That have been major developments in the Trade, Customs and Securities areas and also in the Environmental Area affecting China.



The ITC final injury determination in the Solar Cells case was published yesterday,December 6th,  in the Federal Register.  Attached is the Federal Register notice.   ITC FINAL NOTICE This is important because from this date, December 6th, US importers will be retroactively liable for any increase in antidumping or countervailing duties in subsequent review investigations.

Prior to this date, antidumping and CVD rates on Solar Cells were capped as provisional duties.  That is no longer true so now US importers are exposed to retroactive liability.

Attached also is a copy of the ITC opinions and the final public staff report in the Solar Cells case.  FINAL ITC DETERMINATION OPINIONS Note the big fight at the end of the opinions on Critical Circumstances.

In addition, attached are the antidumping and countervailing duty orders from the Solar Cells case that were published today, December 7, 2012,  in the Federal Register.  DEC7 CVD ORDER DEC 7 AD ORDER Note that the Antidumping Rates declined slightly because Wuxi Suntech went from 31.75% to 29.14% resulting in a corresponding decrease in the average dumping rate for the Separate Rate companies from 25.96 to 24.48%.  There is no change in the China wide rate of 249.96%.

As a result of their publication today, December 7, 2012, annual review investigations in the Solar Cells from China case will start up every year in December to determine the actual antidumping and countervailing duties for past imports of solar cells from China.


India has announced that it is bringing an antidumping case against Chinese Solar Cells.  See attached article.  INDIA SOLAR CELLS CASE

The Chinese solar companies now have a real problem because this has become a worldwide trade problem.  Chinese solar companies are facing cases from around the world and exports may be blocked out of dozens of countries.  Antidumping and Countervailing Duty cases are like a disease and once one country successfully brings a case, dozens of countries follow and bring their own cases against China.   The Indian case indicates a trend is starting.

The US Garlic antidumping case, for example, created dozens of trade cases throughout the world against Chinese garlic, including cases in the EC, Mexico, Canada, Brazil, Japan, Korea, India and other countries.  With the Indian case, there could be antidumping and countervailing cases against Chinese solar cells in a number of countries, including South American countries, such as Brazil, Argentina and Mexico, to name a few.

At the end of the day, because of the third country loophole and the fact that critical circumstances is gone, the US may end up being the best market for Chinese solar cells and panels.

If anyone wants contacts with good Indian trade lawyers, please feel free to contact me.


In response to these cases, the Chinese government has initiated its own critical circumstances investigation against Polysilicon from the US, EC and Korea and is threatening to assess retroactive duties on polysilicon imports into China from those countries.  If the Chinese government finds critical circumstances in March or June 2013, Chinese importers of US, EC and Korean polysilicon could be faced with millions of dollar in liability for past imports of polysilicon into China prior to the preliminary determination dates. 

Shots are being fired in the trade war.  See the attached announcement from MOFCOM. CHINA CRITICAL CIRCUMSTANCES POLYSILICON


There have been developments in the Aluminum Extrusions from China case.  The good news is that after several remands by the Court of International Trade back to Commerce, it has reduced the countervailing duty rate rate for most of the Chinese companies from 374% to 137%.  See the attached November 30th decision by the Court of International Trade in the Maclean Fogg case.  12-146.pdf MACLEAN FOGG

The bad news is that on November 30th Commerce expanded the products covered by the antidumping and countervailing duty orders to cover imports of curtain walls from China.  Curtain walls, in effect, are the sides of buildings and because of their size must be exported to the United States in parts, which are then linked together.  In effect, Commerce stated that since curtain walls are exported as parts, they are covered by the antidumping and countervailing duty orders on aluminum extrusions.   Commerce specifically states in the attached scope decision AlumExt Curtain Wall_DOC Signed Scope Ruling:

Concerning argument of Yuanda, Jangho, and Overgaard & Bucher that a complete curtain wall unit could qualify as a “finished goods kit” and, thus, be excluded from the scope of the Orders, as in prior scope rulings, we note that the CWC’s Amended Scope Request does not seek a scope ruling on complete curtain walls units, but rather “parts of curtain walls,” and this scope ruling is limited to the products discussed in the CWC’s Amended Scope Request. In conclusion, because both the scope of the Orders and the description of the merchandise in the initial investigation explicitly state that curtain walls are included within the scope of the Orders, the Department finds that the products at issue are included.

The interesting question is whether the US International Trade Commission (“ITC”) ever issued an injury determination covering curtain walls.  This order, however, potentially exposes US importers to millions of dollars in liability.



Today in the House of Representatives in Congress, the Ways and Means Trade Subcommittee Chairman Kevin Brady introduced a new bill– The Customs Trade Facilitation and Enforcement Act of 2012.

Part of the bill is trade enforcement to address evasion and underpayment of antidumping and countervailing duties.

Section 223 of the Bill provides Customs and Border Protection (“CBP”) with the authority to strengthen internal controls over “new importers” to ensure collection of revenue through risk-based bonding for duties, fees, and penalties.

Section 224 of the Bill requires CBP to collect additional information and levy financial requirements on “nonresident importers,” such as Chinese companies, to increase revenue protection.

TITLE III- Prevention of Evasion of Antidumping and Countervailing Duty Orders

Section 311: Establishes the Trade Remedy Law Enforcement Division within CBP’s Office of International Trade, dedicated to preventing and investigating trade remedy evasion and directing CBP activity concerning evasion. This division would coordinate information exchange and cooperation between CBP, ICE, and other agencies regarding evasion. It would also serve as the primary contact point for evasion allegations and would be required to provide parties updates on the status and outcome of investigations or other activities resulting from allegations. The division would contain a National Targeting and Analysis Group dedicated to identifying potentially evading imports and alerting relevant ports.

Section 312: Directs CBP to exercise all existing information collection authorities to identify evasion; authorizes CBP to issue questionnaires to collect information on alleged evasion and to apply an adverse inference against a party, which includes an importer or a foreign producer,  that does not provide the requested information.  This will make it more easier to find that products are covered by antidumping and countervailing duty orders.

Section 313: Authorizes increased data sharing between CBP, the Department of Commerce, and the U.S. International Trade Commission for enforcement actions against evasion.

Section 314: Directs CBP to enter into agreements with foreign countries to increase cooperation in combatting evasion and to allow CBP to conduct overseas investigations of evasion.

Section 315: Establishes as a negotiating objective for future trade agreements the creation of arrangements with foreign countries to increase cooperation in combatting evasion and to allow CBP to conduct overseas investigations of evasion.

Section 323: Terminates the ability of new shippers to post bonds during Department of Commerce new shipper antidumping and countervailing duty reviews and establishes criteria for identifying bona fide sales by a new shipper.

Attached are copies of the bill, a press release and a section by section analysis.  CUSTOMS TRADE ENFORCEMENT BILL customs_section-by-section PRESS RELEASE


Attached is compendium of hundreds of US laws enforced by US Customs and Border Protection at US border.  CUSTOMS LAWS ENFORCED AT BORDER


On December 3, 2012, The SEC started a major administrative proceeding against the Big Four Accounting Firms and Other Firms in China for their failure to release audit documents for Chinese companies that are listed in the United States.  Attached is the SEC order starting the administrative proceeding and the SEC Press Release, CHINA SEC ACCOUNTING FIRMS SEC PRESS RELEASE, which states in part:

The Securities and Exchange Commission today began administrative proceedings against the China affiliates of each of the Big Four accounting firms and another large U.S. accounting firm for refusing to produce audit work papers and other documents related to China-based companies under investigation by the SEC for potential accounting fraud against U.S. investors.

The SEC charged the following firms with violating the Securities Exchange Act and the Sarbanes-Oxley Act, which requires foreign public accounting firms to provide the SEC upon request with audit work papers involving any company trading on U.S. markets:

• BDO China Dahua Co. Ltd

• Deloitte Touche Tohmatsu Certified Public Accountants Ltd

• Ernst & Young Hua Ming LLP

• KPMG Huazhen (Special General Partnership)

• PricewaterhouseCoopers Zhong Tian CPAs Limited

Set forth below is a post by Tom Gorman from our DC office, who used to work at the SEC, about this development:

SEC Brings Proceedings Against PRC Based Affiliates of Audit Firms

Posted By T. Gorman On December 03, 2012 @ 8:30 pm

The SEC instituted administrative proceedings against the affiliates of five major accounting firms based in the People’s Republic of China, or the PRC, which bodes ill for companies based there to have continued access the U.S. capital markets. In the Matter of BDO China DahuaCPA Co., Ltd., Adm. Proc. File No. 3-15116 (Dec. 3, 2012). The Order names as Respondents: BDO China, Ernst & Young Hau Ming LLP, KPMG Huazhen (Special General Partnership), Deloitte Touche Tohmatsu Certified Public Accountants Ltd. and Pricewaterhouse Coopers Zhong Tian CPAs Ltd.

The proceeding is based on Rule 102(e)(1)(iii) which permits the Commission to temporarily or permanently deny any person found to have willfully violated or aided and abetted the violation of the Federal securities laws. Section 106 of the Sarbanes-Oxley Act of 2002, as amended by the Dodd-Frank Act, is alleged to have been violated. That Section provides that a PCAOB registered firm that audits the financial statements of a U.S. issuer consents to produce its work papers on request by either the Board or the SEC.

In this matter, each Respondent is registered with the PCAOB. Each Respondent is alleged to have been engaged to audit the financial statements of a PRC based U.S. issuer. Each Respondent was served with a request by the Commission to produce all of its audit work papers for a designated period. Each Respondent declined, at least in part, based on their understanding that the law of the PRC precluded the production. The Order directs that a hearing be held before an ALJ to hear evidence.

This is not the first such proceeding by the Commission. Previously, a similar proceeding was instituted against the Deloitte PRC affiliate. In the Matter of Deloitte Touche Tohmatsu Certified Public Accountants Ltd., Adm. Proc. File No. 3-14872 (May 9, 2012). That proceeding is also based on SOX Section 106 and Rule 102(e). That same firm is a defendant in a subpoena enforcement action brought by the Commission on essentially the same basis.  SEC v. Deloitte Touche Tohmatsu CPA, Ltd., File No. 1:11-MC-00512 (D.D.C. Filed Sept. 8, 2011). That action was stayed earlier this year pursuant to a Commission request, citing ongoing negotiations with a foreign regulator. The parties are due to report back to the Court in January.

To date the Commission’s efforts have been fruitless. If the impasse persists there may be a point at which PRC based companies are not able to access the U.S. capital markets.


A new class action Securities case has been filed against Sinohub, a Shenzhen, China company that is listed in the United States, and various individuals in China and the US.  Attached is a copy of the complaint. SINOHUB COMPLAINT


The Environmental Investigation Agency in the UK has released a detailed report on China’s trade in illegal timber.  See the attached report. EIA CHINA ILLEGAL LOGGING

If anyone has any questions about these cases, legislation  or about the Trade, Customs  or Securities law in general, please feel free to contact me.

Leave a comment

Your email address will not be published.