Moroccan Fertilizer Exporter Received Disproportionate Benefit From Subsidy Relative to Size, Petitioner Says
Domestic petitioner Mosaic Company pushed back against the Commerce Department’s redetermination on remand -- made under protest -- that a Moroccan government program wasn’t specific to fertilizer exporter OCP (see 2507010039), saying the department’s original, contrary finding was reasonable and supported by record evidence (The Mosaic Co. v. United States, CIT Consol. # 23-00246).
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In turn, OCP supported the Court of International Trade’s reasoning in its remand order; the evidence actually shows that it didn’t receive a “disproportionately large” subsidy from the program, the exporter said.
In its remand redetermination, Commerce lowered OCP’s CVD rate from 2.12% to 2.11%, reversing a finding that a Moroccan tax fines and penalties reduction program was de facto specific to the mandatory respondent. While seeking the remand, OCP argued that Commerce failed to consider OCP only received an amount of subsidy proportionate to its total size and share of the Moroccan economy -- its annual revenue, it claimed, is 6.6% of Morocco’s entire GDP. CIT Judge Timothy Stanceu found that Commerce’s rejection of that argument “defie[d] logic and common sense” (see 2504020035).
Opposing the remand redetermination, Mosaic said that the benefit OCP received was still disproportionate to its size. The record shows the reduction in tax fines and penalties the exporter received was “roughly 900 times greater than the average amount that other beneficiaries” got during the review period, it said. Likewise, in 2018, OCP’s benefit was “700 times greater,” and, in 2019, it was “more than 100 times greater,” the petitioner claimed.
Mosaic also argued that the relevant CVD statute, 19 U.S.C. § 1677(5A)(D)(iii)(III), doesn’t require Commerce to consider the relative size of a respondent in determining whether a subsidy it received is de facto specific to it.
OCP disagreed. In its own brief, it said the subsidy it received was actually “disproportionately small” compared with its presence in Morocco’s economy. It agreed with the court’s depiction of it as receiving only “a minuscule [sic] percentage” of the total subsidy in 2021, noting it was “not even among the top five largest beneficiaries.”
And in the past, Commerce has found that much more apparently targeted subsidies still weren't de facto specific to their largest users, it said. For example, it said, the department found in 2001 that a Korean government discount program wasn’t de facto specific to a steel industry that received 51% of those discounts.
The exporter also said that the Moroccan tax fines and penalties reduction program isn’t the type that “Congress intended for Commerce to find specific as explained in the” Uruguay Round Agreements Act’s Statement of Administrative Action, being widely available to Moroccan taxpayers.