Circumvention Inquiries Directed at Merchandise, Not Exporters, Importer Argues
Importer Florida Power & Light Company argued Jan. 9 that the Commerce Department had unreasonably elevated one country-of-origin factor -- research and development -- in importance above the other four in an antidumping duty review of solar cells from Cambodia (see 2412260039) (BYD (H.K.) Co. v. U.S., CIT # 23-00221).
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The company said the U.S. was misstating the issue before the court. Although the government “repeatedly characterizes the relevant inquiry as whether ‘BYD circumvented’ the orders,” the actual issue is whether “the merchandise exported by BYD circumvented the orders," it said.
“Neither the statute nor the [Uruguay Round Agreements Act, Statement of Administrative Action] SAA refer to the exporter of the merchandise."
It brought the argument in response to the U.S. claim that Commerce’s reliance on the R&D metric alone was justified, saying the department was reasonably concerned that Chinese exporters were circumventing the AD order on solar cells from China by “spinning off” the final stage of solar cell production to a third country. The government has made this claim in other solar cell cases as well (see 2409250049).
FPL also said the U.S. was making an “illogical” argument that Commerce’s consideration of all the necessary factors for a country-of-origin analysis “somehow renders irrelevant the dictionary definitions of ‘minor’ and ‘insignificant’” -- the terms used in the overall standard for a circumvention finding, which is that minor and insignificant processing doesn't necessarily play a part in determining that the location of that processing underlies a product’s country of origin.
Those factors, according to the law, were simply there to be “take[n] into account,” and weren’t governing on their own, the importer said. It also argued that other factors, such as the “nature of the production process,” were “inherently more probative” of the overall standard than R&D levels.
And it agreed with exporter BYD that Commerce hadn’t shown it had permissibly ignored processing activity in Cambodia that had been undertaken by a third party.
It said Commerce had “two choices” when it began its inquiry into whether the “process of assembly or completion” of solar cells in Cambodia was minor or insignificant: It could select producers of the subject merchandise only as the mandatory respondents, or “it could collect and consider the necessary information from a non-producing respondent’s suppliers or tollers” and conduct a full analysis.