The latest on Russia sanctions from the International Trade and Supply Chain Team
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On September 22, 2017, the U.S. International Trade Commission (“ITC”) voted in the affirmative and found that U.S. producers are being seriously injured or are threatened with serious injury by imports of silicon photovoltaic cells and modules. This case was brought under section 201 of the Trade Act of 1974. Section 201 cases have two main parts: (1) the case is filed at the ITC which determines if there is such serious injury by imports, and if there is, then recommends a remedy, and (2) if there is a finding of such serious injury, the case goes to the President of the United States for final review and decision on the remedy. The President may modify or agree with the recommendation of the ITC on remedy.

During the vote, the ITC also addressed whether certain countries that are part of a free trade agreements (FTAs) with the United States (such as Mexico, Canada, and South Korea) should be exempt from an injury finding due to the special provisions that apply to such countries. The ITC unanimously found that Mexico and South Korea were sufficiently injurious to the U.S. industry to be included in the injury finding, but found by a vote of 3-1 that Canada was not causing such injury. For other FTA countries, such as Israel, Jordan, Morocco, and others, the ITC found no injury. As a result, Canada and the other non-injurious FTA countries will not be subject directly to a remedy in this case. However, we will need to await further explanation from the ITC as to the remedy that it is recommending in order to see if exports from Canada and those other countries will be affected in some manner by the relief.

The case now moves quickly to the remedy phase at the ITC. Prehearing briefs on remedy must be filed by the parties by September 27, a hearing on remedy will be held on October 3, and post-hearing briefs will be filed on October 10. The ITC is scheduled to vote on remedy on October 31 and will send it recommendations to the President by November 13. The President then will have 60 days to accept or modify the recommendations of the ITC.

The proposed remedy in the Petition may be seen as Suniva’s “opening offer” and probably will not be adopted in exactly the form proposed. Historically, the U.S. has been hesitant to impose minimum pricing standards as part of a remedy. Among other reasons for not doing so, such pricing standards are notoriously difficult to enforce. The tariffs being proposed also are quite high compared to the market price of the cells, so these tariffs also may be modified substantially. Companies purchasing cells or modules should follow the developments in the case closely to assess how relief may affect them. The possibility of widespread relief and disruption of the marketplace now is very real and each company will need to pursue a strategy based on its particular requirements and situation.

For more information on import issues, please contact Jeffrey Neeley.