Solar Importers to Oppose Safeguard Proclamation, as CIT Again Upholds Injunction on Bifacial Cells

Solar importers intend to oppose President Donald Trump’s Oct. 10 proclamation ending an exemption from safeguard duties for bifacial panels (see 2010130028), they told the Court of International Trade in a status report filed Oct. 15. The proclamation runs contrary to the safeguard laws, and is barred by a CIT injunction currently in effect against the Office of the U.S. Trade Representative’s earlier attempts to end the exemption, they said. The brief was filed hours after a related court decision left the injunction in place.

Invenergy Renewables, joined by several other solar companies and the Solar Energy Industries Association, says it will seek to modify the injunction to cover the proclamation, and will request a temporary restraining order barring the proclamation from taking effect in the meantime. Invenergy will also seek to “file a second supplemental complaint to include Defendants’ latest attempt to re-impose safeguard duties on bifacial solar panels,” the brief said.

Invenergy and its co-plaintiffs say the proclamation violates the injunction because the court order applies not only to USTR’s previous attempts to withdraw the bifacial panel exemption, but also any actions that are substantially the same. “Although a different action, the changes to the [Harmonized Tariff Schedule (HTS)] proposed in the Proclamation 'reflect' and 'include' the same changes … [by] requiring CBP to enforce and impose Section 201 Safeguard measures on bifacial solar panels,” the filing said.

And the sole law cited as an authority in the proclamation only allows the president to reduce, modify or terminate safeguards, following a petition from the majority of domestic industry that shows a “positive adjustment to import competition,” the brief said. The proclamation did the contrary by re-imposing safeguards and raising duties on other crystalline silicon photovoltaic cells, and no petition has been provided to either solar importers or the court, it said.

The fight over the bifacial panel exemption has been ongoing since October 2019 (see 1910080054), when USTR issued a notice revoking the exemption only four months after creating it (see 1906120019). CIT issued an injunction months later to stop the withdrawal from taking effect, citing USTR’s failure to follow normal notice-and-comment procedures and the lack of reasoning provided in the October notice (see 1912050063).

USTR followed with a second attempt to end the exemption, requesting comments in January before issuing a second notice withdrawing the exemption in April (see 2001240046 and 2004160027). CIT denied a first bid by the government to dissolve the injunction (see 2005270025), partly because an internal memo with additional justifications for ending the bifacial cells exemption had been provided by USTR to the court only days before.

Shortly before Invenergy filed its brief opposing the president’s Oct. 10 proclamation, CIT on Oct. 15 issued a decision that again denied a government request to remove the injunction and allow the safeguards to take effect on bifacial cells. The court also modified the injunction to specifically cover USTR’s second withdrawal notice in April. The decision does not once mention the proclamation, despite a government filing on Oct. 12 informing the court of its existence.

In the decision, CIT ruled that it is not allowed to lift the injunction because the government appealed the trade court's earlier decision not to dissolve it. But even if it could lift the injunction and allow USTR’s April notice to take effect, it would not because that April notice is still arbitrary and fails to address concerns raised by solar importers, CIT said. The internal memo justifying the withdrawal could form a basis for USTR’s action because it had never been made public, CIT said.

“Today’s decision by the CIT makes clear that the government’s attempted reversal on bifacial modules was flawed, and we are currently evaluating the relevance of today’s decision to Saturday’s proclamation,” Solar Energy Industries Association general counsel John Smirnow said by email Oct. 15. “We also have serious concerns regarding the validity of the proposed tariff increase for 2021.”

A USTR spokesperson on Oct. 13 said the proclamation will end the bifacial panel exemption, regardless of the injunction. The agency didn’t further comment following CIT’s decision. Lawyers for companies that take the government’s side in the case didn’t comment either, nor did lawyers for Invenergy and the other plaintiffs in the case, though their brief does refer to the injunction as amended by CIT on Oct. 15.

The annex to the proclamation, now numbered Proclamation 10101, was also released Oct. 15, and is set for publication in the Federal Register Oct. 16. The annex does not make any changes beyond the previously announced end of the bifacial panel exemption and increase in the tariff rate for out-of-quota cells, to 18%.