International Trade & Investment Alert
December.05.2022
On December 2, 2022, the U.S. Department of Commerce (“Commerce”) issued preliminary affirmative determinations of circumvention with respect to crystalline silicon photovoltaic (“CSPV”) cells and modules exported to the United States from Cambodia, Malaysia, Thailand or Vietnam (“Covered Countries”). Given existing duty-waiver arrangements established by the Biden Administration, these determinations may not result in collection of antidumping or countervailing duty (“AD/CVD”) duties or cash deposits for most imports of CSPV modules (or cells) from Covered Countries until June 2024.
Items covered by the circumvention proceeding and by the preliminary affirmative determinations (“Covered CSPV Items”) are:
(A) CSPV cells that meet the physical description of CSPV cells covered by the scope of underlying AD/CVD orders on CSPV cells and modules from China (A-570-979 and C-570-980) (the “China AD/CVD Orders”), whether or not partially or fully assembled into other products, that were produced in one of the Covered Countries from wafers produced in China (“Covered CSPV Cells”); and
(B) modules, laminates, and panels consisting of Covered CSPV Cells, whether or not partially or fully assembled into other products, and incorporating more than two of the following components produced in China: (1) silver paste; (2) aluminum frames; (3) glass; (4) backsheets; (5) ethylene vinyl acetate sheets; and (6) junction boxes.
CSPV modules, laminates, and panels that do not meet both of the conditions in item (B) above are excluded from the circumvention proceeding and are not covered by the preliminary determinations, even if those CSPV modules, laminates and panels were produced from Covered CSPV Cells in one of the Covered Countries. Wafers produced outside of China with polysilicon sourced from China are not considered to be wafers produced in China for purposes of the circumvention inquiries or the preliminary determinations.
Commerce preliminarily determined that CSPV cells and modules/laminates/panels produced in, and exported by the following entities (“Excluded Companies”) from, respectively, Cambodia, Malaysia, or Vietnam are not circumventing the underlying China AD/CVD Orders:
Cambodia
1. New East Solar (Cambodia) Co., Ltd.
Malaysia
1. Hanwha Q CELLS Malaysia Sdn. Bhd.
2. Jinko Solar Technology Sdn. Bhd./ Jinko Solar (Malaysia) Sdn. Bhd.
Vietnam
1. Boviet Solar Technology Co., Ltd.
CSPV cells and modules/laminates/panels exported by the Excluded Companies are not covered by the preliminary affirmative circumvention determinations.
As discussed in our alert, on June 6, 2022, President Biden issued a proclamation declaring a national emergency and instructing Commerce to waive collection of AD/CVD duties on imports of CSPV cells and modules from the Covered Countries for two years, regardless of the outcome of the ongoing circumvention proceeding.
On November 15, 2022, new regulation 19 C.F.R. Part 362 (“Waiver Regulation”) implementing the AD/CVD duty waiver contained in the presidential proclamation came into effect. As a result, notwithstanding Commerce’s preliminary affirmative circumvention determinations, the U.S. government will not, subject to possible court action (see below), collect AD/CVD cash deposits with respect to imports of:
The Waiver Regulation does not cover China-origin CSPV cells or CSPV modules/laminates/panels containing China-origin cells, even if the modules/laminates/panels are produced from China-origin cells in one of the Covered Countries.
To seek to ensure proper administration of the preliminary determinations and the Waiver Regulation, Commerce is establishing certification requirements involving three types of certifications:
(1) importer and exporter certifications that specific entries meet the regulatory definition of “Applicable Entries” (meaning entries covered by the Waiver Regulation);
(2) importer and exporter certifications that specific entries are not subject to suspension of liquidation or collection of cash deposits based on the preliminary negative circumvention determinations with respect to the exporters listed below in combination with certain wafer exporters; and
(3) importer and exporter certifications that specific entries of solar cells or solar modules from one of the Covered Countries are not subject to suspension of liquidation or collection of cash deposits pursuant to the preliminary country-wide affirmative determinations of circumvention because the merchandise meets the component content requirements described in the certification.
Importers and exporters may represent that an entry is:
In each case, importers and exporters must complete the applicable certification attesting to the claimed facts and meet certain documentation requirements.
Copies of the various certifications are included as Appendices to the preliminary affirmative circumvention determinations and will be published in the Federal Register with the preliminary determinations.
Each entry of Covered CSPV Items that entered the United States on or after April 1, 2022 will be subject to collection of AD/CVD cash deposits unless all certification and documentation requirements are met with respect to the entry, thereby making the entry a “Certified Entry.”
The importer certification must be completed, signed, and dated by the time the entry summary is filed for the relevant entry. Agents of the importer, such as brokers, however, are not permitted to certify on behalf of the importer.
Exporters are required to complete and maintain the applicable exporter certification and provide the importer with a copy of that certification and all supporting documentation (e.g., invoice, purchase order, production records, etc.). The exporter certification must be completed, signed, and dated by the time of shipment of the relevant entries. The exporter certification should be completed by the party selling the Covered CSPV Items to the United States.
For all unliquidated entries of Covered CSPV Items that entered the United States after April 1, 2022, the relevant certification should be completed and signed no later than January 23, 2023.[2] For such entries, importers and exporters each have the option to complete a blanket certification covering multiple entries, individual certifications for each entry, or a combination thereof. Exporters must provide importers with copies of the exporter certifications by January 23, 2023.[3]
Commerce determined that the following companies failed to cooperate to the best of their abilities to provide information that Commerce requested during the circumvention proceeding, and, as a result, Commerce has precluded these companies from participating in the import certification programs:
Malaysia
1. AMC Cincaria Sdn Bhd
2. Flextronic Shah Alam Sdn. Bhd.
3. Funing Precision Component Co., Ltd.
4. Samsung Sds Malaysia Sdn. Bhd.
5. Vina Solar Technology Co., Ltd.
Thailand
1. Celestica (Thailand) Limited
2. Green Solar Thailand Co., Ltd.
3. Lightup Creation CO., Ltd.
4. Thai Master Frame Co., Ltd.
5. Three Arrows (Thailand) Co., Ltd.
6. Yuan Feng New Energy
7. Solar PPM.
8. Sunshine Electrical Energy Co., Ltd.
Vietnam
1. Cong Ty Co Phan Cong Nghe Nang (Global Energy)
2. GCL System Integration Technology
3. Green Wing Solar Technology Co., Ltd.
4. HT Solar Vietnam Limited Company
5. Irex Energy Joint Stock Company
6. S-Solar Viet Nam Company Limited
7. Venergy Solar Industry Company
8. Vietnam Sunergy Joint Stock Company
9. Red Sun Energy Co., Ltd.
As a result, entries of Covered CSPV Items from these companies do not qualify as Certified Entries, do not qualify for the duty waiver, and so will face AD/CVD cash deposit requirements.
Commerce has issued the following AD/CVD cash deposit instructions with respect to entries of Covered CSPV Items that entered the United States on or after April 1, 2022 and which are not Certified Entries (i.e., entries for which all certification and documentation requirements have not been met):
(1) for exporters of Covered CSPV Items that have a company-specific AD and/or CVD cash deposit rate under the China AD/CVD Orders, the cash deposit rate will be the company-specific AD and/or CVD cash deposit rate established for that company in the most recently completed administrative review of the China AD/CVD Orders;
(2) for exporters of Covered CSPV Items that do not have a company-specific AD or CVD cash deposit rate under the China AD/CVD Orders, the cash deposit rate will be the company-specific cash deposit rate established under the China AD/CVD Orders for the company that exported the China-origin wafers to the producer/exporter in the relevant Covered Country that were incorporated in the imported Covered CSPV Items; and
(3) if neither the exporter of the Covered CSPV Items nor the exporter of the China-origin wafers described in item (2) above has a company-specific cash deposit rate, then, as applicable, AD cash deposit rate will be the China-wide rate (238.95 percent), and the CVD cash deposit rate will be the “All-Others” rate (15.24 percent).
[1] For purposes of the Waiver Regulation, “utilized” means withdrawn from a warehouse and/or used or installed in the United States. Merchandise which either (i) remains in inventory or a warehouse in the United States, (ii) is resold to another party, (iii) is reexported out of the United States, or (iv) is destroyed after importation is not considered “utilized” for these purposes.
[2] Certifications should be completed and signed as soon as practicable, but no later than 45 days after the date of publication of the preliminary affirmative determinations in the Federal Register. Liquidation of an entry represents the final disposition of the entry by U.S. Customs and Border Protection and involves the determination and collection of final duty amounts associated with an entry. Under normal circumstances liquidation of an entry occurs roughly a year after the date of importation, but liquidation of entries of merchandise covered by AD/CVD orders usually is suspended and does not occur for several years after the date of importation.
[3] Exporters should provide importers with copies of the certifications as soon as practicable, but no later than 45 days after the date of publication of the preliminary affirmative determinations in the Federal Register.