Key Takeaways

• The Department of Commerce published a Preliminary Determination on December 8, 2022, imposing antidumping and countervailing duties on Chinese solar cells and modules imported to the U.S. from Vietnam, Malaysia, Thailand and Cambodia, as part of an anti-circumvention inquiry requested by Auxin Solar Inc.
• The Preliminary Determination also specifically found that Vina Solar Technology Company Limited in Vietnam, BYD (H.K.) Co., Ltd. in Cambodia, Canadian Solar International Limited in Thailand, and Trina Solar Science & Technology (Thailand) Ltd. in Thailand are attempting to circumvent U.S. antidumping and countervailing duties for Chinese solar cells and modules
• The Biden Administration’s previously issued tariff moratorium on such duties remains in place and importers and exporters can submit a certification under the Preliminary Determination to be temporarily excluded from the imposed duties per the moratorium
• Importers and exporters may also certify that their merchandise is outside the scope of the Preliminary Determination, for instance if their merchandise is not manufactured using wafers produced in China
• The Final Determination is scheduled to be released on May 1, 2023, after a public comment period

On December 8, 2022, the Department of Commerce published a preliminary determination that finds that imports into the U.S. of Chinese crystalline silicon photovoltaic (CSPV) solar cells and modules exported from Vietnam, Malaysia, Thailand and Cambodia (the “Target Countries”) are circumventing existing antidumping duty and countervailing duty orders on solar cells and modules from China (the “Orders”). Imports from Thailand, Vietnam, Cambodia, and Malaysia currently account for approximately 80% of all solar cell imports into the U.S.

The preliminary determination and accompanying country-specific memoranda (the “Preliminary Determination”) found that four companies in particular – Vina Solar Technology Company Limited (Vina Solar) in Vietnam, BYD (H.K.) Co., Ltd. (BYD Hong Kong) in Cambodia, Canadian Solar International Limited (Canadian Solar) in Thailand, and Trina Solar Science & Technology (Thailand) Ltd. (Trina) in Thailand – are attempting to circumvent U.S. antidumping and countervailing duties by sending solar cells or modules manufactured in China through Southeast Asia for only minor processing before shipping the materials to the United States.

The Preliminary Determination also issued findings of circumvention for the following 22 companies in Malaysia, Thailand and Vietnam who did not respond to the Department of Commerce’s requests for information:

Malaysia

• AMC Cincaria Sdn Bhd
• Flextronic Shah Alam Sdn. Bhd.
• Funing Precision Component Co., Ltd.
• Samsung Sds Malaysia Sdn. Bhd.
• Vina Solar Technology Co., Ltd.

Thailand

• 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.
• Sunshine Electrical Energy Co., Ltd.

Vietnam

• 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
• Red Sun Energy Co., Ltd

For solar cells and modules imported from Thailand, Vietnam, Cambodia, and Malaysia, including by the above named companies, the typical process by which final duties are calculated per HTSUS Codes (a process called “liquidation”) will be subject to suspension and instead antidumping and countervailing cash deposits will be collected based on company-specific rates set forth in the Orders, unless an exemption applies.

Exemptions

The Preliminary Determination established a certification process by which importers and exporters may be exempted from such suspension of liquidation and collection of cash deposits for solar cells and modules from the Target Countries. Importers and exporters may submit certifications that imports are exempt from application of antidumping and countervailing duties based on one of three grounds:

• the entry qualifies for the Biden Administration’s June 6 tariff moratorium as announced in Presidential Proclamation 10414 and codified at 19 C.F.R. Part 362;
• the entry consists only of merchandise that falls outside of the scope of the Orders;
• the entry consists of merchandise manufactured by a company preliminarily found not to be circumventing under the Preliminary Determination.

The 22 companies that did not respond the Department’s inquiries are only eligible to pursue certification under the Biden Administration’s tariff moratorium, if applicable.

Certification under the Biden Administration’s Tariff Moratorium

The Biden Administration’s previously issued June 6, 2022 tariff moratorium, which authorized the suspension of antidumping and countervailing duties on solar cells and modules imported from the Target Countries, still remains in place. Importers and exporters can qualify for relief under the mortarium by certifying that the imported solar cells or modules:

• were produced in Cambodia, Malaysia, Thailand, or Vietnam using parts and components manufactured in China;
• were exported to the U.S. from one of the above countries without further assembly in another country;
• “entered into the U.S., or were withdrawn from warehouse, for consumption” before June 6, 2024 (or the date the Biden moratorium is terminated, if terminated early); and
• if “entered, or [were] withdrawn from warehouse,” after November 15, 2022, will be “utilized” in the U.S. by the earlier of December 3, 2024, or 180 days after the moratorium is otherwise terminated.
• Are not already subject to countervailing or antidumping tariffs for products directly from China or Taiwan.

To be “utilized,” solar cells or modules must be “used or installed” in the U.S. and must not “remain in inventory or in a warehouse in the United States,” be resold to another party, subsequently exported, or destroyed after importation.

Certification for Out of Scope Merchandise

Importers and exporters can also certify that their merchandise is outside the scope of the Preliminary Determination. Solar cells and modules (including products that contain solar modules) are out of scope if the solar cell or module is not manufactured using wafers produced in China (whether sourced directly from a Chinese producer or from a downstream supplier), even if the solar cell or module is produced in a Target Country. Wafers produced outside of China with polysilicon sourced from China are not considered wafers produced in China for these purposes.

Solar modules (or products that contain solar modules) can be additionally out of scope even if the wafers were supplied by a Chinese company if only two or fewer of the following components used in manufacturing the module/laminate/panel were produced in China (again, whether sourced directly from a Chinese producer of from a Chinese downstream supplier):

• silver paste;
• aluminum frames;
• glass;
• backsheets;
• ethylene-vinyl acetate; or
• junction boxes.

This exception applies even if the solar modules were manufactured using wafers produced in China. As above, however, this exception is not available for merchandise that is already subject to countervailing or antidumping tariffs for products directly from China or Taiwan.

Finding of Non-Circumvention

Merchandise may also be exempt from the suspension of liquidation and collection of cash deposits if the importers and exporters certify that the Preliminary Determination found that the supplier providing the items was not circumventing the U.S. antidumping and countervailing duties. The Preliminary Determination found that the following four companies were not in contravention of the U.S. antidumping and countervailing duties:

• New East Solar (Cambodia) Co., Ltd. (NE Solar) in Cambodia;
• Hanwha Q CELLS Malaysia Sdn. Bhd. (Hanwha) in Malaysia;
• Jinko Solar Technology Sdn. Bhd. (Jinko Solar) in Malaysia; and
• Boviet Solar Technology Co., Ltd. in Vietnam.

However, the Department of Commerce will not implement the preliminary finding of non-circumvention for NE Solar, Hanwha, and Jinko Solar until the companies disclose the names of their wafer exporters in China.

Until that time, certification under a finding of non-circumvention is available only to Boviet in Vietnam, for solar cells and modules produced, sold and exported to the U.S. by Boviet, with production in Vietnam using Chinese wafers manufactured in China that were exported to Vietnam by Ningbo Kyanite International Trade Co., Ltd.

Additional requirements

Certifications for solar cells or solar modules from the Target Countries that were entered, or withdrawn from warehouse, for consumption between April 1, 2022, and December 8, 2022, must be completed and signed no later than January 22, 2023 (45 days after such publication). Sample forms for all certifications were published with the Preliminary Determination.

Assessment Rates

Pursuant to the Preliminary Determination, the Department of Commerce intends to direct CBP to suspend liquidation and collect cash deposits on any solar cells or modules entering the U.S. from the Target Countries, unless otherwise exempted through the above certifications.

The applicable rate for the assessments will be the company-specific antidumping duty or countervailing duty rate under the Orders for the exporter, or if no such rate exists for the particular exporter, the tariff rate applicable to the Chinese company that exported the wafers to the producer/exporter in the Target Country.

If neither the exporter of the solar cells or solar modules nor the exporter of the wafer have a company specific rate, the applicable antidumping rate will be the China-wide rate of 238.95% and the countervailing rate will be 15.24% for a cumulative rate of up to 254.19%.

Next Steps

As a next step towards finalizing the Preliminary Determinations on May 1, 2023, the Department of Commerce will conduct in-person audits to verify the information on which it based its Preliminary Determination and will hold a public comment period. Companies should stay alert to any changes in the Department’s Final Determination.