Jinko Solar Co., Ltd. et al v. United States

Slip Op. 17-165
UNITED STATES COURT OF INTERNATIONAL TRADE
JINKO SOLAR CO., LTD. ET AL.,
Plaintiffs and Consolidated Plaintiff,
and
YINGLI GREEN ENERGY AMERICAS, INC. ET
AL.,
Plaintiff-Intervenors,
v.
UNITED STATES,
Defendant,
and
SOLARWORLD AMERICAS, INC. ET AL.,
Defendant-Intervenors and
Consolidated Defendant-Intervenors.
Before: Claire R. Kelly, Judge
Consol. Court No. 15-00080
PUBLIC VERSION
OPINION AND ORDER
[Sustaining in part and remanding in part the U.S. Department of Commerce’s remand
determination in its antidumping investigation of certain crystalline silicon photovoltaic
products from the People’s Republic of China.]
Dated: December 13, 2017
Alexander Hume Schaefer, Crowell & Moring, LLP, of Washington, DC, for Jinko Solar
Co., Ltd., Jinko Solar Import & Export Co., Ltd., and JinkoSolar (U.S.) Inc.
Timothy C. Brightbill and Usha Neelakantan, Wiley Rein, LLP, of Washington, DC, for
SolarWorld Americas, Inc.
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Neil R. Ellis, Brenda Ann Jacobs, Rajib Pal, and Richard L.A. Weiner, Sidley Austin, LLP,
of Washington, DC, for Yingli Green Energy Americas, Inc., Yingli Green Energy Holding
Co., Ltd., and Canadian Solar Inc.
Tara Kathleen Hogan, Assistant Director, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington, DC, for Defendant. With her on the brief were
Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, and
Reginald T. Blades, Jr., Assistant Director. 	Of Counsel on the brief was James Henry
Ahrens, II, Attorney, Office of Chief Counsel for Trade Enforcement and Compliance, U.S.
Department of Commerce.
Francis J. Sailer, Andrew Thomas Schutz, and Brandon Michael Petelin, Grunfeld
Desiderio Lebowitz Silverman & Klestadt, LLP, of Washington, DC, for Hanwha Solarone
(Qidong) Co., Ltd. and Hanwha Solarone Hong Kong Limited.
Kelly, Judge: 	Before the court for review is the U.S. Department of Commerce’s
(“Commerce” or “Department”) remand determination in the antidumping investigation of
certain crystalline silicon photovoltaic products from the People’s Republic of China
(“PRC” or “China”), filed pursuant to the court’s order in Jinko Solar Co., Ltd. v. United
States, 41 CIT __, __, 229 F. Supp. 3d 1333, 1361 (2017). 	See Final Results of
Redetermination Pursuant to Court Remand, Aug. 2, 2017, ECF No. 105-1 (“Remand
Results”); see also Certain Crystalline Silicon Photovoltaic Products from the [PRC], 79
Fed. Reg. 76,970 (Dep’t Commerce Dec. 23, 2014) (final determination of sales at less
than fair value) (“Final Results”) and accompanying Issues and Decision Memorandum
for the Final Determination of Sales at Less Than Fair Value, A-570-010, (Dec. 15, 2014),
ECF No. 34-5 (“Final Decision Memo”).
On remand, Commerce provided further explanation of its determination to
collapse Renesola Jiangsu Ltd. and Renesola Zhejiang Ltd. (collectively “ReneSola
group”) with Jinko Solar Co., Ltd. and Jinko Solar Import & Export Co., Ltd. (collectively
“Jinko group”), treating the ReneSola group and the Jinko group as a single entity for
purposes 	of 	the 	antidumping 	investigation. 	See 	Remand 	Results 	8–14, 	18–25.
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Commerce also provided further explanation of its determination to use South African
import data for subheading 8548.10, Harmonized Tariff Schedule (“HTS”), to value
respondents’ by-product offsets for scrapped solar modules when calculating normal
value. 1 	See id. at 15–18, 25–29. 	For the reasons that follow, the court sustains
Commerce’s determination to collapse the ReneSola and Jinko groups and remands for
reconsideration or further explanation, consistent with this opinion, Commerce’s selection
of South African import data for subheading 8548.10, HTS, for valuing the by-product
offset for scrapped solar modules.
BACKGROUND
The court assumes familiarity with the facts of this case as discussed in the
previous opinion, see Jinko Solar Co., Ltd., 41 CIT at __, 229 F. Supp. 3d at 1338–39,
and here recounts the facts relevant to the court’s review of the Remand Results. In this
investigation, Commerce selected Changzhou Trina Solar Energy Co. Ltd. and Renesola
Jiangsu Ltd. as mandatory respondents for individual examination in this investigation.
See Decision Memorandum for the Preliminary Determination in the Antidumping Duty
Investigation of Certain Crystalline Photovoltaic Products from the [PRC] at 3, PD 698,
1 In the prior opinion, the court noted that, while respondent Changzhou Trina Solar Energy Co.
Ltd. reported the by-product offset as “module scrap,” Commerce referred to the by-product as
“scrap solar cells” in the final determination, and requested Commerce to explain on remand its
selection of a heading for scrap modules, consistent with the reported by-product. 	Jinko Solar
Co., Ltd., 41 CIT at __ n.24, 229 F. Supp. 3d at 1353 n.24. On remand Commerce clarifies that
the offset is for scrapped solar modules, rather than scrapped solar cells. See Remand Results
8 n.28, 15 (“Although the petitioner and the Department have previously referred to the offset as
an offset for scrap solar cells, we clarify here that the offset in question is module scrap and should
be valued as such.” (emphasis in original)).
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bar code 3217803-01 (July 24, 2014);2 Section 777A of the Tariff Act of 1930, as
amended, 19 U.S.C. § 1677f-1(c)(2)(B) (2012). 3 Commerce determined that mandatory
respondent Renesola Jiangsu Ltd. is affiliated with Renesola Zhejiang, Jinko Solar Co.
Ltd., and Jinko Solar Import & Export Co., Ltd., pursuant to 19 U.S.C. § 1677(33)(F), and
that these entities should be collapsed and treated as a single entity for the antidumping
investigation, pursuant to 19 C.F.R. § 351.401(f) (2014).4 	See Final Results, 79 Fed.
Reg. at 76,971 n.2; Final Decision Memo at 60–67; Mem. Pertaining to Renesola and
Jinko Solar Affiliation and Single Entity Status at 7, PD 542, bar code 3207993-01 (June
6, 2014); see 19 C.F.R. § 351.401(f). 	Commerce selected South Africa as the primary
surrogate country and calculated mandatory respondents’ dumping margins using South
African import data to value factors of production and offsets for calculating respondents’
normal value. 	See Final Decision Memo at 29–37. 	Pertinent here, Commerce used
South African import data for subheading 8548.10, HTS (‘‘Waste and scrap of primary
cells, primary batteries and electric storage batteries; spent primary cells, spent primary
and electric storage batteries’’), to value respondents’ by-product offsets for scrap solar
modules. See id. at 50–51.
2 On July 7, 2015, Defendant filed on the docket the indices to the public and confidential
administrative records. 	These indices are located on the docket at ECF No. 34. 	All further
references in this opinion to administrative record documents include the administrative record
numbers assigned by Commerce in the indices.
3 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.
4 Further citations to the Code of Federal Regulations are to the 2014 edition.
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In the prior decision, the court sustained in part and remanded in part Commerce’s
determination in this investigation. 5 Jinko Solar Co., Ltd., 41 CIT at __, 229 F. Supp. 3d
at 1361. The court determined that Commerce’s conclusion that the Jinko entities
are affiliated with the ReneSola entities through common control by the Li family
grouping6 was supported by substantial evidence, see id., 41 CIT at __, 229 F. Supp. 3d
at 1339–43, but that the agency did not sufficiently support its decision to collapse the
affiliated entities. 	See id., 41 CIT at __, 229 F. Supp. 3d at 1343–47. 	The court noted
that, while the enumerated provisions of Commerce’s collapsing regulation require the
agency to consider the extent of overlap of individual members on the boards of entities,
“the evidence relied upon by Commerce only demonstrates that members of the Li family
grouping sat on the boards of both entities.” Id., 41 CIT at __, 229 F. Supp. 3d at 1344.
Nonetheless the court emphasized that, because the enumerated provisions of the
regulation are non-exhaustive, Commerce is not precluded from considering the fact that
members of the Li family sat on the boards of the ReneSola and Jinko groups’ entities as
5 The court sustained Commerce’s determinations: 1) that Mustek’s financial statements
constitute the best available information to value respondents’ general expenses and profit; 2)
that import data for articles covered under subheading 7604, HTS, constitutes the best available
information for valuing respondents’ aluminum frames; 3) to accept, for purposes of adjusting its
U.S. prices, the information provided by Changzhou Trina Solar Energy Co. Ltd. during verification
related to quality insurance expenses covering the entire period of investigation; and 4) that
respondents’ antidumping duty cash deposit rate should be offset by the full amount of export
subsidy calculated based on adverse facts available in the companion countervailing duty
investigation. See Jinko Solar Co., Ltd., 41 CIT, 229 F. Supp. 3d at 1361.
6 Commerce explains that the Li family grouping consists of three brothers and their brother-in-
law:
[T]he founder and CEO of Renesola Ltd. and Renesola Zhejiang, Mr. Li Xianshou,
and Mr. Li Xiande, Mr. Li Xianhua, and Mr. Chen Kangping, who are the Chairman
of the Board, Vice President, and CEO, respectively, of Jinko Solar and Jinko Solar
[Import & Export], are members of the same family. Mr. Li Xianshou, Mr. Li Xiande,
and Mr. Li Xianhua are brothers. Mr. Chen Kangping is a brother-in-law of Mr. Li
Xianshou.
Remand Results 10.
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suggestive of a potential for manipulation. Id., 41 CIT at __, 229 F. Supp. 3d at 1344–45.
However the court noted that, if Commerce intends to rely on the fact that members of
the Li family grouping sat on boards of both groups, Commerce must “explain how this
factor creates a significant potential for the manipulation of price or production.” 	Id., 41
CIT at __, 229 F. Supp. 3d at 1345. 	Additionally, the court determined that Commerce
had not explained how the transactions between the ReneSola and Jinko groups were
significant 	to 	a 	degree 	evidencing 	“intertwined 	operations” 	during 	the 	period 	of
investigation (“POI”), in light of Commerce’s finding that the two groups completed
in mutual transactions in 2013 than in 2012 and that Renesola Ltd.’s reported
transactions with Jinko group entities comprised a de minimis part of the ReneSola
group’s overall transactions. Id., 41 CIT at __, 229 F. Supp. 3d at 1345–47. On the basis
of these concerns, the court remanded the agency’s decision to collapse the ReneSola
and Jinko groups. See id., 41 CIT at __, 229 F. Supp. 3d at 1345, 1347.
The court also remanded the agency’s selection of South African import data for
subheading 8548.10, HTS, to value the by-product offset for scrapped solar modules
when calculating normal value. See Jinko Solar Co., Ltd., 41 CIT at __, 229 F. Supp. 3d
at 1353–55. 	The court determined that the selection was unsupported by substantial
evidence because Commerce had not considered the fact that the language of the
subheading “evidences that the products imported under that heading are specific to
electrical batteries” which, according to SolarWorld, “‘are produced using a significantly
different manufacturing process with completely different raw material inputs than are
solar cells.’” Id., 41 CIT at __, 229 F. Supp. 3d at 1354–55 (quoting SolarWorld Br. Supp.
Rule 56.2 Mot. J. Agency R. 23, Mar. 21, 2016, ECF No. 42 (“SolarWorld Br.”)). The court
also 	determined 	that 	Defendant 	had 	provided 	two 	post 	hoc 	rationalizations 	for
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Commerce’s selection of subheading 8548.10, HTS, and stated that, should Commerce
continue to select the subheading on remand and if either reason in fact underlies that
selection, “Commerce must make these rationalizations explicit and identify the record
evidence that supports them.”7 	Id., 41 CIT at __, 229 F. Supp. 3d at 1355. 	The court
remanded the issue to Commerce to reconsider or further explain its determination that
subheading 8548.10, HTS, is the appropriate category with which to value respondent’s
scrapped solar modules by-product, in light of the arguments to the contrary and the
record evidence. Id.
Commerce published the Remand Results on August 2, 2017. Jinko Solar argues
that, on remand, Commerce has continued to insufficiently explain its finding that the Li
family relationship creates the potential for price or production manipulation between the
ReneSola and Jinko groups and its finding of a significant level of intertwined operations
between the groups’ entities. Comments on Final Results of Redetermination Pursuant
to Court Remand Conf. Version 2–5, Sept. 5, 2017, ECF No. 110 (“Jinko Remand
Comments”). 	SolarWorld supports the agency’s decision to continue to collapse the
ReneSola and Jinko entities, contending that the agency has supported its decision with
evidence 	and 	explanation 	of 	significant 	potential 	for 	manipulation 	and 	intertwined
operations. 	See 	[SolarWorld]’s 	Comments 	on 	[Commerce]’s 	Final 	Results 	of
Redetermination Pursuant to Court Remand Conf. Version 4–6, Sept. 5, 2017, ECF No.
7 The two rationalizations that the court deemed post hoc are: 1) that Commerce selected
subheading 8548.10, HTS, because subheading 2804.69, HTS, would undervalue the costs
associated with the additional raw material components that make up solar cells, and 2) that
subheading 8548.10, HTS, was selected because both electrical machinery and solar modules
are capable of generating electricity. See Jinko Solar Co., Ltd., 41 CIT at __, 229 F. Supp. 3d at
1355 (citing Def.’s Mem. Opp. Pls.’, Pls.-Intervenors’, and Def.-Intervenors’ Rule 56.2 Mots. J.
Upon Agency R. 32, Sept. 23, 2016, ECF No. 59).
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111. SolarWorld continues to challenge Commerce’s use of subheading 8548.10, HTS,
to value the by-product offset for scrapped solar modules. See id. at 6–9.
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction pursuant to 19 U.S.C. § 1516a(a)(2)(B)(i) and 28 U.S.C.
§ 1581(c) (2012). Commerce’s antidumping determinations must be in accordance with
law and supported by substantial evidence. 19 U.S.C. § 1516a(b)(1)(B)(i). “The results
of a redetermination pursuant to court remand are also reviewed ‘for compliance with the
court’s remand order.’” Xinjiamei Furniture (Zhangzhou) Co. v. United States, 38 CIT __,
__, 968 F. Supp. 2d 1255, 1259 (2014) (quoting Nakornthai Strip Mill Public Co. v. United
States, 32 CIT 1272, 1274, 587 F. Supp. 2d 1303, 1306 (2008)).
DISCUSSION
I. 	Commerce’s Determination to Collapse the Affiliated Entities
The court remanded for Commerce to explain the agency’s determination to
collapse the affiliated ReneSola and Jinko groups, treating these companies as a single
entity for the antidumping analysis. Jinko Solar Co., Ltd., 41 CIT at __, __, 229 F. Supp.
3d at 1343–47, 1361. 	For the reasons that follow, Commerce has complied with the
court’s order and the agency’s determination of this issue on remand is sustained.
The statute does not address how Commerce is to treat affiliated entities for
purposes of the antidumping analysis. 	See 19 U.S.C. §§ 1675(a)(2)(A)(ii), 1677b(a).
However, the agency’s regulations provide that Commerce may treat affiliated producers
as a single entity when comparing export price with normal value “where those producers
have production facilities for similar or identical products that would not require substantial
retooling of either facility in order to restructure manufacturing priorities” and where
Commerce “concludes that there is a significant potential for the manipulation of price or
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production.” 	19 C.F.R. § 351.401(f)(1). 	To determine the existence of a “significant
potential for manipulation of price or production,” Commerce may consider “[t]he level of
common ownership” among the entities, “[t]he extent to which managerial employees or
board members of one firm sit on the board of directors of an affiliated firm,” and
“[w]hether operations are intertwined, such as through the sharing of sales information,
involvement in production and pricing decisions, the sharing of facilities or employees, or
significant transactions between the affiliated producers.” 	Id. § 351.401(f)(2)(i)–(iii).
Commerce may also consider non-enumerated factors when determining the existence
of a significant potential for manipulation. See id. § 351.401(f)(2) (noting that “the factors
[Commerce] 	may 	consider 	include” 	those 	factors 	enumerated 	in 	19 	C.F.R.
§ 351.401(f)(2)(i)–(iii)).
On remand, Commerce continued to determine that the Jinko and ReneSola
groups should be collapsed and treated as a single entity pursuant to 19 C.F.R.
§ 351.401(f), because “the level of common ownership by the Li family of the two groups,”
“the board memberships and management positions held by members of the Li family,”
and “the extent to which operations between the two groups are intertwined” suggest
significant potential for manipulation between the ReneSola group and the Jinko group.
See Remand Results 14. 	Commerce emphasized that one Li brother was the founder
and CEO of the entities within the ReneSola group while two other Li brothers and one
brother-in-law each held prominent management and/or board positions of entities within
the Jinko group. Id. at 9. Commerce clarified that, while no individual member of the Li
family held a position on both a ReneSola entity and a Jinko entity, “the prominent role
that the Li family,” as a whole, played in the management of these two groups, with
members of the family holding prominent positions on both groups, suggests “significant
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potential for the manipulation of price or production across the two company groups via
the Li family,” id., in accordance with 19 C.F.R. § 351.401(f)(1). 	Id. at 10. 	Commerce
reasoned that, due to the particular Li family relationship, there exists potential to “mak[e]
decisions based on considerations beyond normal commercial considerations . . . .” Id.
The agency concluded that, through these prominent positions within both groups, the Li
family is enabled “to direct outcomes across the companies, and the Li family is positioned
to coordinate its actions to direct the Rene[S]ola Group and the Jinko Group to act in
concert or out of common interest.” Id.
Commerce also addressed the court’s concern that the agency had not previously
explained how the transactions between the ReneSola and Jinko groups were significant
to a degree evidencing intertwined operations, particularly in light of the change in the
level of transactions during the POI. Remand Results 10–14; see Jinko Solar Co., Ltd.,
41 CIT at __, 229 F. Supp. 3d at 1345–47. Commerce explained that the change in the
level of transactions8 is not an indication of a particular trend in transactions between the
two groups, noting that “the record shows that the level of purchases from year to year
fluctuates . . . .” 	Remand Results 10. 	Commerce concluded that the evidence of
transactions between the Jinko and ReneSola groups instead demonstrates “that these
companies have an ongoing commercial relationship.” Id. at 11. Commerce highlighted
in particular the change 9 in raw material purchases from ReneSola entities by a Jinko
entity and noted that the year-end consolidated financial statements obtained from the
8 The change was a 	in the value of purchases between the two groups from 2012 to
2013. See Remand Results 10.
9 The change was an 	in raw material purchases from ReneSola entities by a Jinko
entity. See Remand Results 11.
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entities did not reflect a comprehensive picture of the financial interactions between the
entities during that calendar year. See id. at 11–12. While objecting to the percentages
put forward by Plaintiffs, Jinko Solar Co., Ltd. et al., to suggest that the level of
transactions 	were 	de 	minimis, 	Commerce 	noted 	that, 	“[i]rrespective 	of 	the 	actual
percentage of the cost of sales represented by these transactions, we do not believe that
over $18 million in purchases is an insignificant level of transactions.” 	Id. at 13.
Commerce further explained that the accounts receivable balance put forward by
Plaintiffs “represents the amount of money that ‘Jinko and its subsidiaries’ owed Renesola
Ltd. at a single point in time (December 31, 2013),” which “does not necessarily give an
indication as to the significance of Renesola Ltd.’s sales to ‘Jinko and its subsidiaries’
during 2013.” Id.
Commerce sufficiently supported its determination to collapse the ReneSola and
Jinko groups and treat them as a single entity in this investigation. The agency explained
the enumerated and non-enumerated factors that it considered, and why each was
relevant to a finding that there exists “a significant potential for the manipulation of price
or production” pursuant to 19 C.F.R. § 351.401(f)(1). 	Commerce took into account the
prominent presence of Li family members on the management and boards of Jinko and
ReneSola group entities, see Remand Results 8–10, and found in that presence the
ability to make business decisions based on considerations “beyond normal commercial
considerations” and “out of common interest.” 	Id. at 10. 	It is reasonable to determine
that family members in business relationships may have a common interest and that,
because family relationships are relationships beyond the scope of normal commercial
relationships, business relationships between family members might be influenced by
factors beyond normal commercial factors. It follows from these reasonable assumptions
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that family members with a business relationship may be in a position to use those
business relationships towards a common interest, in a way that would create the
potential for collaboration beyond the scope of a normal commercial relationship. 	The
reasonableness of Commerce’s assumption in this case is buttressed by the fact that, by
virtue of their positions in the entities, Li family members are “positioned to coordinate” to
“act in concert or out of common interest.” Id.
Plaintiffs, Jinko Solar Co., Ltd. et al., argue that Commerce did not sufficiently
explain its determination to collapse, contending that the agency simply relied on
conclusory statements that do not evidence “the level of potential cross-operational
control required to justify a collapsing determination.” 	Comments on Final Results of
Redetermination Pursuant to Court Remand 2, Sept. 1, 2017, ECF No. 109 (“Jinko
Remand Comments”). 	Plaintiffs contend that, to support a decision to collapse, the
entities’ “shareholders would effectively have to conspire together to manipulate the
activities of their companies [or . . .] other companies ultimately owned by their
companies,” 	emphasizing that “[t]here is no evidence of such activity, nor is there any
evidence supporting the inference that Jinko and ReneSola, through these shareholders,
would share sales information, become involved in each other’s production or pricing
decisions, or overlap or share facilities or employees.” 	Id. at 3. 	However, Commerce’s
regulations do not require such evidence to support a determination to collapse. 	As
discussed above, the regulations provide that Commerce may treat affiliated producers
as a single entity where the agency “concludes that there is a significant potential for the
manipulation of price or production,” 19 C.F.R. § 351.401(f)(1), for which the agency may
consider “[t]he level of common ownership” among the entities, “[t]he extent to which
managerial employees or board members of one firm sit on the board of directors of an
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affiliated firm,” “[w]hether operations are intertwined, such as through the sharing of sales
information, involvement in production and pricing decisions, the sharing of facilities or
employees, or significant transactions between the affiliated producers,” and any other
non-enumerated factors. 	Id. § 351.401(f)(2). 	The emphasis in the regulation is on the
potential 	for, 	not 	actual, 	manipulation. 	Plaintiffs’ 	argument 	that 	Commerce 	has
insufficiently supported its conclusion by focusing on potential manipulation therefore
fails.
Plaintiffs also argue that Commerce erred in its analysis by emphasizing that the
transactions between the two groups are not insignificant, rather than demonstrating that
the transactions “are so significant as to justify a determination that the companies’
operations are ‘intertwined.’” Jinko Remand Comments 4–5. Plaintiffs contend that “the
mere fact of an ‘ongoing commercial relationship’ (particularly one featuring a volume
[and value] of transactions as minimal as [those between the Jinko and ReneSola
groups]) is a far cry from the level of ‘intertwined operations’ that 19 [C.F.R. §]
351.401(f)(iii) contemplates.” 	Id. at 4. 	Contrary to Plaintiffs’ argument, on remand
Commerce does focus on the significance of the transactions, rather than the absence of
insignificance.10 	Commerce explains that it found that the “history of transactions”
10 In the Remand Results, Commerce does refer to the transactions as, essentially, not
insignificant in response to the argument, addressed by the court prior to remand, that a
in the values of transactions between the two entities from 2012 to 2013 suggests
that the entities were not intertwined. See Remand Results 12–13. In reference to the relative
drop in transactions between the two years, Commerce explains that “[i]rrespective of the actual
percentage of the cost of sales represented by these transactions, we do not believe that over
in purchases is an insignificant level of transactions.” Id. at 13. This statement
must be viewed in the context of Commerce’s explanation that “the record shows that the level of
purchases from year to year fluctuates, such that an increase or decrease in one year does not
necessarily predict a continuing trend in the level of activity between these companies.” Id. at 10.
It is apparent from this explanation that Commerce considers the transactions between these
entities in the context of their ongoing relationship, which Commerce has found to be significant.
See id. at 14.
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between these two groups indicates “over 	and 	in purchases
by Renesola Ltd. from ‘Jinko and its subsidiaries’ in 2012 and 2013, respectively,” which
the agency found to “demonstrate that, immediately prior to the POI, and in the calendar
year overlapping the POI, there was a significant level of transactions between the
Rene[S]ola and Jinko Groups,” from which the agency concluded “that the potential for
manipulation in the future exists.” 	Remand Results 14. 	For the foregoing reasons,
Commerce’s determination to collapse the Jinko and ReneSola groups into a single entity
for purposes of the antidumping duty analysis is reasonable.
II. 	Surrogate Values for Scrap Solar Modules
The court also remanded Commerce’s decision to use South African import data
for subheading 8548.10, HTS, to value the by-product offset for scrapped solar modules
when calculating normal value. 	Jinko Solar Co., Ltd., 41 CIT at __, 229 F. Supp. 3d at
1353–55, 1361. The court determined that the selection was unsupported by substantial
evidence because Commerce did not explain why the selection is reasonable in light of
“the language of heading 8548, HTS, [which] evidences that the products imported under
that heading are specific to electrical batteries,” which are dissimilar to scrapped solar
modules in both material and production processes. 	Id., 41 CIT at __, 229 F. Supp. 3d
at 1355 (citations omitted); see also SolarWorld Br. 23 (“Simply put, HTS heading 8548
has nothing at all to do with photovoltaic products, including scrap solar cells. Of course,
batteries 	are 	produced 	using 	a 	significantly 	different 	manufacturing 	process 	with
completely different raw material inputs than are solar cells.”). For the reasons that follow,
the court finds that, on remand, Commerce has still not adequately supported its selection
of a surrogate value for the respondents’ scrapped solar module by-product offsets, and
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the issue is remanded to Commerce for further explanation or reconsideration consistent
with this opinion.
Commerce determines whether a company is engaged in dumping by comparing
the normal value of the subject merchandise with the actual or constructed export price
of the merchandise. 19 U.S.C. § 1677b(a). The normal value of the merchandise is the
price of the merchandise when sold for consumption in the exporting country. 	Id.
§ 1677b(a)(1)(B). 	However, when the exporting country is, like China, a nonmarket
economy country, Commerce calculates the normal value for subject merchandise by
valuing inputs including the factors of production utilized in producing the merchandise
and “an amount for general expenses and profit plus the cost of containers, coverings,
and other expenses.” 	Id. § 1677b(c)(1). 	Commerce selects a surrogate value for each
of these inputs from a source in a market economy country that is economically
comparable 	to 	the 	nonmarket 	economy 	country 	and 	is 	a 	significant 	producer 	of
comparable merchandise. Id. § 1677b(c)(4)(A)–(B); see 19 C.F.R. § 351.408(b). 	To
select a surrogate value for each of these inputs, Commerce uses “the best available
information regarding the values of such factors in a market economy country or countries
considered to be appropriate by [Commerce].”11 19 U.S.C. § 1677b(c)(1); see 19 C.F.R.
§ 351.408(a)–(c). With “best available information” not defined in the statute, Commerce
has discretion to determine what data constitutes the best available information for
11 Commerce has a regulatory preference to value all inputs using data from a single surrogate
country. See 19 C.F.R. § 351.408(c)(2) (“[Commerce] normally will value all factors in a single
surrogate country.”).
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valuing the inputs.12 	QVD Food Co. v. United States, 658 F.3d 1318, 1323 (Fed. Cir.
2011); Nation Ford Chemical Co. v. United States, 166 F.3d 1373, 1377 (Fed. Cir. 1999).
On remand, Commerce continued to rely upon South African import data for
subheading 8548.10, HTS, as the best available information for valuing scrapped solar
modules. 	See Remand Results 15–18. 	Commerce 	explained 	that, after further
consideration, it continues to find that scrapped solar modules “are more similar to the
scrap battery materials covered under HTS 8548.10 than the raw polysilicon material
covered under HTS 2804.69.” Id. at 16. Commerce explained that the products covered
within subheading 8548.10, HTS “similarly include metal components and chemicals
which, although not identical to the metal and chemical components in solar modules, are
nonetheless metals and chemicals used in an engineered product designed to generate
electricity that is no longer usable because of breakage, cutting up, wear, or other
reasons[.]” Id. (internal quotation marks omitted). Noting that both of these subheadings
are “imperfect options,” id., Commerce emphasized that subheading 8548.10, HTS,
“more closely reflects the material composition of scrap solar modules, which include
wire, metals, glass, and chemical compounds.” Id. at 17.
Commerce’s 	explanation 	on 	remand 	fails 	to 	adequately 	explain 	why 	its
determination to value the respondents’ scrapped modules using import data under
subheading 8548.10, HTS, a category specific to scrapped battery cells, is supported by
substantial evidence. 	It is apparent from Commerce’s focus on the scrap nature of the
12 Commerce’s practice in determining the “best available information” is to “use investigation or
review period-wide price averages, prices specific to the input in question, prices that are net of
taxes and import duties, prices that are contemporaneous with the period of investigation or
review, and publicly available data.” See U.S. Dep't Commerce, Non-Market Economy Surrogate
Country Selection Process 2 (2004), available at http://enforcement.trade.gov/policy/bull04-1.html
(last visited Dec. 7, 2017).
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by-product and of the products covered by subheading 8548.10, HTS, that the agency
found the scrap nature of the by-product more significant to selecting an appropriate
surrogate value than the material components of the by-product. 	See, e.g., Remand
Results 17 (explaining that Commerce selected subheading 8548.10, HTS, “because it
covers scrapped and spent materials and those materials are more akin to scrap solar
module materials, whereas HTS 2804.69 covers only silicon; thus, its use would not fully
value the scrap module materials, and it is not a subheading at all specific to scrap
materials.”). 	However, Commerce acknowledges that products covered by subheading
8548.10, HTS, do not share any material components with respondent’s by-product. Id.
at 16 (noting that the items covered by subheading 8548.10, HTS, “include metal
components and chemicals which, although not identical to the metal and chemical
components in solar modules, are nonetheless metals and chemicals used in an
engineered product designed to generate electricity that is no longer usable . . . .”). It is
not evident that any of the components within the selected subheading would be similarly
valued to the scrapped modules at issue.13 	Commerce simply does not explain why its
13 Commerce’s argument that the polysilicon heading only covers one component of the solar
modules and therefore would likely undervalue the offset, see Remand Results 29, assumes that
polysilicon is of lesser value than the other components and further suggests that the scrapped
battery category would be more representative. Commerce fails to explain why its assumption is
reasonable, and its position fails to account for the fact that scrapped batteries have no
components in common with the scrapped solar modules. 	See id. at 16. 	Because scrapped
batteries and scrapped solar modules do not have common materials, the scrapped battery
category could undervalue or overvalue the solar modules and is therefore not necessarily more
representative than the heading which covers only one component of the solar modules
(polysilicon). Similarly, Commerce’s argument that the weight of polysilicon in the solar module
suggests that the scrapped battery category is more representative and also relies upon some
unsupported assumptions. See id. at 28–29. Commerce suggests that, since other components
of the module weigh more than the polysilicon, the polysilicon category would likely undervalue
(footnote continued)
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emphasis on the scrap nature of the by-product achieves a representative surrogate
value, given that the selected subheading covers products that do not share any material
components with scrapped modules.
Instead, Commerce supports its selection of subheading 8548.10, HTS, as an
appropriate surrogate value by reading into the term “scrap” common characteristics of
scrapped products that otherwise share no material components. 	But the term “scrap”
does not have meaning on its own in the context of respondent’s by-product offset; the
term simply serves to indicate that the article has been removed from the normal course
of the respondent’s solar module production, with the module components extracted and
resold or reintroduced into production. Dictionary definitions for “scrap” suggest that the
word is used to indicate remnants or fragments of a thing, with at least one relevant
definition describing scrap as “manufactured articles or parts rejected or discarded and
useful only as material for reprocessing; especially waste and discarded metal.” Scrap,
Merriam-Webster, available at https://www.merriam-webster.com/dictionary/scrap (last
visited Dec. 7, 2017). The respondents reported “module scrap” as a by-product in their
questionnaires to indicate that these scrapped modules were removed from production
and should be offset when calculating normal value. 	See, e.g., Changzhou Trina Solar
Energy Co. Ltd. Questionnaire Section D at D–21, CD 394–411, bar code 3202241-01
(May 15, 2014); Renesola Questionnaire Section D at 14, CD 377, bar code 3201658-01.
What is significant about these scrapped modules for purposes of valuing the offset is the
the solar modules because scrap is valued by weight. 	This argument assumes that scrapped
solar modules are purchased for the module components other than polysilicon, because the
other components comprise more of the weight of the scrap. 	It also assumes that scrapped
battery cells are representative of the cost of the non-polysilicon components of the solar
modules. Again, Commerce does not explain why its assumptions are reasonable.
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components of the module; the fact that the modules were “scrapped” does not, in itself,
indicate what HTS subheading would be an appropriate surrogate value for the offset. As
Commerce points out, there is no overlap between the products in a battery cell and a
solar module. 	See Remand Results 16. 	Commerce cannot simply rely on the
appearance of the word “scrap” in subheading 8548.10, HTS, and in the respondents’
description of the by-product as indication that this subheading provides the best available
information for valuing the by-product. 	As the term “scrap” does not indicate particular
materials or composition, it is not reasonable to value products based on that word alone
where it is shown that the covered products are completely different.
Commerce emphasizes that the scrapped modules and the products covered by
subheading 8548.10, HTS, are similar in that they are all products that would generate
electricity (if not scrapped). See Remand Results 16, 27–28. However, the fact that both
battery cells and solar modules could generate electricity does not overcome the fact that
the components of the two types of products differ, as it is the components which lend
each product value. Generating electricity does not mean that the products are similarly
valued. 	A buyer would not purchase scrapped solar modules if the buyer wanted the
components of a battery cell, regardless of the fact that both types of products could
generate electricity. 	Commerce cannot rely on the fact that both types of products
generate electricity to support its selection of a surrogate value without some explanation
as to why generating electricity relates to the products’ value.
CONCLUSION
For the foregoing reasons, the court sustains Commerce’s determination to
collapse the ReneSola entities with the Jinko entities, treating these companies as a
single entity for purposes of the antidumping duty analysis. 	This matter is remanded to
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Commerce for reconsideration or further explanation of the agency’s decision to use
South African import data under subheading 8548.10, HTS, to value the respondents’ by-
product offsets for scrapped solar cells when calculating normal value. It is
ORDERED that Commerce’s determination to use South African import data under
subheading 8548.10, HTS, to value respondents’ offsets for scrapped solar cells when
calculating normal value is remanded for further consideration consistent with this
opinion. 	Commerce shall file its remand determination with the court within 60 days of
this date; and it is further
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:December 13, 2017
New York, New York
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