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At the end of 2023, the USA solar industry witnessed a series of legal disputes as solar panel manufacturers and importers clashed with the USA Department of Commerce (DOC) and USA Customs and Border Protection (CBP) over the imposition of anti-dumping and countervailing duties on crystalline silicon photovoltaic cells and modules (CSPV).
The main cause of the case stemmed from the DOC’s decision to investigate tax evasion practices related to CSPV products imported from Southeast Asia, particularly from countries like Vietnam, Thailand, Malaysia, and Cambodia. The DOC’s final conclusion in August 2023 asserted that tax evasion occurred on a national scale in these countries, leading to strong opposition from the companies involved.
Auxin Solar, a USA solar energy manufacturer, filed a complaint with the USA Court of International Trade (CIT), alleging that the DOC failed to follow proper procedures in collecting import duties and requiring deposits, resulting in a surge of cheap imports from Southeast Asia. Auxin Solar argued that the DOC’s decision to grant exemptions from import duties on CSPV created an uncontrolled market, harming the USA domestic industry.
Additionally, Trina Solar Vietnam, one of the major manufacturers in Vietnam, also opposed the DOC’s conclusion. Trina argued that the DOC overlooked a critical step in the solar panel manufacturing process, specifically the formation of the p/n junction, leading to a mistaken conclusion that production in Vietnam was minimal or insignificant. Trina also opposed the DOC’s decision to extend its conclusion based on available data from a non-cooperating entity, adversely affecting other companies, including Trina.
Meanwhile, USA President Joe Biden issued Executive Order 10414 in 2022, declaring a state of emergency and calling for swift action to ensure an adequate supply of CSPV to meet USA electricity demand. Under this order, imports from Southeast Asia are exempt from duties until June 6, 2024, but must be used or installed in the USA by December 3, 2024.
The CIT rejected the USA government’s request to dismiss the case, stating that Auxin Solar’s complaint fell within the court’s jurisdiction. If the court’s ruling favors Auxin Solar, CSPV importers may face anti-dumping and countervailing duties on shipments that had been exempted under the president’s order.
In this context, the USA solar industry continues to face legal uncertainties and import costs as lawsuits related to tax evasion and import tax measures remain under review. Importers need to prepare thoroughly with relevant documentation and confirmations to avoid potential future taxes if the exemptions are deemed invalid.
ASL Law is a leading full-service and independent Vietnamese law firm made up of experienced and talented lawyers. ASL Law is ranked as the top tier Law Firm in Vietnam by Legal500, Asia Law, WTR, and Asia Business Law Journal. Based in both Hanoi and Ho Chi Minh City in Vietnam, the firm’s main purpose is to provide the most practical, efficient and lawful advice to its domestic and international clients. If we can be of assistance, please email to [email protected].
ASL LAW is the top-tier Vietnam law firm for Anti-dumping & countervailing. If you need any advice, please contact us for further information or collaboration.
