Solar Installer Update: Commerce Publishes Final Results in the 2nd Administrative Review of 2012 Antidumping Duty Order Against Chinese CSPV Cells

Today, June 20, 2016, the U.S. Department of Commerce (through its International Trade Administration or ITA office) published a notice of Final Results in the 2nd annual Administrative Review for the 2012 antidumping duty (AD) Order against Crystalline Silicon Photovoltaic (CSPV) products from China (Case No. A-570-979). Today’s AD notice follows the prior notice on December 28, 2015, publishing Preliminary Results in this Case. These Review proceedings focus on solar cells from China, and modules, panels and other CSPV products assembled anywhere in the world with solar cells from China.

As explained below, these Final Results make relatively small upward adjustments to the average-weighted dumping margins that were proposed in the earlier Preliminary Results. Now, ITA has set dumping margins of 12.19% for the Yingli Group of companies and 6.12% for the Trina Solar Group of companies, both mandatory respondents in this proceeding. For 15 other separate rate respondents, the dumping margin was set at 8.52%. These dumping margins will translate to AD assessment rates for these companies for their entries during the period of review (POR) of 12/1/2013 to 11/30/2014. They will also be the new cash deposit rates going forward for new entries of subject CSPV products.

The AD Preliminary Results

In the Preliminary Results, ITA proposed to modify the dumping margins that form the basis for AD assessment rates and new cash deposit rates for the Yingli Group of companies (11.47%), the Trina Solar Group of companies (4.53%), and 15 other separate rate companies, all at 7.27%. See 80 Fed Reg 80746 (12/28/2015). After nearly six months of contested briefings, discussions and postponements (including for snowstorm “Jonas” that hit Washington, D.C. in late January), ITA was able to settle on final dumping margins. For more information and links about the Preliminary Results, please see our Alert covering that phase of the proceeding.

The AD Final Results

In the Final Results phase, ITA adjusted the dumping rates for the separate rate companies that remained in the Administrative Review by a relatively modest amount. The dumping rates calculated in detail for the two mandatory participants moved upward by 0.72% for the Yingli Group and 1.59% for the Trina Solar Group, both of which groups include several related companies that were combined or “collapsed” into a single respondent for the ITA dumping analysis. Since the other 15 separate rate companies are assigned a weighted-average dumping margin as a function of the mandatory participant rates, their increases pushed up the dumping rate by 1.25 % for these 15 companies. When compared to the China-wide rate of 238.95% assigned to Chinese exporters without separate rates, these dumping rate increases are relatively small. Still, with many millions of dollars of CSPV products at issue, every percentage point counts.

The briefs, rebuttals and analysis in the final phase yielded 26 comments addressed by ITA in a 72-page Decision Memorandum, explaining ITA’s position on them. The Decision Memorandum is available to the public and organized by year/case no. at this link: http://enforcement.trade.gov/frn/.

As to companies not participating in this Administrative Review proceeding, all other producers and exporters previously assigned separate rates in an earlier proceeding will keep those rates. However, we note that six companies that previously had separate rates, lost them during this Review and were placed in the China-wide rate category. (See 81 Fed Reg 39905, 39906 fn 15 (6/20/2016)). All PRC-based companies without separate rates will be subject to the previous China-wide rate of 238.95%. Finally, all companies located outside of China that source subject CSPV products from PRC companies will use the rates applicable to their PRC suppliers. Note also, that the China-wide rate could apply to certain goods that were entered under an incorrect case or exporter number.

To summarize the changes, we have prepared a comparison table:

	2nd Admin Review Mandatory Respondents	2nd Admin Review Final Results Dumping Margins/Separate Rates	2nd Admin Review Preliminary Results Dumping Margins/Separate Rates
1.	Yingli Group*	12.19%	11.47%
2.	Trina Solar Group**	6.12%	4.53%
	2nd Admin Review Separate Rate Companies	2nd Admin Review Final Results Dumping Margins/Separate Rates	2nd Admin Review Preliminary Results Dumping Margins/Separate Rates
1.	BYD (Shangluo) Industrial Co., Ltd.	8.52%	7.27%
2.	Canadian Solar International Limited	8.52%	7.27%
3.	Canadian Solar Manufacturing (Changshu)	8.52%	7.27%
4.	Canadian Solar Manufacturing (Luoyang)	8.52%	7.27%
5.	Dongguan Sunworth Solar Energy Co., Ltd.	8.52%	7.27%
6.	ERA Solar Co., Ltd.	8.52%	7.27%
7.	ET Solar Energy Limited	8.52%	7.27%
8.	JA Solar Technology Yangzhou Co., Ltd.	8.52%	7.27%
9.	Jiangsu High Hope lnt'l Group	8.52%	7.27%
10.	JingAo Solar Co., Ltd.	8.52%	7.27%
11.	Ningbo Qixin Solar Electrical Appliance Co.	8.52%	7.27%
12.	Shanghai BYD Co., Ltd.	8.52%	7.27%
13.	Shenzhen Glory Industries Co., Ltd.	8.52%	7.27%
14.	Shenzhen Topray Solar Co., Ltd.	8.52%	7.27%
15.	Wuxi Suntech Power Co., Ltd. /Luoyang Suntech Power Co., Ltd	8.52%	7.27%
	Non-Reviewed Separate Rate Companies	Previously Assigned Rates	Previously Assigned Rates
	All PRC-based Companies Without a Separate Rate	238.95%	238.95%
	All Non-PRC-based Companies Without a Separate Rate	Same as their PRC Suppliers	Same as their PRC Suppliers

 

* Yingli Energy (China) Company Limited/Baoding Tianwei Yingli New Energy Resources Co., Ltd./Tianjin Yingli New Energy Resources Co., Ltd./Hengshui Yingli New Energy Resources Co., Ltd./Lixian Yingli New Energy Resources Co., Ltd./Baoding Jiasheng Photovoltaic Technology Co., Ltd./Beijing Tianneng Yingli New Energy Resources Co., Ltd./Hainan Yingli New Energy Resources Co., Ltd./ Shenzhen Yingli New Energy Resources Co., Ltd.

** Changzhou Trina Solar Energy Co., Ltd./Trina Solar (Changzhou) Science and Technology Co., Ltd./Yancheng Trina Solar Energy Technology Co., Ltd./Changzhou Trina Solar Yabang Energy Co., Ltd./Turpan Trina Solar Energy Co., Ltd./Hubei Trina Solar Energy Co., Ltd.

Recap, Timing and Ongoing CVD Review

The Administrative Review process commences annually during the anniversary month of the original Order, here December. Therefore, in December, 2014, ITA published a notice of Opportunity to Request participation in the Review. The regulations define who can participate and some involved parties request review for themselves while some involved parties request it for others. ITA reviewed the requests and initiated this Review in February, 2015, for companies deemed eligible based on the regulatory criteria. See 80 Fed. Reg. 6041 (2/4/2015). The POR covers entries from 12/1/2013 to 11/30/2014, and companies without demonstrable entries during the POR will be ineligible to participate. The reasoning behind the entries requirement is that Administrative Review calculates dumping margins during a specific period, so that without entry data, the dumping margins can’t be determined. The Review initiated with dozens of companies but narrowed to 15 companies and 2 company groups in the end. The others either withdrew or were found to be ineligible along the way.

From formal initiation in February, 2015, to Preliminary Results at the end of December, 2015, was a period of more than ten months. Then, it took nearly six full months more to reach these Final Results. From the very start of the process in December, 2014, until its completion took around 18 months, and it will be nearly 19 months by the time ITA issues instructions in two more weeks to Customs and Border Patrol (CBP) on liquidation and cash deposit rates. These Reviews are a critical aspect of the U.S. antidumping and countervailing duty process, but they create price uncertainty for both historical entries and new entries for a very long period of time while the Review is in progress. Note that the companion CVD Review is still underway, though it commenced at the same time as the AD Review. Final Results of the CVD Administrative Review are due to be issued by July 12, with publication of the CVD Results in the Federal Register to follow within a week from issuance and instructions to CBP within about two weeks after that. For more information about the Administrative Review process, please see our Alert, published February 4, 2015, reporting on the initiation of this 2nd Administrative Review.

3rd Administrative Review Has Commenced

As required, ITA commenced the 3rd Administrative Review cycle with a notice of Opportunity to Request participation in December, 2015, covering a period of review for AD of 12/1/2014 to 11/30/2015. In addition, the CVD 3rd Administrative Review covers the period of 1/1/2014 to 12/31/2014. Both Reviews commenced formally on 2/9/2016 through the “Initiation Notice” (81 Fed Reg 6832), with 42 separate respondents plus two “collapsed” company groups (Yingli and Trina Solar) for the AD Review and 45 separate respondents for the CVD Review. Lists of all respondents for both Reviews were published in the Initiation Notice. ITA stated its intention to issue Final Results by the end of 2016. Nonetheless, if the 1st and 2nd Administrative Review proceedings are a guide, we may not see Final Results in these new Review proceedings until well into 2017 by reason of time extensions needed by ITA to complete the analyses of these complex cases. Meanwhile, be mindful of a possible notice in the next two months or so that narrows the number of respondents in this 3rd Administrative Review due either to permissive withdrawals or some failure to demonstrate eligibility to participate.

For all companies not participating in this 3rd Administrative Review, ITA has already issued liquidation instructions to CBP to remove the liquidation suspension for entries during the relevant periods of review and assess AD and CVD rates at the applicable rates for each company. If the Review is rescinded against any currently participating respondents, their entries, if any, will be liquidated and assessed at that time. For all respondents still participating when Final Results issue in the future, those respondents will receive new AD and CVD rates and those assigned rates will be used to liquidate their entries during the relevant periods of review. Since AD and CVD rates for entries during the periods of review can change for participating respondents, importers will not know whether they owe more duties or are entitled to a partial refund of cash deposits paid at entry during the review periods until this 3rd Administrative Review has been completed in some manner for their CSPV product exporter.

More Layers of Rates

As we wrote in our previous Alert, as these Administrative Reviews progress, and as court challenges to previous reviews and proceedings resolve, the AD and CVD rate landscape becomes quite complex. We continue to stress two important points. First, always check the applicable rate in the instructions issued to CBP for the applicable producer or exporter and applicable period of entry to confirm the rates for your planning purposes. Second, be sure you distinguish between assessment rates for liquidation during certain periods and cash deposit rates for those periods. The assessment rate can differ dramatically from the cash deposit rate for a given period, thereby either entitling an importer to a refund or requiring the importer to pay additional duties. Moreover, the final assessment rate can be set many months or even years later, thereby creating price uncertainty for the affected producers and exporters, as well as importers, developers and financial partners in solar projects and installations.

Summary

Due to the nature of the U.S. AD and CVD assessment system, the Administrative Review process is of critical importance to exporters, importers, and the solar project development ecosystem. It is wrong to assume the AD and CVD rates for major producers and exporters will remain constant. To the contrary, for active exporters, the AD and CVD rates can vary from year to year, sometimes significantly, especially if an exporter with a low separate rate fails to retain that low rate in a subsequent Review, or even fails to qualify for a separate rate and becomes subject to the 238.95% China-wide rate. As this 2nd Administrative Review for AD rate proceeding draws to a close, the industry will have some price certainty for now for the exporters and producers subject to the 2012 AD Order against CSPV products from China. This price certainty will become more fixed when the new CVD rates are announced in mid-July. This period of relative certainty could be overtaken within the next few months by developments in the 3rd Administrative Review, and surely by the end of 2016 as the Preliminary and then Final Results are released for the ongoing 3rd Administrative Review. For now, sharpen your pencils and update your spreadsheets. Price changes are a fact of life for the solar supply industry.

Stoel Rives Updates

The Stoel Rives Energy Team will monitor further developments in these Solar Trade Cases and report on events as they occur, including the progress of the 2nd Administrative Review for CVD rates and the 3rd Administrative Review for both AD and CVD rates that was initiated this past February. For more information, please contact a key contributor.