Commerce Finds Circumvention by Southeast Asian Solar Exports, to Require Certifications

Importers and exporters of solar cells and modules from Cambodia, Malaysia, Thailand and Vietnam must complete and sign certifications within the next several weeks for any entries after April 1, 2022, to avoid antidumping and countervailing duties imposed in the preliminary determination of an anti-circumvention inquiry released by the Commerce Department on Dec. 2.

That’s despite a hold on the duties announced by President Joe Biden and the Commerce Department that’s in place until June 2024 (see 2209160065. Importers and exporters will have to certify they meet the conditions of the hold to benefit.

Commerce found solar cells and modules from Cambodia, Malaysia, Thailand and Vietnam are circumventing the AD/CVD orders on solar cells from China (A-570-979/C-570-980), with the exception of exports from a few companies Commerce found are not circumventing the duties: New East Solar in Cambodia, Hanwha Q Cells and Jinko Solar in Malaysia, and Boviet Solar Technology in Vietnam. Those companies are preliminarily exempt, though certifications still will be required.

The closely watched anti-circumvention inquiries had been requested by Auxin Solar, which alleged that the use of Chinese wafers to make solar cells and modules in the four Southeast Asian countries constitutes only “minor or insignificant” processing, and that cells and modules from the four countries that are made from Chinese wafers should be subject to duties (see 2202090060).

“Although these decisions are preliminary and the proceedings remain ongoing, Commerce’s investigations have largely validated and confirmed Auxin’s allegations of Chinese cheating and we are grateful to the professional staff at the Commerce Department for their diligence and professionalism in fairly enforcing the U.S. trade laws for the benefit of U.S. solar manufacturers, their workers, and their communities,” Auxin CEO Mamun Rashid said in an emailed statement. “We will continue to press forward in these cases as they continue to make sure all trade cheats are playing by the rules.”

Solar Energy Industries Association President and CEO Abigail Ross Hopper expressed disappointment and disagreement with the preliminary decision.

"The only good news here is that Commerce didn’t target all imports from the subject countries,” Ross said in a statement. “Nonetheless, this decision will strand billions of dollars’ worth of American clean energy investments and result in the significant loss of good-paying, American, clean energy jobs. While President Biden was wise to provide a two-year window before the tariff implementation, that window is quickly closing, and two years is simply not enough time to establish manufacturing supply chains that will meet U.S. solar demand,” she said. "This is a mistake we will have to deal with for the next several years.”

The preliminary decision was close, and partly based on the failure of many solar exporters in the four countries to cooperate. For each country, Commerce found some factors favored a finding of circumvention, while others did not. The agency nonetheless found circumvention for all except the four companies listed above, as well as an additional fifth company from Cambodia -- NE Solar – that Commerce said would be subject to duties anyway because it did not provide information on its Chinese wafer suppliers.

The agency’s decision to apply the circumvention findings “country-wide” to all solar cell and module exporters except the four exempt was based on the failure of companies in each country to complete a questionnaire. Commerce cited their lack of cooperation to justify its use of “adverse facts available” and automatic application of the duties.

In the preliminary determinations, Commerce outlined three types of certifications that will be required from importers and exporters to avoid AD/CVD.

One type of certification will be required to qualify for the two-year pause on the duties imposed by presidential proclamation and implemented by Commerce regulations. One condition to benefit from the hold on duties is that the solar cells and modules must be used or installed in the U.S. by a “utilization expiration date” that comes 180 days after the June 6, 2024, “termination date” of the pause. The notice says importers and exporters must certify their imports “will be utilized in the United States by no later than 180 days after the earlier of 06/06/2024, or the date the emergency described in Presidential Proclamation 10414 is terminated.”

“Solar cells or solar modules which remain in inventory or in a warehouse in the United States, are resold to another party, are subsequently exported, or are destroyed after importation are not considered utilized,” the notice’s certification language said.

Another certification will be available for exporters of solar cells and modules from Cambodia, Malaysia, Vietnam and Thailand that don’t meet Chinese content requirements. Solar cell and module importers and exporters can certify their solar cells weren’t made from Chinese wafers to avoid duties. Solar module importers can also avoid duties by certifying, even if their modules were made with Chinese wafers, so long as no more than two of the following components were sourced from China: silver paste, aluminum frames, glass, backsheets, ethylene-vinyl-acetate or junction boxes.

Finally, a third certification is available for imports of solar cells from the four exporters that Commerce found were not circumventing Chinese solar cell duties.

Merchandise from 22 companies is ineligible for certification processes for exempt exporters and cells and modules made without Chinese wafers or have only minor Chinese content, though they may still file the certification required to qualify for the grace period. These companies are AMC Cincaria Sdn Bhd, Flextronic Shah Alam Sdn. Bhd., Funing Precision Component Co., Ltd., Samsung Sds Malaysia Sdn. Bhd. and Vina Solar Technology Co., Ltd. in Malaysia; Celestica (Thailand) Limited, Green Solar Thailand Co., Ltd., Lightup Creation CO., Ltd., Thai Master Frame Co., Ltd., Three Arrows (Thailand) Co., Ltd., Yuan Feng New Energy, Solar PPM and Sunshine Electrical Energy Co., Ltd. in Thailand; and Cong Ty Co Phan Cong Nghe Nang (Global Energy), GCL System Integration Technology, Green Wing Solar Technology Co., Ltd., HT Solar Vietnam Limited Company, Irex Energy Joint Stock Company, S-Solar Viet Nam Company Limited, Venergy Solar Industry Company, Vietnam Sunergy Joint Stock Company and Red Sun Energy Co., Ltd. in Vietnam.

Suspension of liquidation and cash deposit requirements under the preliminary determinations take effect for entries April 1, 2022, the date Commerce began the anti-circumvention inquiries, unless the entries qualify for the two-year pause or are otherwise exempt. For entries since April 1, Commerce will require the relevant certification be completed and signed within 45 days of the preliminary determination’s publication, which will likely happen in the coming days.

For any entries since April 1 that are subject to the anti-circumvention inquiries but were entered as type 01 entries, and for which no exemption is available because no certification is allowed, Commerce will require the filing of a post-summary correction to change the entry type to type 03, as well as payment of required cash deposits.

For any entries requiring AD/CVD cash deposits, the applicable rate will be the rate in effect under the China solar cells orders for the Cambodian, Malaysian, Thai or Vietnamese exporter. If the exporter has no rate, then the rate applicable to the Chinese wafer supplier will apply. If neither the Southeast Asian exporter nor the Chinese wafer supplier have a rate under the China solar cells order, the China-wide AD rate of 238.95% and the 15.24% “all-others” CVD rate will apply.

Commerce’s final determinations in the anti-circumvention inquiries are due in May 2023.