The US Department of Commerce published a final rule on September 16 implementing President Joseph Biden’s Proclamation 10414, which declared an emergency with respect to US electricity generation capacity. The final rule permits the importation of select cells or modules without the payment of antidumping and countervailing duty.
The US Department of Commerce (Commerce) is currently conducting circumvention inquiries to determine whether imports of crystalline silicon photovoltaic cells, whether assembled into modules or not, which are completed in Cambodia, Malaysia, Thailand, or Vietnam using parts and components manufactured in the People's Republic of China (China) and exported to the United States, are circumventing the antidumping and countervailing duty (AD/CVD) orders on solar cells and modules from China. In response, President Biden issued Proclamation 10414 on June 6 declaring an emergency with respect to US electricity generation capacity and stating that immediate action is needed to ensure access to a sufficient supply of solar cells and modules to assist in meeting the United States' electricity generation needs. The proclamation also temporarily waives for 24 months the collection of AD/CVD for certain cells and modules subject to Commerce’s anticircumvention inquiry.
On September 16, 2022, Commerce published a final rule to implement Biden’s Proclamation after receiving comments in response to the proposed rule published July 1, 2022. The final rule, which becomes effective November 15, 2022, permits the importation of select cells or modules without AD/CVD and provides that Commerce will instruct US Customs and Border Protection (CBP) to discontinue the suspension of liquidation of entries of these cells and modules and the collection of cash deposits on those entries, so long as the entries of the cells or modules were entered, or withdrawn from warehouse, for consumption before June 6, 2024 or before the date the emergency has terminated, whichever occurs first. The rule applies retroactively for imports made prior to issuance of the Proclamation and even if Commerce makes affirmative preliminary or final determinations for imports that were suspended as a result of the circumvention inquiry.
The noted waiver applies to imports of photovoltaic cells and modules completed in Cambodia, Malaysia, Thailand, and Vietnam, containing parts or components from China, that meet the following criteria:
Commerce also included a requirement that the cells and modules that benefit from the waiver of AD/CVD must be utilized (defined to mean used or installed) in the United States within 180 days following the date of termination of the emergency declared in Proclamation 10414. The date of termination is currently set for June 6, 2024, which would require that the items be utilized in the United States on or before December 3, 2024. The Department of Commerce is scheduled to issue its preliminary determination on the circumvention investigation on November 28, 2022.
Commerce clarified in the final rule that “Merchandise which remains in inventory or a warehouse in the United States, is resold to another party, is subsequently exported, or is destroyed after importation is not considered utilized” for purposes of the waiver of duties. Commerce clearly stated in the final rule that it was not its goal to have merchandise that enters before the date of termination be used in projects long into the future, “as the emergency declared by the President exists at this very moment.” Accordingly, it’s important to understand that cells and modules imported from Cambodia, Malaysia, Thailand, or Vietnam will not be eligible for the waiver if the intent is to stockpile or hold them in inventory.
As you proceed with negotiation of agreements for cells and modules, this restriction on the use of the waiver should be taken into consideration. It should be clear in agreements that the cells or modules are intended to be utilized, rather than stockpiled or put into inventory—or, if the cells and modules are intended for inventory, then the costs of the potentially applicable AD/CVD should be factored into the agreement execution. Importers of merchandise subject to the anticircumvention inquiry and this waiver should also take care to maintain records of utilization prior to December 6, 2024 (or earlier, if the emergency is terminated) to support use of the waiver.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following: