U.S. Department of Commerce Sets Stage for New Countervailing Duties on Chinese Solar Panels

04 June 2014 Renewable Energy Outlook Blog

The U.S. Department of Commerce (DOC) announced its preliminary determination that countervailable subsidies are being provided to producers and exporters of certain crystalline silicon photovoltaic products (Products) from the People’s Republic of China (PRC). This preliminary finding signals the future imposition by the DOC of countervailing duties (CVD) on subject Products pursuant to section 703(b)(1) of the Tariff Act of 1930, as amended, and has resulted in the DOC instructing the U.S. Customs and Border Protection (CBP) to require cash deposits based on the preliminary subsidy rates (discussed below).

The investigation into alleged countervailable subsidies was initiated on December 31, 2013, when SolarWorld Industries America, Inc. filed a petition with the DOC seeking the imposition of CVD on certain solar products from the PRC. The DOC began a formal investigation on January 22, 2014. On February, 14, 2014, the U.S. International Trade Commission issued a preliminary determination that “there is a reasonable indication that an industry in the United States is materially injured by reason of imports of certain solar products from, inter alia, the PRC.”  

For the purposes of the DOC’s CVD investigations, countervailable subsidies are financial assistance from foreign governments that benefit the production of goods from foreign companies and are limited to specific enterprises or industries, or are contingent either upon export performance or upon the use of domestic goods over imported goods.

The Products covered by this preliminary determination are crystalline silicon photovoltaic  (c-Si PV) cells, and modules, laminates and/or panels consisting of c-Si PV, whether or not partially or fully assembled into other products, including building integrated materials. Subject Products also include modules, laminates and/or panels assembled in the PRC consisting of c-Si PV cells that are completed or partially manufactured within a customs territory other the PRC, using ingots that are manufactured in the PRC, wafers that are manufactured in the PRC, or cells where the manufacturing process begins in the PRC and is completed in a country other than the PRC.  Further, the subject Products include c-Si PV cells of thickness equal to or greater than 20 micrometers, having a p/n junction formed by any means, whether or not the cell has undergone other processing, including, but not limited to, cleaning, etching, coating, and/or addition of materials (including, but not limited to, metallization and conductor patterns) to collect and forward the electricity that is generated by the cell.

Excluded from the scope of the preliminary determination are thin film photovoltaic products produced from amorphous silicon (a-Si), cadmium telluride (CdTe), or copper indium gallium selenide (CIGS).

Also, excluded are any products covered by the existing antidumping and CVD orders on c-Si PV cells, whether or not assembled into modules, from the PRC and c-Si PV cells, not

exceeding 10,000mm2 in surface area, that are permanently integrated into a consumer good whose function is other than power generation and that consumes the electricity generated by the integrated c-Si PV cell. Where more than one cell is permanently integrated into a consumer good, the surface area for purposes of this exclusion will be based on the total combined surface area of all cells that are integrated into the consumer good.

The DOC calculated preliminary subsidy rates of: (i) 18.56 percent for Changzhou Trina Solar Energy Co., Ltd. (which includes Trina Solar (Changzhou) Science & Technology Co., Ltd.); (ii) 35.21 percent for Wuxi Suntech Power Co., Ltd. (including its affiliates: Zhenjiang Rietech New Energy Science & Technology Co., Ltd., Zhenjiang Ren De New Energy Science & Technology Co., Ltd., Yangzhou Rietech Renewal Energy Co., Ltd., Suntech Energy Engineering Co., and Kuttler Automation Systems (Suzhou) Co., Ltd.); and (iii) 26.89 percent for all other producers/exporters in the PRC.

As stated above, the DOC has instructed the CBP to require cash deposits based on the preliminary subsidy rates mentioned above, which essentially amounts to an immediate tariff on subject Products, despite the preliminary nature of the DOC’s determination. The final determination from the DOC will be issued on or about August 18, 2014, unless otherwise extended.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services