United States Court of International Trade

Slip Op. 21-114

Before the Court in Canadian Solar Inc., et. al., v. United States, Consol. Court No. 19-00178, Slip Op. 21-114 (September 3, 2021) was a challenge to Commerce’s final determination in the fifth administrative review of the countervailing duty order on crystalline silicon photovoltaic cells, whether or not assembled into modules, from China covering the period from January 1, 2016, to December 31, 2016. Id. at 2. Commerce requested a remand on three of the issues: (1) reconsidering the benchmark for aluminum extrusions, (2) choosing the benchmark for solar grade polysilicon, and (3) its application of adverse facts available in its specificity finding for the provision of electricity for less than adequate renumeration (“LTAR”). Id. at 5-6. Plaintiffs supported the Government’s requests for remand. Id. at 6.

For the following reasons, the Court partially sustained and partially remanded Commerce’s Final Results in the fifth administrative review of Commerce’s countervailing duty order. Id. at 1. The court will uphold Commerce’s determinations in a countervailing duty proceeding unless they are “unsupported by substantial evidence on the record, or otherwise not in accordance with law[.]” 19 U.S.C. § Id. § 1516a(b)(1)(B)(i). Id. at 5. Commerce may assess a countervailing duty if, after investigating a subsidy, Commerce finds that “an authority 1) provides a financial contribution to a person, 2) a benefit is thereby conferred, and 3) the subsidy is specific.” Id. at 6-7. Prior to finding a countervailable subsidy, Commerce must establish that a benefit was conferred upon a respondent. 19 U.S.C. § 1677(5)(B). Id. at 10 “Commerce examines the creditworthiness of a company as a means of establishing a benchmark for measuring benefits from government loans. See 19 C.F.R. § 351.505(a)(4).” Id. at 16. Regulations enumerate a nonexhaustive list of factors Commerce may consider in making such a determination, which include (1) “receipt . . . of comparable commercial long-term loans;” (2) “[t]he present and past financial health of the firm, as reflected in various financial indicators calculated from the firm’s financial statements and accounts;” (3) “[t]he firm’s recent past and present ability to meet its costs and fixed financial obligations with its cash flow; and” (4) “[e]vidence of the firm’s future financial position[.]” 19 C.F.R. §§ 351.505(a)(4)(i)(A)–(D); “As the regulatory language makes clear, Commerce has ‘flexibility and discretion in determining which factors to consider and weigh in making its creditworthiness decision.’ Id. at 16. Commerce establishes countervailing duty rates by calculating an “individual countervailable subsidy rate[] for each investigated exporter and producer.” Id. at 19. If “necessary information is not available on the record” or if a responding party “withholds information” requested by Commerce, Commerce shall “use the facts otherwise available in reaching the applicable determination[.]” 19 U.S.C § 1677e(a) (2020). Id. at 29. Here, the Court found that Commerce’s specificity determination regarding the Government of China’s provision of aluminum extrusions for LTAR is not “unsupported by substantial evidence on the record, or otherwise not in accordance with law,” 19 U.S.C. § 1516a(b)(1)(B)(i), and is sustained. Id. at 10. Additionally, the Court explained that for the land value benchmark, “it was reasonable for Commerce not to use the data submitted by Canadian Solar as a benchmark due to a lack of geographic proximity and economic comparability.” Id. at 14.

“Based on similarity of geographic location, per capita income, regional population density, and economic development Commerce’s chosen tier three benchmark: land prices for industrial zones in Thailand from 2010, is supported by substantial evidence.” Id. at 14. Here, “Commerce’s decision not to consider affiliate loans was reasonable because of the distinction between cross-ownership and affiliation.” Id. at 19. Furthermore, “Commerce’s review of the financial information submitted, analysis under the four factors in 19 C.F.R. § 351.505(a)(4)(i), and determination that Canadian Solar was uncreditworthy in 2016 was reasonable and is sustained.” Id. As such, the Court sustained Commerce’s determination regarding, (1) the specificity finding for the aluminum extrusions for LTAR program, (2) Commerce’s chosen benchmark for the land for LTAR program and, (3) Canadian Solar’s lack of creditworthiness in 2016. Id. at 33. For the foregoing reasons, the Court remanded to Commerce for a determination consistent with this opinion on the remaining issues. Id.