Suniva/SolarWorld Section 201 Solar Panel Proceeding

International Trade & Compliance Alert | June.13.2017

On May 23, 2017, the U.S. International Trade Commission ("USITC") initiated a proceeding under section 201 of the Trade Act of 1974 to determine if imports of crystalline solar photovoltaic ("CSPV") cells and modules are causing "serious injury" to domestic producers of CSPV cells and modules. If the USITC issues an affirmative injury determination in the proceeding, it will recommend to the President that he impose CSPV cell and module import restraints that would, in the agency's view, offset injury experienced by the U.S. CSPV industry. Under section 201, the President would then either accept the proposed remedy, adopt an alternative remedy, or impose no remedy at all.

This proceeding is of critical importance to the entire U.S. solar industry. Absent settlement of this controversy, it appears to us that, more likely than not, this case will lead to quantitative restraints on imports of solar cells and modules (perhaps negotiated with supplying nations), additional duties on imports of cells and modules, or both.

Key Aspect of the Proceeding

Expected Timing

Key features of the timeline for the proceeding are expected to be as follows:

September 22, 2017
USITC determination of whether imports cause serious injury

November 13, 2017
USITC submission of report to President on proposed remedy

January 12, 2018
President's decision on remedy and President's transmittal to Congress of the report describing the remedy and reasons for the Remedy

January 27, 2018
Effective date of remedy imposed by the President if that remedy is consistent with the remedy proposed by the USITC [1] and does not entail one or more agreements with foreign countries limiting the export of subject merchandise from foreign countries to the United States

April 12, 2018
Effective date of remedy proposed by the President if that remedy isconsistent with the remedy proposed by the USITC and entails agreements with foreign countries limiting the export of subject merchandise from foreign countries to the United States

Expected Remedy/Relief

The petitioners (Suniva and SolarWorld) propose four forms of relief:

(1) A tariff on cell imports and a price floor on module imports;

(2) Distribution to U.S. producers of CSPV cells and modules and U.S. producers of polysilicon of antidumping and countervailing duties collected and still under suspension in the ongoing antidumping and countervailing duty cases targeting CSPV cells and modules from China and Taiwan;

(3) Creation of an economic investment development program funded with the tariffs collected under any resulting remedies under a safeguard action; and

(4) Bilateral and multilateral negotiations by the U.S. government to reduce global excess capacity and restore a supply and demand balance in the global market.

If the USITC reaches an affirmative injury determination, the USITC will, in our view, probably recommend a remedy involving a quota on imports of CSPV cells and modules, duties on imports of CSPV cells and modules, or both. Given uncertainties about whether a price floor would be authorized by statute, we think it unlikely that the USITC would propose a price floor as requested by the petitioners.

Scope

The section 201 proceeding covers all U.S. imports of CSPV cells and modules from all foreign countries. Imports of thin film solar products are outside of the scope of the proceeding and would be unaffected by any remedy.

Current USITC Activity in Section 201 Proceeding

The USITC is gathering information to be analyzed in reaching its injury determination. On June 6, the USITC sent questionnaires to U.S. purchasers of CSPV cells and modules and all U.S. importers of CSPV cells and modules. Responses to those questionnaires are due on June29, 2017.

On August 15, 2017, the USITC will hold a public hearing on injury. In the event the UISTC makes an affirmative injury determination on September 22, it will then hold a public hearing on remedy on October 3, 2017.


[1] If the remedy proposed by the President differs from the remedy proposed by the USITC or the President reports that no remedy will be implemented, then Congress, within 90 days of receiving the President's report, may enact a joint resolution not approving such decision. If such a joint resolution is enacted, then the remedy proposed by the USITC will be implemented on the date of the joint resolution.