Commerce Correctly Excluded Solar Sales When Calculating Prices, Government Tells CIT

The Department of Commerce correctly used its knowledge test to exclude from the final margin calculation sales made to JA Solar, argued the government in a July 8 brief at the Court of International Trade opposing a summary judgment by JA Solar (JA Solar International Limited v. U.S., CIT #21-00514).

The case concerns Commerce's fifth administrative review of the antidumping duty order on crystaline silicon photovoltaic products from Taiwan. For the review, Commerce picked two mandatory respondents, including the affiliated companies Inventec Solar Energy Corporation and E-TON Solar Tech. Co., Ltd. (together, ISEC). ISEC claimed that some of its sales constituted reportable U.S. sales because it knew the goods were headed for the U.S. after assembly. Commerce disagreed and excluded those sales when calculating the export price.

JA Solar challenged portions of the review and asked for summary judgment in a March 10 motion (see [Re:2203170042]).

The issue in this case, says the government, stems from Commerce’s “knowledge test” for determining a company’s first subject sale to the U.S. Commerce interprets the term “first sold” to mean the first party in the sales chain with knowledge of the U.S. destination at the time of sale. According to the government's brief, the test allows Commerce to determine which entity was the “price discriminator” that may have engaged in dumping and which company’s dumping margin should apply to the entry. The “knowledge test” determines whether sales should be treated as U.S. sales or not. If evidence indicates that the seller knew at the time of sale that the goods were for export to the U.S., then Commerce will include those sales in determining the export price.

Commerce applied these principles during the original investigation into Taiwan solar products to exclude a large portion of the sales reported by Gintech Energy Corporation, a mandatory respondent in that investigation. Gintech relied on employee affidavits to show that the company had knowledge of the final destinations of its products. During that investigation, Commerce ruled that the sworn statements were "self-serving" and "not documentary evidence of knowledge of the destination [of the merchandise].”

Similarly, JA Solar claims that ISEC had knowledge that sales to JA Solar were destined for the U.S. However, the government argues that JA Solar "relies significantly on sworn [after-the-fact] affidavits from its employees and those of ISEC." Therefore, Commerce correctly determined that ISEC did not know that sales to JA Solar were destined for the U.S. and properly excluded those sales when calculating ISEC’s final dumping margin, the government brief said.

"The fundamental problem with JA Solar’s position is that it seeks to rely on ... initial discussions and shipments, while disregarding record evidence that the companies’ discussions continued through negotiation of a formal contract," the government argues. "ISEC required language indicating that it did not know for certain whether the merchandise it sold to JA Solar was destined for the U.S." Even if the court agrees with JA Solar's claims, the court has recognized “tremendous deference" to the Department of Commerce and other agencies in their methodologies and conclusions in fact-finding inquiries and that it would be improper to overturn a determination “simply because the reviewing court would have reached a different conclusion based on the same record,” the government says.