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COMMERCE DEPARTMENT INITIATES CIRCUMVENTION INVESTIGATION ON SOLAR CELLS AND MODULES EXPORTED FROM MALAYSIA, THAILAND, VIETNAM, AND CAMBODIA CONTAINING PARTS AND COMPONENTS PRODUCED IN CHINA

On March 28, 2022, the Department of Commerce (“DOC”) initiated a country-wide circumvention investigation on Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, from the People’s Republic of China (“CSPV”), which are further processed in Malaysia, Thailand, Vietnam, and/or Cambodia prior to exportation to the United States.  The investigation was requested in a petition filed by Auxin Solar Inc.  The petition alleged that CSPV producers are completing production in these third countries to circumvent the antidumping duty (“ADD”) and countervailing duty (“CVD”) Orders on CSPV cells and modules from China.  This investigation covers all CSPV cells and modules that have been completed in these four countries using parts and components from China and are exported from these countries to the United States.  This investigation is not limited to any specific manufacturer or group of manufacturers (i.e., Chinese-owned companies).

Under the DOC’s current practice CSPV containing Chinese wafers which are doped (i.e., p-n junction created) outside of China are not subject to the Chinese ADD/CVD Orders. If the DOC issues an affirmative determination in this case, CSPV exported from these countries which contain significant Chinse inputs – e.g., polysilicon, wafers, ingots, framing, glass, wires, EVA, silver paste, backsheets, silicone sealant, junction boxes, and inverters – could be subject to the China ADD/CVD Orders, even if the wafers are doped in one of these countries.

Important information on retroactivity: Upon publication of the Notice of Initiation, the DOC will instruct Customs and Border Protection (“CBP”) to continue the suspension of liquidation for any entries that were already suspended. Furthermore, if there is an affirmative preliminary determination of circumvention, the DOC will instruct CBP to suspend liquidation and require a cash deposit of estimated duties of all unliquidated entries retroactive to the date of publication of the notice of initiation. The DOC also has the authority to retroactively suspend liquidation prior to the initiation publication date based upon a request made by an interested party, or at its discretion. The Preliminary Determination is expected 150 days from the publication of initiation (i.e., last week of August 2022). The Final Determination is expected 150 days thereafter (i.e., end of January 2023).

The DOC intends to release CBP import data shortly after the initiation is published, and after reviewing comments, to issue quantity and value (“Q&V”) questionnaires to CSPV exporters from the four countries.  Commerce intends to select mandatory respondents whose production processes will be subject to extensive examination based on responses to the Q&V questionnaires.

In light of the potential broad reach and retroactive impact of these investigations, all companies importing solar module products from Malaysia, Thailand, Vietnam, and Cambodia should promptly evaluate their supply chain and potential exposure for antidumping and countervailing duties.

We are available to advise companies on the potential impact of this circumvention investigation. Please feel free to contact Erik Smithweiss or any other attorney in our firm if you have questions or require assistance.

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