Solar Installer Update: Commerce Issues Preliminary Results in the 2nd Administrative Review of 2012 Antidumping and Countervailing Duty Orders on Chinese CSPV Cells

On January 8, 2016, the U.S. Department of Commerce (through its International Trade Administration or ITA office) published a notice of Preliminary Results in the 2nd annual Administrative Review for the 2012 countervailing duty (CVD) Order against Crystalline Silicon Photovoltaic (CSPV) products from China (Case No. C-570-980). This CVD notice follows the earlier companion notice on December 28, 2015, publishing Preliminary Results in the 2nd Administrative Review for the 2012 antidumping duty (AD) Order (Case No. A-570-979). These Orders focus on solar cells from China, and modules, panels and other CSPV products assembled anywhere in the world with solar cells from China.

These Preliminary Results provide an indication of how ITA analyzes the changing nature and business practices of producers and exporters of Chinese Solar CSPV Cells and products made with them. In these cases, ITA proposes a CVD rate of 19.62% for three important producers or producer groups and an AD rate of between 4.53% and 11.47% for 17 important producers or producer groups.

The CVD Preliminary Results
ITA proposes to modify the CVD assessment rates and set new cash deposit rates of 19.62% for the JA Solar Group of companies, Changzhou Trina Solar Energy Co., Ltd., and Wuxi Suntech Power Co., Ltd. See 81 Fed Reg 908 (1/8/2016) Final Results could be issued as soon as 120 days (May) or, if this follows the timing of the 1st Administrative Review, as long as 180 days (July) from now. The CVD Period of Review (POR) is from 1/1/2013 to 12/31/2013, so all entries of subject goods for these three entities/groups during the POR would be assessed these new CVD rates as may be adjusted in the Final Results. These rates, as adjusted, will also become the new cash deposit rates for these separate rate entities after the Final Review. All other producers and exporters previously assigned separate rates in an earlier proceeding will keep those rates. All other entities without separate rates will be subject to the previous All Others Rate of 15.24%. Parties interested in submitting comments or requesting a hearing on these Preliminary Results generally have 30 days from January 8 to do so. Details for these submissions and the briefing schedule can be found in the ITA Decision Memorandum listed by year/case no., available at http://enforcement.trade.gov/frn/summary/prc/prc-fr.htm.

Our analysis of key changes in CVD rates for these entities is presented in the following table:
 

Exporter	Preliminary Cash Deposit Rates Starting 3/26/2012	Original Order Cash Deposit Rates Starting 12/06/2012	1st Admin Rev Final Assessment Rates for  3/26/2012 - 12/31/2012 and Cash Deposit Rates as of 7/14/2015	2nd Admin Rev Preliminary Assessment Rates for 01/01/2013 - 12/31/2013 and Cash Deposit Rates to be set in Final Results	3rd Admin Rev for Assessment Rates 01/01/2014 - 12/31/2014 and Cash Deposit Rates for Future Entries
JA Solar Group*	3.61%	15.24%	15.24%	19.62%	Not Yet Initiated
Changzhou Trina Solar Energy Co., Ltd.**	4.73%	15.97%	20.94%	19.62%	Not Yet Initiated
Wuxi Suntech Power Co., Ltd.**	2.9%	14.78%	20.94%	19.62%	Not Yet Initiated

*Includes a large number of cross-owned companies listed in footnote 4 of the notice
**Does not include related or cross-owned companies

The AD Preliminary Results
ITA proposes 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) In dumping cases, the actual assessment and cash deposit rates are adjusted slightly to remove the effect of double counting certain subsidies already made part of the CVD rates. Since CVD and AD rates are cumulative on subject goods, this adjustment is necessary. Therefore, importers must wait for the Final Results in this Review to issue, then wait a little longer until Customs and Border Protection (CBP) instructions issue with the Final Results adjusted for the certain subsidy effects. As with the CVD review, Final Results could be issued as soon as 90 days (May) or, if this follows the timing of the 1st Administrative Review, as long as 180 days (July) from now. As with the CVD review, parties interested in submitting comments or requesting a hearing on these Preliminary Results generally have 30 days from December 28 to do so. Details for these submissions and the briefing schedule can be found in the AD notice and further information about the AD calculations is available in the Decision Memorandum listed by year/case no. at http://enforcement.trade.gov/frn/summary/prc/prc-fr.htm.

The AD Period of Review is from 12/1/2013 to 11/30/2014, nearly a full year later than the companion CVD Period of Review (POR). All entries of subject goods for these separate rate entities during the POR will be assessed these new AD rates as may be adjusted in the Final Results. These rates, as adjusted, will also become the new cash deposit rates for these separate rate entities after the Final Review. All other producers and exporters previously assigned separate rates in an earlier proceeding will keep those rates. All other entities without separate rates will be subject to the previous China-Wide Rate of 238.95%. Note also, that the China-Wide Rate could also apply to certain goods that were entered under an incorrect case or exporter number.

Layers of Rates
As these Administrative Reviews progress, and as court challenges to previous reviews and proceedings resolve, the rate landscape becomes quite complex. We 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 years later, as was the case in the 1st Administrative Review published July 14, 2015, and pertaining to entries potentially as early as March 26, 2012. 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 11 months ago.

Summary
Due to the nature of the U.S. AD and CVD assessment system, the Administrative Review process is of critical importance to exporters and importers. Often, initial news of Final AD and CVD Orders occupies industry trade journal headlines and then is forgotten. Many parties seem to assume that the cash deposit rates set in AD and CVD orders are the end of the story. To the contrary, they are only the beginning. Much work remains to be done each year after the AD and CVD orders issue to set the final assessed AD and CVD rates and future cash deposit rates. Exporters and importers should plan for these reviews and the possibility of cash requirements changing significantly as a result.

Stoel Rives Updates
The Stoel Rives Energy Team and International Trade 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 and the soon to commence 3rd Administrative Review.