[Federal Register Volume 77, Number 23 (Friday, February 3, 2012)]
[Notices]
[Pages 5487-5489]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-2479]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-980]


Countervailing Duty Investigation of Crystalline Silicon 
Photovoltaic Cells, Whether or Not Assembled Into Modules, From the 
People's Republic of China: Preliminary Determination of Critical 
Circumstances

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: On October 19, 2011, the Department of Commerce (Department) 
received a countervailing duty (CVD) petition concerning imports of 
crystalline silicon photovoltaic cells, whether or not assembled into 
modules (solar cells), from the People's Republic of China (PRC), filed 
in proper form by SolarWorld Industries America Inc. (Petitioner).\1\ 
The petition included a timely allegation, pursuant to section 
703(e)(1) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 
351.206, that critical circumstances exist with respect to imports of 
the merchandise under investigation. In accordance with section 
703(e)(1) of the Act, because Petitioner submitted its critical 
circumstances allegation more than 20 days before the scheduled date of 
the preliminary determination, the Department must promptly issue a 
preliminary critical circumstances determination.\2\ Based on 
information provided by Petitioner and the data placed on the record of 
this investigation by the mandatory respondents, Wuxi Suntech Power 
Co., Ltd. (Suntech) and Changzhou Trina Solar Energy Co., Ltd. (Trina) 
(collectively, respondents), the Department preliminarily determines 
that critical circumstances exist for imports of solar cells from the 
PRC for Suntech, Trina, and all other producers or exporters.
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    \1\ See Petition for the Imposition of Antidumping and 
Countervailing Duties Against Crystalline Silicon Photovoltaic 
Cells, Whether or Not Assembled Into Modules, from the People's 
Republic of China, dated October 19, 2011 (Petition).
    \2\ An allegation of critical circumstances was also included 
with the antidumping duty (AD) petition. However, the statute 
establishes an earlier due date for a CVD preliminary determination 
than for an AD determination. As such, a critical circumstances 
determination in the AD proceeding will be issued subsequent to this 
determination.

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DATES: Effective Date: February 3, 2012.

FOR FURTHER INFORMATION CONTACT: Gene Calvert, Jun Jack Zhao or Emily 
Halle, AD/CVD Operations, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-
3586, (202) 482-1396 or (202) 482-0176, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On November 8, 2011, the Department initiated a CVD investigation 
of solar cells from the PRC.\3\ In the Initiation Notice, the 
Department stated that, if the criteria for a finding of critical 
circumstances are established, we would issue a critical circumstances 
finding at the earliest possible date.\4\ Section 703(e)(1) of the Act 
provides that the Department will preliminarily determine that critical 
circumstances exist if there is a reasonable basis to believe or 
suspect: (A) That ``the alleged countervailable subsidy'' is 
inconsistent with the Subsidies and Countervailing Measures (SCM) 
Agreement of the World Trade Organization, and (B) that there have been 
massive imports of the subject merchandise over a relatively short 
period. To determine whether imports of the subject merchandise under 
investigation have been ``massive,'' 19 CFR 351.206(h)(1) provides that 
the Department normally will examine: (i) The volume and value of the 
imports; (ii) seasonal trends; and (iii) the share of domestic 
consumption accounted for by the imports. In addition, 19 CFR 
351.206(h)(2) provides that imports must increase by at least 15 
percent during the ``relatively short period'' to be considered 
``massive.'' A ``relatively short period'' is defined in the 
regulations as normally being the period beginning on the date the 
proceeding begins (i.e., the date the petition is filed) and ending at 
least three months later.\5\ The regulations also provide, however, 
that, if the Department finds that importers, or exporters or producers 
had reason to believe, at some time prior to the beginning of the 
proceeding, that a proceeding was likely, the Department may consider a 
period of not less than three months from that earlier time.\6\
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    \3\ See Crystalline Silicon Photovoltaic Cells, Whether or Not 
Assembled Into Modules, from the People's Republic of China: 
Initiation of Countervailing Duty Investigation, 76 FR 70966 
(November 16, 2011) (Initiation Notice).
    \4\ See id. at 70969.
    \5\ See 19 CFR 351.206(i).
    \6\ Id.
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    In determining whether the above statutory and regulatory criteria 
have been satisfied, we examined the evidence presented in the October 
19, 2011 petition, comments from both

[[Page 5488]]

Petitioner and Suntech,\7\ and the respondents' shipment volume 
submissions.\8\
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    \7\ See letter from Suntech, ``Crystalline Photovoltaic Cells, 
Whether or Not Assembled into Modules, from the People's Republic of 
China: Opposition to Petitioner's Request for a Critical 
Circumstances Inquiry,'' November 28, 2011, and letter from 
SolarWorld, ``Crystalline Silicon Photovoltaic Cells, Whether or Not 
Assembled Into Modules, From the People's Republic Of China: 
Petitioner's Critical Circumstances Rebuttal Comments,'' December 8, 
2011.
    \8\ The Department requested that both mandatory respondents 
provide data on monthly quantity and value of shipments to the 
United States, to be updated within two weeks after the end of each 
month up until a preliminary determination is issued. We requested 
that the respondents report quantity in terms of solar cells, solar 
modules, and watts. See Memorandum to the File, ``Crystalline 
Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, 
From the People's Republic of China: Request for Critical 
Circumstances Information,'' December 15, 2011.
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Alleged Countervailable Subsidy is Inconsistent With the Subsidies 
Agreement

    To determine whether an alleged countervailable subsidy is 
inconsistent with the SCM Agreement, in accordance with section 
703(e)(1)(A) of the Act, the Department considered the evidence 
currently on the record of this investigation. Specifically, the 
petition included allegations, supported by factual information 
reasonably available to Petitioner, that the following export subsidy 
programs were available to solar cell producers: Export Product 
Research and Development Fund; Subsidies for Development of ``Famous 
Brands'' and ``China World Top Brands;'' Sub-Central Government 
Subsidies for Development of ``Famous Brands'' and ``China World Top 
Brands;'' Funds for Outward Expansion of Industries in Guangdong 
Province; Income Tax Reductions for Export-Oriented FIEs; Tax Refunds 
for Reinvestment of FIE Profits in Export-Oriented Enterprises; Export 
Credit Subsidy Programs; and Export Guarantees and Insurance for Green 
Technology. In addition, the petition included allegations that two 
import substitution programs were provided to solar cell producers: Tax 
Reductions for FIEs Purchasing Chinese-Made Equipment and VAT Rebates 
on FIE Purchases of Chinese-Made Equipment. The Department has 
determined in previous CVD investigations of imports from the PRC that 
a number of these programs constitute export subsidies and import 
substitution subsidies.\9\
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    \9\ See, e.g., Aluminum Extrusions From the People's Republic of 
China: Final Affirmative Countervailing Duty Determination, 76 FR 
18521 (April 4, 2011); Certain Coated Paper Suitable for High-
Quality Print Graphics Using Sheet-Fed Presses From the People's 
Republic of China: Final Affirmative Countervailing Duty 
Determination, 75 FR 59212 (September 27, 2010); Certain Kitchen 
Shelving and Racks From the People's Republic of China: Final 
Affirmative Countervailing Duty Determination, 74 FR 37012 (July 27, 
2009); Coated Free Sheet Paper From the People's Republic of China: 
Final Affirmative Countervailing Duty Determination, 72 FR 60645 
(October 25, 2007).
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    Based on the record evidence available to the Department at this 
time, the Department has a reasonable basis to believe or suspect that 
the subsidy allegations identified above are inconsistent with the SCM 
Agreement.

Massive Imports

    In determining whether there are ``massive imports'' over a 
``relatively short period,'' pursuant to section 703(e)(1)(B) of the 
Act, the Department normally compares the import volumes of the subject 
merchandise for at least three months immediately preceding the filing 
of the petition (i.e., the ``base period'') to a comparable period of 
at least three months following the filing of the petition (i.e., the 
``comparison period''). Imports normally will be considered massive 
when imports during the comparison period have increased by 15 percent 
or more compared to imports during the base period.
    Based on evidence provided by Petitioner, the Department finds that 
pursuant to 19 CFR 351.206(i), importers, exporters or producers had 
reason to believe, at some time prior to the filing of the petition, 
that a proceeding was likely. Specifically, the Department concludes 
that the available factual information provided by Petitioner indicates 
that importers, exporters or producers had reason to believe that a 
proceeding was likely during September 2011.
    The petition included factual information from August 24, 2009, 
through October 11, 2011. The factual information included commentary 
about the closing and/or bankruptcy of U.S. solar cell companies, 
articles discussing subsidies given to Chinese solar cell producers in 
the PRC, and articles concerning actions being taken by the U.S. Trade 
Representative. However, it is not until September 2011 that the 
information submitted explicitly refers to AD and CVD remedies.\10\ 
Given the factual information in the petition, we find that knowledge 
was imputed to importers, exporters or producers during September 2011.
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    \10\ See, e.g., Petition at Volume IV, exhibit 13 (an article by 
Bloomberg, dated September 8, 2011) and exhibit 16 (an article by 
Bloomberg, dated September 28, 2011).
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    In analyzing whether there have been massive imports, the 
Department typically determines whether to include a month in the base 
or comparison period depending on whether the prior notice took place 
in the first or second half of the month. However, in this case, 
regardless of whether knowledge was imputed to importers, exporters or 
producers in the first or second half of September 2011, we find that 
imports have been massive over a relatively short period of time. 
First, the Department compared imports during a base period of May 
through August 2011 to imports from September through December 2011 
(assuming knowledge was imputed in early September, putting that month 
into the comparison period). Second, we compared imports during a July 
through September 2011 base period to imports from October through 
December 2011 (assuming knowledge was imputed in late September, 
putting that month into the base period).
    According to the monthly shipment information provided by the 
respondents, the volume of shipments of solar cells to the United 
States increased by substantially more than 15 percent for Suntech and 
Trina, regardless of which of these two base and comparison periods we 
examined.\11\ The data provided by the two respondents is business 
proprietary information (BPI), and, therefore, the exact figures are 
included in a separate, BPI memorandum.\12\
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    \11\ At the Department's request, the respondents provided three 
measures of quantity (modules, cells, and wattage). The increase is 
more than 15 percent regardless of which quantity figure is used.
    \12\ See Memorandum to The File, from Jun Jack Zhao, 
``Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled 
Into Modules, from the People's Republic of China--Monthly Shipment 
Q&V Analysis for Critical Circumstances'' (Preliminary Critical 
Circumstances Memorandum), dated concurrently with this notice.
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    In determining if U.S. shipments from all other producers or 
exporters were massive, we relied on the experience of the mandatory 
respondents. We did not rely on data from the ITC to determine if 
critical circumstances existed for all other producers or exporters. 
After examining the ITC data for Harmonized Tariff Schedule of the 
United States numbers 8541.40.6020 (solar cells assembled into modules 
or panels) and 8541.40.6030 (solar cells, not assembled into modules or 
made up into panels) for the time period of June to November 2011, we 
found that the reported quantity amount is not uniform because it 
includes both modules and cells in its calculation of quantity. 
Therefore, based on the experience of the respondents, we find that 
shipments by all other producers or exporters also increased by more 
than 15 percent.

[[Page 5489]]

Conclusion

    In summary, in accordance with section 703(e)(1) of the Act, we 
find that there is a reasonable basis to believe or suspect that 
certain subsidy allegations under investigation are inconsistent with 
the SCM Agreement, and we find that there have been massive imports of 
solar cells over a relatively short period from Suntech, Trina, and all 
other producers or exporters. Given the analysis summarized above, and 
described in more detail in the Preliminary Critical Circumstances 
Memorandum, we preliminarily determine that critical circumstances 
exist with respect to imports of solar cells from the PRC for Suntech, 
Trina, and all other producers or exporters.\13\
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    \13\ See Preliminary Critical Circumstances Memorandum.
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Final Critical Circumstances Determination

    We will make a final determination concerning critical 
circumstances for solar cells from the PRC when we make our final 
determination in this CVD investigation. All interested parties will 
have the opportunity to address this determination further in case 
briefs to be submitted after completion of the preliminary subsidies 
determination.

ITC Notification

    In accordance with section 703(f) of the Act, we have notified the 
ITC of our determination.

Suspension of Liquidation

    In accordance with section 703(e)(2) of the Act, because we have 
preliminarily found that critical circumstances exist with regard to 
imports exported by Suntech, Trina and all other producers or 
exporters, if we make an affirmative preliminary determination that 
countervailable subsidies have been provided to respondents at above de 
minimis rates,\14\ we will instruct U.S. Customs and Border Protection 
(CBP) to suspend liquidation of all entries of solar cells from the 
PRC, as described in the ``Scope of Investigation'' section of the 
Initiation Notice,\15\ that are entered, or withdrawn from warehouse, 
for consumption on or after the date that is 90 days prior to the 
effective date of ``provisional measures'' (e.g., the date of 
publication in the Federal Register of the notice of an affirmative 
preliminary determination that countervailable subsidies have been 
provided to respondents at above de minimis rates).
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    \14\ The preliminary determination concerning the provision of 
countervailable subsidies is currently scheduled for February 13, 
2012.
    \15\ See Initiation Notice, 76 FR at 70969; see also Appendix 1.
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    At such time, we will also instruct CBP to require a cash deposit 
or the posting of a bond equal to the estimated preliminary subsidy 
rates reflected in the preliminary subsidies determination published in 
the Federal Register. This suspension of liquidation will remain in 
effect until further notice.
    This notice is issued and published pursuant to section 777(i) of 
the Act.

    Dated: January 27, 2012.
Paul Piquado,
Assistant Secretary for Import Administration.
[FR Doc. 2012-2479 Filed 2-2-12; 8:45 am]
BILLING CODE 3510-DS-P