EC to impose 11.8% duties on Chinese solar products manufacturers

07 June 2013

Michelle de Rijke, Levent Gurdenli, Wolfgang Hess

Following a claim by the industry association EU ProSun that solar panels (and their key components) imported from China enter the EU market at prices below market value, the European Commission launched a 15 month anti-dumping investigation on 6 September 2012. EU ProSun claimed in its complaint of 25 July 2012 that solar panels imported from China benefit from unfair government subsidies in China. In addition to this, on 8 November 2012, the European Commission also initiated anti-subsidy proceedings relating to imports of crystalline silicon photovoltaic modules and key components (i.e. cells and wafers) originating in China.

Following the initiation of the anti-dumping investigation, on 1 March 2013, the European Commission directed local customs authorities to take appropriate steps to register imports of solar panels (and their key components) originating in or consigned from China, so that possible anti-dumping duties adopted by the EU may subsequently be applied against those imports from the date of such registration.

On 8 May 2013, the European Commission agreed to impose provisional anti-dumping duties on imports of solar panels from China. It was proposed by EU Trade Chief Karel De Gucht to levy the provisional anti-dumping duties from 6 June  2013.

Following this decision, the EU and China entered into trade talks to come to a negotiated settlement. These trade talks ended on 27 May  without an agreement. On 4 June, the European Commission therefore decided to impose provisional anti-dumping duties on imports of solar panels, cells and wafers from China. Considering the large market for, and imports of, solar panels in the EU, a phased approach will be followed with the duty initially set at a level of 11.8% until 6 August 2013. This is intended to provide additional time for the EU and China to pursue negotiations in order to find a solution and suspend the provisional anti-dumping duties. If further negotiations do not result in an agreement, the EU intends to increase the provisional anti-dumping duties to the level of 47.6% from 6 August.

The next step is for individual member states to sign off on the provisional anti-dumping duties, in order for them to come into effect. The expected date from which the duties shall be applied is 6 June  2013. However, it is yet to be seen whether the provisional anti-dumping duties will be given retroactive effect and levied retroactively to the date of the registration of imports of solar panels, cells and wafers into the EU.

Any anti-dumping duties that are payable must be paid by either a cash deposit or by means of a guarantee at the time of importation into the EU of the relevant products. In the case of cash deposits, the local customs authorities will refund deposits automatically if the provisional anti-dumping duty is (i) cancelled; or (ii) not replaced in full by a definitive duty, at the end of the official investigation. In cases where a guarantee is to be provided, the release of the relevant products for free circulation in the EU shall be conditional upon the actual provision of such a guarantee at the time of declaring the goods to the customs authorities for free circulation.

After the full 15-month investigation comes to an end in December 2013, the European Commission must then determine whether to revoke the provisional anti-dumping duties. If the European Commission believes that China has not altered its trade practices, this may lead to imposing definitive anti-dumping duties for a duration period of five years.

Products covered by the EU anti-dumping investigation and provisional anti-dumping duties

The "products under investigation" are crystalline silicon photovoltaic modules or panels and cells and wafers of the type used in crystalline silicon photovoltaic modules or panels. The cells and wafers must have a thickness not exceeding 400 μm.

Specifically, the products under investigation fall within codes ex 3818 00 10, ex 8501 31 00, ex 8501 32 00, ex 8501 33 00, ex 8501 34 00, ex 8501 61 20, ex 8501 61 80, ex 8501 62 00, ex 8501 63 00, ex 8501 64 00 and ex 8541 40 90 of the current EU customs tariff called the Combined Nomenclature.

From these products under investigation and registration, the following product types are excluded:

• solar chargers that consist of less than six cells, are portable and supply electricity to devices or charge batteries,

• thin film photovoltaic products,

• crystalline silicon photovoltaic products that are permanently integrated into electrical goods, where the function of the electrical goods is other than power generation, and where these electrical goods consume the electricity generated by the integrated crystalline silicon photovoltaic cell(s).

The products must originate (i.e. wholly obtained or produced) in China. This means that the investigation is not directed at products being consigned from China. However, as set out above, the EU has imposed a registration obligation for relevant products that have been consigned from China. It will be reviewed whether the provisional anti-dumping measures announced  will cover both relevant products that have originated from and that have been consigned from China.

Consideration with regard to products being imported into the EU

If a supplier suspects its products may be subject to the (provisional) anti-dumping duties, it may consider some of the following options:

i. If possible (i.e. if it controls or has access to multiple sites), manufacturing the products under investigation at sites outside China. This will result in the products originating in a different country than China and therefore not being subject to the EU provisional anti-dumping duties;

ii. Commenting on the disclosed provisional findings of the European Commission, provided that it has made itself known to the European Commission at the time notice was given of the initiation of the anti-dumping investigation. If this is the case, it may present its views in writing and submit information if such views and information are to be taken into account by the European Commission in coming to its  decision to impose definitive duties;

iii. Submitting an undertaking to the European Commission to revise its prices or to cease exports at dumped prices. The  undertaking may not be offered later than the end of the period (at least ten days) during which representations may be made to the European Commission, following the final disclosure by the European Commission of the relevant details and underlying facts on which the decision to impose provisional anti-dumping were based.

Please get in touch with Michelle de Rijke, Levent Gürdenli or Wolfgang Hess at Bird & Bird LLP if you have any further questions on the provisional anti-dumping duties announced by the EU and how it may affect your business.

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