Three China Solar-Panel Groups May Lose EU Duty Exemption

The European Union plans to apply tariffs on three groups of Chinese solar-panel makers that have been exempted from the levies, potentially reviving tensions in the EU’s biggest trade case of its kind.

The three producer groups, which include Canadian Solar Inc. subsidiaries, breached the terms of a price-floor accord that underpinned the exemption, according to a European Commission document obtained by Bloomberg News. The ET Solar and ReneSola groups are the other two accused in the document of violating the agreement to respect a minimum selling price.

The Brussels-based commission, the 28-nation EU’s executive arm, also concluded in the text dated March 5 that the price pact, known as an undertaking, is too difficult to monitor in the case of the three groups.

“The findings of breaches of the undertaking and its impracticability established for Canadian Solar, ET Solar and ReneSola justify the withdrawal of the acceptances of the undertaking for these three exporting producers,” according to the document, which was drawn up by the commission’s trade department. The plan, disclosed to interested parties, would take effect after publication in the EU’s Official Journal.

Publication of such a proposal would normally come within weeks of its disclosure. The commission refused to comment about its ultimate intentions.

“No final decision on any withdrawal of the undertaking has been taken,” Daniel Rosario, the commission’s trade spokesman, said by telephone on Thursday.

Minimum Price

Repealing the undertaking would expose weaknesses in an EU-China agreement in late 2013 to curb European imports of Chinese solar panels. The accord set a minimum price and a volume limit on European imports of the renewable-energy technology until the end of 2015. Chinese manufacturers that opted to take part in the pact are spared EU tariffs meant to counter alleged below-cost sales, a practice known as dumping, and subsidies.

The Canadian Solar and ET groups would each face an anti-dumping duty of 43.1 percent and an anti-subsidy levy of 6.4 percent were their undertaking to be repealed. The ReneSola group would face an anti-dumping duty of 43.1 percent and an anti-subsidy levy of 4.6 percent.

Canadian Solar and ReneSola Ltd. issued statements earlier this week on the matter. Canadian Solar said on March 10 that the commission “has informed the company of potential issues.” The company said it has “strived to fully comply” with the undertaking.

ReneSola said on March 11 that it had been notified by the commission of “a potential compliance issue.” The company said it “has fully complied with the undertaking agreement” and is cooperating with the commission.

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