Exporter Questions Commerce's Policies on AFA for China's EBCP Program

A Chinese solar panel exporter said May 15 that the U.S. claim that adverse facts available findings for the Chinese government’s Export Buyers’ Credit Program are directed at the Chinese government, not individual exporters, is a “false narrative” (Risen Energy Co. v. U.S., CIT # 23-00153).

Courts have repeatedly ruled otherwise, exporter Risen Energy said in a response to opposition to its motion for judgment (see 2404120040). Even when they do allow an AFA finding for EBCP, they require the Commerce Department to minimize that AFA’s impact on the exporter if the exporter is cooperating.

“It is Risen, the cooperating party, that is bearing the effect of the AFA finding,” it said.

The exporter was hit with AFA after one of its customers, comprising 1% of its total sales, refused to submit a certification of non-use of the Chinese buyer subsidy to Commerce. The department claimed that, without the certification, it needs a list of partner banks from the Chinese government to verify EBCP wasn’t used.

But this wasn’t true, especially after the department changed its practice for verifying non-use, Risen said. Commerce’s new practice involves issuing EBCP questionnaires to customers and confirming the information provided in them. In doing so, the department has never needed a list of partner banks from the Chinese government, the exporter said, proving that such a list isn’t necessary.

It said it had given Commerce its sales contract with the one recalcitrant customer, and it noted that it “understands that the exporter … must be aware of any such [EBCP] loan in any case because the exporter has to be involved" in the Export-Import Bank’s "loan evaluation and approval proceeding and the post-lending loan management proceeding.” It said both Risen and the Chinese government confirmed that the customer had never been involved in such a process.

It disagreed that customers have financial incentives to complete EBCP questionnaires.

“The Customers have agreed to cooperate and provide certifications due to their relationship with Risen and not because of any financial incentive that will impact them directly,” it said. “Thus, it is completely understandable that the one Customer did not provide the certification given they had disputes with Risen over business matters.”

Similar issues arose in a previous case brought by Risen over the sixth administrative review over its products, the exporter said.

In that case -- which saw multiple remands -- all of Risen’s customers provided non-use certifications and answered questionnaires, but Commerce still found various reasons to apply AFA, Risen said. Its final explanation was that AFA was warranted because Commerce wasn't allowed to conduct an in-person verification of one of Risen’s customers, it said.

The court repeatedly overturned use of AFA against Risen in that review, the exporter said.

“Applying this reasoning to this case, the Department’s blanket dismissal of the record evidence of non-use in the segment on appeal is not supported by substantial evidence,” Risen said.

Similarly, in litigation over the eighth administrative review of Risen’s products, the courts also held that Commerce was required to notify Risen of any deficiencies in customer non-use certifications before applying AFA, something else that Commerce hadn’t done in the circumstances currently in dispute, Risen said.