Changzhou Trina Solar Energy Co. v. United States, Slip Op. 19-143
| Decision Date | 18 November 2019 |
| Docket Number | Slip Op. 19-143,Consol. Court No. 17-00246 |
| Parties | CHANGZHOU TRINA SOLAR ENERGY CO., LTD., ET AL., and SOLARWORLD AMERICAS, INC., Plaintiffs, and Consolidated Plaintiffs, v. UNITED STATES, Defendant, SOLARWORLD AMERICAS, INC., CHANGZHOU TRINA SOLAR ENERGY CO., LTD., and CHANGZHOU TRINA SOLAR ENERGY CO., LTD., Defendant-Intervenor and Consolidated Defendant-Intervenor. |
| Court | U.S. Court of International Trade |
Before: Jane A. Restani, Judge
PUBLIC VERSION
OPINION AND ORDER[Commerce's Remand Redetermination in the Administrative Review of Commerce's Countervailing Duty Order pertaining to Crystalline Silicon Photovoltaic Products from the People's Republic of China is remanded for reconsideration consistent with this opinion.]
Robert G. Gosselink, Jonathan M. Freed, and Kenneth Hammer Trade Pacific, PLLC, of Washington, D.C., for Plaintiffs and Consolidated Plaintiffs Changzhou Trina Solar Energy Co., Ltd., Trina Solar Limited, Trina Solar (Changzhou) Science & Technology Co., Ltd., Yancheng Trina Solar Energy Technology Co., Ltd., Changzhou Trina Solar Yabang Energy Co., Ltd., Hubei Trina Solar Energy Co., Ltd., Turpan Trina Solar Energy Co., Ltd., and Changzhou Trina PV Ribbon Materials Co., Ltd. (collectively "Trina").
Jeanne E. Davidson, Tara K. Hogan, and Justin R. Miller, International Trade Field Office, U.S. Department of Justice, of New York, NY for defendant United States. Of counsel on the brief was Paul Keith, Office of Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C. Timothy C. Brightbill, Laura El-Sabaawi, and Usha Neelakantan, Wiley Rein, LLP, of Washington, D.C., for Defendant-Intervenor SolarWorld Americas, Inc.
Restani, Judge: This action concerns the U.S. Department of Commerce's ("Commerce") remand redetermination filed pursuant to the court's order in Changzhou Trina Solar Energy Co. v. United States, Ct. No. 17-146, Slip Op. 18-167, 2018 WL 6271653 (CIT Nov. 30, 2018) ("Remand Order"); see Final Results of Redetermination Pursuant to Court Remand, ECF No. 103-1 (Apr. 25, 2019) ("Remand Results").
In the Remand Order, the court determined that remand was necessary for Commerce to further explain some of its decisions in the underlying review, or else alter its review. Specifically, the court remanded for Commerce to explain and/or reconsider its decision that respondent benefitted from the People Republic of China's ("PRC") Export Buyer's Credit Program ("EBCP") and whether to include potentially overbroad United Nations Comtrade data in Commerce's calculations of aluminum extrusion and solar glass benchmarks were appropriate. On remand, Commerce has attempted to clarify its decisions, but its ultimate decisions remain largely unaltered.
The court assumes familiarity with the facts of this case as discussed in the Remand Order, and accordingly recounts relevant facts only as necessary below. This matter involves a challenge made by Changzhou Trina Solar Energy Co., Ltd., Trina Solar Limited, Trina Solar (Changzhou) Science & Technology Co., Ltd., Yancheng Trina Solar Energy Technology Co., Ltd., Changzhou Trina Solar Yabang Energy Co., Ltd., Hubei Trina Solar Energy Co., Ltd., Turpan Trina Solar Energy Co., Ltd., and Changzhou Trina PV Ribbon Materials Co., Ltd. (collectively "Trina") against Commerce's remand redetermination in the First Administrative Review of Commerce's Countervailing Duty Order pertaining to photovoltaic products from the PRC. SolarWorld Americas. Inc. ("SolarWorld") is a defendant-intervenor.1
The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) and 19 U.S.C. § 1516a(a)(2) (2012). The court will uphold Commerce's remand redetermination unless "unsupported by substantial evidence on the record, or otherwise not in accordance with law[.]" 19 U.S.C. § 1516a(b)(1)(B)(i).
Lately, the Export Buyer's Credit Program ("EBCP') has been a subject of frequent litigation in the court. See Clearon Corp. v. United States, 359 F. Supp. 3d 1344, 1358-60 (CIT 2019) (collecting cases). The EBCP promotes PRC exports by providing preferential loan rates to foreign purchasers of PRC goods. See id. at 1347. Commerce found that following the 2013 revisions to the program, it appeared that the prior $2 million-dollar contract minimum requirement had been repealed and that EBCP loans might be routed through third-party banks and not simply issued from the EX-IM Bank as previously understood. See Decision Memorandum for the Preliminary Results of the Administrative Review of the Countervailing Duty Order on Certain Crystalline Silicon Photovoltaic Products from the People's Republic of China; 2014-2015, C-570-011, POR: 6/10/2014-12/31/2015, at 30 ( ). The Government of China ("GOC") refused to provide requested information on the 2013 revisions, including internal guidelines. See Id.Because of the GOC's non-cooperation, Commerce found that it was unable to verify respondent's certificates of non-use. See id. at 29-31; Decision Memorandum for Final Results and Partial Rescission of Countervailing Duty Administrative Review: Crystalline Silicon Photovoltaic Products from the People's Republic of China; 2014-2015, C-570-011, POR:6/10/2014-12/31/2015 at 31-34 ("I&D Memo"). Accordingly, Commerce found that respondent, through the application of AFA,2 had used the program despite their cooperation in the review. I & D Memo at 33-34.
The court remanded this issue concluding that Commerce did not demonstrate that respondent's certifications were unverifiable. Remand Order Slip Op. 18-167 at 8. The court held that although Commerce may apply AFA in a way that collaterally affects a cooperating party, Commerce had not attempted to avoid that undesirable consequence. See id. Additionally, Commerce did not explain "why it was necessary for it to fully understand the EBCP in order to ascertain claims of non-use." Id. at 7.
On remand, Commerce continues to find the certifications unverifiable and imputes usage of the EBCP based on the application of AFA. Remand Results at 7-19. Commerce admits that it previously verified non-use of the program, but says it can no longer do so now that it is unsure of the minimum contract size and whether loans are routed through third-party banks. See id. at 8-15. Commerce cites a discussion with an EX-IM Bank official who apparently indicated that the 2013 revisions eliminated the contract minimum. See Remand Results at 13; see also Administrative Review of Countervailing Duty Order on Citric and Certain Citrate Salts:Verification of the Questionnaire Resp. Submitted by the GOC, at 2, P.R.3 146 (Oct. 7, 2014) ("EX-IM Discussion"). In addition, Commerce cites a questionnaire submitted by the GOC in a different investigation indicating that an EBCP "borrower must be an importer or a bank approved by the China EX-IM Bank." See GOC's 7th Supp. Resp., Certain Amorphous Silica Fabric from China CVD Investigations (C-570-039), P. R. 146 (Sep. 6, 2016) ("GOC Silica Questionnaire Resp."). Commerce states that it cannot conduct verification using its normal practices given these uncertainties about the EBCP's potential use of third-party banks to distribute EBCP funds. Remand Results at 14-18. Commerce claims it requires the GOC's disclosure of the 2013 internal guidelines and other information, because without this information, effective verification is stymied, if not completely impeded, as Commerce would be unable to effectively sort through and identify potentially-suspect transactions given the size of the respondent companies.4 Id. at 18. Finally, Commerce states that it finds that respondent benefitted from the program after applying an adverse inference to evidence that the EX-IM Bank provided loans to "new and high-tech projects" and because "energy projects are eligible for this financing." Id. at 19.
Trina argues that Commerce has not addressed why information about the operation of the EBCP is necessary to verify usage. See Comments on Final Results of Redetermination Pursuant to Court Remand of Trina, ECF No. 75, at 5-8 (June 19, 2019) ("Trina Br."). It further contends that Commerce does have ways in which it could verify Trina's non-use certifications, and that Commerce has made no such attempt to do so. Id. at 7, 12. Finally, Trina argues that Commercemisapplies AFA and improperly relies on "uncorroborated statements from the petition." Id. at 11-14. The government defends Commerce's decision that verification was impossible and its use of AFA in finding that Trina benefitted from the EBCP. See Def.'s Reply to Comments on Remand Redetermination, ECF No. 82, at 6-12 (Aug. 9, 2019) ("Gov. Br.").
The court must determine whether substantial evidence exists by reviewing the record as a whole. See e.g., Nippon Steel Corp. v. United States, 337 F.3d 1373, 1379 (Fed. Cir. 2003). From the documents submitted by the government, it appears that Commerce became concerned about the verifiability of customer certifications of non-use following a discussion with an EX-IM Bank official in a different administrative review. See Remand Results at 13-14. During that discussion, the official apparently informed Commerce that in 2013 the $2 million-dollar contract minimum was eliminated. See EX-IM Discussion at 2. This prompted Commerce to review EX-IM Bank documents including "The Implementing Rules for the Export-Buyer's Credit of the Export-Import Bank of China" which Commerce claims appears to indicate the involvement of "intermediary Chinese bank[s]." See Remand Results at 14. When asked to clarify, the GOC failed to do so. Id. at 14-15. The record indicates, however, that the GOC had in another investigation a month earlier explained that:
According to the Ex-Im Bank, in order to make a disbursement, the Ex-Im Bank lending contract requires the buyer (importer) and seller (exporter) to open accounts with either the...
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