US Solar Cell Maker Opens Suit Against US Suspension of AD/CV on Solar Cells From SE Asia

U.S. solar cell maker Auxin Solar and solar module designer Concept Clean Energy launched a lawsuit at the Court of International Trade on Dec. 29 to contest the Commerce Department's pause of antidumping and countervailing duties on crystalline silicon photovoltaic cells and modules from Southeast Asian found to be circumventing the AD/CVD orders on these products from China (Auxin Solar v. U.S., CIT # 23-00274).

In the complaint, Auxin and Concept Clean Energy said that the statute Commerce relied on in taking the controversial action, 19 U.S.C. 1318(a), doesn't allow for the duty-free importation of CSPV cells and modules. The statute says goods may not be imported without duty unless they are imported following a presidential proclamation laying out an emergency; used in emergency relief work; and considered to be "food, clothing, and medical, surgical, and other supplies."

Reading the words of the statute with their ordinary meaning, allowing the solar cells and modules to enter duty-free "plainly contravenes the statute," the brief said. Because the reading of "other supplies" in the statute must be read to be "something akin to medical & surgical supplies," which the products at issue are not, citing this statute was unlawful, the complaint said.

Commerce imposed the rule in question following a proclamation from President Joe Biden calling for the duty pause due to the emergency of "electricity generation capacity." The move was taken following a preliminary affirmative anti-circumvention finding on solar cells and modules from Malaysia, Thailand, Vietnam and Cambodia (see 2212020064).

Auxin, the company that requested the anti-circumvention proceeding, noted in its complaint that, since it filed the petition, it has been subject to "physical break-ins, cyber-intrusions using Chinese computer code, vandalism, commercial boycotts, harassment and unfounded conspiracy theories." Amid these alleged developments and after the preliminary finding of circumvention, Biden cited a "seldom-used, 90-year-old Tariff Act provision" to invite Commerce to suspend duties on the solar cells and modules for two years due to the threat to the availability of sufficient electricity generation capacity.

In their complaint, Auxin and Concept Clean Energy bemoaned alleged communications between solar exporter group Solar Energy Industries Association and the White House. Auxin noted that SEIA's news release celebrating the proclamation was issued before the White House's news release and press reports of the announcement, indicating a lack of transparency in the decision-making process.

Commerce issued its final rule shortly after the proclamation, suspending the AD/CVD. Congress attempted to end the pause, though Biden vetoed the resolution, keeping the suspension in place (see 2305160052).

Auxin and Concept Clean Energy said that Commerce strayed from the statute by not implementing its "core principles from its [Section 1318] regulations." While the agency's rule "pays lip service to" its mandate to allow only the duty-free importation of goods for use in "emergency relief work," the rule is "notably silent as to how it would meaningfully enforce its on-paper requirement that duty-free CSPV cell and module imports be 'utilized' in relief of the" emergency.

Because CBP is supposed to suspend liquidation only for relevant CSPV cells and modules, it seemingly follows that the customs agency must suspend all entries until it is confirmed that the goods will be "utilized" to resolve the emergency, the companies said. "[B]ut Commerce's new regulations require no such confirmation," the complaint noted. Commerce's "certification regime" solely requires a "vague promise" from the importer that the goods will be used "by Commerce's deadline," the complaint said.

In imposing this "verification" procedure, the agency "jettisoned" the regulations it established "through extensive interagency consideration and lengthy notice and comment rulemaking" for previous Section 1318 actions, the U.S. companies argued. In addition, the agency's definition of "utilization" contradicts the statute, the brief said. Commerce defined "utilization" as the simple installation or use in the U.S., though this definition is "inadequate" because solar cells could be easily installed without actually contributing U.S. electricity generation capacity, the complaint said.

Auxin and Concept Clean Energy also raised Administrative Procedure Act claims against Commerce, arguing that the agency violated the law when it granted duty-free treatment to products imported outside the emergency period. Biden's proclamation allowed for the duty-free importation of goods within 24 months after the proclamation or until the emergency was terminated, whichever happens first. However, Commerce suspended the duties for goods that entered the U.S. before and after the proclamation, then tacked on a rule that gives importers another 180 days after the emergency has ended for the products to be used.

The companies also claimed that Commerce "failed to engage with other significant comments raised during the notice-and-comment period." The agency didn't address how its procedures account for the "strong likelihood that CSPV cells and modules from countries subject to circumvention inquiries were likely produced using forced labor in the value chain," nor did the agency touch on the "carbon-intensity of China's production of solar modules" and of international freight linked with the shipping of the modules from China.