## Facts

- U.S. nuclear utilities obtain low enriched uranium (LEU) either by buying finished LEU for cash under enriched uranium product (EUP) contracts or by supplying “feed uranium” and paying for enrichment work under separative work unit (SWU) contracts.
- A SWU is an industry measure of the work needed to enrich uranium to a specified level.
- Because feed uranium is fungible and enrichment plants operate with pooled, continuous processing, the LEU delivered under a SWU contract cannot be traced to the specific feed uranium supplied by a particular utility.
- The Department of Commerce, responding to a petition by the U.S. Enrichment Corporation (USEC), found that French LEU sold in the United States at less than fair value injured domestic industry and imposed antidumping duties under 19 U.S.C. § 1673, including on LEU imported pursuant to SWU contracts.
- Commerce rejected the view that SWU arrangements were merely “enrichment services,” reasoning that a services classification would permit restructuring transactions to avoid antidumping duties.
- The Court of International Trade and the Federal Circuit set aside Commerce’s determination, treating SWU contracts as service transactions outside § 1673 and emphasizing formal ownership concepts regarding the feed uranium.

## Issues

1. Whether LEU imported under SWU contracts may be treated by Commerce as “foreign merchandise” “sold in the United States” and thus subject to antidumping duties under 19 U.S.C. § 1673.
2. Whether, given statutory ambiguity, Commerce’s classification of SWU-based LEU transactions as goods rather than services is entitled to judicial deference.

## Decision

- The Supreme Court unanimously reversed the Federal Circuit and upheld Commerce’s antidumping determination.
- The Court held that § 1673 does not clearly resolve how to classify SWU-based LEU transactions, triggering Chevron review.
- Commerce’s interpretation treating SWU transactions as sales of LEU (goods) was a permissible construction of “foreign merchandise sold in the United States.”
- The Court approved Commerce’s focus on economic substance and the fungible, pooled nature of uranium processing rather than a rigid, ownership-based characterization.
- The Court accepted Commerce’s concern that treating SWU contracts as services could allow circumvention of antidumping duties by altering transactional form.

## Legal Principles

- When the Tariff Act is ambiguous as applied to hybrid commercial arrangements, courts apply Chevron deference and uphold an agency interpretation that is reasonable.
- Commerce may classify transactions by their economic reality and practical operation, not solely by contractual labels or formal title arrangements.
- In markets involving fungible inputs and pooled processing, delivery of a finished product in exchange for payment plus fungible input may reasonably be treated as a sale of goods for antidumping purposes.
- Agency interpretations that reasonably prevent avoidance of trade-remedy statutes are permissible under Chevron where the statute leaves interpretive space.

## Conclusion

The Court held that Commerce could reasonably treat SWU-contract LEU imports as sales of “foreign merchandise” covered by § 1673, making them subject to antidumping duties, and that the lower courts erred by substituting a formal ownership analysis for the agency’s permissible, substance-based classification.


United States v. Eurodif S.A., 555 U.S. 305 (2009)