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Department of Commerce Issues Preliminary Determination of Circumvention Inquiries of Solar Cells and Modules Produced in China

Today, the U.S. Department of Commerce announced its preliminary determinations in the circumvention inquiries of solar cells and modules from the People’s Republic of China (PRC). Commerce examined a complaint alleging that eight solar companies that manufacture solar cells and modules are manufactured the components in the PRC, then sending those cells and modules to Cambodia, Malaysia, Thailand, and/or Vietnam for minor processing before being exported to the United States.  Such actions amount to an effort to evade the existing antidumping duty (AD) and countervailing duty (CVD) orders on solar cells and modules from the PRC. Today’s preliminary determination underscores Commerce’s commitment to holding the PRC accountable for its trade distorting actions, which undermine American industries.

Under U.S. law, Commerce may conduct a circumvention inquiry when evidence suggests that merchandise subject to an existing AD/CVD order is completed or assembled in third countries from parts and components imported from the country subject to the order. AD/CVD orders are designed to provide relief to the U.S. domestic industries when they are facing unfair competition. Circumvention of these duties threatens to undermine American industries, workers, and businesses.

After a thorough, transparent, and data-driven investigation of eight companies across the four countries, Commerce preliminarily found that four of the eight companies being investigated are attempting to bypass U.S. duties by doing minor processing in one of the Southeast Asian countries before shipping to the United States.

The preliminary findings are as follows:

Third Country

Company

Finding

Cambodia

BYD Hong Kong

Circumventing

New East Solar

Not Circumventing

Malaysia

Hanwha

Not Circumventing

Jinko

Not Circumventing

Thailand

Canadian Solar

Circumventing

Trina

Circumventing

Vietnam

Boviet

Not Circumventing

Vina Solar

Circumventing

Further, some companies in Malaysia, Thailand and Vietnam did not respond to Commerce’s request for information in this investigation, and consistent with longstanding practice, will be found to be circumventing.

Because Commerce preliminarily found that circumvention was occurring through each of the four Southeast Asian countries, Commerce is making a “country-wide” circumvention finding, which simply designates the country as one through which solar cells and modules are being circumvented from the PRC. This does not constitute a ban on imports from those countries. Companies in these countries will be permitted to certify that they are not circumventing the AD/CVD orders, in which case the circumvention findings will not apply. With regard to the companies under investigation that were not circumventing the AD/CVD duties, no action will be taken as long as their production process and supply chain do not change. 

These findings are preliminary, and as a next step, Commerce will conduct in-person audits in the coming months to verify the information that was the basis of its finding.  Furthermore, all parties will have an opportunity to comment on Commerce’s finding, which Commerce will fully consider before issuing its final determination, which is currently scheduled for May 1, 2023.

Independent of Commerce’s final determination, the Presidential Proclamation issued on June 6, 2022, provides that duties will not be collected on any solar module and cell imports from these four countries until June 2024, unless parties cannot certify that the imports will not be consumed in the U.S. market within six months of the entry date. This provides U.S. solar importers with sufficient time to adjust supply chains and ensure that sourcing isn’t occurring from companies found to be violating U.S. law.

For more information on antidumping and countervailing duties, visit the International Trade Administration’s FAQs.

Public records on this investigation can be found at access.trade.gov under case number A-570-979.

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