US, Petitioner Defend LTAR Finding Against Russian Phosphate Fertilizer Exporters at CAFC

On appeal, the U.S. and a petitioner each defended the Court of International Trade’s acceptance of its thrice-remanded (see 2401190037) countervailing duty calculation for Russian phosphate fertilizer exporters (The Mosaic Company v. U.S., Fed. Cir. # 21-00117, -20, -21).

Exporters led by PhosAgro brought their appeal to push back against a de facto specificity finding regarding Russia’s provision of natural gas to the exporters for less-than-adequate remuneration (see 2311150059). But the Russian government negated "any attempts that had been made to create a [natural gas] segment where pricing was set based on market principles” rather than government intervention, and Russian energy supplier Gazprom “set its prices in order to further the Russian government’s social and economic goals,” the U.S. said in its brief.

The Russian agrochemical industry was the largest consumer of Russian natural gas, it said, as the input serves both as an energy source and an ingredient in fertilizer manufacturing.

And the statute governing countervailing duties, it said, specifically directs Commerce to find de facto specificity when the company or industry being investigated is a “predominant user of the subsidy”; being the largest consumer is equivalent, it said.

“The next three largest industries … accounted for a small percentage, each less than half of the agrochemical industry, and even with the ‘other’ category, the proportion of consumption for each group was still insignificant,” the government said.

It and petitioner Mosaic also stood up for Commerce’s use of European benchmark prices to measure the actual market prices the exporters should have faced.

The department used International Energy Agency prices placed on the record by Mosaic. This was the same method used in previous reviews of steel concrete rebar from Turkey, it said.

In January, Judge Jane Restani also upheld the department’s use of PhosAgro’s profit before tax number instead of its gross profits, another claim the exporters intended to appeal before CAFC (see 2403190038). The former, she said, was narrower, allowing Commerce to isolate phosphate manufacturing costs. In other words, PhosAgro had "failed to demonstrate that including expenses broader than those involved in the mining and beneficiation of phosphate ore would bolster Commerce's goal to render an accurate profit ratio," she said (see 2401190037).