Chinese Solar Cell Circumvention Determinations Challenged at CIT

In Canadian Solar's complaint (Canadian Solar v. U.S., CIT # 23-00195), the company said that it invested half a billion dollars in Thailand through its subsidiary Canadian Solar International Limited (CSIL) and exports solar modules produced by its affiliate, Canadian Solar Manufacturing (Thailand) to the U.S. market. Canadian Solar said that CSIL cooperated fully as a mandatory respondent throughout the course of the circumvention proceeding. Commerce reported finding "no discrepancies” between CSIL’s reported information and the officials’ observations at the Thai factory.

The agency found that three of the five factors weighed against a circumvention finding, including Canadian Solar Manufacturing (Thailand)'s high level of investment, the complicated production process, and comprehensive production facilities. Commerce therefore based its circumvention finding on the value of Chinese components it said made up a significant portion of the total value of the merchandise exported to the U.S. and the "minor or insignificant processing" done in Thailand.

Canadian Solar argued that such a finding "contradicts the terms of the statute and agency precedent," and noted that Commerce found a majority of circumvention factors weighed against a positive finding. In addition, the company said that Commerce "unlawfully elevated" the research and development prong instead of using a "holistic" assessment and disregarded substantial R&D investments made in the Thai operations.

In Trina Solar Science & Technology (Thailand)'s complaint (Trina Solar Science & Technology (Thailand) v. U.S., CIT # 23-00196), the company took issue with Commerce's sole reliance on the low level of research and development in Thailand to come to an affirmative circumvention determination. The company said that Commerce incorrectly determined circumvention with only one of the five factors weighing in favor of a positive result. Commerce correctly found the production process to be significant and noted that it required a skilled workforce in addition to “sophisticated, precise, and technologically advanced equipment.” The department further noted that the production of solar cells and wafers “involves more than attaching Chinese components together.”

Similarly, Trina Solar (Vietnam) and Trina Solar Energy Development's joint complaint (Trina Solar (Vietnam) v. U.S., CIT # 23-00197) argued that Commerce’s decision that the process of assembly in Vietnam is minor or insignificant was unsupported by substantial evidence. Trina pointed to the department's findings that the process of producing solar cells and modules is not only significant, but "complex and sophisticated." Commerce made several detailed findings regarding the complexity of solar cell and module production in the country, Trina said. The department also erred when it failed to exclude solar cells and modules assembled from wafers produced inside China but using polysilicon produced outside of China, Trina said.

In its own complaint (Red Sun Energy v. U.S., CIT # 23-00198), Red Sun Energy Long An Company took issue with Commerce's use of AFA based on supposed noncooperation and an untimely questionnaire response. Red Sun said that despite Commerce's promise and obligation that it would afford the respondent assistance in meeting reporting requirements, the department failed to do so. Red Sun also argued that Commerce lacked evidence that would justify the use of AFA against it because communication between the company and Commerce was not on the record. The department had a statutory obligation to provide "any assistance that is practicable" to interested parties, but failed to provide that assistance and then punished Red Sun for the time it took the company to request help, it said. Finally, Red Sun claimed that its supposed non-cooperation didn't force the department's hand because its response arrived with more than enough time to minimize any finality concerns.