, in reassessing the likelihood of continued dumping, Commerce must necessarily examine economic and political changes that have occurred since the preliminary determination, such as the dissolution of the Union of Soviet Socialist Republics and Russia’s change of status to a market economy, and determine whether these changes affect the reevaluation of the likelihood of continued or recurring dumping.
See Government of Uzbekistan v. United States,
25 CIT 1084, 1088 (2001) (“As a threshold matter, Commerce must support its finding of a non-de
minimus
margin before it can embark on a rational § 1675(c) analysis.”)
In addition to arguments relating to the
Eurodif
cases and market and political changes in Russia, Tenex challenges Commerce’s conclusion that there is a likelihood of continued or recurring dumping as not logically connected to its factual findings. Specifically, Tenex argues that Commerce never found that sales of subject merchandise would be at less than fair value, as required by 19 U.S.C. § 1675a(c).
Tenex Br.
at 20. Rather, Tenex claims that the determination at most finds that there would be greater imports from Russia which would lower U.S. market prices for uranium products, but that lower prices do not necessitate a finding that dumping has occurred.
Tenex
Br.
at 20-21, citing
Decision Mem.
at 6-9. Commerce describes this argument by Te-nex as being based on “economic factors,” and argues that it is barred by the exhaustion doctrine.
Def.’s Br.
at 15-16. However, Tenex is challenging the conclusion drawn by Commerce (the likelihood of continued dumping) as not supported by the actual findings (likelihood of price depression and of some “margin” likely to prevail).
Thus, in this argument, Tenex is not merely challenging the specific price data used, or a specific finding made,
but rather both the analysis followed and the conclusion drawn. This challenge is in contrast to those in the cases the government cites to support its proposition that the court should here exercise its discretion to “require the exhaustion of administrative remedies,” as those cases generally involved the challenge of a specific economic factor,
or are otherwise not applicable.
In the Review at issue here, Commerce’s finding of likelihood of continued or recurring dumping was challenged on various grounds by both Tenex and AHUG. Tenex argued that the inclusion of SWU transactions in its data was unlawful, that Russia’s status as a market economy, no longer part of the U.S.S.R., warranted the use of different data, and that changes in the Russian uranium industry and the global market for uranium warranted a broader analysis. In addition, AHUG also argued that Russia’s status as a market economy, no longer part of the U.S.S.R., warranted a use of different data. Commerce was thus given the opportunity to develop a record in order to address its ultimate finding that dumping was likely to occur or continue.
Tenex claims that those findings, however, simply do not support the conclusion Commerce has drawn. While Tenex disputed these issues in the context of the magnitude of the margin likely to prevail, rather than in the finding of likelihood of recurrence or continuation of dumping, Tenex did challenge the likelihood finding at the administrative level,
and properly sought administrative relief from the result it felt was improperly reached by the agency.
See,
Techsnabexport Case Brief in response to
Uranium from the Russian Federation,
71 Fed.Reg. 16, 560 (Dep’t Commerce Apr. 3, 2006)(preliminary results) and accompanying Issues and Decision Mem., P.R. Doc. 38 at 2 (Cmt.l) (“[Commerce’s] failure to acknowledge the [Court of Appeals for the Federal Circuit’s]
Eurodif
rulings invalidates any of [Commerce’s] findings regarding ... the likelihood of dumping and effect on U.S. market prices _”). As Tenex notes, determining whether dumping is likely to recur is precisely what Commerce was doing during this sunset review. Pl.’s Reply Br. Supp. R. 56.2 Mot. J. Agency R., Court No. 06-00228 at 11 (“[t]he issue is the basic statutory obligation in a sunset review to make a determination of dumping that should be and is crystal clear”). Accordingly, Tenex has not failed to exhaust its administrative remedies with regard to its claim that Commerce failed to make a finding regarding future sales, future margins, and the likelihood of continued dumping.
Although the court may, in its discretion, hear this argument, it need not reach the issue today. On remand, Commerce will be reexamining data relating to the likelihood of continued or recurring dumping, and the margin likely to prevail. In that context, it will have the opportunity to further examine whether its findings support its ultimate conclusion.
Conclusion
For the foregoing reasons, the court remands Commerce’s determination, for re-determination in accordance with this opinion, and denies Plaintiffs’ Motions for Judgment on the Agency Record.
Remand results are due by November 26. Comments are due by December 17. Reply comments are due by December 27. SO ORDERED.