Commerce Reverses Specificity Finding for Moroccan Tax, Penalty Reduction Program
The Commerce Department on June 30 reversed its finding that the Moroccan government's tax fine and penalty reduction program is de facto specific, slightly lowering respondent OCP's countervailing duty rate. Commerce said in light of the Court of International Trade's decision rejecting its de facto specificity analysis, it's finding, under respectful protest, that the program isn't de facto specific (The Mosaic Co. v. United States, CIT Consol. # 23-00246).
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The result lowered OCP's CVD rate in the 2020-21 administrative review of the CVD order on phosphate fertilizers from Morocco, from 2.12% to 2.11%.
In the review, Commerce said the Moroccan government's reductions in OCP's tax fines and penalties are de facto specific and that OCP was a disproportionate user of the program, since it received a share of reductions that were around 900 times larger than the average user. The trade court rejected the agency's approach, finding it wasn't in line with the Statement of Administrative Action's limiting principle, "which sets forth that a broad-based, nationwide program does not satisfy the specificity requirement in the statute" (see 2504020035).
The court also said Commerce's disproportionality analysis "wrongfully ignored highly probative evidence of OCP's relative size:" and held that the "recipients of tax penalty relief under the program could not be limited in number on an enterprise basis because there was no record evidence that eligibility or participation was limited in number on an enterprise or industry basis."
On remand, Commerce said OCP wasn't a disproportionate user of the program and that the record doesn't provide a basis for finding that the program is de facto specific "under any of the other criteria enumerated" in the statute.