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CIT Remands Parts, Sustains Parts of CVD Review of Photovoltaic Cells From China

The Court of International Trade remanded parts and sustained parts of the Commerce Department's final results in the fifth administrative review of the countervailing duty order on crystaline silicon photovoltaic cells from China, in a Sept. 3 order. Judge Jane Restani sustained Commerce's specificity finding for the aluminum extrusions for less than adequate remuneration (LTAR) program, the agency's chosen benchmark for the land value for the LTAR program, and plaintiff and mandatory respondent Canadian Solar's lack of creditworthiness in 2016. Conversely, the judge remanded Commerce's entered value adjustment finding for Canadian Solar and its determination that the respondents benefited from China's Export Buyer's Credit Program.

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Restani began her opinion by touching on Commerce's LTAR specificity finding for aluminum extrusions. Canadian Solar contested the finding so far as Commerce's determination was unsupported by substantial evidence since the extrusions were "provided widely at LTAR." To skirt a specificity finding, the Chinese government pointed to six different industries that use the extrusions, which Commerce then examined, finding a significant number and types of manufacturers in China that don't appear to use extrusions as an input.

In essence, the court sided with Commerce in its analysis that held that "users of aluminum extrusions do not make up something akin to the whole of the Chinese economy," meaning that the extrusion subsidies can be deemed appropriately specific to the photovoltaic cells industry. "Commerce properly compared 'the number and nature of the users' of aluminum extrusions to the 'overall structure' of the Chinese economy in reaching its determination that the provision of aluminum for LTAR is de facto specific," the judge said.

In the review, Commerce conducted a tier-three review to assess the value of land use-rights. The agency opted for a tier-three review -- seeing if Chinese land-use rights align with general market principles -- since the first two tiers were deemed unavailable. Canadian Solar held that this benchmark should have been based on data provided by Canadian Solar since Commerce's dataset was more "stale." But, Canadian Solar failed to raise this argument in its opening brief and resigned this argument to one line in its reply brief, precluding further litigation on the issue, Restani ruled.

Lastly, Restani sustained Commerce's finding that Canadian Solar and certain of its cross-owned affiliates were uncreditworthy in 2016 since certain ones of the affiliates received commercial long-term loans. Canadian Solar countered that the commercial loans made to the non-cross-owned affiliates in 2016 actually indicate its creditworthiness.

"Commerce’s decision not to consider affiliate loans was reasonable because of the distinction between cross-ownership and affiliation," the judge said. "Evidence on the record does not indicate that Canadian Solar nor any cross-owned affiliate was party to a commercial loan and therefore, that this activity is dispositive of Canadian Solar’s creditworthiness."

Turning to the remanded elements of the case, Restani started with the involvement of entered value adjustment in the review -- an adjustment made by Commerce to account for mark-ups in transit to the target market. The goal is to not overvalue duties on subject entries. Commerce denied an entered value adjustment for Canadian Solar in the review -- a decision the company contested, saying that it proved that its total exported sales to the U.S. through affiliates were marked up in the aggregate and that if Canadian Solar were required to show each U.S. sale was marked up to quality for the adjustment, Commerce was then required to at least notify the company of this deficiency in its submission.

Restani gave Commerce two options on remand on the issue: it can grant the adjustment to Canadian Solar seeing as there should be enough evidence to make the calculation, or if Commerce refuses to do this, the agency must "clarify its calculation methodology, explain the evidence it requires and why it is reasonable given the calculation methodology, give CS an opportunity to submit additional evidence and in the case of new info, reassess."

The judge then turned to Commerce's decision that the respondents benefited from China's Export Buyer's Credit Program -- an issue with a long history at the court. Concurrent with prior opinions on the issue, Restani backed the plaintiffs in this instance, holding that they provided enough evidence that they didn't use the program via their customer certifications.

"We conclude, as we have in the past, that Commerce has not reasonably shown that the customer certifications are unverifiable on the record before us," Restani said. "There is no record evidence suggesting that Mandatory Respondents or their customers used this program, and no reason to doubt the legitimacy of the Mandatory Respondents’ statements of nonuse or customers’ certifications. Commerce’s claims that it is unable to verify these certifications without information from the GOC are not supported by substantial evidence." On remand, Commerce can attempt to verify the respondents' claims of non-use, or it can elect to simply accept the evidence of non-use.

(Canadian Solar Inc., et al. v. United States, Slip Op. 21-114, CIT Consol. 19-00178, dated 09/03/21, Judge Jane Restani. Attorneys: Bryan Cenko of Mowry & Grimson for plaintiffs; Justin Miller for defendant U.S. government)