November 29, 2022

Volume XII, Number 333

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November 28, 2022

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Commerce Department Adds Guardrails Against Stockpiling of Certain Solar Cells and Modules During Temporary Waiver of AD/CVD Duties

On September 16, 2022, the U.S. Commerce Department released its final rule regarding antidumping and countervailing duty (AD/CVD) circumvention inquiries on solar cells and modules from Cambodia, Malaysia, Thailand, and Vietnam. The rule implements President Biden’s June 6, 2022, Proclamation 10414, (which we discuss here) declaring an emergency with respect to the U.S. energy market, and temporarily waives the collection of AD/CVD duties for certain cells and modules subject to the AD/CVD anticircumvention inquiry initiated by Commerce in April 2022.

Background

On April 1, 2022, Commerce initiated its AD/CVD anticircumvention inquiry on cells and modules from Cambodia, Malaysia, Thailand, and Vietnam. On June 6, 2022, President Biden issued Proclamation 10414, directing Commerce to take action to pause the imposition of potential AD/CVD duties stemming from the circumvention investigations. Commerce then published a proposed rule to implement Biden’s Proclamation on July 1, 2022. Sixteen comments were submitted from interested parties. In response to some of the comments, Commerce introduced new guardrails against the stockpiling of the solar cells and modules by adding a “utilization provision” in the new regulation. The final rule states that it is “not Commerce’s 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.”

Key Takeaways

  • Scope of the Waiver. The 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:

    • entered or withdrawn from warehouse for consumption prior to June 6, 2024 (or any earlier date the President decides to terminate the national emergency declared in Proclamation 10414);

    • not already subject to the scope of the orders against cells and modules from China or Taiwan; and

    • not already subject to an anticircumvention order

  • Cells and Modules Must be Utilized To Benefit from the Waiver. The final rule includes certain changes compared to the proposed rule issued in July. Most notably, Commerce added a requirement that the cells and modules that benefit from the waiver of AD/CVD duties 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 June 6, 2024 (which would require that the items be utilized in the United States on or before December 3, 2024). It is possible that the President may terminate the emergency early. If the emergency is terminated earlier, the utilization date will be 180 days from the early termination date. The definition of “utilization” also contains the following provision: “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.

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XII, Number 270
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About this Author

J. Scott Maberry, Lawyer, Sheppard Mullin, International Trade, Trade Practice
Partner

Mr. Maberry is an International Trade partner in the Government Contracts, Investigations & International Trade Practice Group in the firm's Washington, D.C. office.

Areas of Practice

Mr. Maberry's expertise includes counseling and litigation in export controls, the Foreign Corrupt Practices Act (FCPA), anti-terrorism, economic sanctions, anti-boycott controls, and Customs.  He also represents clients in negotiations and dispute resolution under the World Trade Organization (WTO), North American Free Trade Agreement (NAFTA), and other multilateral and...

202-469-4975
Fatema Merchant, international, trade, Lawyer, Sheppard Mullin
Associate

Fatema Merchant is an associate in the Government Contracts, Investigations & International Trade Practice Group in the firm's Washington, D.C. office.

Fatema’s practice focuses on investigations and compliance counseling related to international trade laws.  She has extensive experience with U.S. Foreign Corrupt Practices Act and U.S.-Sanctioned Countries investigations, compliance, due diligence, and training.  Fatema also advises clients on compliance with International Traffic in Arms Regulations, Export Administration Regulations, Customs and Anti-Money Laundering...

202-469-4930
Reid Whitten, partner, Sheppard Mullin Law Firm
Partner

Reid Whitten works with clients around the world to plan, prepare, and succeed in global business transactions.

In the areas of U.S. and international sanctions, export and defense export controls, and anti-corruption regulations, he supports clients in detecting and deterring potential compliance issues as well as conducting and defending investigations and enforcements. Mr. Whitten also advises on anti-dumping, anti-money laundering, and anti-boycott regulations.

Mr. Whitten is a thought leader on cross-border business regulations. He teaches a seminar on The Law of...

202-469-4968
Associate

Jonathan Wang is an associate in the Government Contracts, Investigations & International Trade Practice Group in the firm's Washington D.C. office.

Areas of Practice

His primary areas of practice are in compliance counseling, investigations, public policy, and cross-border transactional work involving export controls, including the International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR); customs and imports; economic sanctions and embargoes, the Foreign Corrupt Practices Act (FCPA); antidumping and countervailing duties (AD/CVD); and...

202-747-2653
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