US Implements Measures Targeting Solar Companies in Xinjiang Region | Bryan Cave Leighton Paisner


On Thursday, June 24, 2021, the Biden administration took various actions against solar product manufacturers in the Xinjiang region, which will have supply chain implications for the construction of solar power projects in the interior. and outside US borders.

Suspension of release order against Hoshine Silicon Industry Co. Ltd.

U.S. Customs and Border Protection (CBP) has issued a restraining order (“W.R.O.”) against Hoshine Silicon Industry Co. Ltd. (“Hoshine”), a company located in the Xinjiang region.

As a result of the WRO, personnel at all U.S. ports of entry must immediately begin detaining shipments containing silica-based products, including materials and goods derived from or manufactured using silica-based products, manufactured by Hoshine and its subsidiaries. Silica is a raw material used in the production of solar panels. CBP has the authority to seize products covered by the WRO unless US importers can prove that the products or materials are not made with forced labor. Forced labor is defined as “any work or service which is exacted from any person under the menace of any penalty for its non-performance and for which the worker does not offer himself [/herself] voluntarily1.“In practice, the effect of the WRO is that importers in the United States who import silica-based products must obtain supply chain traceability information to verify whether their products are manufactured by Hoshine or its subsidiaries. .

List of entities

The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) updated its entity list to include five Chinese entities that manufacture polysilicon, also a raw material for solar products. The entities are:

  1. Hoshine Silicon Industry (Shanshan) Co., Ltd.
  2. Xinjiang Daqo New Energy Co., Ltd.
  3. Xinjiang East Hope Nonferrous Metals Co., Ltd.
  4. Xinjiang GCL New Energy Material Technology Co., Ltd.
  5. Xinjiang Production and Construction Corps (XPCC)

The Entity List requires U.S. companies to hold licenses for the export, re-export, and transfer (within the country) of items, including products, software, and technology subject to U.S. Administration regulations. exports (EAR), where the listed entities are parties to the transaction (i.e. buyer, intermediate consignee, final consignee, end user).

And after?

The US Congress is also considering legislation that would ban all imports from the Xinjiang region into the United States unless companies can certify that the products do not use forced labor in their supply chains. The proposed legislation would also allow new sanctions to be imposed on companies in the Xinjiang region.

Xinjiang is said to produce 45% of the world’s polysilicon and it remains to be seen what practical effect these measures will have on solar manufacturers in the region and on global supply in general.

1. Section 307 of the Tariff Act of 1930 (19 USC §1307)

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