U.S. implements measures targeting solar companies in the Xinjiang region

Bryan Cave Leighton Paisner

On Thursday, 24 June 2021, the Biden administration took various actions against solar product manufacturers in the Xinjiang region, which will have implications on the supply chain for the construction of solar energy projects both within and outside U.S. borders.

Withhold Release Order against Hoshine Silicon Industry Co. Ltd.

The U.S. Customs and Border Protection (CBP) issued a Withhold Release Order (“WRO”) against Hoshine Silicon Industry Co. Ltd. (“Hoshine”), a company located in the Xinjiang region.

As a result of the WRO, personnel at all ports of entry within the U.S. must immediately begin detaining shipments containing silica-based products, including materials and goods derived from or produced using silica-based products, made by Hoshine and its subsidiaries. Silica is a raw material used in the production of solar panels. CBP has the authority to seize products covered by the WRO unless U.S. importers can prove the products or materials are not produced with forced labour. Forced labour is defined as “all work or service which is exacted from any person under the menace of any penalty for its nonperformance and for which the worker does not offer himself [/herself] voluntarily1.” Practically, the effect of the WRO is that importers in the U.S. importing any silica-based products should obtain supply chain tracing information to check whether their products are made by Hoshine or its subsidiaries.

Entity List

The U.S. Department of Commerce's Bureau of Industry and Security (BIS) updated its Entity List to include five Chinese entities that make polysilicon, also a raw material for solar products. The entities are:

  1. Hoshine Silicon Industry (Shanshan) Co., Ltd.
  2. Xinjiang Daqo New Energy Co., Ltd.
  3. Xinjiang East Hope Nonferrous Metals Co., Ltd.
  4. Xinjiang GCL New Energy Material Technology Co., Ltd.
  5. Xinjiang Production and Construction Corps (XPCC)

The Entity List requires U.S. companies to have licenses for the export, re-export, and transfer (in-country) of items including commodities, software, and technology subject to the Export Administration Regulations (EAR), where listed entities are a party to the transaction (i.e., purchaser, intermediate consignee, ultimate consignee, end-user).

What’s next?

U.S. Congress is also considering legislation that would ban all imports from the Xinjiang region to the U.S., unless companies can certify that products do not use forced labour in their supply chains. The proposed legislation would also allow further sanctions to be imposed on companies in the Xinjiang region.

Xinjiang reportedly produces 45% of the world’s polysilicon and it remains to be seen what practical effect these measures will have on solar manufacturers in the region and on the global supply in general.

1. Section 307 of the Tariff Act of 1930 (19 U.S.C. §1307) 

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Bryan Cave Leighton Paisner | Attorney Advertising

Written by:

Bryan Cave Leighton Paisner

Bryan Cave Leighton Paisner on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.