Commerce Alters AFA Rate Calculation in Solar Cell AD Review After CIT Remand
The Commerce Department on Sept. 26 stuck with its valuation of solar glass, an input in solar cells, and altered its adverse facts available calculations in remand results submitted to the Court of International Trade in a case on the 2019-20 administrative review of the antidumping duty order on solar cells from China. The result left the AD rates for respondents Jinko Solar and Risen Energy unchanged, with Jinko receiving a 20.99% rate and Risen getting a 12.24% rate (Jinko Solar Import and Export Co. v. United States, CIT Consol. # 22-00219).
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The trade court has twice now sent back Commerce's selection of its AFA rate for respondent Risen Energy, which the agency determined due to the failure of Risen's unaffiliated solar cell and module suppliers to provide their factors of production data. Most recently, CIT Judge Claire Kelly said Commerce illegally created a "multiplicative inverse" that it used to apply an adverse inference, noting the agency can only use information on the record and can't create information "not rooted in record evidence" (see 2506090057).
To calculate the AFA rate, Commerce “calculated a consumption ratio for three categories of inputs using simple averages of the highest ratio for each item in each category, and multiplied each input ratio by the multiplicative inverse of the simple average input ratio.” The agency did this to develop a formula for choosing an AFA rate after finding that just using the highest consumption quantity wasn't "sufficiently adverse" to induce cooperation. Kelly rejected this as not being logically related to record information.
CIT said that while getting a consumption rate for each of Risen's inputs, then separating them into three categories and averaging each might not be unreasonable, the agency erred by then dividing "the number 1 by the simple average input ratio to create a multiplicative inverse" then multiplying each input ratio by the multiplicative inverse of the simple average input ratio." By creating this "multiplicative inverse," Commerce was essentially creating new facts, Kelly said.
On remand, Commerce said it's calculating the adverse inference rate "without applying any multiplicative inverse."
The agency said it "used the variation of consumption quantities contained within the reported consumption data to estimate the difference between Risen’s reported consumption quantities and the unreported consumption quantities." To do this, Commerce said it first "isolated the highest reported consumption quantity for a given input in any [control number]." Then, the agency "averaged the reported consumption quantities for the remaining CONNUMs," then calculated the "percentage difference between the highest reported consumption quantity and the average of the other reported consumption quantities for each input."
This percentage difference is then added to the "highest reported consumption quantity" for the relevant input. However, since there are "hundreds of inputs," the agency grouped the inputs into three categories: solar modules, solar cells and material inputs for packing solar modules. Within these categories, Commerce then averaged the percentage adjustments calculated for each input in step one.
At this point, Commerce would then add this average to input cost as its AFA calculation.
The agency justified this approach by arguing that it hasn't tried to replicate the AD margin it would have calculated if it had the missing consumption quantities, but, instead, it's using the "facts otherwise available to fill in the missing information and add a 'built-in increase intended as a deterrent to non-compliance.'"
Kelly also remanded Commerce's decision to value solar glass using data under Romanian Harmonized System subheading 7007.19.80, rather than Malaysian HS subheading 7007.19.90. The agency initially justified their pick by noting that the Malaysian data is reported in square meters while the respondents reported their consumption of solar glass in kilograms, and the Romanian data doesn't exclude imports of the solar glass used by the respondents, despite claims to the contrary.
The trade court said Commerce "failed to address why it could not convert the respondents’ per-piece glass consumption quantities into square meters using record evidence" and "failed to address some of the examples of excluded products listed in the Romanian HS description of imports under number 7007.19.80 in its explanation of why the respondent’s glass is not excluded from that HS category." The court also noted that Romania was picked as the primary surrogate country.
In its draft remand results, Commerce recalculated respondent Jinko Solar's and Risen's solar glass consumption using the Malaysian data, though it switched its position in the final remand after considering comments from the petitioners. The petitioners argued that values for solar glass reported in square meters are "inherently distortive given the physical properties of solar glass," and the agency's calculation of the conversion factor to determine the respondents' solar glass in meters squared is "distortive." The petitioners also said the Romanian data is more specific to the solar glass consumed by the respondents than the Malaysian data.
Commerce said it agrees that "using Malaysian import values expressed in RM per square meter to value glass is distortive on a CONNUM-specific basis." If a respondent used glass with the same number of square meters but "very different thickness in two solar modules with different CONNUMs," it's "reasonable to conclude that the thicker glass would cost more and thus, all else being equal, the normal value for the CONNUM with the thicker glass would be greater than the normal value of the CONNUM with the thinner glass."