U.S. Commerce Department Imposes Preliminary Antidumping Duties on CSPV Products Sourced from Taiwan and China

by Stoel Rives LLP

As we first reported on Twitter, the International Trade Administration of the U.S. Department of Commerce (“ITA”) announced in a Fact Sheet on July 25, 2014, its Affirmative Preliminary Determination that certain Chinese and Taiwanese crystalline silicon photovoltaic (“CSPV”) products had been imported into the United States at unfairly low prices during the 2012 investigation period.

As a result of the determination,, ITA imposed preliminary antidumping (“AD”) duties on the CSPV products by requiring AD cash deposits upon entry through US Customs in addition to the payment of normal tariffs. The cash deposits will be equivalent to the following percentages of the entered value of the subject merchandise:

  • 10.74%, 55.49%, and 14.03% for Chinese entities Trina Solar, Renesola/Jinko Solar, and Suntech Power, respectively;
  • 20.38% for 42 other listed Chinese companies; and
  • 165.04% for all unlisted others as a China industry rate;
  • 27.59% and 44.18% for Taiwanese entities Gintech and Motech, respectively; and
  • 35.89% for all unlisted others as a Taiwan industry rate.

For affirmative preliminary determinations, cash deposits are amounts paid at the time of importation to estimate the increased duties owed based on the preliminary dumping margins in order for the subject merchandise to be entered or withdrawn from a warehouse after the preliminary determination date. If the final determination is negative, then the cash deposits will be refunded to the importer. On the other hand, if ITA imposes increased AD duties in a final order, the cash deposits will be retained, subject to any adjustments in the final AD rates.

Certain Cash Deposit Rates Reduced Below Dumping Margins

It is important to note that for the Chinese CSPV products from specific companies, the dumping margins determined by ITA are higher than the cash deposit rates, but the cash deposit rates required at the time of importation for the AD duties have been reduced to account for the earlier preliminary countervailing duty (“CVD”) cash deposits imposed on the same products. Those reductions do not apply to any products subject to the Chinese industry rate of 165% or to the rates on Taiwanese products (Taiwanese companies are not subject to the CVD investigation).

This follows a similar Affirmative Preliminary Determination last month in which ITA determined that the Chinese CSPV industry had received unfair subsidies during the investigation period in 2012, and imposed commensurate preliminary countervailing duties on the subject CSPV products. Our previous Alert details the facts and effects of that determination.

New Duties Go into Effect upon Publication in Federal Register

These new preliminary AD duties will be effective when ITA issues a Notice in the Federal Register, probably in about a week. That Notice will contain a detailed summary of the investigation findings to date and the legal consequences. We will provide a full report of the formal Notice at that time and a summary of U.S. Customs procedures for the affected products.

ITA to Align Final Phases of CVD and AD Investigations

In addition, last week ITA indicated it will “align” the final phases of the CVD investigation for Chinese entities and the AD investigation for the Chinese and Taiwanese entities. ITA will commence the final phase of its AD investigations of CSPV products and issue its final determination by December 16, 2014. The alignment of the final phase investigations will postpone the final determination in the CVD case for China from the previously scheduled date of August 18, 2014, to December 16 as well. U.S. importers of the subject CSPV products will need to deal with these preliminary cash deposit requirements for another four and a half months while they wait for the final determinations in these cases.

Final Determinations Subject to Change

As the final phases of these investigation continue, there likely will be vigorous efforts by various parties to influence the final determinations. These preliminary penalty rates could change and it’s possible that the ongoing investigation will lead to a reversal in the form of a negative final decision. Likely issues for the final investigation phases will be the scope description for the subject products, the dumping margins and subsidy rates, and corresponding AD and CVD facts gathered in the investigations, among others. The scope of the subject products is repeated in the ITA Fact Sheet noted above.

We note that U.S. legislators (on behalf of U.S. constituents), the Chinese Ministry of Commerce (MOFCOM) and various parties have weighed in with their views on the current proposed scope and its alleged deviations from existing country rules of origin. Various industry groups have also weighed in, including the Solar Energy Industries Association which called for a “negotiated solution”. Expect these debates to continue, though so far, petitioner SolarWorld Industries’ proposed scope has carried the day with ITA.

Our further report will be published on or about the date of the publication of the formal Notice of these preliminary determinations in the Federal Register, expected in about a week.

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.

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