Department of Commerce Issues Final Rule Imposing Tariff Moratorium for Solar Panels

September 16, 2022

On Sept. 16, 2022, the Department of Commerce (DOC) issued its final rule effectuating a two-year moratorium on tariffs on certain solar cells and modules exported from Cambodia, Malaysia, Thailand and Vietnam.

As discussed in McGuireWoods’ June 7, 2022, alert, “President Biden Orders Tariff Exemption for Solar Panels,” President Biden’s Proclamation 10414 issued on June 6, 2022, declared an emergency and authorized the Secretary of Commerce to allow the importation of solar cells and modules exported from Cambodia, Malaysia, Thailand and Vietnam for up to two years.

The new rule shields certain solar cells and modules — cells and modules assembled in Cambodia, Malaysia, Thailand or Vietnam, but using Chinese parts and components — from new antidumping and countervailing duties until the earlier of 24 months after the date of the proclamation or when the emergency is terminated. Specifically, the rule freezes any duties that may be ordered as a result of the ongoing DOC circumvention investigation discussed in McGuireWoods’ April 15, 2022, alert, “U.S. Department of Commerce Investigation of Solar Panel Imports Puts Solar Projects at Risk.” Tariffs may be reinstated following the exemption period, but importers of solar cells and modules will not be subject to retroactive payments of tariffs on imports during the exemption period.

The new rule does not apply to solar cells and modules that are exported from China and that are subject to the existing antidumping or countervailing duties. It also does not apply to solar modules and panels exported from Cambodia, Malaysia, Thailand or Vietnam if those modules and panels incorporate solar cells originally manufactured in China. However, the rule provides a little more certainty to importers of solar cells and modules as they await the results of the DOC investigation, expected in the spring of 2023. Importers are still subject to the certification process the U.S. Customs and Border Protection Service conducts on solar cells and modules in its discretion, so importers should remain prepared to provide the requisite documents supporting the origin of solar cell products.

The McGuireWoods team has been advising a variety of industry participants throughout the course of the DOC investigation. If you have any questions regarding the DOC investigation or the tariff moratorium, please contact the authors.

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