Chinese Solar Cell Exporter Says Commerce Wrong About NME Standard

Leaning on Loper Bright, Chinese solar cell exporter Yingli Energy pushed back against the Commerce Department’s usual presumption that exporters in nonmarket economies are under governmental control (Yingli Energy (China) Co. v. United States, CIT # 24-00131).

Previous cases “suggest that the wind is blowing against wide-ranging claims for deference,” Yingli said, citing one.

The exporter said that Commerce’s “policy is to presume that all companies within the NME country are subject to control by the Chinese Government unless the company demonstrates the absence of both de jure and de facto Government control over its export activities.” When Yingli was asked to be a mandatory respondent in the underlying review, it properly responded to all of Commerce’s questionnaires and established it was not under de facto control, it said. And Commerce found it wasn't under de jure control, it said; in other words, “there are no restrictive stipulations associated with the Yingli China’s business and export licenses; applicable legislative enactments decentralize the control of companies; and formal measures by the GOC decentralize control of Chinese companies.

Despite that, the department determined early in the separate rate review that Yingli was subject to government control, refusing to use the exporter as a mandatory respondent.

But the department isn’t properly applying the statutory standard for nonmarket economies, Yingli claimed -- because it is almost impossible to prove independence.

“Commerce has made perfectly clear that a respondents’ chances of rebutting majority GOC ownership is practically nil,” it said.

Citing the case Jilin Forest, Yingli said that “the statute does not indicate that Commerce can simply assign a rate to a mandatory respondent based on its relationship to an NME government.”

“The Court goes on to find that Commerce has never explained the reason behind its NME Presumption, which is also not found in the antidumping statute nor Commerce’s regulation,” it said. “... The Jilin Forest Court next expends considerable effort searching for the statutory authority for the NME Presumption, and finds none.”

Yingli said it manufactures and sells all of its merchandise to its former affiliate Yingli Green Energy Americas (YGEA) , which “has full autonomy in dealing with U.S. customers.” It said it still had reported an affiliation between the two entities because “YGEA’s general manager was also the vice president of Yingli China’s sales.”

It said YGEA is owned by an undisclosed company registered in the British Virgin Islands. That parent company was also Yingli’s owner, but Yingli’s ownership was “transferred to two entity shareholders.”

In a mostly redacted section of the public brief, it said Commerce, citing Yingli’s Section A and supplemental questionnaire responses, “calculated that this change in ownership resulted in the Government of China (“GOC”) indirectly … owning [part] of Yingli China.”

In its final results, the department upheld its decision, saying that the Chinese government held a majority equity ownership in Yingli, enough to find that the exporter was under de facto government control.

But when the department conducted that de facto analysis, however, it “almost completely ignored” the fact that “YGEA conducts all export sales with its U.S customers,” not Yingli China, Yingli China said. It said the parties agreed YGEA was owned entirely by a foreign entity.

“Commerce merely speculates that YGEA’s general manager is controlled by GOC because she is also the vice president of Yingli China in charge of sales,’ Yingli said.