SUNPOWER CORPORATION et al., Plaintiff and Consolidated Plaintiffs, and Canadian Solar Inc. et al., Plaintiff-Intervenors and Consolidated Plaintiff-Intervenors, v. UNITED STATES, Defendant, and SolarWorld Americas, Inc., Defendant-Intervenor and Consolidated Defendant-Intervenor.
Consol. Court No. 15-00067
United States Court of International Trade.
July 21, 2017
Slip Op. 17-89
Kelly, Judge
ORDERED that Plaintiff‘s Application to Extend Temporary Restraining Order, ECF No. 66, is denied as moot; and it is further
ORDERED that the Parties shall confer and submit a joint proposed scheduling order for the remainder of this action on or before August 1, 2017.
Craig Anderson Lewis, Hogan Lovells US LLP, of Washington, DC, argued for consolidated plaintiffs Shanghai BYD Co., Ltd. and BYD (Shangluo) Industrial Co., Ltd. Diana Dimitriuc-Quaia, Arent Fox LLP, of Washington, DC, argued for consolidated plaintiffs and plaintiff-intervenors Canadian Solar Inc., Changzhou Trina Solar Energy Co., Ltd., China Sunergy (Nanjing) Co., Ltd., China Solar (Zhejiang) Co., Ltd., ET Solar Industry Ltd., Hefei JA Solar Technology Co., Ltd., Jinko Solar Co., Ltd., LDK Solar Hi-Tech (Nanchang) Co., Ltd., Perlight Solar Co., Ltd., ReneSola Jiangsu Ltd., Shanghai JA Solar Technology Co., Ltd., Shenzhen Sacred Industry Co., Ltd., Shenzhen Sungold Solar Co., Ltd., Sumec Hardware & Tools Co., Ltd., Sunny Apex Development Ltd., Wuhan FYY Technology Co., Ltd., Wuxi Suntech Power Co., Ltd., Zhongli Talesun Solar Co., Ltd., Znshine PV-Tech Co., Ltd. With her on the brief were John Marshall Gurley and Julia L. Diaz.
Neil R. Ellis, Richard L.A. Weiner, Brenda A. Jacobs, and Rajib Pal, Sidley Austin LLP, of Washington, DC, for plaintiff-intervenors Yingli Green Energy Holding Co., Ltd., and Yingli Green Energy Americas, Inc.
Tara Kathleen Hogan, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC, argued for defendant. With her on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Jeanne E. Davidson, Director, and Reginald T. Blades, Jr., Assistant Director. Of counsel on the brief was Scott McBride, Assistant Chief Counsel, Office of the Chief Counsel for Trade Enforcement and Compliance.
Timothy C. Brightbill, Wiley Rein LLP, of Washington, DC, argued for defendant-intervenor SolarWorld Americas, Inc. With him on the brief was Laura El-Sabaawi.
OPINION
Kelly, Judge:
Before the court1 is the U.S. Department of Commerce‘s (“Commerce” or “Department“) remand determination in
BACKGROUND
The court assumes familiarity with the facts of this case as discussed in the previous opinion, see SunPower, 40 CIT at —, 179 F.Supp.3d at 1289-93, and here recounts the facts relevant to the court‘s review of the Solar II PRC Remand Results. This case concerns an antidumping duty (“ADD“) investigation and a countervailing duty (“CVD“) investigation of certain solar products from the People‘s Republic of China (“China” or “PRC“) which is intrinsically related to an ADD investigation and CVD investigation of certain crystalline silicon photovoltaic cells (“solar cells” or “cells“) from the PRC and an ADD investigation of certain solar cells from Taiwan. An overview of all three sets of investigations2 is warranted to contextualize the current proceeding.
Initially, Commerce investigated the solar industry in China on the basis of a petition from domestic producer SolarWorld Americas, Inc. (“SolarWorld“), Defendant-Intervenor here, alleging dumping activity and countervailable subsidies injurious to the domestic solar industry (“the Solar I PRC investigations“). Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From the [PRC], 76 Fed. Reg. 70,960 (Dep‘t Commerce Nov. 16, 2011) (initiation of ADD investigation); Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From the [PRC], 76 Fed. Reg. 70,966, 70,967 (Dep‘t Commerce Nov. 16, 2011) (initiation of CVD investigation). The Solar I PRC investigations resulted in ADD and CVD orders covering solar cells from China, including Chinese cells assembled into modules, laminates, and panels outside of China; these orders did not cover solar modules, laminates, or panels assembled in China using solar cells produced outside of China. See Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From the [PRC], 77 Fed. Reg. 73,018 (Dep‘t Commerce Dec. 7, 2012) (amended final determination of sales at less than fair value and ADD order); Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From the [PRC], 77 Fed. Reg. 73,017 (Dep‘t Commerce Dec. 7, 2012) (CVD order) (“the Solar I PRC Orders“). Although the Solar I PRC Orders covered both solar cells and modules, laminates, and/or panels containing solar cells, Commerce determined that the solar cell is the
Subsequently, SolarWorld petitioned Commerce to initiate additional proceedings related to the Chinese and Taiwanese solar industry. Pet. for Imposition of [ADD] and [CVD] Investigation, Certain Crystalline Silicon Photovoltaic Products from the [PRC] and Taiwan, ADD PD 1-8, bar codes 3171232-01-08 (Dec. 31, 2013); Pet. for Imposition of [ADD] and [CVD] Investigation, Certain Crystalline Silicon Photovoltaic Products from the [PRC] and Taiwan, CVD PD 1-8, bar codes 3171278-01-08 (Dec. 31, 2013) (“Solar II PRC and Taiwan Petition“).4 SolarWorld claimed ongoing injury to the domestic solar industry, alleging that the Chinese solar industry had, in response to the Solar I PRC Orders, shifted from the assembly of modules, laminates, and panels (or “panels“) using Chinese cells to the assembly of panels in China using non-Chinese cells. Id. at 3-6 (stating that the Solar I PRC Orders “failed to cover Chinese solar modules assembled from non-Chinese solar cells, allowing Chinese solar
These investigations resulted in two sets of orders. The investigation into the Chinese solar industry resulted in an ADD order and a CVD order covering modules, laminates, and/or panels assembled in China consisting of cells manufactured outside of China, including cells manufactured in Taiwan. Certain Crystalline Silicon Photovoltaic Products from the [PRC], 80 Fed. Reg. 8,592 (Dep‘t Commerce Feb. 18, 2015) (ADD order; and amended final affirmative CVD determination and CVD order) (“the Solar II PRC Orders“). The investigation into the Taiwanese solar industry resulted in an ADD order covering solar cells manufactured in Taiwan,5 including Taiwanese cells assembled into modules, laminates, and/or panels outside of Taiwan, but excluding Taiwanese cells assembled into modules, laminates, and/or panels in China covered by the Solar II PRC Orders.6 Certain Crystalline Silicon Photovoltaic Products from Taiwan, 80 Fed. Reg. 8,596 (Dep‘t Commerce Feb. 18, 2015) (ADD order) (“the Solar II Taiwan Order“).7
The Solar II PRC Orders are at issue in this case. The Solar II PRC Initiation Notices stated that the merchandise covered by these investigations is crystalline silicon photovoltaic cells, and modules, laminates and/or
The proposed scope for the Solar II PRC investigations included language which Commerce and the parties referred to as “the two out of three rule.” This language provided that
See, e.g., Solar II PRC CVD Initiation Notice, 79 Fed. Reg. at 4,671. Defendant explained that this language was referred to as the “two-out-of-three rule” because “a product would qualify as subject merchandise if it contained Chinese input (ingots, wafers, or partially manufactured cells) and assembly of the module occurred in China,” even if the cell was manufactured or completed in a third country. Def.‘s Opp‘n Mots. J. Admin. R. 7 n.5, Feb. 9, 2016, ECF No. 78 (“Def.‘s Resp.“).subject merchandise also includes modules, laminates and/or panels assembled in the subject country consisting of crystalline silicon photovoltaic cells that are completed or partially manufactured within a customs territory other than that subject country, using ingots that are manufactured in the subject country, wafers that are manufactured in the subject country, or cells where the manufacturing process begins in the subject country and is completed in a non-subject country.
Following publication of the preliminary results, on October 3, 2014, Commerce notified interested parties of a proposed revision of the scope language in an attempt to address concerns about administration and enforcement of the “two-out-of-three rule.”8 [ADD] and [CVD] Investigations of Certain Crystalline Silicon Photovoltaic
On December 23, 2014, Commerce published the final determinations in the Solar II PRC ADD and CVD investigations. Certain Crystalline Silicon Photovoltaic Products from the [PRC], 79 Fed. Reg. 76,970 (Dep‘t Commerce Dec. 23, 2014) (final determination of sales at less than fair value) (“Solar II PRC ADD Final Results“) and accompanying Issues and Decision Mem. for the Final Determination of Sales at Less than Fair Value, A-570-010, (Dec. 15, 2014), ECF No. 32-6 (“Solar II PRC ADD Final Decision Memo“); [CVD] Investigation of Certain Crystalline Silicon Photovoltaic Products from the [PRC], 79 Fed. Reg. 76,962 (Dep‘t Commerce Dec. 23, 2014) (final affirmative CVD determination) (“Solar II PRC CVD Final Results“) and accompanying Issues and Decision Mem. for the Final Determination in the [CVD] Investigation of Certain Crystalline Silicon Photovoltaic Products from the [PRC], C-570-011, (Dec. 15, 2014), ECF No. 32-11 (“Solar II PRC CVD Final Decision Memo“). Commerce implemented the revised scope language from the October 3, 2014 letter, removing the “two-out-of-three rule” and modifying the scope language to cover all modules, laminates, and/or panels assembled in the PRC consisting of non-Chinese solar cells:
Solar II PRC ADD Final Decision Memo at 4; Solar II PRC CVD Final Decision Memo at 3-4. Commerce determined that, for purposes of the Solar II PRC Orders, country of origin would be determined by the country in which the assembly of the panel occurred (i.e., China, for all covered products).9 Solar II PRC ADD Final DecisionThe merchandise covered by this investigation is modules, laminates and/or panels consisting of crystalline silicon photovoltaic cells, whether or not partially or fully assembled into other products, including building integrated materials. For purposes of this investigation, subject merchandise includes modules, laminates and/or panels assembled in the PRC consisting of crystalline silicon photovoltaic cells produced in a customs territory other than the PRC. . . . [E]xcluded from the scope of this investigation are any products covered by the existing antidumping and countervailing duty orders on crystalline silicon photovoltaic cells, whether or not assembled into modules, laminates and/or panels, from the PRC.
On March 18, 2015, Plaintiff SunPower Corporation (“SunPower“) commenced this action. Summons, Mar. 18, 2015, ECF No. 1; see Am. Summons, Mar. 25, 2015, ECF No. 13. SunPower moved for judgment on the agency record, SunPower Corporation‘s Rule 56.2 Mot. J. Agency R., Oct. 5, 2015, ECF No. 60, challenging Commerce‘s final determination on the grounds that the agency unlawfully and unreasonably expanded the scope of the petition to include modules and panels assembled in China from cells manufactured outside of China. See Br. Supp. SunPower Corporation‘s Rule 56.2 Mot. J. Agency R. 10-25, Oct. 5, 2015, ECF No. 60 (“SunPower Br.“). Specifically, SunPower argued that Commerce‘s scope alteration in the final determination impermissibly expanded the scope beyond the scope stated in the petition, id. at 10-13; was inconsistent with the agency‘s prior practice for determining country of origin in similar proceedings, and departed from that practice without sufficient explanation, id. at 13-21; and deprived parties of procedural due process. Id. at 21-24. SunPower also requested the court to ensure that the final scope of the
On June 8, 2016, the court remanded the final determination for Commerce to reconsider or further explain its scope determination in the Solar II PRC Orders, because the court determined that Commerce‘s final scope determinations departed from the agency‘s prior rule for determining national origin for solar panels without adequate consideration or discussion of the continuing relevance, if any, of Commerce‘s prior factual finding that the assembly of imported solar cells into panels is insufficient to change the product‘s country-of-origin from the country of cell-production to the country of panel-assembly. SunPower, 40 CIT at —, 179 F.Supp.3d at 1288-89. The court ordered that Commerce further consider and explain what appeared to be: (1) its departure from its prior practice of using a single country of origin test for a particular class or kind of merchandise; (2) Commerce‘s dissimilar treatment of similarly situated merchandise; and (3) Commerce‘s departure from its prior practice of calculating normal value using the market where the majority of production of the subject merchandise took place. Id., 40 CIT at —, 179 F.Supp.3d at 1298-1308. The court deferred consideration of Plaintiff‘s request that the court “prevent the retroactive application” of the revised scope language in the Solar II PRC Orders to entries made prior to the publication of the final Solar II PRC Orders.11 Id., 40 CIT at —, 179 F.Supp.3d at 1308. On June 14, 2016, the court remanded the final determination in the Solar II Taiwan investigation “for consistency with, and based on the same reasoning as” its remand order in SunPower, SunEdison, Inc. v. United States, 40 CIT —, 179 F.Supp.3d 1309, 1312 (2016), as “[b]oth cases concern the rules of origin for solar panels manufactured from Taiwanese cells” such that the issues in the two cases are “inextricably entwined.” Id., 40 CIT at —, 179 F.Supp.3d at 1312-13.
On October 5, 2016, Commerce published the Solar II PRC Remand Results. On remand, as requested by the court, Commerce provided explanation of its determinations in the Solar II PRC and Solar II Taiwan investigations. See Solar II PRC Remand Results at 2-31. Commerce explained that it has the authority to modify the scope language from the initiation of the investigation to the issuance of the ADD or CVD order, see id. at 12-18, and that “[t]he class or kind of merchandise defined in a petition may not be exactly the same class or kind of merchandise ultimately subject to a countervailing or antidumping duty order.” Id. at 12. Com
SunPower challenges the remand determination. See Comments of Pls. SunPower Corporation and SunPower Corporation, Systems on Final Results of Redetermination Pursuant to Court Order, Oct. 27, 2016, ECF No. 110. Specifically, SunPower challenges the Solar II PRC Remand Results on grounds that Commerce unlawfully created two country of origin rules for products within the same class or kind of merchandise, id. at 4-6; that Commerce impermissibly departed from a substantial transformation analysis in the Solar II PRC investigations, id. at 6-13; and that Commerce insufficiently explained its departure from a substantial transformation analysis in the Solar II PRC investigations. Id. at 13-14.
STANDARD OF REVIEW
The court has jurisdiction pursuant to section 516A of the Tariff Act of 1930, as amended,
DISCUSSION
In SunPower, the court remanded to Commerce for further consideration and explanation of: (1) Commerce‘s apparent departure from its prior practice of using a single country of origin test for a particular class or kind of merchandise; (2) Commerce‘s dissimilar treatment of similarly situated merchandise; and (3) Commerce‘s departure from its prior practice of calculating normal value using the market where the majority of production of the subject merchandise took place. SunPower, 40 CIT at —, 179 F.Supp.3d at 1298-1308. The court deferred consideration of the argument that Commerce applied the Solar II PRC Orders to entries made prior to the publication of the final Solar II PRC Orders. 40 CIT at —, 179 F.Supp.3d at 1308. The remanded and deferred issues are addressed in turn.
A. The Class or Kind of Merchandise
The court remanded to Commerce to explain its deviation from its prior policy of applying only one rule of origin to a single class or kind of merchandise, based on the court‘s assumption that solar panels were
On remand, Commerce explained its use of different origin rules in the Solar II PRC and Solar II Taiwan investigations. Commerce stated that, contrary to the court‘s assumption, the Solar II PRC Orders and Solar II Taiwan Order (as well as the Solar I PRC Orders) covered different classes or kinds of merchandise. Solar II PRC Remand Results at 16-17. Therefore, Commerce did not apply different origin rules to the same class or kind of merchandise; it applied different origin rules to different classes or kinds of merchandise. See id. at 22, 26. For the reasons that follow, on remand Commerce has sufficiently explained that its country-of-origin analysis does not constitute application of two rules of origin to a single class or kind of merchandise.
The statute and case law instruct that the term “class or kind of merchandise” refers to the products within a particular proceeding. The term “subject merchandise” is statutorily defined as “the class or kind of merchandise that is within the scope of an investigation, a review, a suspension agreement, an order under this subtitle or section 1303 of this title, or a finding under the Antidumping Act, 1921.”
On remand, in response to the court‘s assumption that it had applied different origin rules to the same class or kind of merchandise, Commerce explained that, pursuant to the statutory framework, the term “class or kind of merchandise” refers to the products covered within a particular proceeding.15 See Solar II PRC Remand Results at 12-22. Commerce stated that the solar products covered by the Solar II PRC Orders therefore are not and could not be within the same class or kind of merchandise as the products covered by the Solar II Taiwan Order.
The Department did not apply conflicting country-of-origin analyses to a “single” class or kind of merchandise. The Department initiated investigations (Solar I, Solar II PRC, and Taiwan Solar) into three different classes or kinds of merchandise, independently analyzed the country-of-origin of the products at issue in each, and ultimately issued final determinations as to three different classes or kinds of merchandise which, as is reflected in the Orders themselves, cover different products. Solar II PRC Remand Results at 16. Commerce explained that “class or kind of merchandise” does not refer to a “general type of product,” not restricted by the merchandise specifically described as within, and limited by, the scope of the AD[D] and CVD orders.” Id. at 35. According to Commerce, as the Solar II PRC Orders and Solar II Taiwan Order cover products within two distinct classes or kinds of merchandise, the agency did not apply two rules of origin to products within the same class or kind of merchandise.16 See id. at 22, 26.
On remand Commerce has sufficiently explained the basis for the two distinct rules of origin it applied in the Solar II PRC and Solar II Taiwan investigations. As the harm alleged and ultimately confirmed in the Solar II PRC investigations was specific to solar panels that had been assembled in China, it was reasonable for Commerce to determine that the appropriate country-of-origin for subject merchandise within that investigation was the country of panel assembly. At the same time, the harm alleged and ultimately confirmed in the Solar II Taiwan investigation was specific to the manufacture of solar cells in Taiwan; it accordingly was reasonable for Commerce to determine that the appropriate country-of-origin for subject merchandise within that investigation was the country of cell manufacture. The differing rules of origin appear reasonably tailored to cover the particular solar products at issue in the two sets of investigations, and reflect the particular injurious activity discovered in each investigation. Based on this understanding of the term “class or kind of merchandise” as applicable to products within a particular proceeding, the concern expressed by the court that Commerce applied more than one country-of-origin rule to products within the same class or kind of merchandise necessarily dissipates. The solar panels covered by the Solar II PRC Orders are not within the same class or kind of merchandise as the solar panels covered by the Solar II Taiwan Order.
B. Similarly Situated Products
A related but distinct issue is the court‘s concern that Commerce treated similarly situated products differently in the Solar II PRC proceeding than in the Solar II Taiwan proceeding. See SunPower, 40 CIT at —, 179 F.Supp.3d at 1302-07. In the Solar II PRC investigations, Commerce assessed ADD and CVD liability based on pricing and subsidization behavior in the country of panel assembly and, in the Solar II Taiwan investigation, consistent with prior practice Commerce assessed ADD liability based on pricing behavior in the country of cell manufacture. See id., 40 CIT at —, 179 F.Supp.3d at 1302-03. The court expressed concern that, in so doing, Commerce “applied two different rules to similarly situated products.” Id., 40 CIT at —, 179 F.Supp.3d at 1303.
On remand, Commerce explained that, due to the particular circumstances present in the Solar II PRC investigations, it sought to investigate different products than in the Solar II Taiwan investigation (i.e., assembled solar modules, laminates, and/or panels rather than solar cells), and it defined the scope in the Solar II PRC investigations differently as a result. See Solar II PRC Remand Results at 22, 27-28. Thus, it reasons that the products covered by the Solar II PRC Orders are not similarly situated to the products covered by the Solar II Taiwan Order. Id. at 27-28. The Solar II PRC investigations concern assembled panels while the Solar II Taiwan investigation concerns solar cells.17 Commerce explained that it determined that China subsidizes the panel assemblies and prices panels exported to the U.S. below the prices at which those products
Commerce provided a reasoned basis for its different approaches in the two different cases. As discussed above, Commerce concluded that, although Taiwanese cell production was injuring the U.S. industry, there were not similar concerns regarding evasion and panels assembled in Taiwan as were present in the Solar II PRC investigations:
Solar II Taiwan Final Decision Memo at 23.[A]lthough Petitioner has claimed that it wishes Taiwanese modules to be covered by the scope of this investigation, all facts it alleged with respect to the modification of the exporters’ commercial activity to avoid the payment of duties under the Solar I orders pertained to modules, laminates and panels using Taiwanese solar cells and not solar modules assembled in Taiwan using third country cells. Furthermore, [Petitioner] did not provide evidence on the record that indicates that Taiwanese modules produced using third country cells are being dumped or used to evade the application of any existing AD[D] or CVD order. In fact, nearly all U.S. sales reported by the Taiwanese mandatory respondents were sales of solar cells, not sales of solar modules. . . . Therefore, in light of our determination that the module assembly in Taiwan does not constitute substantial transformation, we have determined that the substantial evidence on the record does not support the inclusion of solar modules assembled in Taiwan using third country cells in the scope of this investigation.
C. Normal Value
The court sought further explanation or reconsideration from Commerce regarding its decision to base duty assessments on the Chinese market in the Solar II PRC investigations. SunPower, 40 CIT at —, 179 F.Supp.3d at 1305-07. The court emphasized that Commerce did not consider whether comparing the Chinese price for the finished product to the U.S. export price constituted a “fair comparison” as required by statute, and that Commerce did not explain its deviation from its past practice of assessing antidumping and countervailing duty liability on the market of essential production. Id. The court remanded for Commerce to explain or reconsider this determination.21 Id. at 1307.
The statute requires that Commerce compare normal value (the price at which the subject merchandise sells in the country of export (i.e., home market)) and the export price (the price at which the subject merchandise sells in the U.S.).22
The subject merchandise, its physical attributes and its country of origin, is defined by the scope which is set by Commerce (e.g., widgets from China). Duferco Steel, Inc. v. United States, 296 F.3d 1087, 1096-97 (Fed. Cir. 2002). To say that a product is “from China” necessarily raises the question of what it means to be “from” a country. Commerce often answers this question by using a substantial transformation test with reference to the merchandise described in the order; but Commerce can answer this question by using the words of the order or some other analysis. SunEdison, Inc. v. United States, 40 CIT at —, 179 F.Supp. at 1320 (“Because the plain language of the antidumping statute does not unambiguously prescribe any specific approach to origin determinations, Commerce may exercise reasonable discretion in selecting a reasonable method for such determinations.“); see also Duferco Steel, Inc., 296 F.3d at 1097.
The origin established by Commerce, using a reasonable means it chooses, determines the relevant market for the purpose of assessing duty. The country-of-origin establishes the country by which normal value is determined. See
Commerce explained that the statute does not require a fair comparison based on the country where most of the production occurs, requiring only that a fair comparison be made between normal value and export price. See Solar II PRC Remand Results at 30-31. Commerce emphasized that, pursuant to the statute, the agency must be able to, “where appropriate, address unfair pricing decisions or unfair subsidization that is taking place in the exporting country where further manufacturing, such as assembly, occurs, notwithstanding that such activities may not necessarily result in a substantial transformation of merchandise.” Solar II PRC ADD Final Decision Memo at 15; Solar II PRC CVD Final Decision Memo at 41. Reasonably discernible from Commerce‘s explanation is that the proper market for normal value is not necessarily the market where most of the production occurs.27 Rather, the proper market for normal value is the market of origin as determined by Commerce‘s origin test in any given situation. As discussed above, in the Solar II PRC investigations, because the petitions alleged dumping and subsidization activities during panel assembly within the PRC, and because Commerce found that panels assembled in China using non-Chinese solar cells were being subsidized in China and dumped in the United States, Commerce applied a country of origin rule based on the country of panel assembly. See Solar II PRC Remand Results at 22-26. Commerce explained that this focus on China as the location of “qualitatively” significant production activity caused the agency to base normal value on the Chinese market, “without regard to where the majority of production may have taken place.” See id. at 28-31.
Commerce has sufficiently explained why its methodology for determining normal value is different in the Solar II PRC and Solar II Taiwan investigations. For each order, Commerce must identify the home market for the purpose of determining normal value. The statute does not require Commerce to base normal value on the country of essential production. While Commerce looks to the country of essential production in the Solar II Taiwan investigation, Commerce may deviate from prior practice as long as it explains why doing so is justified under the circumstances. Save Domestic Oil, Inc., 357 F.3d at 1283-84 (“[I]f Commerce has a routine practice for addressing like situations, it must either apply that practice or provide a reasonable explanation as to why it departs therefrom.“). Here, the subject merchandise is solar modules, laminates, and/or panels assembled in the PRC, which are exported to the United States from China. Pursuant to the statute, Commerce must compare the price at which the foreign like product is sold in the home market to the price at which the imported solar panels are sold in
D. Retroactive application of the scope determination
Finally, in SunPower the court deferred consideration of SunPower‘s argument that “Commerce unlawfully applied the final Solar II PRC scope determinations to entries made prior to the publication of the AD[D] and CVD orders.”28 SunPower, 40 CIT at —, 179 F.Supp.3d at 1308. SunPower argues that, should the court sustain Commerce‘s scope determination, the court should order that determination only applies prospectively. SunPower Br. 24 (“[S]hould the Court [affirm Commerce‘s final Solar II PRC scope determinations], the Court must prevent the retroactive application of the ‘scope clarification’ to entries made prior to the publication of the [ADD] order on February 18, 2015, or at least prior to the publication of [Commerce]‘s final determination in the Federal Register on December 23, 2014.“).
SunPower does not point to anything that supports the implication that Commerce‘s order applies to merchandise entered prior to publication of the final antidumping duty order. Defendant cites Commerce‘s instructions to U.S. Customs and Border Protection (“CBP“) to suspend liquidation and collect cash deposits as of the date of publication of the Solar II PRC ADD Final Results and Solar II PRC CVD Final Results on December 23, 2014, and Commerce‘s subsequent instructions (adjusted to reflect subsidy offsets) to CBP to suspend liquidation and collect cash deposits as of the date of publication of the Solar II PRC ADD and CVD orders on February 18, 2015. Def.‘s Resp. at 49-50. Indeed, Commerce instructed CBP to suspend liquidation of, and collect cash deposits at the final rate for, subject merchandise within the final scope which was “entered, or withdrawn from warehouse, for consumption on or after 12/23/2014,” the date of the publication of the Solar II PRC ADD Final Results. See CBP Instructions Pertaining to Final ADD Determination, Message No. 5002303, A-470-010, ADD PD 833, bar code 3251068-01 (Jan. 2, 2015). Commerce subsequently instructed CBP to suspend liquidation and collect ADD cash deposits at rates “adjusted to reflect the subsidy offsets determined in the companion [CVD] proceeding,” as of February 18, 2015, the date of publication of the final ADD and CVD orders. See CBP Instructions Pertaining to Interested Parties Order Instructions, Message No. 5051302, ADD PD 847, bar code 3271944-01 (Apr. 23, 2015). Commerce instructed CBP to suspend liquidation and collect CVD cash deposits at the final subsidy rates, as of February 10, 2015, “the date of publication of the International Trade Commission‘s final determination in the Federal Register.” See CBP Instructions Pertaining to Interested Parties Amended Final and CVD Order, Message No. 5051303, CVD PD 416, bar code 3261675-01 (Feb. 20, 2015). SunPower states that, “if Defendant‘s position is that the expanded scope, as embodied in the Department‘s scope ‘clarification,’ is not being applied to entries prior to the date of the final determinations, we agree with the Defendant‘s position.” Reply Br. Pls. SunPower Corporation and SunPower Corporation, Systems 21, Mar. 29, 2016, ECF No. 91. That is Defendant‘s position. See Def.‘s Resp. at 49-50. Accordingly, there is no dispute to resolve with respect to this issue.
For the foregoing reasons, the remand determination in the antidumping and countervailing duty investigations of certain crystalline silicon photovoltaic products from the People‘s Republic of China are found to comply with the court‘s order in SunPower, 40 CIT at —, 179 F.Supp.3d at 1308, and the conclusions are supported by substantial evidence and in accordance with law. Judgment will enter accordingly.
CLAIRE R. KELLY
JUDGE
Notes
SunEdison, 40 CIT at —, 179 F.Supp.3d at 1321-22.Because the final Solar II Taiwan scope incorporates the Solar II PRC exception for solar panels assembled in China—which exempts all such panels from the otherwise generally applicable rule that the origin of solar panels is determined by the origin of their constituent cells—these same concerns are also implicated here. Accordingly, Commerce‘s final Solar II Taiwan scope determination must be remanded for the same reasons as those elaborated in the court‘s prior opinion, to ensure that the agency‘s approach in these proceedings is consistent.
Solar II PRC Remand Results at 22-23 (quoting Solar II PRC ADD Final Decision Memo at 13, 14, n.45; Solar II PRC CVD Final Decision Memo at 38, 40, n.215).the Department found that the two-out-of-three scope language originally proposed by Petitioner would not be administrable, given that certain parties reported that they did not track where the ingots, wafers, or partial cells used in third-country cells being assembled into modules in the PRC were produced, and that it would be “virtually impossible” for importers to have that information. Additionally, in light of the history of evasion under the Solar I PRC Orders and the undisputed “complex and readily adaptable global supply chain,” the Department found that the two-out-of-three scope language would permit further evasion and ultimately incomplete relief.
Id.Commerce does not explain why either of its rationales provides a sufficient basis for disregarding Commerce‘s prior factual findings regarding the relative insignificance of panel assembly in determining country-of-origin. Nor does Commerce explain why either ground provides a sufficient basis for applying AD[D]/CVD duties to the entire value of panels that are assembled in China from non-Chinese cells, thereby failing to consider and explain an important aspect of the problem.
Id. at 4,161.What formerly was referred to as the “class or kind” of merchandise subject to investigation or covered by an order is now referred to simply as the “subject merchandise.” The substitution of terms from the Agreement is not, in itself, intended to affect the meaning ascribed by administrative and judicial interpretation to the replaced terms.
Solar II PRC ADD Final Decision Memo at 13; Solar II PRC CVD Final Decision Memo at 38-39.In these investigations, the alleged injury to the domestic industry stems from certain solar modules that are assembled in the PRC using cells produced in third countries, modules which are not covered by the scope of Solar I and, thereby, exceed the reach of the remedy afforded by the Solar I AD[D] and CVD orders. In addition, taking the instant PRC investigations together with Solar I, the Petitioner has alleged that the domestic industry is being injured as a result of the unfair pricing of cells produced in the PRC, modules containing such cells, and modules assembled in the PRC with third-country cells, as well as unfair subsidization in the PRC of both cells and modules. . . . [T]here exist prior AD[D] and CVD orders on related merchandise (i.e., solar cells and modules) from the PRC—Solar I—and following the initiation of the Solar I investigations and the imposition of those orders, there has been a shift in trade flows that has resulted in increased imports of non-subject modules produced in China. Such imports—if they are dumped and/or unfairly subsidized and injurious—should not be beyond the reach of the AD[D] and CVD laws.
SunPower, 40 CIT at —, 179 F.Supp.3d at 1305.Commerce continued to hold, in Solar II Taiwan as in Solar I PRC, with respect to all solar cells except those assembled into panels in China, that analyzing the market where most of the essential production takes place, i.e., the country of cell-production, is more important than basing the AD[D]/CVD analysis and liability on the market of the much less significant subsequent assembly step. Commerce does not square this circle in its rationale [in Solar II PRC].
merchandise in the first of the following categories in respect of which a determination for the purposes of part II of this subtitle can be satisfactorily made:
(A) The subject merchandise and other merchandise which is identical in physical characteristics with, and was produced in the same country by the same person as, that merchandise.
(B) Merchandise—
(i) produced in the same country and by the same person as the subject merchandise,
(ii) like that merchandise in component material or materials and in the purposes for which used, and
(iii) approximately equal in commercial value to that merchandise.
(C) Merchandise—
(i) produced in the same country and by the same person and of the same general class or kind as the subject merchandise,
(ii) like that merchandise in the purposes for which used, and
(iii) which the administering authority determines may reasonably be compared with that merchandise.