Federal Circuit Affirms Anti-Dumping Ruling Against Chinese Manufacturer
We’ve blogged before about legal translation services for antidumping lawsuits, and the importance of using certified legal translation services for these kinds of highly complex international business disputes. In the case discussed below, Sunpreme v. United States, SolarWorld Americas, Inc., (“Sunpreme”) a Chinese company filed suit challenging anti-dumping restrictions that the U.S. imposed against the solar modules it manufactured in China and sold in the United States. As discussed below, the Federal Circuit affirmed in part and reversed in part the decision by the CIT, thereby finding that all of Chinese plaintiff’s solar modules were subject to the anti-dumping orders originally imposed by the Commerce Department.
Background on Antidumping and Related Statutes.
“Dumping” is when a company exports their products to another country and charges a lower price than it would in its home market. According to the U.S. Customs and Border Protection’s “Frequently Asked Questions” page, “Dumping occurs when a foreign producer or exporter sells a product in the United States at a price that is below “normal value… Antidumping and countervailing duties are intended to offset the value of dumping and/or subsidization, thereby leveling the playing field for domestic industries injured by such unfairly traded imports.”
Anti-dumping laws seek to prevent this activity by imposing tariffs on foreign goods that are perceived to be priced below their fair market value.
According to the United States International Trade Commission’s website (USITC),
“Under the Tariff Act of 1930, U.S. industries may petition the government for relief from imports that are sold in the United States at less than fair value (“dumped”) or which benefit from subsidies provided through foreign government programs. Under the law, the U.S. Department of Commerce determines whether the dumping or subsidizing exists and, if so, the margin of dumping or amount of the subsidy; the USITC determines whether there is material injury or threat of material injury to the domestic industry by reason of the dumped or subsidized imports.”
A “dumping margin” is the margin by which the price the exporter charges in its own market exceeds the price charged in the United States. According to 19 U.S.C § 1677b(c)(4), Commerce must value the factors of production “to the extent possible . . . in one or more market economy countries that are—(A) at a level of economic development comparable to that of the nonmarket economy country, and (B) significant producers of comparable merchandise.”
If the U.S Department of Commerce (“Commerce”) continues to find that imports are being dumped or unfairly subsidized, it will direct Customs and Border Patrol to assess Antidumping and Countervailing Duties (“AD/CVD”) in the amount calculated by Commerce. For additional information regarding the conduct of Commerce’s investigations and reviews, visit Commerce’s website at https://www.trade.gov.
In Sunpreme, the plaintiff manufactured “solar modules” in China. Solar modules are composed of crystalline silicon photovoltaic cells (“CSPC”) and are used to convert sunlight into energy. When sunlight strikes such cells, the light energy is absorbed, electrons are mobilized, and energy capable of being translated into usable energy is generated.
In 2011, defendant SolarWorld field a petition with Commerce and the United States International Trade Commission (“ITC”) requesting the imposition of antidumping and countervailing duties on CSPC cells being imported from the People’s Republic of China under the Tariff Act of 1093. Commerce then issued antidumping and duty orders directed at those imports in 2012.
Nevertheless, the plaintiff operated as if its own merchandise was not covered by the antidumping orders until 2015, when Customs notified the plaintiff that it had determined that the plaintiff’s merchandise was, indeed, covered by the anti-dumping orders. Accordingly, the plaintiff was required to pay cash deposits in order for its shipments to be released from the port’s warehouse.
Plaintiff Challenges Custom’s Anti-Dumping Orders
In a separate proceeding, the plaintiff filed a complaint with the US Court of International Trade (CIT) challenging the Customs’ determination under 28 U.S.C. 1581 (i) that the plaintiff’s solar modules were subject to the orders. The court determined that Customs was unable to determine whether the plaintiff’s solar modules were, in fact, subject to the duty orders. However, that decision was later reversed in a separate appeal on the grounds that an alternative remedy was available; namely, a ruling from the Department of Commerce that interpreted the scope of the duty orders.
Thereafter, in November of 2015, plaintiff petitioned Commerce for a “scope ruling” to determine whether its solar modules were subject to the Orders. The plaintiff argued that Commerce’s Orders did not cover its solar modules because they do not contain CSPV cells and because they otherwise qualify for the Orders’ exclusion because they are thin film products.
In 2016, Commerce issued a final ruling which held that the plaintiff’s product could not circumvent the Orders and issued instructions to Customs requiring it to begin suspending the liquidation of the solar modules and collecting cash deposits.
The plaintiff then challenged Commerce’s ruling by filing a complaint in the CIT. The plaintiff argued that the ruling was unsupported by substantial evidence, but the CIT upheld Commerce’s ruling with respect to the suspension of liquidation for new imports. However, the CIT invalidated the order with respect to entries pre-dating the scope inquiry.
Court Review’s CIT’s Ruling
Based on the above, the Federal Circuit affirmed CIT’s conclusion that Commerce’s ruling that the plaintiff’s products were covered by the anti-dumping orders was supported by substantial evidence. However, the Federal Circuit reversed CIT’s determination that Commerce’s instructions to Customs were invalid with respect to the continued suspension of liquidation and collection of cash deposits on the plaintiff’s solar modules prior to the commencement of Commerce’s inquiry in 2014, finding that collection of such deposits was, in fact, allowed. In sum, the court reinstated Commerce’s liquidation instructions in full.
The case is Sunpreme, Inc. v. United States, SolarWorld Americas, Inc., 946 F.3d 1300 (Fed. Cir. 2020).
Get in touch with legal translators and court interpreters at All Language Alliance, Inc. to obtain certified legal translation services for documents written in Simplified Chinese, Korean, Traditional Chinese, Japanese, Italian, Arabic, Russian, Spanish, Portuguese, and other languages and to reserve a Mandarin court interpreter, a Japanese court interpreter, a Russian court interpreter, an Italian court interpreter, a Korean court interpreter, a Cantonese court interpreter for an in-person deposition or hearing, or to book a remote deposition interpreter for a virtual deposition or hearing via Zoom video conference for antidumping litigation cases.
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