Russian Exporter Challenges Benchmark for Mining Rights for LTAR Program at Trade Court

Russian exporter JSC Apatit took to the Court of International Trade to contest the Commerce Department's 2020-21 administrative review of the countervailing duty order on phosphate fertilizers from Russia, in which it received a 28.5% CVD rate (Joint Stock Company Apatit v. U.S., CIT # 23-00254).

Apatit said in a Jan. 3 complaint that, among other things, Commerce illegally set the benchmark for calculating the benefit derived from the exporter's receiving of mining rights for less than adequate remuneration and failed to include an additional fee the company paid to maintain a mining license from the "cost of production build-up" for this program. Also related to the provision of mining rights, the exporter challenged Commerce's calculation of the firm's profit ratio and the agency's use of data only from the 2021 calendar year and not the entire review period.

Regarding the provision of mining rights for LTAR program, Commerce decided not to use an April 1, 2002, cut-off date when finding whether the mining rights were given to the exporter for LTAR. Apatit said that decision flies in the face of a long-established past agency practice.

The agency "has firmly established and consistently held that it is unable to identify and measure subsidies conferred in Russia prior to April 1, 2002, due to previously existing broad distortions in the Russian economy, and that Commerce thus is unable to countervail alleged subsidies received prior to that date," the complaint said. As a result, consideration of licenses before this date is not adequately supported, the exporter charged.

During the review, Commerce set a "tier three" benchmark for the provision of mining rights for LTAR program by using Global Trade Atlas data for South Africa. Apatit argued that the agency failed to include Global Trade Tracker data for South Africa, "notwithstanding that these data are significantly more consistent with market principles and reflective of prevailing market conditions." In a separate count, the exporter challenged the agency's failure to use "additional phosphate rock pricing data from EuroStat and GTT" to set the benchmark.

Apatit also said Commerce failed to consider a separate CIT case regarding a CVD investigation on phosphate fertilizers from Morocco. In September, the trade court discussed Commerce's world price benchmark, sustaining Commerce's decision to average 13 world prices to set the mark (see 2309150066). Apatit said the agency "failed to acknowledge" this opinion.

Lastly, the company said the agency "unlawfully determined" that all the firm's natural gas suppliers are government authorities "due to the application of [adverse facts available] to the [Russian government]."