DOJ Says Commerce Properly Fulfilled Requirements of CIT Upon Remand in Russian Phosphate Fertilizer CV Duty Case

The U.S. defended its use of profit before tax in its calculation of a Russian phosphate fertilizer export company’s less-than-adequate-remuneration government subsidy, saying it was the most accurate method of calculation. It also said the Commerce Department’s countervailing duty on the exports fulfilled all the requirements of the Court of International Trade upon its second remand (The Mosaic Company v. United States, CIT Consol. # 21-00117).

Exporters Industrial Group Phosphorite, Apatit and Apatit parent company PhosAgro join U.S. petitioner Mosaic Company as plaintiffs challenging the duty rate that resulted from Commerce’s 2020 CVD investigation on Russian phosphate fertilizer exports. Industrial Group and Apatit had been respondents in that investigation.

The Court of International Trade first remanded Commerce’s final investigation results in September 2022 (see 2209020061). It remanded the results again in July 2023 so Commerce could consider three further issues (see 2307120028), telling Commerce to directly address why PhosAgro’s financial statements, rather than Apatit’s, were reconciled in its investigation; why it allowed a cost submission from Industrial Group’s parent company, EuroChem, to be supported; and why it selected “Profit Before Tax” in its benefit calculation of less-than-adequate remuneration for PhosAgro. It also ordered Commerce to allow EuroChem to provide English translations of certain documents.

Commerce issued additional questionnaires to the investigation’s respondents to answer those questions, DOJ said in its brief. It released its draft remand redetermination, which kept in place its calculated subsidy rates, for comment in September (see 2310120050). Plaintiffs Phosagro and Apitit responded by arguing it still used Apartit’s profit-before-tax figure (see 2311150059).

DOJ said in its reply to the plaintiffs’ redetermination comments that Commerce had addressed all the issues for which its previous draft was remanded. In regard to their arguments about use of profit before tax in the profit calculation, DOJ said Commerce reconsidered its use of profit before tax, pursuant to court order in the remand, and decided it was justified. It argued profit before tax was more accurate, as gross profit would include costs unrelated to the mining of phosphate ore and production of phosphate rock.

“PhosAgro’s arguments to the contrary are wrong because Profit Before Tax exclude expenses that relate to activities much broader than JSC Apatit’s mining and beneficiation of phosphate ore and contain instances of double counting,” it said.

DOJ also said new documents received from Apatit confirmed prior financial statements and provided reliable data that Commerce used in the company’s less-than-adequate remuneration benefit calculation. It added that Commerce also received a cost submission from EuroChem translated into English, which it deemed reliable.