Department of Commerce

On September 22, the Commerce Department published a final rule implementing the national security-related restrictions and obligations on recipients of incentive funds under the CHIPS and Science Act of 2022 (the “CHIPS Act”).  The final rule clarifies in some respects, and substantially expands in other respects, the definition of “foreign entity of concern” that appeared in Commerce’s proposed rule, issued in March. 

When Commerce issued its proposed rule, the Treasury Department cross-referenced Commerce’s definition of “foreign entity of concern” in Treasury’s concurrently proposed regulations for the CHIPS Act’s tax credit under section 48D of the Internal Revenue Code.  We commented at the time that if Treasury were to adopt that same definition for the section 30D electric vehicle (EV) credit under the Inflation Reduction Act (the “IRA”), there could be a significant reduction in the number of vehicles eligible for such credits relative to market expectations.  Treasury issued proposed regulations for other aspects of the 30D credit one week after the CHIPS Act guidance, but did not include an interpretation of the term “foreign entity of concern,” and to date has yet to do so (though it has signaled an intent to do so later this year).…

Continue Reading Commerce Final Rule Heightens Uncertainty as to How Treasury Will Interpret “Foreign Entity of Concern” for EV Credits Under Section 30D of the Inflation Reduction Act

On July 14, 2022, the U.S. Department of Commerce (“Commerce”) issued a request for a range of additional factual information in connection with the agency’s ongoing circumvention inquiries into solar cells and modules from Cambodia, Malaysia, Thailand, and Vietnam that employ inputs from mainland China.[1]  The deadline to respond is July 21st.…

Continue Reading Commerce Requests Factual Information in Solar Circumvention Inquiries on Level of Investment, Non-Financial Barriers, and Research and Development Expenses

On July 1, 2022, the U.S. Department of Commerce (“Commerce”) issued proposed rules implementing President Biden’s emergency declaration to provide temporary tariff relief on certain imports of solar cells and modules from Cambodia, Malaysia, Thailand, and Vietnam.[1] Commerce has provided the public with a 30-day period to comment on the proposed rules.

If enacted in their current form, the proposed rules would provide meaningful relief and increased tariff certainty to U.S. importers of solar cells and modules from these four Southeast Asian countries.  Specifically, under the proposed rules, Commerce will not impose tariffs during the emergency period established by President Biden on imports of solar cells and modules from those countries even if the products are found to be circumventing an existing antidumping (“AD”) or countervailing duty (“CVD”) order.  The proposed rules do not affect tariffs on imports that are already within the scope of existing AD/CVD orders on solar cells and modules from mainland China or Taiwan, including in-scope modules that incorporate cells from mainland China or Taiwan but are assembled in a different country.

While the proposed rules would represent a positive development for foreign manufacturers, U.S. importers, and U.S. consumers, including the U.S. solar project development industry, if promulgated in their current form, changes to the rules are possible.  It is therefore important for parties with a stake in Commerce’s pending circumvention inquiries to file comments by the August 1, 2022 deadline. …

Continue Reading Commerce Invites Comments on Proposed Rules Implementing Presidential Emergency Declaration on Solar Tariffs 

Presidential Action Triggered by Crisis in the U.S. Solar Industry

In recent months, the U.S. solar industry has been in the midst of an existential crisis, triggered by the threatened imposition of retroactive and future tariffs on a significant portion of U.S. imports. That crisis began on April 1, 2022, when the Department of Commerce (“Commerce”) initiated an inquiry to determine whether solar cells and modules from Cambodia, Malaysia, Thailand, and Vietnam are circumventing antidumping (“AD”) and countervailing duty (“CVD”) orders on solar cells from China. Solar cells from these countries generally accounted for approximately 80% of U.S. solar module imports in 2020.[1] If Commerce finds circumvention, solar cells and modules from the four target countries could not only be subject to combined AD/CVD tariffs approaching 250%, but Commerce’s regulations also allow for the agency to apply these tariffs retroactively to merchandise entering on or after April 1, 2022 (and potentially as far back as November 4, 2021). This threat of AD/CVD tariffs triggered a steep decrease in imports of solar cells and modules from Southeast Asia, and caused parts of the U.S. solar industry to come to a stand-still, furthering domestic reliance on coal.[2] Given this paralysis in the solar industry, lawmakers and others urged the President to provide relief from potential AD/CVD tariffs.[3]…

Continue Reading President Acts to Prevent Import Tariffs on Solar Cells and Modules from Southeast Asia

As described in an earlier post to this blog, the Commerce Department initiated an investigation under Section 232 of the Trade Expansion Act of 1962 into whether “laminations for stacked cores for incorporation into transformers, stacked and wound cores for incorporation into transformers, electrical transformers, and transformer regulators are being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security.”…
Continue Reading National Security Tariff Investigation of Steel-Based Components of Electrical Transformers: Comment Dates Set

The Commerce Department on May 4, 2020, announced a new investigation under Section 232 of the Trade Expansion Act of 1962, examining whether “laminations for stacked cores for incorporation into transformers, stacked and wound cores for incorporation into transformers, electrical transformers, and transformer regulators are being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security.”
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Continue Reading National Security Tariff Investigation Targets Steel-Based Components of Electrical Transformers

As reported in our blog post of last week, the Commerce Department Bureau of Industry and Security (“BIS”) recently determined in two private classifications that lease condensate — a type of stabilized and distilled light crude oil — is not subject to the United States’ broad ban on crude oil exports.  BIS has for years…