Commerce Erred in CVD Admin Review, Chinese Solar Exporter Argues at Trade Court

The Commerce Department made multiple errors in assigning duty rates in an administrative review of the countervailing duty order on crystalline silicon photovoltaic cells from China, plaintiff intervenor JA Solar argued in its Jan. 30 motion for judgment at the Court of International Trade (Risen Energy Co., et al. v. United States, CIT # 22-00231).

Among other things, JA Solar argued that Commerce’s conclusion that JA Solar benefited from China's Export Buyer’s Credit Program (EBCP) based on adverse facts available was incorrect. Commerce claimed that the Chinese government's lack of cooperation in the investigation "left it no choice but to apply AFA ... and impute a benefit to JA Solar." The company argued that the decision disregarded evidence that would have allowed Commerce to find non-use of the EBCP, as it did in the 2017 review.

JA Solar provided "extensive evidence" of its non-use of the EBCP including a non-use certificate for JA Solar’s sole U.S. importer. Further, Commerce's decision was inconsistent with recent CIT decisions requiring Commerce to verify non-use, citing two cases where CIT "condemned" Commerce’s refusal to verify non-use based on record evidence.

JA Solar also challenged Commerce’s decision to include a 2010 report in its benchmark calculation. The report, which Commerce used in its land cost benchmark, was "grossly outdated" and contained a "flawed and stale analysis of the economic comparability of China and Thailand," JA Solar argued. The use of the report is especially egregious because CIT "remanded Commerce’s use of the same exact report in the 2017 review of the same case," JA Solar argued.

Commerce's decision not to revise benefit calculations from the 2017 review also was improper, JA Solar argued. Commerce contradicted its own regulations when it allocated 2017 benefits of the Chinese land lease program over multiple years instead of assigning it to the year the benefit was received, JA Solar said. "Commerce properly recognized the recurring nature of land leases when it expensed the 2018 and 2019 lease payments in their respective years, but then arbitrarily treated the 2017 leases differently," JA Solar argued. Commerce claimed to rely on the 2017 review but, JA Solar said, Commerce is not bound by that decision as each administrative review is "a distinct and separate proceeding."

Commerce also treated the Article 26(2) tax exemption program as a countervailable subsidy even though it was not specific and did not provide a financial contribution, JA Solar said. The exemption was not expressly limited to the subsidy of an enterprise or industry as required by the statute. The exemption was "merely designed to avoid double taxation on qualified gains from dividends" rather than provide a financial contribution as required, JA Solar said.

Finally, if the court upholds Commerce’s decision to treat the tax exemption program as countervailable, it should overturn Commerce's decision to treat the exemption program as non-recurring. Recond evidence did not support Commerce's normal practice of treating tax benefits as recurring subsidies because the exemption is directly tied to profit structure and the distribution which triggered the exemption was a "one-time event," according to JA Solar.