Commerce Department Issues Preliminary Affirmative Determinations of Circumvention Regarding Solar Modules from Southeast Asia

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.

Key Points

  • Imports of CSPV panels from Covered Countries that are within the scope of the circumvention inquiries are subject to AD/CVD duties except to the extent that the duty-waiver arrangements apply.
  • Imported CSPV panels are within the scope of the circumvention inquiries and the preliminary determinations if they are exported from a Covered Country, were produced using CSPV cells made from Chinese wafers, and contain at least two of the following components that are made in China: (1) silver paste; (2) aluminum frames (3) glass; (4) backsheets; (5) ethylene vinyl acetate sheets; and (6) junction boxes.
  • Subject to possible court action, the duty-waiver arrangements generally apply to imports of covered panels exported from a Covered Country and imported before the earlier of (1) June 6, 2024, or (2) the end of the emergency proclaimed by President Biden to underpin the waiver. For imports that enter or entered after November 15, 2022, application of the waiver also depends on imported panels being “utilized” in the United States before the earlier of (i) December 3, 2024 or (ii) the date that is 180 days after the end of the emergency announced by President Biden.
  • To try to avoid collection of AD/CVD duty deposits on imports of panels from Covered Countries, importers and exporters must certify that the imports (1) qualify for the duty waiver, (2) are not covered by an affirmative circumvention determination, or (3) are not within the scope of the circumvention inquiry. Absent such a certification, which the importer and/or exporter might need to substantiate, the U.S. government is expected to collect duty deposits on imports of panels from Covered Countries that entered or enter on or after April 1, 2022.
  • Commerce preliminarily found the following companies not to be circumventing the underlying China AD/CVD orders: New East Solar (Cambodia) Co., Ltd., Hanwha Q CELLS Malaysia Sdn. Bhd., Jinko Solar Technology Sdn. Bhd./ Jinko Solar (Malaysia) Sdn. Bhd., and Boviet Solar Technology Co., Ltd.

Circumvention Proceeding Scope

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.

Excluded Companies

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.

AD/CVD Duty Waiver

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:

  • Covered CSPV Items exported from one of the Covered Countries to the United States and entered into the United States, or removed from a warehouse, for consumption prior to the earlier of:
    • June 6, 2024, or
    • the end of the emergency proclaimed by President Biden, and, for entries that enter after November 15, 2022, that involve Covered CSPV Items “utilized” in the United States prior to the earlier of (i) December 3, 2024 or (ii) the date that is 180 days after the end of the emergency announced by President Biden (“Applicable Entries”).[1]

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.

Certification Procedures

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:

  • an Applicable Entry,
  • an entry of Covered CSPV Items exported by one of the four Excluded Companies, or
  • an entry of CSPV cells or modules/laminates/panels that are not Covered CSPV Items based on the inputs used to manufacture such merchandise.

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]

Waiver Excluded Companies

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.

Cash Deposit Instructions

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).

Possible Court Challenge

The AD/CVD circumvention petitioner, Auxin Solar, might bring a court challenge against the duty waiver.  Given uncertainties about the outcome of any such court challenge, traders cannot be confident that the waiver will last until its scheduled June 6, 2024 expiration (or unscheduled termination by the Biden Administration before then).


[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.