On March 28, 2022, the U.S. Department of Commerce announced it would launch an investigation into alleged circumvention of duties for solar panels imported into the United States from Malaysia, Thailand, Vietnam, and Cambodia. Commerce based its decision on a petition from a domestic solar manufacturer that alleged, in effect, Chinese manufacturers improperly shifted certain aspects of production to those four countries solely for the purpose of evading duties originally imposed in 2012. The domestic petitioner argues this alleged circumvention makes it impossible for domestic manufacturers to compete against panels made in Asia. Last December, Commerce rejected a similar domestic petition on the grounds that it was filed anonymously and sought duties on specific companies instead of specific countries.
Here the Commerce Department found “[i]nformation provided by [petitioner] indicates that multiple companies in Cambodia, Malaysia, Thailand and Vietnam, rather than a single company, have the facilities necessary to conduct the processing in question and that subsidiaries of Chinese companies that are located in these countries source numerous solar cell and panel inputs from China.” Solar panel imports from these four countries account for approximately 80% of overall solar panel imports to the U.S.
Solar industry trade groups opposed the petition and warned of severe market disruptions in the event of a Commerce investigation. Commerce stated this investigation is just a “first step,” but it remains to be seen whether this will calm the market. Commerce stated it will issue a preliminary determination in 150 days, on August 25.
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.