New Articles

Commerce Finds Solar Cells and Modules from Cambodia, Malaysia, Thailand, and Vietnam Circumventing AD/CVD Orders

solar panel commerce

Commerce Finds Solar Cells and Modules from Cambodia, Malaysia, Thailand, and Vietnam Circumventing AD/CVD Orders

On December 2, 2022, the Department of Commerce (“Commerce”) announced its preliminary circumvention determination with respect to certain solar cells and modules exported from Cambodia, Malaysia, Thailand, and Vietnam.  Commerce found that imports of solar cells from all four countries circumvented the antidumping (“AD”) and countervailing (“CVD”) orders on solar cells and modules from the People’s Republic of China (China).  Commerce conducted an eight-month investigation following allegations by the domestic solar industry claiming that solar cell producers, which manufacture solar cells and modules in China, were sending the fabricated cells and modules to one of the four named countries to undergo only minor processing prior to export to the U.S. in an attempt to evade AD/CVD orders.  U.S. imports of solar cells and modules from China have been subject to AD/CVD orders since 2012. See 77 Fed. Reg. 73017-73018 (Dec. 7, 2012).

Commerce individually examined eight exporters, however, the preliminary determination applies on a country-wide basis to all solar cells and modules produced in and exported from Cambodia, Malaysia, Thailand, and Vietnam to the U.S., except for the four companies that Commerce determined were not circumventing the Chinese order.  Commerce also has allowed comments on the instituting of a certification process that exporters can submit to demonstrate and certify that they are not circumventing the AD/CVD orders and avoid paying the AD/CVD imposed by this determination. The four companies specifically exempted from the preliminary determination are New East Solar in Cambodia, Hanwha Q Cells and Jinko Solar in Malaysia, and Boviet Solar Technology in Vietnam, provided their production process and supply chain remain unchanged.

We expect that the certification requirements will go into effect towards the end of the first week of December, such that any imports starting with the date of publication of the preliminary anticircumvention determination would require a certification to be presented at the time of entry.  Should an exporter wish to continue to export from one of these countries, the certification requirements will be stringent and exporters should work with their importers on these issues.   Solar cells and modules would not be subject to AD/CVD duties if an exporter can certify that the input cells are not made from Chinese wafers, or if the modules are either not made from Chinese wafers or not using certain other Chinese components. However, despite the general availability of importer/exporter certifications permitted to exempt entries from AD/CVD, Commerce preliminarily found twenty-two (22) individual companies in Malaysia, Thailand, and Vietnam are ineligible for certification due to their failure to cooperate with the inquiry. Any companies wishing to have their certification ineligibility re-evaluated may request an administrative review “during the next anniversary month of these Orders (i.e., December 2022 for the Solar Cells AD Order and December 2023 for the Solar Cells CVD Order).”

As this is a preliminary determination, Commerce will next conduct in-person verifications over the ensuing months to verify the information in its initial findings. In addition, all parties will be able to comment on Commerce’s finding before Commerce issues its final determination on May 1, 2023.

We expect that many importers and consumers of solar panels now will need to assess their risks while signing contracts, with CVD and antidumping duties potentially being applied to exporters that may affect projects being planned for 2024 and beyond.

Notwithstanding Commerce’s final determination, the Presidential Proclamation issued on June 6, 2022, provides that Customs and Border Protection (CBP) will not collect duties 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. Domestic solar importers should utilize this time to make any necessary supply chain adjustments and to ensure they are not sourcing from companies found to be circumventing these duties.

Commerce’s full preliminary determination can be found here.

Nithya Nagarajan is a Washington-based partner with the law firm Husch Blackwell LLP. She practices in the International Trade & Supply Chain group of the firm’s Technology, Manufacturing & Transportation industry team.

Jeffrey Neeley is a Washington-based partner with the law firm Husch Blackwell. He leads the firm’s International Trade Remedies team.

Eric Dama is an attorney in Husch Blackwell’s Dallas office.


Commerce Proposes Modifications to AD/CVD Laws to Strengthen Enforcement

The U.S. Department of Commerce (“Commerce”) announced in a Federal Register notice that it is proposing significant changes to its antidumping and countervailing duty regulations. The last time such sweeping changes were undertaken were in 1997 after the WTO went into effect. Commerce is requesting comments on the proposed changes by September 14, 2020.

Among the most significant changes outlined in Commerce’s proposal are the changes to its conduct of scope proceedings, which determine whether a certain product is subject to the scope of an AD or CVD order; and to circumvention proceedings where importers are alleged to be avoiding duties, often by using components from the subject country to assemble the product in another country not subject to the relevant AD/CVD order. Currently, both types of proceedings are governed by the same set of regulations in 19 C.F.R. §351.225. Commerce’s proposal would separate the two proceedings into unique regulatory frameworks.

The proposed modifications also affect the following areas of analysis which are often contentious in the context of scope rulings and circumvention proceedings:

Proposed Changes to Scope Rulings/Proceedings

-The proposed changes to the scope would “codify and clarify” Commerce’s analysis with respect to mixed media products that involve commingled goods where a single item in a commingled product may be subject to an AD/CVD order. Mixed media products generally refer to a set of packaged goods that contain multiple products (g. a plastic toolbox with nails, screws, a level, a hammer, and a couple of screwdrivers where only the nails and screws are potentially subject to an AD/CVD order and the remaining items when examined individually are not).

-The changes would codify Commerce’s longstanding “substantial transformation” test or analysis, which is used to determine the country of origin of a product or products.

-The changes would codify the analytic framework in which the primary analysis in any scope inquiry is the language of the scope itself.

Proposed Changes to Circumvention Proceedings

-The proposed changes to the circumvention regulations would grant Commerce the authority to self-initiate anti-circumvention proceedings without the filing of a request or petition by the U.S. domestic industry.

-The changes would enhance Commerce’s ability to make circumvention determinations that would apply to the exporting country as a whole rather than on a company-specific basis.

-The changes would codify Commerce’s current practice with respect to various issues including the valuation methodology for parts and components; the criteria for determining whether a product is “later developed,” and the criteria for determining whether any alterations to the merchandise at issue are “minor.”

Proposed Changes to Both Scope Proceedings and Circumvention Proceedings

-The proposed regulations would also make other changes, including modifications of the deadlines in scope and circumvention proceedings and modifications to the information a party must provide in any request for initiation of a scope or circumvention proceeding.

-Perhaps most importantly, the proposed modifications to both the scope and circumvention regulations would retroactively impose duties on any unliquidated entries, dating back to the date on which the preliminary determination was issued during the original investigation, rather than to the date that the scope or circumvention inquiry was initiated, as is the case under the current regulations.

-The proposal also creates a new regulation to address procedures and standards related to Commerce’s consideration of covered merchandise referrals from Customs and Border Protection (“CBP”) in Enforce and Protect Act (“EAPA”) investigations.

Proposed Changes to New Shipper Reviews

-In addition to the proposed scope changes, Commerce also has proposed major changes with respect to new shipper reviews. These include: (1) requiring more detailed information at the outset of a request for a new shipper review so that Commerce can “expend its resources in conducting a new shipper review only where there is a reasonable likelihood that there ultimately will be a bona fide sale for Commerce to review;” (2) limit requests for new shipper reviews to only those producers or exporters who can demonstrate the existence of a bona fide sale by providing certain documentation, including a certification from an unaffiliated U.S. customer that it did not purchase subject merchandise from the relevant producer or exporter during the period of investigation and that the customer will provide information requested by Commerce. The proposed regulations would also codify some of the factors Commerce will consider in determining if a sale is bona fide.

Proposed Other Changes Affecting AD/CVD Procedural Filings

-Other changes in the proposal include allowing Commerce to impose a certification requirement on importers to ensure subject merchandise is properly classified as subject to AD/CVD duties.

-Commerce also proposes to amend the regulations governing reimbursement certifications to account for updated procedures.

-Commerce also proposes to set a deadline for parties to comment on industry support in investigations.

Additionally, the proposed rules make modifications to entry of appearance filing requirements and clarify or codify practices which Commerce has adopted as a matter of practice. For example, Commerce proposes to amend the rules to reflect that an interested party that submits a scope ruling application does not need to file an entry of appearance. Similarly, for circumvention inquiries, Commerce proposes to amend the rules to reflect that an interested party that submits a request for circumvention inquiry need not file an entry of appearance.

The proposed changes to the AD/CVD laws, especially the changes to scope and circumvention proceedings and new shipper reviews, will make it more difficult for foreign exporters and U.S. importers to reduce or eliminate potential antidumping and countervailing duties.


Nithya Nagarajan is a Washington-based partner with the law firm Husch Blackwell LLP. She practices in the International Trade & Supply Chain group of the firm’s Technology, Manufacturing & Transportation industry team.

Stephen Brophy is an attorney in Husch Blackwell LLP’s Washington, D.C. office focusing on international trade.

Jeffrey Neeley is a Washington-based partner with the law firm Husch Blackwell LLP. He leads the firm’s International Trade Remedies team.