International Trade Administration Investigation Set to Impose Significant Import Duties on Certain Solar Cells and Modules | Kilpatrick Townsend & Stockton LLP

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On April 1, 2022, the U.S. Department of Commerce’s International Trade Administration (“ITA”) issued a Notice of Circumvention Investigation (“Investigation”) that may significantly increase the cost of certain cells and modules solar panels imported into the United States.

The investigation, which was initiated at the request of solar manufacturer Auxin Solar Inc. (“Request”), concerns the claim that crystalline silicon (c-Si) photovoltaic cells and modules “were made in Cambodia, in Malaysia, Thailand, or Vietnam using parts and components made in China,” circumvent “U.S. anti-dumping (AD) and countervailing duty (CVD) orders.” These investigations allow the government to determine if anti-dumping and countervailing duties are circumvented.

As part of the investigation, and consistent with the approach taken in prior nationwide circumvention investigations, the Commerce Department “will seek information from certain companies in Cambodia, Malaysia, Thailand and Vietnam regarding their production of solar cells and modules and their shipments to the United States.”

The investigation does not yet require U.S. Customs and Border Protection to make a final calculation of duties for the affected products (also known as a stay of liquidation), but such a determination could follow a preliminary or final circumvention determination. The duties can be applied retroactively to all affected cells or modules imported at any time from October 19, 2021. This would have a substantial impact on solar developers. According to some estimates, the products concerned could see a fivefold increase in the applicable duties.

Companies and individuals wishing to provide feedback on the survey and related request will be given the opportunity to do so, but should act promptly. For example, interested parties will be able to “submit comments and factual information to refute, clarify or correct the factual information contained in the application”. The expected deadline for these comments is May 2, 2022. Additionally, the Commerce Department is in the process of identifying and selecting companies as defendants in the investigation. The process of identifying respondents should be completed this week.

The investigation is governed by 19 CFR § 351.226 and Section 781(b) of the Tariff Act of 1930. Pursuant to applicable regulations, the Department has 150 days from the date of notice of its investigation to render a preliminary decision (approximately August 29, 2022). A final affirmative determination will empower Commerce to retroactively apply penalty duties. A negative Final Action will terminate the liquidation suspension and require Commerce to refund all security deposits paid on the products in question.

Purchasers of the panels in question should be aware that they may be subject to retroactive tariffs for any past purchases of solar cells or modules made after October 19, 2021, and should consider the potential effect of such tariffs on purchases. future.

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