Recent Memorandum from Commerce regarding Solar Circumvention Investigation

06 May 2022 Renewable Energy Outlook Blog
Author(s): Jeffery R. Atkin Natalie S. Neals Rachel Conrad

On May 2, 2022, the U.S. Department of Commerce (“Commerce”) released a memorandum to “All Interested Parties” that clarifies the scope of the investigation into the alleged circumvention of tariffs on certain solar cells and solar modules imported into the United States from Malaysia, Thailand, Vietnam or Cambodia, originally announced by Commerce on March 28, 2022 (the “Investigation”). For additional background, please see Foley’s article regarding the launch of the Investigation.

Among other things, the three-page memorandum, entitled “Circumvention Inquiries with Respect to Cambodia, Malaysia, Thailand, and Vietnam, - Potential Certification Requirements” (the “Memorandum”) provides more clarity on (i) what type of certification requirements would be placed on solar cells and modules, (ii) what types of inputs would be subject to the duties, and (iii) what the amount of the duties would be, in each case, in the event of an affirmative preliminary or final determination in the Investigation.

Certification Requirements

The Memorandum notes that in previous affirmative circumvention inquiries, Commerce established certification procedures for importers and exporters regarding the source of the materials used in the subject products, and indicates that Commerce would utilize a similar certification process here. In the past, only imports that were found not to comply with the certification requirements were subject to the orders and applicable cash deposits, and imports that satisfied the certification requirements were considered not subject to the orders. The only exception to this was the exclusion of companies that “did not cooperate” to the best of their ability in the circumvention inquiry and companies that were unable to trace the input from the subject country to the actual merchandise that the company shipped to the United States.


Importantly, Commerce makes clear that wafers made from polysilicon sourced from China but actually sliced into wafers outside of China are outside the scope of the circumvention inquiries.  Similarly, Commerce noted that only Chinese-origin inputs that have not undergone further manufacturing processes in another country are subject to the investigation. This added clarity will allow panel manufactures to better assess their risk of circumvention duties and may give manufacturers that do not use wafers manufactured in China an advantage in commercial negotiations. 

Potential Duties

Importantly, Commerce stated that solar cells and modules made from non-Chinese wafers are not covered by the circumvention proceeding and will not be subject to cash deposit requirements even if Commerce issues an affirmative determination.  Commerce states that in the event of an affirmative determination, if solar cells or modules have Chinese inputs that are traceable to a specific Chinese manufacturer and are found to be subject to the duties, the intended cash deposit rate for such imports will be equal to that Chinese manufacturer’s company-specific rates, as if they had been shipped directly from China. Even though Commerce identifies the origin of silicon wafers as the determining factor as to whether a panel is subject to the investigation, Commerce does not say that cash deposits would be required to cover only the value of the wafer. If Commerce issues an affirmative circumvention determination, then cash deposits will be based on the entire value of the cells and modules incorporating Chinese wafers.  For imports that cannot be tied to a specific Chinese manufacturer, the U.S. Customs and Border Patrol will be instructed to suspend liquidation of the entry and collect cash deposits at the rates applicable under applicable law relevant to Chinese-produced solar cells and modules.1

The Department of Commerce is requesting any interested parties to provide comments and other factual information related to the material in the Memorandum prior to 5:00pm Eastern Time on May 9, 2022.

Foley’s Renewable Energy practice has deep experience in all aspects of the solar industry, as well as extensive experience with the Department of Commerce. If you have any questions about Commerce’s determination or its impact on your business, please contact Mike Walsh, Jeff Atkin, or your Foley lawyer. Jeff is the co-chair of Foley’s Energy practice, and Mike is the former chief of staff and acting general counsel at the U.S. Department of Commerce.

1 See Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled into Modules from the People’s Republic of China: Amended Final Determination Letter of Sales at Less Than Fair Value, and Antidumping Duty Order, 77 FR 73018 (December 7, 2012); and Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, from the Republic of China: Countervailing Duty Order, 77 FR 73017 (December 7, 2012)

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.