ADD/CVD

Update on the Solar Panel AD & CVD Landscape in the United States

A lot has happened in the past few months to make the solar panel AD & CVD landscape even more convoluted. I’ve created a diagram to help illustrate what I believe to be the current situation regarding AD and CVD duties on solar panels.

SolarPanelAD&CVD_Diagram

There are a couple of flavors of solar panels that may be imported and depending on the details, may be subject to AD and/or CVD.

1.) Solar panels manufactured in China using Chinese solar cells are covered under A-570-979.

2.) Solar panels manufactured in anywhere (including China) using Taiwanese solar cells are covered under A-583-853.

3.) Solar panels manufactured in China using solar cells that have their essential material background in China (example: ingots and / or wafers) fall under a new AD & CVD case (A-570-010 and C-570-010).

4.) Solar panels manufactured in China using solar cells that are completely of origin other than China or Taiwan are currently excluded outside the scope of any of the cases mentioned above. HOWEVER, it is the importer’s responsibility to be able to prove that the solar cells are completely made in a country other than China or Taiwan. Most recently, Customs has begun requesting documents and information such as the following:

  • Name and address of the actual manufacturer of the solar panels
  • Country of origin of the solar cells
  • Production records / bill of materials related to the manufacture of the goods (including solar cells)
  • Manufacturer purchase invoices related to the materials incorporated into the goods with particular focus on the cells incorporated into the goods,
  • Cell lot number(s)
  • Cell manufacturing date
  • Plant location of the cells
  • Serial numbers for the cells
  • Cell specification sheets including cell physical dimension and cell material type
  • Purchase orders and contracts
  • Certificate of Origin for the solar cells

The AD & CVD landscape may be changing even further as the DOC looks into possibly closing loophole#4 mentioned above.

Feel free to contact me with questions.

 

-Jimmy Ting

Great World Customs Service

jimmyting@gwlcorp.com

t: 650-873-9050 x1019

 

 

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U.S. ITC Considers Antidumping Duties for Taiwanese Solar Cells

Importers of solar panels are very much aware that solar panels manufactured with Chinese made solar cells are subject to Antidumping and Countervailing duties. Most are also aware than an exception to the AD and CVD duties is if the solar panels are manufactured using solar cells sourced from other countries. We have seen a number of imports of solar panels from China this past year using solar cells manufactured in Taiwan. Importers have used this method to avoid the AD and CVD duties on Chinese manufactured solar panels.

Unfortunately, this door may be closing. The U.S. ITC has determined that there was injury to the U.S. solar industry from the Taiwanese solar industry. They have approved further investigation into an AD case regarding Taiwanese solar products with a preliminary AD duty determination due on or around June 9, 2014.

Importers of solar panels using Taiwanese  solar cells are urged to proceed with caution. Despite the June 9, 2014 Preliminary  Determination date being more than three months away, there is the possibility that the ITC will determine Critical Circumstances exist thereby allowing the AD duties to be retroactively applied three months from the date of the Preliminary Determination. While it is difficult to predict whether or not the ITC will determine Critical Circumstances, in this case there is history supporting the possibility. The ITC did find and impose Critical Circumstances for the original AD & CVD case on solar panels from China. Importers who think they can rush a shipment into the United States within the next three months before the Preliminary Determination may find that the AD duties are retroactively applied to their shipments during that time period.

Please feel free to contact me if you have questions.

Jimmy Ting
Great World Logistics (GWL)
Great World Customs Service
Great World Express
218 Littlefield Ave.
South San Francisco, CA 94080
Direct: 650-308-8838
Tel: 650-873-9050 x 1019
Fax: 650-873-7029 / 7024
Skype: jimmy_ting
email: jimmyting@gwlcorp.com
www.gwlcorp.com
blog: http://gwlcorp.com/gwlcorp/resources/

 

 

 

U.S. Solar Manufacturing Industry Attempts to Extend the Solar Module AD/CVD Case to Cover Taiwan

SolarWorld, on behalf of a coalition of U.S. domestic solar manufacturers, has submitted new AD and CVD cases to the ITC for review. This time around, the AD and CVD cases are broadened to cover both China and Taiwan. This is an attempt to close what SolarWorld has argued is a loophole in the original AD and CVD cases that were issued one year ago. The loophole allowed Chinese manufactured solar panels to enter into the U.S. without being subject to AD or CVD duties if they were manufactured in third countries. You can read more about SolarWorld’s justification in their news release.

What is important to understand is that by creating a case that includes Taiwan directly, SolarWorld is doing more than just closing a loophole. This is an attack on solar modules and solar cells from Taiwan, whether or not they are shipped indirectly through Chinese products. The Taiwanese solar industry is essentially the victim of collateral damage from the solar trade war between the U.S. and China. Since the U.S. instituted AD and CVD duties on Chinese solar modules last year, the Chinese government has responded by beginning their own AD and CVD investigations of U.S. polysilicon (a key raw material in solar module production) exports to China.

Note that as during the first AD and CVD investigation, not everyone in the U.S. solar industry supports this trade war. The Solar Energy Industries Association, a broad based coalition of solar companies in the United States that includes researchers, installers, and manufacturers, has spoken out against the new AD and CVD case. They would like to see a compromise to end this dispute.

The ITC has until February 14, 2014 to make a preliminary injury determination. It is extremely important that importers of solar modules made directly or indirectly from Taiwan solar cells follow this news closely. Feel free to contact me if you have any questions.

– Jimmy Ting

Great World Customs Service

http://www.gwlcorp.com

http://www.great-world.com

t: 650-873-9050 x1019

email: jimmyting@gwlcorp.com

Another Antidumping & Countervailing Duty Investigation: Hardwood Plywood from China

It seems like a month can’t by without another AD and/or CVD case being brought against a product coming from China. The latest product is “hardwood plywood.” If this product sounds familiar, you may be getting it mixed up with the AD/CVD case that was opened last year.

Some interesting facts about this investigation:

  • This case against hardwood plywood was brought by a collection of U.S. manufacturers, The Coalition for Fair Trade of Hardwood Plywood. They claim to represent about 80% of the domestic plywood market.
  • They are represented by the same counsel, Jeff Levin, that let the establishment of AD and CVD duties on engineered wood flooring.
  • They are alleging dumping upwards of 300%.

You can find a timeline for the investigation on hardwood plywood from China at the following ITA website: http://www.usitc.gov/trade_remedy/731_ad_701_cvd/investigations/2012/hardwood_plywood/prelimphase.htm

Let me know if you have any questions.

-Jimmy Ting

jimmyting@great-world.com

No importer wants to pay ADD or CVD. However beware of circumvention!

I completely understand that ADD and CVD duties can be very onerous. As importers try to find ways to avoid ADD and CVD, it is extremely important that they are aware of the danger of circumvention. The domestic companies who are behind the bringing of ADD and CVD cases are heavily invested in making sure importers pay the correct ADD and CVD. Therefore they will be watching for importers who trying to circumvent the ADD and CVD Cases.

What is circumvention?

There are two main types of circumvention that importers should be aware of.

1.) Trans-shipment

Shipping the product from the origin country to a middle-country and then importing the goods to the United States while claiming the goods are from this middle country. Don’t do it! Don’t even think about it. It is illegal. Importers can and will be prosecuted by the U.S. government.

2.) Changing their products in an attempt to avoid paying ADD and CVD.

This is a bit more tricky and is worth discussing. The DOC has the right to investigate whether a product is considered “later-developed merchandise.” If the product is found to be “later-developed merchandise,” it can be brought within the scope of the ADD and CVD cases even though the product was initially not within the scope of the cases.

The most recent example is the ADD case regarding honeyfrom China. For those unfamiliar with the case, initial AD duties for honey from China ranged from 25.88% to 183.80%. Covered under the scope was “natural honey, artificial honey containing more than 50 percent natural honey by weight, preparations of natural honey containing more than 50 percent natural honey by weight and flavored honey. The subject merchandise includes all grades and colors of honey whether in liquid, creamed, comb, cut comb, or chunk form, and whether packaged for retail or in bulk form.” Importers apparently have been bringing in honey blended with rice syrup in order to avoid ADD and CVD. This was brought to the attention of the DOC, who ruled that honey from China blended with rice syrup, regardless of the percentage of honey, was circumventing the ADD and CVD orders. Customs suspended the liquidation of the products, which were brought within the scope of the ADD and CVD orders.

What should importers do?

As mentioned above, don’t even think about trans-shipment.

However if the importer is thinking about developing a new product that is outside the scope of the ADD & CVD orders, please be extremely careful. If the DOC finds that the product is considered “later-developed merchandise,” the products can still be brought within the scope of the ADD & CVD order. It helps to understand what the DOC will be evaluating when making this determination. The DOC shall consider the following criteria during their investigation:

(A) Whether the later-developed merchandise has the same general physical characteristics as the merchandise with respect to which the order was originally issued (‘‘earlier product’’);
(B) Whether the expectations of the ultimate purchasers of the later-developed merchandise are the same as for the earlier product;
(C) Whether the ultimate use of the earlier product and the later-developed merchandise is the same;
(D) Whether the later-developed merchandise is sold through the same channels of trade as the earlier product;
(E) Whether the later-developed merchandise is advertised and displayed in a manner similar to the earlier product”

If an importer really intends to go through with the development of a new product, I would highly recommend consulting with a trade attorney. The time, money, and effort spent on a new business model can all be for naught. A trade attorney can advise whether the product is in danger of being considered “later-developed merchandise.”

-Jimmy Ting

jimmyting@great-world.com

ADD and CVD cases involving Solar Cells from China: Watch out!

Most importers of solar panels are now well aware of the ADD and CVD determinations made this year covering certain solar cells manufactured in China. However from talking to various importers, there are some key elements of the determinations that many were not aware of and that I feel importers should be cognizant of.

1.) The ADD & CVD cases cover more than you think!

The scope of the ADD & CVD cases goes well beyond coverage of solar panels manufactured using solar cells made in China. The actual investigation covered “crystalline silicon photovoltaic cells” manufactured in China, whether or not they were assembled into modules or panels. Importers can read about the cases in the Federal Register (A-570-979 for AD and C-570-980  for CVD).

What many importers may have failed to note is that under this broad language, if the product they are purchasing from a 3rd country (other than China) contains solar cells manufactured in China, that specific product may be within the scope of the ADD & CVD cases. An example would be the solar powered outdoor landscape lights that are so popular in many backyards these days. These lights use solar cells to charge the lamp during the day. If the solar cells used in the product were manufactured in China, the item may be subject to ADD & CVD, even if the actual lamp was manufactured in a 3rd country (say Vietnam or Thailand). I say “may” because there is a 10,000mm2 surface area exclusion that is applied to the cases involving consumer products. If the consumer product contains cells that do not exceed 10,000 mm2 (roughly 15.5 square inches) in total surface area, they are excluded from the case. Some consumer items with very small solar cells that I think would generally be outside the scope would be solar powered calculators and possibly solar powered flashlights.

Importers of consumer products that contain solar cells with surface area greater than 10,0000 mm2 need to do their homework and investigate where the solar cells in the product were manufactured. The Department of Commerce (DOC) is requiring that importers of such solar panels/modules that “do not contain subject solar cells produced in the PRC must maintain (an importer) certification, as well as documentation supporting the certification”. The exact language of what must be shown on the importer certification can be found here: Solar_Importer_Certification

Keep in mind that the importer is being asked to have documentation supporting the certification. This may mean requesting the manufacturer disclose the actual source of the solar cells. Taking it a step further, it may even mean asking the manufacturer to provide shipping documents from the solar cell provider. I have seen too many cases where importers were “lied to” by their manufacturers as to the true origin of their products. Ultimately, it is the importer who is liable. I would recommend that at the very least, importers get copies of purchase orders, bills of lading, and warehouse receipts showing the purchase and shipping of the solar cells from the solar cell manufacturer to the factory assembling the final product.

Having spoken with our local Customs Commodity Specialist Team (CST) at the port of San Francisco, their current request is that the shipping documents (commercial invoice and packing list) clearly indicate what country the solar cells are made in. In addition, the importer should have their Importer Certification readily available. My recommendation is to include the certification with any shipping documents sent to Customs at the time of entry

2.) What if my solar panels are made in China from solar cells manufactured outside of the PRC?

I have had various importers inform me that their products are shipping from China, but use solar cells manufactured outside of of China. My response to each of these importers is “Are you absolutely sure”? The scope of the ADD and CVD cases excludes these products. However the very fact that the items are shipping from China will definitely lead Customs to be very suspicious. Importers of such products need to be extra cautious. In addition to getting supporting documentation from the shipper in China and issuing an Importer Certification, the importer needs to also get an Exporter Certification. The language to be used in the Exporter Certification should use the following template: Solar_Exporter_Certification.

As I indicated above, ultimately it is the importer who is liable. Customs WILL investigate cases they feel are fraudulent!

One other issue to keep in mind is the possibility that at some point in the future, the DOC may decide that such products are a circumvention of the ADD & CVD case. The DOC has taken measures to prevent circumvention. If such products were already being manufactured and shipped to the United States prior to the ADD & CVD determinations, the Chinese shipper and importer have a better argument to the DOC that they are not circumventing the case. However if the product is new, importers should be careful with how they proceed with the development of the product. It such cases of “later-developed” products, arguments may be made that the products were specifically developed to circumvent the ADD and CVD cases. If the DOC concludes that circumvention does exist, the products may be brought within the scope of the ADD & CVD case.

3.) How will the bond company react to my imports of solar cells?

I have spoken to three bond underwriters about this ADD/CVD case. All are extremely cautious. If the importer begins importing goods that are indeed subject to ADD/CVD, the bond companies will require collateral on the bond. If the importer is importing products containing solar cells not manufactured in China, the bond companies are requesting letters of indemnity.

If you have any questions concerning this topic or other Customs/Logistics issues, feel free to contact me.

-Jimmy Ting

jimmyting@great-world.com

tel: 650-873-9050 (x.1019)