Commerce Releases Remand Redetermination in Russian Phosphate Fertilizers CVD Case
The Commerce Department on Dec. 16 filed its remand redetermination in a Court of International Trade case stemming from its countervailing duty investigation on phosphate fertilizers from Russia (The Mosaic Company v. U.S., CIT #21-00117). Commerce reconsidered its calculation of the total sales for EuroChem, its calculation of the natural gas benchmark, and its analysis of mining rights for less than adequate remuneration. Commerce revised its subsidy rate calculations for EuroChem from 47.05% to 23.77%, for PhosAgro from 9.19% to 14.3%, and the "all others" rate from 17.2% to 16.3%.
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The redetermination addressed CIT Judge Jane Restani's September opinion that sent back parts of Commerce's final determination in the investigation. Restani found Commerce erred in adjusting the natural gas benchmark price, misapplied its methodology in calculating EuroChem's total sales and took issue with Commerce's cut-off date for measuring subsidies in the Russian economy. The judge noted that she took no issue with Commerce's stated methodology, but that Commerce's calculations didn't follow it (see 2209020061).
Because EuroChem reported that Trading Rus did not receive any subsidies during the period of investigation, Commerce said that there was no reason to include those sales in any subsidy calculation, but noted that sales from Phosphorite and its affiliates to Trading Rus were incorrectly excluded from the total sales in the previous determination.
Commerce agreed that it "wrongly relied" on sales figures from EuroChem that did not include sales from the eight subject merchandise producers and input suppliers to export company Trading Rus. Those figures had artificially increased the duty rate by excluding the sales to Trading Rus from the total sales figures, Commerce said. In the redetermination, Commerce used EuroChem’s determination questionnaire responses and added the sales of each responding cross-owned company to Trading Rus back into the EuroChem companies’ total sales. Commerce said that EuroChem’s submitted sales values removed sales between various cross-owned affiliates as intercompany sales, but also incorrectly removed sales to Trading Rus, which is not a producer or an input supplier and not otherwise involved in the subsidy calculations.
Commerce says that it added a 20% VAT and 5% import duty to the rate calculation because of announcements by the Russian government. CIT found that Commerce may have erred in adjusting the benchmark natural gas price because the IEA benchmark price already included the European export VAT and so Commerce "may have" double counted. The agency said that it still believes including VAT and import duties would be appropriate, but says that in order to "avoid the possibility of double counting" and to comply with the remand order, it removed the Russian VAT and import duties in this instance.
Commerce had decided not to countervail benefits from mining rights provided to PhosAgro and EuroChem prior to 2002, when Russia was designated as a market economy. CIT reasoned that Commerce could calculate subsidies from all mining licenses as the agency had previously done for Joint Stock Company Kovdorksy GOK (KGOK). "Under respectful protest," Commerce agreed not to apply the cut-off date methodology and arrived at PhosArgo received a countervailable subsidy of 8.08%, but maintained that Eurochem received no benefit from the mining rights program.