CIT Says Protest Needed to Challenge Solar Cells Duties Due to Lack of Timely Certifications

Judge Mark Barnett, in a June 10 decision made public June 18, said CBP appeared primed to address Greentech's claims that the AD/CVD shouldn't be assessed on its goods during the protest proceeding, making jurisdiction proper under Section 1581(a) as a challenge to a CBP decision. The court said the protest proceeding could have provided the importer "with a bona fide opportunity to avoid liability," despite the fact that the U.S. "hasn't clearly stated that CBP had the authority to do so" and suggested at oral argument that "CBP may lack such authority."

Greentech made 19 entries of solar cells from Vietnam in 2019, though it failed to maintain the certification requirements for importers and China-based exporters of solar cells from third countries that don't contain solar cells made in China, as imposed by the Commerce Department under its AD order on Chinese solar cells. CBP asked Greentech for the certifications, which the company provided.

After receiving this information, CBP imposed the duties, noting that Greentech failed to hand over the "proper documents," since it gave the certificates after CBP issued the company a request for information. Greentech protested the liquidation of its entries with the AD/CVD, though the protest period was suspended after the importer filed the present suit to contest the imposition of the duties (see 2306130025).

The U.S. asked the trade court to toss the present suit for lack of jurisdiction under Section 1581(i) since remedy was available under Section 1581(a) via the protest proceeding before CBP. Barnett noted that "Greentech's requested relief is clear": it wants to avoid AD/CVD liability only for its entries and isn'tchallenging the underlying certification requirements.

While Barnett said he's "unaware of any case addressing CBP's role" in connection with Commerce's certification requirements, he agrees that Greentech's claims "are amenable to protest." Commerce's instructions "contemplate ministerial action by CBP." And while both Greentech and the U.S. seemingly agree that CBP "had no choice but to suspend liquidation and require Greentech to post cash deposits when" the importer couldn't provide certifications "signed as of the date of importation," there's maybe "some leeway in the timing requirement," the court said.

Commerce's certification instructions say the importer understands that the certification "should be completed at the time of entry," and not that it must be. However, the instructions "are silent on what CBP should do when an importer lacks timely-signed certifications but can provide documentation potentially supporting the claimed country of origin and which, if so proven, would" show that the goods aren't covered by the orders.

Barnett rejected the government's claim that Greentech had an obligation to "familiarize itself with" the orders, which imposed the certification requirements, since the point for this case is that "no agency has determined, as a factual matter, that Greentech's entries" had solar cells from China. The statute suggests that it doesn't consider any other process to be required for importers, like Greentech, but it "offers no explanation why that position comports with principles of due process," the court said.

As a result, noncompliance with the certification requirement can impose a rebuttable presumption that an importer's solar cells are from China, but the government "must provide recourse for importers to rebut that presumption," the decision said.

CBP told Greentech that it could challenge the assessment of the AD/CVD via protest, and it acted consistent with that view when it asked the importer for information on its products' country of origin, Barnett noted. As a result, relief appears possible under the protest proceeding either based on CBP's own decision or the agnecy's failure to consult with Commerce, the court held.

Commerce released new regulations recently laying out "the procedure CBP should have followed and, indeed, may have been intending to follow," the court said. These regulations establish an "ongoing role in resolving issues" for Commerce "that arise when dealing with compliance with the certification requirements," the court said.

Barnett also dismissed Greentech's claim that the AD/CVD amount to an excessive fine in violation of the Eighth Amendment to the U.S. Constitution if they are imposed solely based on a failure to timely submit certifications. The court said that since relief is available through the protest proceeding, this claim is not yet "ripe." Barnett also said that if AD/CVD are lawfully calculated, the Constitution isn't violated -- a principle recently affirmed by the U.S. Court of Appeals for the Federal Circuit in Rimco v. U.S. (see 2404080036).

(Greentech Energy Solutions v. United States, Slip Op. 24-69, CIT # 23-00118, dated 06/10/24; Judge: Mark Barnett; Attorneys: Mark Lehnardt of Law Office of David L. Simon for plaintiff Greentech; Emma Bond for defendant U.S. government)