Commerce Can’t Base Circumvention Finding on Only 1-2 Factors, Exporters Say

Two Thai exporters said in a motion for judgment June 13 that the Commerce Department wrongly determined they were circumventing an antidumping duty order on solar panels from China -- even though between three and four of the five relevant factors it analyzed weighed against a circumvention finding (Canadian Solar International Limited v. U.S., CIT # 23-00222).

“Commerce cannot promote one factor to supersede all others -- and particularly not the R&D factor,” they said.

Exporters Trina Solar Science & Technology and Canadian Solar said in support of their motion that “for many years,” they have “operated transparently and diligently to follow the rules clarified repeatedly by Commerce” until its “sudden change of course” in 2023 with an affirmative circumvention finding.

If it wants to “expand the scope” of an existing AD order, Commerce must meet all five statutory requirements under 19 U.S.C. 1677j(b)(1), the exporters said. The language of the statute, they noted, includes the conjunction “and, ” not “or,” in its list of those five factors. Therefore, if even one factor is missing, Commerce can’t reach an affirmative circumvention finding, they said.

They also said they reviewed 18 affirmative circumvention findings Commerce has made since 2012; Commerce found that all five factors indicated circumvention in 15 of them, and four of the five did in the remaining three.

However, the department only found that one factor, R&D, indicated circumvention by Trina and Canadian Solar, they said. This also went against Commerce’s own prior claim that R&D was the “least informative” of the five factors, they said.

Even if the department could affirm circumvention on that one factor alone, there was actually substantial evidence that the two exporters invested adequately in R&D in Thailand, the exporters said. For instance, Commerce verified the presence of a technology team and a process team working for Canadian Solar in Thailand, they said.

Trina and Canadian Solar also argued that Commerce’s analysis regarding the value added by processing in Thailand was inaccurate. They said the department “wrongly focused solely on a quantitative, value-added analysis, failing to take into account the qualitative element of [Canadian Solar’s] significant production processes in Thailand.”

And they said that the portion of Canadian Solar’s products’ quantitative value derived from its Thai processing was “not a small number.” The actual figure was redacted from the public version of the brief.