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The anti-dumping and anti-circumvention rules
The anti-dumping and anti-circumvention rules
There are four sets of rules that are relevant. More specifically:
There are the 2016 Implementing Regulations (ADD) and the 2016 Implementing Regulations (CVD) referred to at [8(7)]. These are materially identical in terms (they simply relate to different charges, ADD in one case and CVD in another), and it will only be necessary to refer to one set of rules.
The 2016 Implementing Regulations contain what we term “anti-circumvention” rules. They are secondary to, and intended to support, “anti-dumping” rules against China which (as the EU Commission found) were being circumvented. The relevant anti-dumping rules are as follows:
Council Implementing Regulation (EU) No 1238/2013 of 2 December 2013 imposing a definitive anti-dumping duty and collecting definitively the provisional duty on imports of crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned from the People’s Republic of China (“Reg 1238/2013”).
Council Implementing Regulation (EU) No 1239/2013 of 2 December 2013 imposing a definitive countervailing duty on imports of crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned from the People’s Republic of China (“Reg 1239/2013).
It is necessary to refer only briefly to the anti-dumping rules, and we shall refer to Reg 1238/2013, there being for these purposes no material difference between Reg 1238/2013 and Reg 1239/2013. Essentially, anti-dumping duties are imposed (quoting from Article 1(1) of Reg 1238/2013) “on imports of crystalline silicon photovoltaic modules or panels and cells of the type used in crystalline silicon photovoltaic modules or panels” falling within certain “CN codes” which we will not further specify “originating in or consigned from the People’s Republic of China, unless they are in transit in the sense of Article V GATT [General Agreement on Tariffs and Trades]”. Thus, certain products (defined by reference to what we call TARIC Codes), including in particular what we refer to as solar cells and solar modules, are subject to anti-dumping duties where they either originate in or are consigned from the People’s Republic of China, subject to a limited “pure transit” exception, and certain limited producers set out (but not listed in this decision).
The EU Commission ascertained (we were referred to the extensive investigative work of the EU Commission in this regard, but need say no more in this decision) that these anti-dumping rules were being circumvented by products falling within these rules being consigned from other jurisdictions other than the People’s Republic of China. One of these jurisdictions was Taiwan, and Taiwan is one of the jurisdictions subject to the 2016 Implementing Regulations.
As to these, and referring to the 2016 Implementing Regulation ADD (simply because that is the one we were generally taken to: there is no material difference):
Article 1(1) provides:
The definitive anti-dumping duty applicable to “all other companies” imposed by Article 1(2) of [Reg 1238/213] on imports of crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned from the People’s Republic of China, unless they are in transit in the sense of Article V GATT is hereby extended to imports of crystalline silicon photovoltaic modules and key components (i.e. cells) consigned from Malaysia and Taiwan whether declared as originating in Malaysia and in Taiwan or not, currently falling within CN codes [which are then set out, and to which we will revert] with the exception of those produced by the companies listed below…” (emphasis added to original).
There then follows a table, to which we will also revert.
We have underlined some critical words in Article 1(1): the ambit of the anti-circumvention duty is limited to components consigned from Taiwan. Canadian Solar rightly made these words the central point of their submissions on the interpretation issue. We will come to those submissions in due course, but want to highlight that the critical words in Article 1(1) refer to consignment and not origin.
Beginning with the “CN codes” – what we term TARIC Codes – one of these listed to an eight digit specificity is 8541 40 90, which embraces all of the TARIC Codes listed at [17] and [18] of this decision. The list, however, is more specific than this, and materially provides:
…ex 8541 40 90 (TARIC codes…8541 40 90 23, 8541 40 90 32…
The TARIC Codes ending …23 and …32 are unfamiliar. That is because at the time material to the Entries, they had been superseded. These commodity codes expired on 1 October 2017 (the Entries in this case began on 9 November 2017) and were replaced by the TARIC Codes described above. Unfortunately, the regulations we have been citing were not (and may never have been (Footnote: 2)) consequentially updated. Nothing turns on this, save that an additional layer of complexity and confusion is thereby introduced.
Turning, then, to the table, this is what we term an “exceptions table”. It lists a number of companies (classified by country: Malaysia or Taiwan) and provides for each company a “TARIC additional code”. This is nothing to do with the TARIC Code we have been referencing, but is additional to the TARIC Code and specifies those companies not subject to the anti-circumvention duties imposed on companies not listed in the exceptions table.
The FTT found (it was not disputed) that the cells here in issue (i.e. those incorporated in the modules that were the subject of the Entries) were all acquired by Canadian Solar from companies listed in the exceptions table. It was, therefore, common ground that provided Canadian Solar applied the importation rules correctly, the Entries would not be subject to the charges. In other words, the questions before us are (i) has a mistake been made, such that the importation rules have not been correctly applied (which is the interpretation issue) and (ii) if a mistake has been made, can it be/has it been rectified so that the charges can be remitted (which compendiously describes the correction issue and the general equity issue).
Naturally, it is necessary to ensure, where there is an import of products that would be subject to the anti-circumvention duty but for the fact that the products have been acquired from a company listed in the exceptions table, that this is (i) properly documented and (ii) applied by the relevant customs authorities. This is the function of Articles 1(2) and 1(3), which we set out in full below:
The application of exemptions granted to the companies specifically mentioned in paragraph 1 of this Article or authorised by the Commission in accordance with Article 2(2) shall be conditional upon presentation to the customs authorities of the Member States of a valid commercial invoice issued by the producer or consignor, on which shall appear a declaration dated and signed by an official of the entity issuing such invoice, identified by his/her name and function. In the case of crystalline silicon photovoltaic cells this declaration shall be drafted as follows:
I, the undersigned, certify that the (volume) of crystalline silicon photovoltaic cells sold for export to the European Union covered by this invoice was manufactured by (company name and address) (TARIC additional code) in (country concerned). I declare that the information provided in this invoice is complete and correct.
In the case of crystalline silicon photovoltaic modules this declaration shall be drafted as follows:
I, the undersigned, certify that the (volume) of crystalline silicon photovoltaic modules sold for export to the European Union covered by this invoice was manufactured
by (company name and address) (TARIC additional code) in (country concerned); OR
by a subcontracted third party for (TARIC additional code) in (country concerned)
(delete as appropriate one of the two above options)
with the crystalline silicon photovoltaic cells manufactured by (company name and address) (TARIC additional code) [to be added if the country concerned is subject to original or anti-circumvention measures in force]) in (country concerned)…
I declare that the information provided in this invoice is complete and correct.
If no such invoice is presented and/or one or both of the TARIC additional codes are not provided in the above-mentioned declaration, the duty rate applicable to “all other companies” shall apply and shall require the declaration of TARIC additional code B999 in the customs declaration.
The duty extended by paragraph 1 of this Article shall be collected on imports consigned from Malaysia and Taiwan, whether declared as originating in Malaysia and Taiwan or not, registered in accordance with Article 2 of Commission Implementing Regulation (EU) 2015/833 and Articles 13(3) and 14(5) of Regulation (EC) No 1225/2009 with the exception of those produced by the companies listed in paragraph 1.
We are conscious that we have traversed, at unfortunate length, the very same provisions that the FTT considered in the Decision. Given that the question of construction which was before the FTT was squarely before us on this appeal, we have had little choice but to do so. We should, however, state that there is nothing in our exposition of the legal framework that is inconsistent with the Decision, nor do we consider that the Decision has misstated any aspect of the law. With that, we turn to the interpretation issue, setting out the parties’ submissions and providing our analysis and decision on this point.
- Heading
- INTRODUCTION
- We refer to these collectively as the “charges”
- No agreed statement of facts
- The facts as found by the FTT
- Additional facts and the structure of the FTT’s Decision
- The European Community is a contracting party to the International Convention on the Harmonised Commodity Description and Coding System (the “Harmonised System”). The Convention requires that the tari
- The preliminary provisions, additional section or chapter notes and footnotes relating to CN sub-headings The CN uses an eight-digit numerical system to identify a product, the first six digits of which are those of the Harmonised System, while the t
- Rules of origin
- The anti-dumping and anti-circumvention rules
- Submissions, analysis and determination of the interpretation issue Introductory
- The Solar Module Code was the correct TARIC Code: Canadian Solar’s submission
- The Alternative Solar Module Code was the correct TARIC Code: HMRC’s positive case
- The correct TARIC Code was Code 8541 40 90 73 (solar cells consigned from Taiwan): the FTT’s conclusion
- Conclusions