Changzhou Trina Solar Energy Co., Ltd. et al v. United States

Slip Op. 19-12
UNITED STATES COURT OF INTERNATIONAL TRADE
CHANGZHOU TRINA SOLAR ENERGY CO., LTD.
ET AL.,
Plaintiffs and Consolidated
Plaintiff,
v.
UNITED STATES,
Defendant,
and
SOLARWORLD AMERICAS, INC. and
CHANGZHOU TRINA SOLAR ENERGY CO.,
LTD.,
Defendant-Intervenors and
Consolidated Defendant-Intervenor.
Before: Claire R. Kelly, Judge
Consol. Court No. 17-00199
PUBLIC VERSION
OPINION AND ORDER
[ Sustaining in part and remanding in part the U.S. Department of Commerce’s final
determination in the administrative review of crystalline silicon photovoltaic products from
the People’s Republic of China.]
Dated: January 25, 2019
Jonathan Michael Freed, Trade Pacific, PLLC, of Washington, DC, argued for plaintiff,
defendant-intervenor, and consolidated defendant-intervenor Changzhou Trina Solar
Energy Co., Ltd., and plaintiffs Trina Solar (Changzhou) Science & Technology Co., Ltd.
and Trina Solar (U.S.) Inc. With him on the brief was Robert George Gosselink.
Timothy C. Brightbill, Wiley Rein, LLP, of Washington, DC, argued for consolidated
plaintiff and defendant-intervenor SolarWorld Americas, Inc. With him on the brief were
Laura El-Sabaawi and Usha Neelakantan.
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Justin Reinhart Miller, Senior Trial Counsel, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington, DC, argued for defendant. With him on the
brief were Reginald T. Blades, Jr., Assistant Director, Jeanne E. Davidson, Director, and
Joseph H. Hunt, Assistant Attorney General. Of Counsel on the brief was James Henry
Ahrens, II, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance,
U.S. Department of Commerce, of Washington, DC.
Kelly, Judge: This consolidated action is before the court on motions for judgment
on the agency record filed by Changzhou Trina Solar Energy Co., Ltd., Trina Solar
(Changzhou) Science and Technology Co., Ltd., and Trina Solar (U.S.) Inc. (collectively
“Trina”) and SolarWorld Americas, Inc. (“SolarWorld”). 1 See [Trina] Pls.’ Rule 56.2 Mot.
J. Agency R., Feb. 2, 2018, ECF No. 29; SolarWorld’s Mot. J. Agency R., Feb. 2, 2018,
ECF No. 30. Trina and SolarWorld challenge various aspects of the U.S. Department of
Commerce’s (“Department” or “Commerce”) final determination in the administrative
review 	of 	the 	antidumping 	duty 	(“ADD”) 	order 	covering 	certain 	crystalline 	silicon
photovoltaic products from the People’s Republic of China (“PRC”). 2 	See Mem. Supp.
Mot. [Trina] J. Agency R. at 4–14, Feb. 2, 2018, ECF No. 29-3 (“Trina Pls.’ Br.”); Pl.
[SolarWorld’s] Mem. Supp. Rule 56.2 Mot. J. Agency R. at 10–27, Feb. 5, 2018, ECF No.
33 (“Pl. SolarWorld’s Br.”); see also Certain Crystalline Silicon Photovoltaic Prods. from
the [PRC], 82 Fed. Reg. 32,170 (Dep’t Commerce July 12, 2017) (final results of [ADD]
administrative review and final determination of no shipments; 2014–2016) (“Final
1 Changzhou Trina Solar Energy Co., Ltd., Trina Solar (Changzhou) Science and Technology Co.,
Ltd., and Trina Solar (U.S.) Inc. and SolarWorld Americas, Inc. also appear as defendant-
intervenors in this consolidated action.
2 On November 1, 2017, the court consolidated Changzhou Trina Solar Energy Co. Ltd. v. United
States, Ct. No. 17-00199 (USCIT filed July 27, 2017) and SolarWorld Americas, Inc. v. United
States, Ct. No. 17-00217 (USCIT filed Aug. 11, 2017). 	Order [Granting Consent Mots.
Consolidate], Nov. 1, 2017, ECF No. 24.
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PUBLIC VERSION
Results”) and accompanying Issues & Decision Mem. for the Final Results of [ADD]
Admin. [Review]: Certain Crystalline Silicon Photovoltaic Prods. from the [PRC]; 2014–
2016 at 9–10, A-570-010, (July 5, 2017), ECF No. 19-3 (“Final Decision Memo”); Certain
Crystalline Silicon Photovoltaic Prods. from the [PRC], 80 Fed. Reg. 8,592, 8,593–95
(Dep’t Commerce Feb. 18, 2015) ([ADD] order).
For the reasons that follow, the court sustains Commerce’s selection of surrogate
values for aluminum frames, module glass, 3 and financial ratios. The court also sustains
Commerce’s decisions to include import data with reported quantities of zero in the
surrogate value calculations and to deny offsetting respondent’s U.S. indirect selling
expenses by the debt restructuring income reported by its U.S. sales affiliate. However,
the court finds that Commerce’s decision not to offset the Ex-Im Bank Export Buyer’s
Credit Program is contrary to law and Commerce is directed to recalculate Trina’s U.S.
selling prices to account for the offset on remand.
BACKGROUND
This administrative review covers subject imports entered during the period of July
31, 2014, through January 31, 2016. 	See Initiation of Antidumping and Countervailing
Duty Admin. Reviews, 81 Fed. Reg. 20,324, 20,335 (Dep’t Commerce Apr. 7, 2016).
Commerce selected Changzhou Trina Solar Energy Co., Ltd./Trina Solar (Changzhou)
3 The final determination and the parties’ briefs use a variety of terms to refer to this input, e.g.,
module glass, tempered and coated glass, solar glass, and solar module glass. See, e.g., Final
Decision Memo at 27–28; Def.’s Resp. Br. at 18; Pl. SolarWorld’s Br. at 18. The court refers to
the input as “module glass” because it is how Commerce identifies the input in the title of the
comment addressing this issue. Final Decision Memo at 27 (Comment titled, “Surrogate Value
for Module Glass”).
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Science & Technology Co., Ltd. as the sole mandatory respondent for individual review.
See Resp’t Selection Mem. [for 2014–2016 ADD Admin. Review] at 5, PD 94, bar code
3472551-01 (May 24, 2016). 4 Aside from Commerce’s decisions to exclude Trina Solar
(U.S.) Inc.’s (“TUS”) debt restructuring income from its calculation of respondent’s indirect
selling 	expenses 	and 	to 	use 	a 	simple 	average 	to 	calculate 	the 	financial 	ratios,
Commerce’s conclusions regarding the other issues challenged before this Court did not
change from the preliminary to the final determination. 	For the final results, Commerce
calculated a weighted-average dumping margin of 	9.61% for the sole mandatory
respondent. Final Results, 82 Fed. Reg. at 32,171.
SolarWorld challenges as not in accordance with law and unsupported by
substantial 	evidence 	three 	aspects 	of 	Commerce’s 	final 	determination. 	See 	Pl.
SolarWorld’s Br. at 10–27. Specifically, SolarWorld challenges Commerce’s selection of
surrogate value data sources to value respondent’s aluminum frames, see id. at 10–18,
and module glass, see id. at 18–19, and Commerce’s selection of Styromatic (Thailand)
Co., Ltd.’s (“Styromatic”) 2015 financial statements to value respondent’s selling, general,
and administrative expenses. See id. at 20–27.
Trina challenges three other aspects of Commerce’s final determination. 	See
Trina Pls.’ Br. at 4–14. Specifically, Trina challenges as not in accordance with law and
unsupported by substantial evidence Commerce’s decision not to adjust respondent’s net
4 	On September 	20, 	2017, 	Defendant 	submitted 	indices to the 	public 	and 	confidential
administrative records underlying Commerce’s final determination. These indices are located on
the docket at ECF No. 19-4–5. Citations to administrative record documents in this opinion will
be to the numbers assigned to the individual documents by Commerce in these indices.
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U.S. selling prices by the amount countervailed in a parallel countervailing duty (“CVD”)
investigation. 	See id. at 4–9. 	Trina also challenges as unsupported by substantial
evidence Commerce’s decision to use zero import quantities to calculate surrogate
values. 	See id. at 9–11. 	Finally, Trina challenges as not in accordance with law,
unsupported by substantial evidence, and arbitrary Commerce’s decision to exclude, as
an offset, the debt restructuring income reported by TUS. See id. at 11–14. On October
16, 2018, the court held oral argument. Oral Ar., Oct. 16, 2018, ECF No. 56.
JURISDICTION AND STANDARD OF REVIEW
The Court has jurisdiction pursuant to 19 U.S.C. § 1516a(a)(2)(B)(iii) (2012) 5 and
28 U.S.C. § 1581(c) (2012), which grant the Court authority to review actions contesting
the final determination in an administrative review of an ADD order. The court will uphold
Commerce’s determination unless it is “unsupported by substantial evidence on the
record, or otherwise not in accordance with law[.]” 19 U.S.C. § 1516a(b)(1)(B)(i).
DISCUSSION
I. 	Surrogate Values
SolarWorld challenges Commerce’s surrogate value data selections for aluminum
frames, module glass, and financial statements to calculate surrogate financial ratios.
See Pl. SolarWorld’s Br. at 10–27. 	Defendant refutes all these challenges and argues
that Commerce’s final determination should be sustained in all respects. 	See Def.’s
Resp. Br. Opp’n [Trina’s & SolarWorld’s] Rule 56.2 Mots. J. Agency R. at 12–23, June 7,
5 Further citations to the Tariff Act of 1930, as amended, are to the relevant provisions of Title 19
of the U.S. Code, 2012 edition.
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2018, ECF No. 38 (“Def.’s Resp. Br.”). 	For the reasons that follow, the court sustains
Commerce’s surrogate value selections for aluminum frames, module glass, and financial
ratios.
A. Legal Framework
In 	antidumping 	proceedings 	involving 	non-market 	economies, 	Commerce
generally calculates normal value using the factors of production used to produce the
subject 	merchandise 	and 	other 	costs 	and 	expenses. 	19 	U.S.C. 	§ 	1677b(c)(1).
Commerce will value respondents’ factors of production using the “best available
information regarding the values of such factors in a market economy country or countries
considered to be appropriate by [Commerce].” 19 U.S.C. § 1677b(c)(1)(B). As the term
“best available information” is not statutorily defined, Commerce has broad discretion in
deciding what constitutes the best available information. 	See QVD Food Co. v. United
States, 658 F.3d 1318, 1323 (Fed. Cir. 2011). 	However, the agency must ground its
selection in the overall purpose of the statute, which is to calculate accurate dumping
margins. 	See Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1191 (Fed. Cir.
1990); see also Parkdale Int’l. v. United States, 475 F.3d 1375, 1380 (Fed. Cir. 2007). To
the extent possible, Commerce uses factors of production from 	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.”
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19 U.S.C. § 1677b(c)(4). 	Commerce’s regulatory preference is to “value all factors in a
single surrogate country.” 19 C.F.R. § 351.408(c)(2) (2016). 6
Commerce’s methodology for selecting the best available information evaluates
data sources based upon their: (1) specificity to the input; (2) tax and import duty
exclusivity; (3) contemporaneity with the period of review; (4) representativeness of a
broad market average; and (5) public availability. 	See Import Admin., U.S. Dep’t
Commerce, Non-Market Econ. Surrogate Country Selection Process, Policy Bulletin 04.1
(Mar. 1, 2004), available at http://ia.ita.doc.gov/policy/bull04-1.html (last visited Jan. 18,
2019); Decision Mem. for Prelim. Results of [ADD] Admin. Review: Certain Crystalline
Silicon Photovoltaic Prods. from the [PRC]; 2014–2016 at 15, PD 223, bar code 3547659-
01 (Feb. 28, 2017) (“Prelim. Decision Memo”).
B. Aluminum Frames
SolarWorld challenges Commerce’s valuation of respondent’s aluminum frames
using Thai Harmonized Tariff Schedule (“HTS”) subheading 7604.29.90001, covering
“Aluminum bars, rods and profiles: Of aluminum alloys: Other,” as not in accordance with
law and unsupported by substantial evidence. 	See Pl. SolarWorld’s Br. at 10–18.
Specifically, 	SolarWorld 	argues 	that 	evidence 	on 	this 	record 	demonstrates 	that
respondent’s frames were processed into a form beyond the simple aluminum extrusions
covered by HTS subheading 7604.29.90001. 	Id. at 12–14. 	Defendant responds that
Commerce 	reasonably 	concluded 	that 	import 	data 	under 	HTS 	subheading
6 Further citations to Title 19 of the Code of Federal Regulations are to the 2016 edition.
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7604.29.90001 is the best available information to value respondent’s non-hollow
aluminum profiles. 	See Def.’s Resp. Br. at 12–18. 	For the reasons that follow,
Commerce’s determination is sustained.
Commerce’s 	determination 	that, 	on 	this 	record, 	import 	data 	under 	HTS
7604.29.90001 constitutes the best available information with which to value respondent’s
frames is reasonable. 	In the final determination, Commerce explains that respondent
demonstrated that its frames are “non-hollow, aluminum profiles” and that nothing on the
record contradicts that characterization. 	See Final Decision Memo at 16–19. 	It further
explains that “profiles” under HTS 7604 include products that are further processed and
do not have a uniform cross section across their entire length. Id. at 16–17. 7 In support,
Commerce highlights the explanatory notes to HTS Chapter 76 that indicate that profiles
include products that “have been subsequently worked after production.” 	Id. at 16
(quoting Notes to Chapter 76 of the HTS). Commerce also references the International
Trade Commission’s (“ITC”) definition of aluminum profiles that allows for profiles to be
“cast, sintered, and worked after production[,]” to explain that profiles with corners, i.e.,
not uniform across the entirety of their length, are not necessarily excluded from HTS
7604. 	Id. at 17. 	Commerce explains that SolarWorld’s proposed alternative, HTS
subheading 7616.99, is an “other” category and HTS 7616 includes articles dissimilar to
7 SolarWorld contends that Commerce’s determination is not in accordance with law because
Commerce construes the word “profile” in HTS 7604 beyond its statutory definition. 	See Pl.
SolarWorld’s Br. at 10–12, 17–18. Commerce's task is not to classify the solar frame inputs used
for customs purposes, but to select the best available data to value the factors in production in
question. 	See SolarWorld Americas, Inc. v. United States, 910 F.3d 1216, 1223–24 (Fed. Cir.
2018) (“SolarWorld I”).
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aluminum frames such as “nails, tacks, staples, screws, bolts, nuts, screw hooks, rivets,
cotters, cotter pins, washers, knitting needles, bodkins, crochet hooks, embroidery
stilettos, safety pins, other pins and chains, and cloth, grill and netting of aluminum wire.”
Id. at 18.
Nonetheless, SolarWorld argues that respondent’s profiles are finished aluminum
goods and can no longer be considered profiles. 	Pl. SolarWorld’s Br. at 12–14.
Specifically, 	SolarWorld 	claims 	that 	evidence 	on 	this 	record 	demonstrates 	that
respondent’s aluminum profiles are no longer extrusions, but aluminum frames that have
been so further processed and manufactured as to constitute a product ready for
immediate incorporation into solar modules. See id. (citing e.g., [Changzhou Trina Solar
Energy Co., Ltd. & TUS’s] First Suppl. Questionnaire Resp. at Ex. 19, CD 171, bar code
3502007-05 (Aug. 29, 2016); [Changzhou Trina Solar Energy Co., Ltd. & TUS’s] Section
C & D Questionnaire Resp. at Exs. D-13, D-15, CD 124, bar code 3488926-12 (July 19,
2016); [SolarWorld Americas, Inc.’s] Submission of Info. to Rebut, Clarify, or Correct Info.
Pertaining to Surrogate Values at Ex. 4, PD 157, bar code 3500966-01 (Aug. 23, 2016);
[Changzhou Trina Solar Energy Co., Ltd. & TUS’s] Third Suppl. Questionnaire Resp. at
Ex. 6, PD 176, bar code 3534067-01 (Jan. 4, 2017)). 	In the final determination,
Commerce explains that because HTS 7604 does not necessarily cover only unfinished
aluminum profiles, the degree of finishing is not dispositive of whether HTS 7604 is the
best available information for valuing respondent’s frames. See Final Decision Memo at
16–17 (incorporating by reference its reasoning from the investigation and prior reviews
that because HTS 7604 does not specify whether the profiles are finished or unfinished,
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HTS 7604 does not necessarily exclude finished aluminum profiles and noting that the
ITC’s definition for profiles allows for the profiles to be worked on after production). It is
reasonably discernable that Commerce did not find that the mechanical features added
to Trina’s frames were sufficient to make the profiles more similar to the products
enumerated in HTS 7616. 	See id. at 18–19. 8 	Commerce’s determination is supported
by substantial evidence.
C. Module Glass
SolarWorld challenges Commerce’s valuation of respondent’s module glass using
Thai HTS subheading 7007.19.90000, covering “toughened (tempered) safety glass, not
suitable for incorporation in vehicles, aircraft, spacecraft or vessels; other,” as not in
accordance with law and unsupported by substantial evidence. See Pl. SolarWorld’s Br.
at 6, 18–19. 	Specifically, it argues that HTS 7007.19.90000 does not cover tempered
glass of “extreme durability” and accordingly undervalues the input. 	Id. 	Defendant
responds that Commerce reasonably concluded that import data under HTS subheading
7007.19.90000 is the best available information to value respondent’s module glass. See
Def.’s Resp. Br. at 18–19. 	For the reasons that follow, Commerce’s determination is
sustained.
8 SolarWorld also argues that Commerce did not accord proper weight to Customs and Border
Protection rulings classifying the merchandise in question and did not address the rulings which
detract from its determination. 	See Pl. SolarWorld’s Br. at 14–17. 	Commerce reasonably
explained why the rulings placed on the record do not undermine its determination that HTS 7604
represents the best available information for valuing respondent’s frames, see Final Decision
Memo at 18, and the court will not reweigh record evidence.
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Commerce 	reasonably determined that 	import 	data under 	HTS subheading
7007.19.90000 constitutes the best available information with which to value this input.
In the final determination, Commerce explains that respondent’s characterization of the
module glass as “tempered” is supported by record evidence and that HTS subheading
7007.19.90000 plainly covers tempered glass. 	See Final Decision Memo at 29.
SolarWorld does not dispute that respondent’s module glass is tempered. 	See Pl.
SolarWorld’s Br. at 18. 	Instead, it argues that record evidence demonstrates that
respondent’s module glass was strengthened through various surface treatments, that
HTS 7007.19.90000 does not account for such treatments, and that HTS 7007.29.90,
which covers “Laminated safety glass; Other; Other,” does. See id. at 18–19. Relying on
an explanatory note from the World Customs Organization, Commerce explains that
laminated safety glass is created by sandwiching of multiple layers of glass and plastic.
See 	Final 	Decision 	Memo 	at 	29–30 	(citing 	[Trina’s] 	Info. 	for 	the 	Department’s
Consideration in Prelim. Results at Ex. C-2, PD 205–07, bar codes 3539773-01–03 (Jan.
30, 2017)). It further explains that evidence on this record does not support the conclusion
that respondent’s module glass was made in such a fashion or that the additional
processing it underwent “result[ed] in glass comparable to laminated glass[.]” 	Id. at 30.
Commerce has explained why record evidence supports its determination and addressed
the 	evidence 	SolarWorld 	claims 	detracts 	from 	its 	determination. 	Therefore, 	its
determination is reasonable.
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D. Financial Ratios
SolarWorld 	challenges 	Commerce’s 	reliance 	on 	Styromatic’s 	2015 	financial
statements to calculate respondent’s surrogate financial ratios as contrary to law and
unsupported by substantial evidence. See Pl. SolarWorld’s Br. at 20–27. For the reasons
that follow, Commerce’s determination is sustained.
As discussed above, Commerce is required to select a surrogate value for each
factor of production using “the best available information.” 	19 U.S.C. § 1677b(c)(1). 	In
selecting a data source to value a respondent’s surrogate financial ratios, Commerce’s
preference is to use financial statements from producers of identical or comparable
merchandise. 19 C.F.R. § 351.408(c)(4). Where the record lacks data from a producer
of identical merchandise, Commerce prefers statements from a producer of comparable
over non-comparable subject merchandise and from companies that did not receive
subsidies Commerce found to be countervailable. Final Decision Memo at 37–38 (citing
e.g., Certain New Pneumatic Off-the-Road Tires From the [PRC]: Issues & Decision Mem.
Final Results 2010–2011 Admin. Review of [ADD] Order at Cmt. 6, A-570-912, (Apr. 9,
2013), available at http://ia.ita.doc.gov/frn/summary/prc/2013-08894-1.pdf (last visited
Jan. 18, 2019)).
Commerce explains that Styromatic’s 2015 financial statements constitute the best
available information because these statements are audited, contemporaneous, and from
a company in the primary surrogate country that produced comparable merchandise. See
Final Decision Memo at 36–39; Prelim. Decision Memo at 24. SolarWorld contends that
Commerce erred in its selection because the record contained the financial statement of
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Ekarat Engineering (Public) Co., Ltd.’s (“Ekarat”), a producer of identical merchandise in
the primary surrogate country. 	See Pl. SolarWorld’s Br. at 20–23. Commerce explains
that during the period of review (“POR”) Ekarat sold distribution transformers which are
not comparable merchandise. 	Final Decision Memo at 35–36 (citing [SolarWorld’s]
Submission of Surrogate Values at Ex. 10 at 66, PD 146, bar code 3498792-03–04 (Aug.
15, 2016) (“Ekarat’s 2015 Annual Report”)). 	Commerce points to record evidence
demonstrating that 99% of Ekarat’s revenue was derived from “sales of distribution
transformers and services[.]” 9 Id. at 36. Commerce also explains that although Ekarat’s
financial statement shows that the company produced some solar modules and derived
one percent of its revenue from such business, the record did not support a conclusion
that Ekarat’s experience was comparable to that of a seller or manufacturer of solar
modules and cells. 	Id. at 37. 	SolarWorld presents no evidence that undermines
Commerce’s determinations. 	Therefore, Commerce’s conclusion is reasonable on this
record.
II. 	Decision Not to Offset the Countervailed Ex-Im Bank Export Buyer’s Credit
Program
Trina argues that Commerce’s decision to deny an offset for the export buyer’s
credit program that was countervailed in the parallel CVD investigation is contrary to law.
9 SolarWorld contends that Commerce’s conclusion regarding Ekarat’s primary source of revenue
is not supported by the record because the page Commerce cites to in support does not discuss
revenue. Pl. SolarWorld’s Br. at 21. Defendant responds that the cite in the final determination
is the result of inadvertent error and that another page of the same report supports Commerce’s
conclusion. Def.’s Resp. Br. at 22. At oral argument counsel for SolarWorld agreed that the page
Defendant cites supports Commerce’s conclusion. 	Oral Arg. at 01:25:20–01:25:25. 	It is
reasonable to presume that Commerce reviewed Ekarat’s 2015 Annual Report in its entirety in
reaching its final determination.
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See Trina Pls.’ Br. at 4–9. Defendant responds that Commerce acted in accordance with
its practice and should be given deference in interpreting ambiguous statutory language.
See Def.’s Resp. Br. at 23–27. 	Commerce’s refusal to offset the CVDs imposed is
contrary to law because Commerce necessarily determined that the export buyer’s credit
program was an export subsidy in the parallel CVD investigation.
To impose a CVD, Commerce must find that an exporter benefited from a
countervailable subsidy. 	19 U.S.C. § 1671(a)(1). 	A “countervailable subsidy” is a
financial contribution, price support, or funding mechanism, provided by an “authority,”
that confers a benefit to its recipient. 10 19 U.S.C. § 1677(5)(B). A countervailable subsidy
must be specific, meaning it is an (i) import substitution subsidy, (ii) export subsidy, or (iii)
domestic subsidy that is specific, in law or fact, to an enterprise or industry within the
10 (5) Countervailable subsidy
(A) In general
Except as provided in paragraph (5B), a countervailable subsidy is a subsidy
described in this paragraph which is specific as described in paragraph (5A).
(B) Subsidy described
A subsidy is described in this paragraph in the case in which an authority--
(i) provides a financial contribution,
(ii) provides any form of income or price support within the meaning of
Article XVI of the [General Agreement on Tariffs and Trade] 1994, or
(iii) makes a payment to a funding mechanism to provide a financial
contribution, or entrusts or directs a private entity to make a financial
contribution, if providing the contribution would normally be vested in the
government and the practice does not differ in substance from practices
normally followed by governments, to a person and a benefit is thereby
conferred. For purposes of this paragraph and paragraphs (5A) and (5B),
the term “authority” means a government of a country or any public entity
within the territory of the country.
19 U.S.C. § 1677(5)(A)–(B).
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jurisdiction of the authority providing it. 19 U.S.C. § 1677(5)(A); 19 U.S.C. § 1677(5A)(A)–
(D). 11 Thus, to impose a CVD, Commerce must find that an exporter both benefited from
a subsidy and that the subsidy was specific. 19 U.S.C. § 1677(5).
11 In general, a subsidy is countervailable if it “is specific as described in paragraph (5A).” 	19
U.S.C. § 1677(5)(A). According to paragraph (5A), “[a] subsidy is specific if it is an export subsidy
described in subparagraph (B) or an import substitution subsidy described in subparagraph (C),
or if it is determined to be specific pursuant to subparagraph (D).” 19 U.S.C. § 1677(5A)(A). The
statute provides the following definitions for such subsidies:
(B) Export subsidy
An export subsidy is a subsidy that is, in law or in fact, contingent upon export
performance, alone or as 1 of 2 or more conditions.
(C) Import substitution subsidy
An import substitution subsidy is a subsidy that is contingent upon the use of
domestic goods over imported goods, alone or as 1 of 2 or more conditions.
(D) Domestic subsidy
In determining whether a subsidy (other than a subsidy described in subparagraph
(B) or (C)) is a specific subsidy, in law or in fact, to an enterprise or industry within
the jurisdiction of the authority providing the subsidy, the following guidelines shall
apply:
(i) Where the authority providing the subsidy, or the legislation pursuant to
which the authority operates, expressly limits access to the subsidy to an
enterprise or industry, the subsidy is specific as a matter of law.
(ii) Where the authority providing the subsidy, or the legislation pursuant to
which the authority operates, establishes objective criteria or conditions
governing the eligibility for, and the amount of, a subsidy, the subsidy is not
specific as a matter of law, if—
(I) eligibility is automatic,
(II) the criteria or conditions for eligibility are strictly followed, and
(III) the criteria or conditions are clearly set forth in the relevant
statute, regulation, or other official document so as to be capable of
verification. . . .
19 U.S.C. § 1677(5A)(B)–(D).
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During the course of an investigation or review, Commerce may have difficulty
accessing and verifying the information it needs to satisfy the statutory elements for
imposing a CVD. Subject to 19 U.S.C. § 1677m(d), Commerce shall use facts otherwise
available to reach its final determination when “necessary information is not available on
the record,” a party “withholds information that has been requested by [Commerce],” fails
to provide the information timely or in the manner requested, “significantly impedes a
proceeding,” or provides information Commerce is unable to verify. 19 U.S.C. § 1677e(a).
Further, under certain circumstances, such as a party’s failure to comply to the best of its
ability with a request for information, Commerce may “use an inference that is adverse to
the interests of that party in selecting from among the facts otherwise available.” 	19
U.S.C. § 1677e(b). Commerce and parties generally refer to this two-step process by the
shorthand “AFA” or “adverse facts available.”
Regardless of the shorthand used, AFA is a two-step process that does not obviate
the need for Commerce to affirmatively find that the elements of the statute have been
satisfied. Accordingly, to impose a CVD, Commerce must find that an exporter benefited
from a specific subsidy. 19 U.S.C. § 1671; 19 U.S.C. § 1677(5), (5A). That Commerce
resorts to facts available and/or imposes an adverse inference under 19 U.S.C. § 1677e
to make those findings, does not mean that the required findings have not been made.
Pursuant to 19 U.S.C. § 1677a(c)(1)(C), where goods are subject to both
antidumping and countervailing duties, “[t]he price used to establish export price and
constructed export price shall be—(1) increased by . . . (C) the amount of any
countervailing duty imposed on the subject merchandise under part I of this subtitle to
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offset an export subsidy[.]” An export subsidy is defined as “a subsidy that is, in law or in
fact, contingent upon export performance, alone or as 1 of 2 or more conditions.” 	19
U.S.C. § 1677(5A)(B).
Commerce’s decision to deny an offset for the countervailing duties imposed is
contrary to law because in the parallel CVD investigation Commerce necessarily found
that the export buyer’s credit program was an export subsidy. See [CVD] Investigation of
Certain Crystalline Silicon Photovoltaic Products From the [PRC], 79 Fed. Reg. 76,962
(Dep’t 	Commerce 	Dec. 	23, 	2014) 	(final 	affirmative 	[CVD] 	determination) 	and
accompanying Issues & Decision Mem. for the Final Determination in the [CVD]
Investigation of Certain Crystalline Silicon Photovoltaic Products from the [PRC] at 30, C-
570-011, (Dec. 15, 2014) (“CVD Investigation Final Decision Memo”) (finding that through
the export buyer’s credit program the “Export-Import Bank of China (Ex-Im Bank) provides
loans at preferential rates for the purchase of exported goods from the PRC”) available
at http://ia.ita.doc.gov/frn/summary/prc/2014-30071-1.pdf (last visited Jan. 18, 2019). 	It
is reasonably discernible from Commerce’s description of the export buyer’s credit
program that Commerce found the program to be specific under the statute because the
benefits it provided were contingent upon export. See CVD Investigation Final Decision
Memo at 30, 91–94. 	Commerce did not resort to facts available or adverse inferences
when describing the export buyer’s credit program. 	Commerce did not describe any
aspect of the export buyer’s credit program in a manner that could lead to the conclusion
that the program was considered anything other than an export subsidy. 	Further,
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Commerce explicitly states that it is relying on AFA to determine that respondents used
the export buyer’s credit program, not that the program was specific. See id. at 91–94.
Here, Commerce asserts that it denied the offset because in the parallel CVD
investigation it did not make a finding as to whether the export buyer’s credit program was
contingent on export performance and countervailed the program on the basis of AFA.
See Final Decision Memo at 9–10. Commerce’s assertion here contradicts its assertion
in the first administrative review of the CVD Order where it explicitly states that the
“program is specific because it is contingent upon export performance, within the meaning
of 	section 	771(5A)(A)–(B) 	of 	the 	[Tariff] 	Act 	[of 	1930, 	as 	amended, 	19 	U.S.C.
§ 1677(5A)(A)–(B)].” Issues & Decision Mem. for the Final Results of the [CVD] Admin.
Review: Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules,
from 	the 	[PRC] 	at 	33, 	C-570-980, 	(July 	7, 	2015) 	available 	at
http://ia.ita.doc.gov/frn/summary/prc/2015-17241-1.pdf (last visited Jan. 18, 2019); see
also Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From
the [PRC], 77 Fed. Reg. 73,017 (Dep’t Commerce Dec. 7, 2012) ([CVD] order) (“CVD
Order”). To the extent that Commerce’s decision here implicitly disavows the conclusion
it reached in the first administrative review and marks the crafting of a new position, that
position rests on Commerce’s conflation of 19 U.S.C. § 1677e(a) and (b).
Commerce’s invocation of AFA implies that instead of using adverse facts to
support specific findings, as 19 U.S.C. § 1677e(a) and (b) require, respondents are simply
saddled with an adverse result by the combined operation of subsections 1677e(a) and
(b). Commerce states that “[its] determination to countervail the program was based on
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facts otherwise available with an adverse inference, as a result of non-cooperation by the
Government of China.” Final Decision Memo at 9. That statement conflates subsections
1677e(a) and (b) and obfuscates the findings Commerce had to, and did, make to impose
a CVD. Specifically, in the parallel CVD investigation, Commerce based its determination
that the respondents used the export buyer’s credit program, i.e., that respondents
benefited from the specific subsidy, in order to satisfy one of the statutory elements
necessary to impose CVDs. See CVD Investigation Final Decision Memo at 30, 91–94.
The statute does not authorize Commerce to impose CVDs because a party fails to
cooperate. 	Subsections 1677e(a) and (b) allow Commerce to resort to facts available
and to apply adverse inferences in making its findings. 	Neither subsection, however,
relieves Commerce from relying on some facts to make the requisite determinations to
satisfy the elements of 19 U.S.C. § 1677(5), (5A). 12 	If Commerce could simply declare
the statute satisfied without resorting to actual facts, Congress would have had no need
12 Although it is not clear from Commerce’s decision, or Defendant’s brief, Commerce may be
trying to argue that the CVD at issue here was determined to be “specific” more generally by virtue
of an adverse inference, i.e., it was not found to be an import substitution subsidy, a domestic
subsidy, or an export subsidy. Presumably, Commerce would then argue it could impose a CVD
without identifying the particular type of specific subsidy at issue. If this is Commerce’s argument,
it must fail. 	First, Commerce’s CVD determination does not support that position. 	More
importantly, the statute would not support that position. A subsidy is countervailable if it “is specific
as described in paragraph (5A).” 	19 U.S.C. § 1677(5)(A). 	According to paragraph (5A), “[a]
subsidy is specific if it is an export subsidy described in subparagraph (B) or an import substitution
subsidy described in subparagraph (C), or if it is determined to be specific pursuant to
subparagraph (D).” 	19 U.S.C. § 1677(5A)(A). 	Subsection 1677e(a) requires Commerce to
identify facts available prior to imposing an adverse inference. 	Commerce must therefore rely
upon facts to demonstrate specificity. Congress, by identifying the types of specificity, cabined
the choices available to Commerce. There is no provision for some sort of generalized specificity.
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to provide potential sources of information for adverse inferences, as it did in 19 U.S.C.
§ 1677e(b)(2)(A)–(D). 13
Further, while it is conceivable that Commerce could use subsections 1677e(a)
and (b) to make a finding that a particular program is an export subsidy, there is no
reasonable reading of Commerce’s final decision memorandum for the parallel CVD
investigation that Commerce used an adverse inference to make such a finding here.
Therefore, Commerce cannot now say that it did not make a finding of an export subsidy,
because (i) it had to have made a finding of specificity to satisfy the statute, (ii) it is
reasonably discernible that it found that the export buyer’s credit program was contingent
upon exports, see CVD Investigation Final Decision Memo at 30, and (iii) it only invoked
an adverse inference to find that the respondents used, i.e., benefited from, the program.
Id. 90–94.
Defendant’s argument that Commerce changed its practice with respect to
offsetting CVDs calculated on the basis of AFA also relies upon its conflation of
subsections 1677e(a) and (b). 	See Def.’s Resp. Br. at 24–27. 	Defendant argues that
“[i]n past proceedings, Commerce has determined that the term ‘export subsidy’ within
the meaning of 19 U.S.C. § 1677(5A)(B) encompasses certain subsidy programs for
13 Listing the petition, a final determination in the investigation under 19 U.S.C. § 1677, any
previous review under 19 U.S.C. § 1675 or determination under 19 U.S.C. § 1675b, or any other
information placed on the record, among the potential sources of information from which
Commerce can derive an adverse inference. 19 U.S.C. § 1677e(b)(2)(A)–(D).
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which specificity was determined on the basis of AFA.” 14 Id. at 24. Defendant’s argument
posits that the term “export subsidy” is ambiguous and therefore Commerce is free to
interpret the term as either including or excluding subsidies determined to be specific as
a result of facts available with an adverse inference. See id. at 24–26. Again, Defendant
starts with the premise that Commerce may impose CVDs simply as an adverse
inference. 	However, Commerce does not impose a CVD as a result of an adverse
inference. 	Commerce derives an adverse inference from a set of facts relevant to the
proceeding and those facts may lead to Commerce concluding that the necessary
elements of the statute are satisfied and a finding that a CVD is appropriate.
Further, there is no ambiguity with respect to the term “export subsidy” because
Congress has defined it. 	“An export subsidy is a subsidy that is, in law or in fact,
contingent upon export performance, alone or as 1 of 2 or more conditions.” 	19 U.S.C.
§ 1677(5A)(B). 	That Commerce might have used AFA to find that a subsidy was
contingent upon export performance does not render the term ambiguous. 	Even if one
could argue that the term “export subsidy” is ambiguous because it may or may not
14 Defendant invokes Jinko Solar Co., Ltd. v. United States, 41 CIT __, __, 229 F. Supp. 3d
1333,1359–61 (2017) as discussing and affirming Commerce’s prior practice of interpreting the
term “export subsidy” as including “subsidy programs for which specificity was determined on the
basis of AFA.” 	Def.’s Resp. Br. at 24. 	Defendant’s characterization of Jinko as affirming
Commerce’s prior practice with respect to the term “export subsidy” is incorrect. Jinko addressed
Commerce’s practice of offsetting a respondent’s ADD cash deposit rate by an export subsidy
amount calculated in a parallel CVD investigation on the basis of AFA. 	Jinko specifically
referenced the lack of statutory and regulatory guidance on how Commerce should calculate a
cash deposit rate, as compared to antidumping administrative reviews where the statute requires
that “the price used to establish export price and constructed export price must be increased by
“‘the amount of any countervailing duty imposed on the subject merchandise . . . to offset an
export subsidy.’” 	Jinko, 41 CIT at __, 229 F. Supp. 3d at 1359, n.30 (quoting 19 U.S.C. §
1677a(c)(1)(C)).
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include subsidies that Commerce cannot verify as contingent upon export, 15 here,
Commerce never questioned whether the export buyer’s credit program was a subsidy
contingent upon export. 16
Given that 19 U.S.C. § 1677a(c)(1)(C) uses the mandatory “shall” to direct
Commerce’s actions as to offsets when a countervailing duty is imposed and here
Commerce imposed such a duty, on remand Commerce must increase Trina’s U.S.
selling prices by the amount countervailed to offset the export subsidy.
15 If Commerce is unable to verify information, the statute directs Commerce to rely on facts
otherwise available. 19 U.S.C. § 1677e(a)(2)(D). Commerce clearly explains that the issue on
verification during the CVD investigation was whether respondents used the export buyer’s credit
program. 	See CVD Investigation Final Decision Memo at 91–94. 	There is no indication that
Commerce could not verify whether the export buyer’s credit program was, in law or in fact,
continent upon export during the CVD investigation.
16 Finally, even if Commerce used an adverse inference to determine that the export buyer’s credit
program was an export subsidy and the term could be construed as ambiguous, Commerce failed
to explain why its current practice is a reasonable interpretation of the statute. Where goods are
subject to both antidumping duties and countervailing duties, the statute requires Commerce to
increase the export or constructed export price by “the amount of any countervailing duty imposed
on the subject merchandise under part I of this subtitle to offset an export subsidy[.]” 19 U.S.C.
§ 1677a(c)(1)(C). 	The statutory language focuses on the purpose of the CVD, i.e., whether it
was imposed to offset an export subsidy. If Commerce determines that a program is an export
subsidy after resorting to AFA, it would not change the fact that it was imposed for the purpose of
offsetting the export subsidy. It is not apparent to the court why a practice of not offsetting a CVD
imposed on an export subsidy after a determination based on AFA would be reasonable and
Commerce has not explained why it would be reasonable. Defendant contends that Commerce
explained the change in its practice in prior determinations and that Trina was on notice of the
change starting approximately a year prior to the issuance of the Final Results. See Def.’s Resp.
Br. at 24–27 (citing Decision Mem. for the Prelim. Determination in the [ADD] Investigation of
Stainless Steel Sheet & Strip from the [PRC] at 13, A-570-042, (Sept. 9, 2016), available at
http://ia.ita.doc.gov/frn/summary/prc/2016-22397-1.pdf 	(last 	visited Jan. 	18, 	2019); 	Circular
Welded Carbon-Quality Steel Pipe from Pakistan: Affirmative Prelim. Less Than Fair Value
Determination 	Decision 	Mem. 	at 	13, 	A-535-903, 	(May 	31, 	2016), 	available 	at
http://ia.ita.doc.gov/frn/summary/pakistan/2016-13481-1.pdf (last visited Jan. 18, 2019)). 	The
determinations Commerce cites in support of its change in practice do not provide an explanation
for why the change in practice is reasonable. Each of these determinations simply asserts that a
change in practice has occurred.
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III. The Use of Zero-Quantity Import Data
Trina argues that Commerce erred by including values for import data with
reported quantities of zero in the surrogate value calculations. See Trina Pls.’ Br. at 9–
11. Trina emphasizes that there are more zero values than other low-quantity values in
the data and that inclusion of these zero-quantity values resulted in distorted surrogate
values. 	Id. at 10–11. 	Defendant argues that it was reasonable for Commerce to
determine that the values were reliable because record evidence does not show that the
zero-quantities are the result of errors. See Def.’s Resp. Br. at 27–29. For the following
reasons, Commerce’s decision is sustained.
In the final determination, Commerce explains that the zero-quantities in the data
are the result of small import quantities being rounded down to zero. See Final Decision
Memo at 12. 	Commerce also explains that had the zero-quantities been the result of
error, there would be an effect on the reported value, but that here, “there are no imports
in the data with a zero value.” 	Id. 	Trina argues that if the zero-quantities were tied to
rounding, it would expect the data to contain double the amount of import entries rounded
to the quantity of 1 than those rounded to 0. See Trina Pls.’ Br. at 10–11. As Commerce
explains, record evidence does not support the underlying assumption of this argument,
i.e., that every 0.5 interval unit of measure will have the same number of imports
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associated with it as those with zero-quantities. Final Decision Memo at 12. 17 Trina has
not shown that Commerce’s determination is unreasonable.
IV. Decision 	Not 	to 	Offset 	Trina’s 	Net 	U.S. 	Selling 	Expenses 	by 	Debt
Restructuring Income
Trina challenges Commerce’s decision to exclude a debt restructuring line item in
calculating 	TUS’s 	indirect 	selling 	expense 	ratio 	as 	not 	in 	accordance 	with 	law,
unsupported by substantial evidence, and arbitrary. 	See Trina Pls.’ Br. at 11–14; Pl.
Trina’s Submission Suppl. Authority Supp. Mot. J. Agency R. at 1–2, Oct. 30, 2018, ECF
No. 60 (“Trina Pls.’ Suppl. Br.”). Defendant argues that Commerce’s decision to exclude
debt restructuring gains as an offset to respondent’s U.S. indirect selling expenses is in
accordance with law and supported by substantial evidence. Def.’s Resp. Br. at 29–32;
Def.’s Suppl. Br. at 1–3, Nov. 30, 2018, ECF No. 66. 	For the following reasons,
Commerce’s determination is sustained.
Commerce’s decision to deny the offset was reasonable. 	The party seeking a
favorable adjustment on an expense carries the burden of “demonstrat[ing] to the
Secretary’s satisfaction that the allocation is calculated on as specific a basis as is
feasible, and must explain why the allocation methodology used does not cause
inaccuracies or distortions.” 19 C.F.R. § 351.401(g)(2); see also QVD Food Co. v. United
States, 658 F.3d 1318, 1324 (Fed. Cir. 2011) (explaining that it is the respondent’s burden
to populate the record with all relevant information). Commerce’s practice is to offset only
17 Trina also argues that the risk of introducing error by including the reported zero-quantities
outweighs the possibility that the zero-quantities can be explained by rounding. This argument is
not supported by record evidence.
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the “current portion of the debt restructuring gain[,]” as to avoid distortions. Final Decision
Memo at 26–27 (citing Issues & Decision Mem. for the Final Determination in the [ADD]
Investigation of Light-Walled Pipe & Tube from Mexico at 69–70, A-201-832, (Aug. 26,
2004) available at http://ia.ita.doc.gov/frn/summary/mexico/E4-2045-1.pdf (last visited
Jan. 18, 2019); Issues & Decision Mem. for [the] Final Results of [ADD] Admin. Review
of Certain Preserved Mushroom from India – Feb. 1, 2001, through Jan. 31, 2002 at 19–
21, A-533-813, (July 11, 2003) available at http://ia.ita.doc.gov/frn/summary/india/03-
17627-1.pdf 	(last 	visited 	Jan. 	18, 	2019); 	Issues 	& 	Decision 	Mem. 	for 	the 	Final
Determination in the [ADD] Investigation of Structural Steel Beams [ ] from South Korea,
65 ITADOC 41,437, (July 5, 2000) at Cmt. 26). 	Here, TUS’s 2015 income statements
contained, as a line item, debt restructuring income. 	Final Decision Memo at 27 (citing
Trina’s Sec. A Resp. at Ex. A-18, CD 34–110, bar codes 3480957-01–77 (June 24,
2016)). 	Respondent did not tie the income to the POR by producing, for example, the
debt restructuring agreement or placing on the record information that would explain the
agreement’s terms or information about the maturity of the relevant loans. 	See Final
Decision Memo at 26–27. 	It is reasonable for Commerce to require those seeking an
adjustment to tie the offset to a specific POR or period of investigation (“POI”) and it is a
respondent’s burden to populate the record with the relevant information.
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Trina argues that debt restructuring income is a period expense and is properly
attributed in its entirety to the period of review during which it is recorded. 18 	See Trina
Pls.’ Br. at 12–17; Pl. Trina’s Reply Def.’s & Def.-Intervenor’s Resps. Trina’s Mot. J.
Agency R. at 15, July 19, 2018, ECF No. 45 (“Trina’s Reply Br.”); Trina Pls.’ Suppl. Br. at
1–2. 	Specifically, Trina contends that because Commerce does not parse out indirect
expenses into POR and non-POR components and debt restructuring income is an
indirect selling expense, Commerce should not have denied respondent’s request for an
adjustment based on a failure to submit documents linking the debt restructuring income
to the POR. 	See Trina Pls.’ Suppl. Br. at 1–2 (citing Final Results of Redetermination
Pursuant to Court Remand in Liberty Frozen Foods Pvt. Ltd. v. United States, 35 CIT __,
791 F. Supp. 2d 1249 (2011) (“Liberty Remand Results”)). 	Liberty Remand Results
addressed how Commerce treats bad debt write-offs within a POR for the purposes of
calculating indirect selling expenses. 	See generally Liberty Remand Results at 4–9.
Unlike debt restructuring income that can span a prolonged period of time, a bad debt is
necessarily tied to a particular fiscal year and therefore Commerce is able to link it to a
18 Trina also contends that the final determinations Commerce cites in support of its practice are
incomparable because they address debt restructuring as a financial expense for purposes of
calculating the cost of production, and not as part of indirect selling expenses. See Trina Pls.’ Br.
at 12–17; Trina’s Reply Br. at 15. It is reasonably discernable that Commerce, to avoid distortions
by either 	overcounting 	or 	undercounting, 	requires 	parties to 	demonstrate that 	the debt
restructuring income claimed is tied to a specific POR or POI, notwithstanding what the income
offsets.
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POR or POI. 19 	Liberty Frozen Foods Pvt. Ltd. v. United States, 36 CIT __, __, 819 F.
Supp. 2d 1346, 1349–50 (2012). 	The court cannot say Commerce’s practice is
unreasonable given the nature of debt restructuring income.
CONCLUSION
For the foregoing reasons, it is
ORDERED that Commerce’s surrogate value selections for valuing respondent’s
aluminum frames, module glass, and financial ratios are sustained; and it is further
ORDERED 	that 	Commerce’s 	decision 	to 	include 	import 	data with 	reported
quantities of zero in the surrogate value calculations is sustained; and it is further
ORDERED 	that 	Commerce’s 	decision 	to 	deny 	an 	offset 	for 	TUS’s 	debt
restructuring income is sustained; and it is further
ORDERED that Commerce’s decision not to offset the Ex-Im Bank Export Buyer’s
Credit Program is contrary to law and is remanded to the agency to recalculate Trina’s
U.S. selling prices; and it is further
ORDERED that Commerce shall file its remand determination with the court within
90 days of this date; and it is further
19 Trina contends that Commerce’s determination is unsupported by substantial evidence
because record evidence does not demonstrate that the debt restructuring income was not tied
to the relevant POR. Trina Pls.’ Br. at 13. Trina’s argument misplaces the burden for production
of relevant information on Commerce and wrongly presumes that just because debt restructuring
income can offset indirect selling expenses it automatically qualifies as an offset. As Commerce
explains, although TUS’s debt restructuring income “could be considered an offset to indirect
selling expenses,” Commerce’s practice is to require the party seeking the adjustment to
substantiate its request by demonstrating that the income is tied to the relevant POR or POI to
avoid distortion. Final Decision Memo at 27. The court cannot say that Commerce’s practice is
unreasonable.
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ORDERED that the parties shall have 30 days thereafter to file comments on the
remand determination; and it is further
ORDERED that the parties shall have 30 days thereafter to file a reply to comments
on the remand determination.
/s/ Claire R. Kelly
Claire R. Kelly, Judge
Dated:January 25, 2019
New York, New York
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