Exporter, Petitioner Seek Judgment in Next Battle Over Moroccan Phosphate Fertilizer

OCP and petitioner The Mosaic Company each filed a motion for judgment in the exporter’s case against the second CVD administrative review on Moroccan phosphate fertilizers.

OCP discussed its two procedural claims and several other issues regarding Commerce’s price benchmark selection and profit rate, while Mosaic said it provided “substantial new evidence” in support of its claim that the department should have countervailed the provision of mining rights to OCP and excluded Egypt from its Tier II benchmark calculation.

The exporter said Commerce’s request for information about five potential countervailable subsidies was “contrary to law and practice.” So was the department’s catch-all question about “all ‘other benefits’” provided to OCP by its government, it said.

Commerce may only investigate a possible countervailable subsidy if it's either petitioned to do so or it finds based on evidence that, as a threshold, the “practice ‘appears to be a countervailable subsidy,’” OCP said. Otherwise, the department can’t ask about it, the exporter said.

It acknowledged CIT has ruled in prior cases that Commerce could seek “information from OCP about other assistance or benefits it received.” But during this review, Commerce specifically asked for information on programs it had previously determined weren’t countervailable subsidies, OCP said.

“Accordingly, we respectfully submit that this Court should reach a different conclusion here based on these different facts -- that Commerce’s investigations of these purported programs violated the law because it not only had no basis to investigate the purported programs, Commerce had affirmative evidence that none were countervailable subsidies,” it said.

Further, it said, the department’s questionnaires themselves state Commerce won’t investigate programs it has already determined weren’t countervailable. For example, OCP said, the initial questionnaire said that it was “inquiring into each subsidy program previously examined in the investigation or prior review, except for programs already determined to be terminated or not countervailable.”

Commerce was wrongly trying to distinguish between a finding that a subsidy wasn’t countervailable and its actual findings that the five programs didn’t provide any benefits during the review period, OCP argued. This was especially true regarding a nonrecurring Moroccan bonds program, it said.

And the department’s “other benefits” question plainly disregarded the rule that Commerce can only ask about programs that “appear” countervailable, it said, and represented an “unlawful ‘fishing expedition.’” It observed that this was the specific question CIT has upheld in prior cases, but it noted that those cases haven’t yet been finalized and “respectfully” raised the argument again to preserve for appeal.

The exporter also took issue with the multiproduct profit rate Commerce used in its normal value calculation. Phosphate rock isn’t sold on the market in Morocco, it said, so Commerce decided to calculate a government price for the product. But it did so by dividing OCP’s total profits in 2022 by its phosphate mining costs, even though OCP does much more than just sell phosphate rock.

And it said Commerce wrongly abandoned its old method of including a portion of OCP’s headquarters and support costs in its normal value based on site-specific operation costs. The department claimed it did so because it would be unreasonable to presume “that incurring more site-specific costs would result in more HQ/Support costs”; but that wasn’t unreasonable at all, OCP argued.

Mosaic, meanwhile, repeated its claim from the first Moroccan fertilizer review that Commerce should have countervailed government-provided mining rights. Specifically, the petitioner said again that Commerce should have excluded all of OCP’s HQ/Support and Debt Costs from its analysis of the provision of rights.

And it said again that Commerce shouldn’t have used Egyptian phosphate rock prices in its world market price calculation.

First, it said, Egyptian phosphate rock is lower-quality, containing more impurities, and so can’t be used to make phosphate fertilizer without costly additional processing. It said it provided “extensive new evidence” on the point for this review. OCP itself described the impurity level as an important consumer consideration, it said.

Second, the department disregarded Mosaic’s argument that the Egyptian phosphate rock market has been distorted by “its state-owned mining companies,” the petitioner said. Commerce claimed that it wasn’t relevant because a country’s domestic market doesn’t necessarily have an impact on its exports. But Mosaic provided evidence that Egyptian phosphate rock exports have been priced significantly lower than the neighboring Jordan’s.

Mosaic and OCP are still involved in litigation over that first review’s results (see 2508080045). The Court of International Trade remanded the results in April (see 2504020035).