Power & Pipes

FERC, CFTC, and State Energy Law Developments

US Customs and Border Protection (CBP) has begun issuing questionnaires to solar companies requesting extensive disclosures about the source of modules, panels, and other products. This marks an expansion of the scrutiny on the supply chain for the solar industry, as importers previously only had to provide such information if shipments were detained for inspection.

Surveys are being sent to importers and include requests on randomly selected entries for which the same level of supply chain tracing information will be required as in a detention case. In addition, the questionnaire requires information on the importer’s corporate structure and overall supply chain within a specified timeframe. CBP is also asking for a detailed explanation of how companies are auditing their supply chains to determine if they are complying with their obligations under the Uyghur Forced Labor Prevention Act (UFLPA).

Scope of Questionnaire

The questionnaire asks about both raw materials and the finished product, and it requires separate responses for all affiliates and entities. The following outlines the scope of each section:

  • Corporate Structure: In addition to standard information, the questionnaire requests a complete narrative history of the company and comprehensive information on controlling interests. The Corporate Structure section also includes 12 questions on measures to ensure imported goods are not produced wholly or in part with convict labor, forced labor, and/or indentured labor (including forced or indentured child labor).
  • Overall Supply Chain: This section requests a detailed description of the full supply chain, including roles, relationships, and affidavits to verify the roles. Additional questions include visits to facilities to verify production, compliance policies and procedures, and a comprehensive listing of all solar imports.
  • Walk-Through Entries: This section refers to the specific shipments that prompted the questionnaire and requests comprehensive importation documentation for each entry and sales documentation for US customers.
  • Accounting/Financial Practices: This section requests accounting and financial practices and a series of financial statements and bank accounts. It specifically requests accounting practices for possible raw materials procurement for foreign affiliates and has a full section for startups under three years old.
  • Production: This section requests a detailed description of the production process and all documents “generated/used/relied upon in the normal course of business for each stage/workshop of the production process of the finished goods.” The section asks for a list of all raw materials and an explanation of how importers ensure there is no forced labor involved. There is a separate section on labor practices. The CBP also requests a listing of final products and comprehensive documentation on those identified in Walk-Through Entries.
  • Sales: This section requests sales documentation, marketing materials, a product list, a method for obtaining certificate of origin, and export process.
  • Sales and Production Reconciliations: This section requests a chart of sales to domestic and other countries, a reconciliation of sales to financial statements, and a list of customers.

CBP has recently posted Guidance on Executive Summaries and Sample Tables of Contents: Preparing a UFLPA Applicability Review Submission, which includes a sample table of contents for all suppliers and an expanded table of contents for solar companies The table of contents for solar includes a section for specific types of suppliers, such as module, cell, ingot, wafer, polysilicon, metallurgic grade silicon, and quartzite suppliers.

Beyond Solar

While the focus here is on solar, based on their Commodity-Specific Guidance, we know that CBP is looking across imports, including aluminum, batteries, cotton, polysilicon, PVC, steel, tires for automobiles and trucks, and tomatoes. Continued pressure by US Congress on forced labor in the global supply chain suggests continued enforcement pressure on importers.