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  • entered or withdrawn from warehouse for consumption prior to June 6, 2024 (or any earlier date the President decides to terminate the national emergency declared in Proclamation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