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Commerce Cuts Solar Cell CVD Rate After Dropping Position on EBCP, Entered Value Adjustment

The Commerce Department said that two countervailing duty respondents did not use China's Export Buyer's Credit Program, in Dec. 13 remand results, flipping its position on the issue. The agency also granted one of the respondents, Canadian Solar, an entered value adjustment in response to remand instructions from the Court of International Trade that spurned the agency's decision to not make the adjustment. If sustained, the result would be a CVD rate cut for the respondents and non-selected companies (Canadian Solar Inc., et al. v. United States, CIT Consol. #19-00178).

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The case concerns Commerce's final results in the fifth administrative review of the countervailing duty order on crystalline silicon photovoltaic cells from China. In September, the trade court penned a lengthy opinion sustaining parts and remanding part of the final results (see 2109030045). Judge Jane Restani sustained Commerce's specificity finding for the aluminum extrusions sold for less than adequate remuneration (LTAR) program, the agency's chosen benchmark for the land value sold for LTAR program, and Canadian Solar's lack of creditworthiness in 2016. Conversely, the judge remanded Commerce's EVA finding for Canadian Solar and its determination that the respondents benefited from the EBCP.

The EBCP question has been one upon which the trade court has consistently struck down Commerce's position. Commerce has said that it cannot verify that a CVD respondent's U.S. customers did not use the program because it does not have key information from the Chinese government over how the program works. Without this information, which includes the banks that participate in the program, Commerce says it doesn't know how to look for the information to verify non-use. Nevertheless, after having its position rebuked by Restani, Commerce swapped to finding that the mandatory respondents of the CVD review did not use the EBCP.

Recently, though, Commerce's stance on verifying non-use of the EBCP was called into question when it verified non-use of its own accord, without cooperation from China, in a separate CVD review (see 2110140053). One of the plaintiffs brought up this instance in an effort to get Commerce to drop its "under respectful protest" addendum to its position. Commerce responded by saying it verified non-use in that instance "because of various Court opinions on the EBCP," implying that it did not do so because it feels it can verify non-use without the Chinese government's cooperation.

On the EVA question -- an adjustment made by Commerce to account for mark-ups in transit to the target market -- Commerce originally denied an EVA for Canadian Solar. The respondent contested the decision, arguing that it proved that its total exported sales to the U.S. through affiliates were marked up in the aggregate. The company also argued that even if it were required to show that each U.S. sale was marked up to qualify for the adjustment, Commerce was then at least required to give notice of the deficiency in the submission. Restani then gave the agency two options: grant the adjustment or clarify its calculation methodology and explain the evidence it requires and give Canadian Solar a chance to submit additional evidence.

Commerce responded by granting Canadian Solar the EVA. "In coming to this conclusion, Commerce finds that re-evaluating this issue would involve reopening the record and potentially analyzing new information and providing interested parties with an opportunity to comment on any new information," the remand results said. "After careful consideration, Commerce finds that it would not be feasible to conduct such an analysis within the time constraints associated with the Court’s Remand Order."

As a result of these position changes, Canadian Solar saw its CVD rate drop from 9.70% to 3.65%; mandatory respondent Jinko Solar saw its rate drop from 12.70% to 5.86%; and the non-selected companies saw their rate drop from 11.76% to 5.17%.