Not content with recent countervailing duties (CVD) imposed on imports of phosphate fertilizers from Morocco and Russia (GM Feb. 12, p. 1), The Mosaic Co., Tampa, has filed a pair of federal lawsuits arguing that the duties should have been higher and that the U.S. Department of Commerce (DOC) miscalculated the value of certain foreign government subsidies.
Mosaic challenges the rate calculations in a pair of complaints, one each for Morocco and Russia, filed on May 12 at the U.S. Court of International Trade.
For Morocco’s OCP SA, DOC calculated at a CVD rate of 19.97 percent. For Russia, the rate was 9.19 percent for PhosAgro, 47.05 percent for EuroChem Group, and 17.2 percent for other Russian companies.
For Morocco, Mosaic alleges five specific DOC miscalculations, including:
- DOC improperly declined to exclude Egyptian prices from its calculation of a Tier 3 benchmark price for phosphate rock. Mosaic argued that Egyptian and Moroccan rock are not reasonably comparable due to BPL content, with Egyptian at a lower value both in terms of BLP content as well as unwanted carbonate and iron content.
- DOC improperly declined to adjust the world market benchmark price of phosphate rock to include international freight, customs duties, and VAT.
- DOC improperly determined that a MAD 20.5 billion VAT refund did not confer a benefit to OCP.
- DOC improperly determined that the VAT exemptions that OCP obtained for imported capital goods, machinery, and equipment did not confer a benefit to OCP.
- DOC improperly determined not to countervail the Provision of Phosphogypsum Waste Disposal Program based on findings that there was no financial contribution when considered as the provision of services for Less Than Adequate Remuneration (LTAR) and there was no use of the program by OCP when considered as revenue foregone. Mosaic explained that both the Government of Morocco (GOM) and OCP confirmed that OCP dumps phosphogypsum waste in Moroccan coastal waters, that the GOM is not enforcing the provisions of Moroccan law that prohibit such dumping, and that the record evidence demonstrates this program provides a financial contribution that confers a benefit on and is specific to OCP.
For Russia, Mosaic alleges three miscalculations, including:
- DOC improperly declined to adjust the International Energy Agency (IEA) benchmark prices for natural gas to exclude exports of Russian gas. Mosaic argued that the IEA prices should be adjusted, as the Russian prices are distorted by the Russian government. Mosaic argued the DOC has made this adjustment in prior proceedings upon evidence that Russia uses its natural gas supplies to exert influence in Europe.
- DOC unlawfully declined to countervail mining rights subsidies that PhosAgro and EuroChem received pursuant to phosphate mining licenses initially issued prior to an April 1, 2002 cut-off date.
- DOC improperly declined to adjust the benchmark prices for phosphate rock to include international freight, customs duties, and VAT.