Commerce Makes No Changes on Remand in Phosphate Fertilizers From Russia Results

Among other things, Commerce said that by further explaining how the use of Profit Before Tax in the benefit calculation for the Provision of Mining Rights for Less Than Adequate Remuneration program was appropriate, along with its explanations of phosphate rock cost information and EuroChem's cost reconciliations, it successfully complied with the court's July 11 remand order.

In that order, Judge Jane Restani remanded Commerce's decision to use a "profit before tax" figure to account for exported phosphate rock prices when calculating PhosAgro's profit ratio, as well as Commerce's reliance on PhosAgro's cost information and its explanation for why it found EuroChem's cost information supported (see 2307120028).

In remanding the case, the court also found that Commerce’s supplemental questionnaire to exporter PhosAgro specifically requested that its subsidiary, JSC Apatit, reconcile its reported costs to its own financial statements and that the department didn't explain why the reconciliation instead with PhosAgro’s statements was sufficient. During the remand, Commerce said it asked for, and received, the original requested reconciliation and that nothing led it to doubt the reliability of JSC Apatit’s reported costs incurred to mine and process phosphate ore into beneficiated phosphate rock.

CIT also specifically objected to data submitted by exporter EuroChem being in Russian and possibly unrelated to phosphate production. The court found that it couldn't be certain why Commerce had accepted the submission as accurate. Commerce said that the remand order allowed it to reopen the record to obtain translated documents that EuroChem provided. Commerce concluded that the evidence, now in English, supported the cost reconciliation that EuroChem provided in its first questionnaire response. Although the specifics were heavily redacted, the department said that it continued to find that EuroChem’s reported cost data was reliable for use in the cost buildup for the Provision of Mining Rights for LTAR benefit calculation. Further, Commerce argued that the petitioner failed to show how any of the untranslated sections conflicted with the later-provided portions in English.

The court also told Commerce to further explain its decision to use profit before tax, as opposed to gross profit, to calculate PhosAgro’s profit ratio. The department explained that compared to gross profit, profit before tax includes net financing income and net foreign exchange gains while excluding selling and administrative expenses and taxes other than income taxes.

Commerce explained that, for the limited purpose of calculating production costs of phosphate ore extraction and phosphate rock production conveyed via mining rights, the figures captured by profit before tax better reflected the desired measurements. Using gross profit "would be inconsistent with the aim of the calculation," Commerce said, and it "would include costs unrelated to the mining of phosphate ore and production of phosphate rock in the profit ratio calculation."