EN Official Journal of the European Union L 56/1

COMMISSION IMPLEMENTING REGULATION (EU) 2017/366

of 1 March 2017

imposing definitive countervailing duties on imports of crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned from the People's Republic of China following an expiry review pursuant to Article 18(2) of Regulation (EU) 2016/1037 of the European Parliament and of the Council and terminating the partial interim review investigation pursuant to Article 19(3) of Regulation (EU) 2016/1037

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) 2016/1037 of the European Parliament and of the Council of 8 June 2016 on protection against subsidised imports from countries not members of the European Union (1), and in particular Article 18 thereof,

Whereas:

1. PROCEDURE

1.1. Existing measures

(1) By Council Implementing Regulation (EU) No 1239/2013 (2) (‘the original Regulation’), the Council imposed definitive countervailing duties ranging to 11,5 % on imports of crystalline silicon photovoltaic modules or panels and cells of the type used in crystalline silicon photovoltaic modules or panels from the People's Republic of China (‘the PRC’ or ‘China’). These measures will hereinafter be referred to as ‘the measures in force’ and the investigation that led to the measures imposed by the original Regulation will be hereinafter referred to as ‘the original investigation’.

(2) The Commission confirmed by Implementing Decision 2013/707/EU (3) the acceptance of the price undertaking as amended (‘the undertaking’) for the period of application of definitive measures. Since then the Commission adopted Implementing Decision 2014/657/EU (4) clarifying the implementation of the undertaking. It also adopted five Implementing Regulations withdrawing the acceptance of the undertaking for several exporting producers (5).

(3) On 5 May 2015, the Commission published a Notice of Initiation of a partial interim review of the anti-dumping and countervailing measures applicable to imports of the product under review (6). The review was limited in scope to the benchmark used as a reference for the price adaption mechanism set out in the above undertaking. It was terminated in January 2016 by virtue of Commission Implementing Regulation (EU) 2016/12 (7).

(4) By Commission Implementing Regulation (EU) 2016/184 (8), following an anti-circumvention investigation, the Council extended the definitive anti-countervailing imposed by Implementing Regulation (EU) No 1239/2013 to imports into the Union of crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned from the People's Republic of China 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.

1.2. Request for a review

(5) Following the publication of a notice of impending expiry (9) of the countervailing measures in force on the imports of crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned from the People's Republic of China, the European Commission (‘the Commission’) received a request for review pursuant to Article 18 of Council Regulation (EC) No 597/2009 (10) (‘the basic Regulation’).

(6) The request was lodged on 4 September 2015 by EU ProSun (‘the applicant’) on behalf of producers representing more than 25 % of the total Union production of crystalline silicon photovoltaic modules and key components (i.e. cells) and it was supported by Union producers whose collective output constitutes more than 50 % of the total production of the like product produced by that portion of the Union industry expressing either support for or opposition to the request. The request was based on the grounds that the expiry of the measures would be likely to result in continuation of subsidisation and recurrence of injury to the Union industry.

1.3. Initiation of an expiry and interim review

(7) Having determined, after consulting the Committee established by Article 25(1) of the basic Regulation, that sufficient evidence existed to justify the initiation of an expiry review, the Commission announced, on 5 December 2015, by a notice published in the Official Journal of the European Union (‘Notice of Initiation’) (11) the initiation of an expiry review under Article 18 of the basic Regulation.

(8) On the same day, the Commission initiated an expiry (12) and a partial interim review (13) of the anti-dumping measures in force on the imports of crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned from the People's Republic of China. This is a parallel but distinct proceeding which is dealt with by means of a separate Regulation.

(9) Prior to the initiation of the expiry review, and in accordance with Articles 10(7) and 33(a) of the basic Regulation, the Commission notified the Government of China (‘GOC’) that it had received a properly documented review request and invited the GOC for consultations with the aim of clarifying the situation as regards the content of the review request and arriving at a mutually agreed solution. The GOC accepted the offer for consultations and consultations were subsequently held on 2 December 2015. During the consultations, no mutually agreed solution could be reached. However, due note was taken of the comments submitted by the authorities of the PRC.

(10) On the same day the Commission initiated ex officio a partial interim review pursuant to Article 19(3) of the basic Regulation limited to the examination of whether or not it is in the Union interest to maintain measures currently in force on cells of the type used in crystalline silicon photovoltaic modules or panels (14) (‘the Notice of Initiation of an interim review’).

1.4. Review investigation period and period considered

(11) The investigation of the likelihood of a continuation or recurrence of subsidy covered the period from 1 October 2014 to 30 September 2015 (‘the review investigation period’ or ‘RIP’). The examination of the trends relevant for the assessment of the likelihood of a continuation or recurrence of injury covered the period from 1 January 2012 to 30 September 2015 (‘the period considered’).

1.5. Interested parties

(12) In the Notices of initiation, the Commission invited interested parties to contact it in order to participate in the investigation. In addition, the Commission specifically informed the applicant, other known Union producers, the known exporting producers in China and the Chinese authorities, the known importers, suppliers and users, traders, as well as associations known to be concerned about the initiation of the investigation and invited them to participate.

(13) Interested parties had an opportunity to comment on the initiation of the investigation and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings.

1.6. Sampling

(14) In the notice of initiation, the Commission stated that it might sample the interested parties in accordance with Article 27 of the basic Regulation.

1.6.1. Union producers

(15) In its Notices of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission selected the sample on the basis of the largest representative volume of Union sales, taking into account production volume and the geographical location, which could reasonably be investigated within the time available. The sample consisted of six Union producers for modules and three for cells. Both vertically integrated and non-integrated producers were included in the sample. The Commission invited all interested parties to comment on the provisional sample. All companies that were provisionally selected agreed to be included in the sample.

(16) Comments on the proposed sample were received from several interested parties. They criticised the fact that the names and the location of several Union producers were kept confidential which prevented them from making comments on the selected producers' share with respect to the total production and sales volumes of the Union industry.

(17) The Commission recalled that all sampled Union producers, except for SolarWorld, WARIS Srl (‘Waris’) and Sillia VL (‘Sillia’), requested at initiation stage that their names be kept confidential. The Commission respected those requests, but invited them to confirm their wish to remain anonymous throughout the reviews investigations and to provide good cause for their request. All of the companies concerned, with the exception of one, confirmed their initial request and provided justification for their requests. In particular, the companies indicated that they fear losing business activities in the PRC, and/or supplies of raw materials and components sourced from the PRC. These reasons were found to be warranted. Thus the Commission decided to accept their claim for anonymity and to reject the requests by interested parties to reveal the identity and location of the sampled Union producers. Among the anonymous companies, only Jabil Assembly Poland sp. zoo. (‘Jabil’) agreed to have its name disclosed in the final sample.

(18) One exporting producer argued that the Commission failed to define the Union industry prior to selecting the provisional sample thereof. Therefore, it could not comment whether the latter is representative. In addition, some of the selected Union producers, like SolarWorld, are vertically integrated as they manufacture cells which are mainly used for their own modules production. Consequently, there is a risk that the production of the same final product, modules, has been counted twice.

(19) It follows from the Notices of Initiation that ‘Union industry’ refers to all Union producers of modules and key components (i.e. cells). In addition, the Union industry was already clearly defined in the original investigation. Finally, the captive use of cells production has been deducted when examining the standing and the representativeness of the Union industry. Therefore, this claim was rejected.

(20) Several other interested parties argued that the Commission should not have included in the sample Waris and Sillia since they are small Union producers of modules. As such they have a very specific business model which is not representative. Rather, the Commission should have included big and middle sized companies such as Jabil.

(21) The Commission rejected this argument as it included in the sample a significant number of big and middle sized modules producers. Waris and Sillia were included in the sample in order to ensure a wider geographical representativity.

(22) After the initiation of the proceeding the Commission had to exclude from the sample the company Sillia due to lack of cooperation. As a result, the remaining sampled Union producers accounted for 38,8 % of the total EU sales and 55 % of total Union production of modules. For cells they accounted for 76,6 % of the total EU sales volume and 77 % of the total Union production. Therefore, the modified sample was still considered representative of the Union industry.

1.6.2. Sampling of importers

(23) In order to decide whether sampling is necessary and, if so, to select a sample, the Commission asked unrelated importers to provide the information specified in the Notices of Initiation.

(24) Two unrelated importers provided the requested information and agreed to be included in the sample. In view of the low number, the Commission decided that sampling was not necessary.

1.6.3. Exporting producers

(25) To decide whether sampling is necessary and, if so, to select a sample, the Commission asked all exporting producers in China to provide the information specified in the Notice of initiation. In addition, the Commission requested the authorities of China to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

(26) While 86 exporting producers/group of exporting producers in China provided the information requested in Annex I to the notice of initiation for the purpose of sampling, the three largest main exporting producers/group of exporting producers (in terms of export sales of the product under review to the Union according to the Article 14(6) database) did not provide the requested information. In these circumstances, the Commission sampled the following three exporting producers/groups of exporting producers with the highest volume of export sales to the Union that provided the requested information and cooperated with the investigation — Changzhou Trina Solar Energy Co. Ltd, Changzhou, China — Jinko Solar Co Ltd, Shangrao, China — Chint Group, Hangzhou, China

(27) In accordance with Article 27(2) of the basic Regulation, all known exporting producers concerned, and the authorities of China, were consulted on the selection of the sample. No comments were made.

1.7. Questionnaire replies and verification visits

(28) A questionnaire was sent to the GOC including specific questionnaires for the China Development Bank, Export Import Bank of China (‘EXIM’), Bank of Beijing, China Construction Bank (‘CCB’), Industrial and Commercial Bank of China (‘ICBC’), China Merchants Bank (‘MEB’), China Mingsheng Bank (‘MiB’), Ping An Bank, Suzhou Bank, and China Export & Credit Insurance Corporation (Sinosure) based on the fact that they had provided loans and financial services to the PV industry according to the information in the request. In addition, the GOC was asked to forward a questionnaire for banks to any other financial institutions known by the GOC to have provided loans to the industry concerned (the ‘photovoltaic industry’ or ‘PV industry’), This questionnaire for the GOC also included specific questionnaires for those polysilicon producers, those producers of aluminium extrusions and those producers of glass, which are partially or fully State-owned and which supplied these raw materials to the PV industry during the review investigation period. Questionnaires were also sent to the three sampled (groups of) exporting producers, to the sampled Union producers, as well as to all importers and users that had come forward.

(29) The Commission received questionnaire replies from EXIM, CCB, ICBC, MEB, MiB and Sinosure, but not the other financial institutions listed in the previous recital), the three sampled (groups of) exporting producers, from the sampled Union producers and from four importers/users.

(30) The Commission sought and verified all information deemed necessary for the likelihood of continuation and recurrence of subsidisation, the likelihood of recurrence of injury and Union interest: (a) Government of the People's Republic of China: — Chinese Ministry of Commerce, Beijing, China — China Export & Credit Insurance Corporation, Beijing, China — China Merchants Bank, Beijing, China — Export Import Bank of China, Beijing, China — Industrial and Commercial Bank of China, Beijing, China — China Construction Bank, Beijing, China (b) Sampled groups of producers — Changzhou Trina Solar Energy Co. Ltd, Changzhou, China — Jinko Solar Co Ltd, Shangrao, China — Chint Group, Hangzhou, China (c) Sampled Union producers — SolarWorld Group, Bonn, Germany; — Jabil, Kwidzyn, Poland; — WARIS S.r.l., Borgo Chiese, Italy. — 2 anonymous module producers and 2 anonymous cell producers. (d) Unrelated importers in the Union — IBC Solar AG, Germany — BayWa r.e. Solar Energy Systems GmbH, Germany (e) Upstream operators — Wacker Chemie AG, Germany

(31) The questionnaire reply of MiB, received via the GOC, was not verified as it indicated on 30 June 2016 that it would not accept an on-the-spot verification. From the information provided by the three sampled producers, it appears that eighteen financial institutions, namely the Agricultural Bank of China, Bank of China, Bank of Communication, China Development Bank, China Everbright Bank, China Trust Commercial Bank, Hua Xia Bank, Industrial Bank of China, Jiangnan Rural Commercial Bank, Ping An Bank, Rural Commercial Bank, Shanghai Pudong Development Bank and Xiantao Finance Bureau had provided loans to those sampled producers, in addition to EXIM, CCB, ICB, MEB and MiB.

1.8. Disclosure

(32) On 20 December 2016, the Commission disclosed to all interested parties the essential facts and considerations on the basis of which it intends to maintain the countervailing measures in force and invited all interested parties to comment. The Commission considered the comments made by the interested parties and took them into account, where appropriate. Following disclosure, the Chinese Chamber of Commerce, Wacker, Solar Power Europe (‘SPE’) and Solar Alliance for Europe (‘SAFE’) requested and were granted a hearing with the Hearing Officer in trade proceedings.

(33) After the Committee referred to in recital 790 delivered no opinion, the Commission disclosed its intention to reduce the period for which the measures would apply from 24 months to 18 months. It invited the interested parties to comment on this aspect.

2. PRODUCT UNDER REVIEW AND LIKE PRODUCT

2.1. Product under review

(34) The product under review is the same as in the investigation leading to the imposition of the existing measures (‘the original investigation’), i.e. crystalline silicon photovoltaic modules or panels and cells of the type used in crystalline silicon photovoltaic modules or panels (the cells have a thickness not exceeding 400 micrometres), originating in or consigned from the People's Republic of China (‘product under review’ or ‘product concerned’) and currently falling within CN codes 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 (TARIC codes 8501310081, 8501310089, 8501320041, 8501320049, 8501330061, 8501330069, 8501340041, 8501340049, 8501612041, 8501612049, 8501618041, 8501618049, 8501620061, 8501620069, 8501630041, 8501630049, 8501640041, 8501640049, 8541409021, 8541409029, 8541409031 and 8541409039), unless they are in transit in the sense of Article V GATT.

(35) The following product types are excluded from the definition of the product under review: — 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), — modules or panels with a output voltage not exceeding 50 V DC and a power output not exceeding 50 W solely for direct use as battery chargers in systems with the same voltage and power characteristics.

2.2. Like product

(36) As in the original investigation, the product under review as well as the product produced and sold in the Union by the Union industry have the same basic physical, chemical and technical characteristics as well as the same basic end uses. Similarly, the product produced and sold on the domestic market in China and sold for export to the Union share the same basic physical and technical characteristics and uses. Therefore, they are considered as alike within the meaning of Article 2(c) of the basic Regulation.

3. LIKELIHOOD OF A CONTINUATION OF SUBSIDISATION

(37) In accordance with Article 18(1) and 18(2) of the basic Regulation, the Commission examined whether the expiry of the existing measures would be likely to lead to a continuation or recurrence of subsidisation.

3.1. Preliminary remarks on partial non-cooperation by the GOC

(38) At the request of the GOC, the Commission granted a deadline extension of 14 days for the reply to the questionnaire which resulted in an overall period of 50 days for submitting the questionnaire response.

(39) Following disclosure, the GOC commented that considering the breadth of the questionnaire, the 50 days granted for completing the questionnaire response were inadequate. The GOC stated that the Commission did not act to the best of its ability as it ‘granted itself 11 months to assess information that it required the GOC to provide in 50 days’. The GOC also compared the deadlines given and/or applicable in the original investigation and other anti-subsidy investigations to those in this expiry review. It was also claimed by the GOC that the deadlines imposed in the expiry review were aimed at placing the GOC in a difficult position and to prevent it from cooperating to the best of its ability. The Commission notes that the basic Regulation stipulates that at least 30 days shall be granted to interested parties to submit a questionnaire response and 15 months at most for concluding an expiry review. These legal deadlines have been respected, and the GOC had 20 days more than stipulated as minimum time. The argument of the GOC is therefore inoperative.

(40) In its deadline extension letter dated 7 January 2016, the Commission reminded the GOC that the questionnaire reply should cover subsidy programs and benefits to all exporting producers of the product under review. The GOC replied by letter on 21 January 2016 expressing concerns on the scope of the questionnaire and informing the Commission that the company-specific data in its questionnaire reply, as in the original investigation, would only cover the sampled (groups of) exporting producers. The Commission, by letter of 22 January 2016, indicated its disagreement with the position of the GOC on this issue and pointed out that, unlike in the original investigation, several of the largest exporting producers, amongst which the three largest in terms of export volume of the product under review to the Union, did not co-operate in the expiry review, leading to a level of cooperation which was significantly lower than in the original investigation. As a consequence, important information to establish the subsidy findings were likely to be omitted if the GOC's questionnaire reply were to cover only the sampled groups of exporting producers. Nevertheless the Commission, in the spirit of good cooperation, exceptionally accepted in that letter that the GOC could limit the company-specific data in its questionnaire reply to the ten largest (groups of) exporting producers in the RIP, listed by name in the letter and which included the three sampled companies, and it expressed its willingness to grant another deadline extension until 2 February 2016.

(41) The GOC submitted an incomplete reply to the questionnaire in three parts: the first on 26 January 2016, the second on 3 February 2016 and the third on 5 February 2016. In the cover letter of the submission of 26 January 2016, the GOC expressed its wish to clarify the reasons for its incomplete questionnaire reply and re-iterated its position as regards the scope of the questionnaire reply being limited to the three sampled groups of exporting producers, which was also repeated throughout its questionnaire reply.

(42) Following disclosure, the GOC expressed dissatisfaction with the fact the Commission ‘is critical of the fact that the GOC provided information after 26 January 2016’. The Commission notes that the recital above is a factual account of the way in which the GOC submitted its questionnaire reply. No legal consequences have been drawn from that late reply.

(43) The Commission sent deficiency letters to the GOC on 14 March 2016 (‘first deficiency letter’) and 14 July 2016 (‘second deficiency letter’), to which the GOC replied on 8 April 2016 and 22 July 2016. On 14 July 2016 the Commission sent the verification schedule to the GOC requesting the GOC to comment and to complete the missing logistical information.

(44) In the spirit of good cooperation, the Commission sent a detailed pre-verification letter on 19 July 2016. The GOC replied on 2 August 2016, proposing a different time structure for the verification including changes to the duration of some of the sections to be verified. This, as the Commission explained by reply on the same day, could not be accepted since the modified schedule no longer followed a logical flow. In addition, the Commission could not accept the changes made to the allocation of verification time to each of the sections.

(45) Following disclosure, the GOC commented that the above showed that the GOC was flexible in its cooperation while the Commission was not. The Commission would like to underline that the previous recital is a factual account on the exchanges prior to the verification visit.

(46) The verification visit took place from 8 August 2016 to 12 August 2016 based on the schedule proposed by the Commission.

(47) None of the banks mentioned in recital 29 provided the requested information concerning the PV industry arguing that they were bound by legal requirements and contractual clauses as regards the confidentiality of company-specific loan information. The banks invited the Commission to rely on the information provided by the sampled (groups of) exporting producers.

(48) In its second deficiency letter, the Commission invited the GOC to request the ten largest (groups of) exporting producers of the product under review to authorise the banks to provide company-specific information to the Commission in the framework of the current expiry review investigation. The GOC stated that it could not ask, force nor compel the Chinese exporting producers to cooperate in the present investigation or any other investigation. However, this statement does not relate to the Commission's invitation. The GOC further indicated that the Commission could directly request these companies to provide the relevant information to the Commission. The Commission has indeed used the relevant information provided by the three sampled companies. However, since the request for authorization concerned information held by the financial institutions, in particular credit risk assessments, the three sampled companies could not provide all relevant information. The Commission considers that it was the responsibility of the GOC to facilitate the necessary contacts between the banks and the exporting producers, so that the banks would have been able to provide the requested information.

(49) The GOC claimed during the verification visit that it had requested the sampled exporting producers to forward the relevant Appendix to the questionnaire for the GOC to the financial institutions from which they had received loans, credit lines and/or credit insurance. The GOC also claimed to have forwarded the Appendix to the other financial institutions mentioned in the cover letter of the questionnaire. When so asked during the verification visit, no trace of either of these actions could be shown to the Commission.

(50) Following disclosure, the GOC expressed its dissatisfaction on the above statements. The Commission notes that recital 49 sets out a factual account of the events as they happened.

(51) During the verification visit to the GOC, the Commission endeavoured to verify the questionnaire reply and requested the supporting documents that were used to prepare it, in line with the provisions of Articles 11 and 26 of the basic Regulation. With few exceptions, those supporting documents, although and even where it was specifically requested, were not available. This did not allow a complete verification of the reply to the questionnaire. As a consequence, the Commission, in addition to the standard list of exhibits, also compiled a list of documents that were requested on the spot, but were not provided. At the end of the verification, this list was reviewed with the GOC and signed by the GOC and the Commission (‘list of documents not provided’). The list contained 28 items and explanations/comments for each item.

(52) Following disclosure, the GOC commented that the list of documents requested but not provided could be categorised into four types, namely allegedly ‘non-existent documents’, ‘documents under preparation and not officially issued’, ‘sensitive and confidential credit risk assessment reports’, and ‘information provided in other documents submitted’. The Commission notes that the list of documents not provided includes the item ‘Evidence for liberalisation of financial markets (People's Bank of China, “PBOC”)’, with which the GOC seemed to take issue in its comments after the disclosure.

(53) Furthermore, the GOC argued that if eliminating the documents falling within one of the four above mentioned categories, the list would contain only a few documents that were requested but not provided. The Commission disagreed with that statement. As to the so-called ‘non-existent’ documents, the Commission had reason to ask for them as they had been mentioned in other documents submitted previously during this and/or the original investigation. For ‘documents under preparation and not officially issued’, some of them could have been provided to the Commission after their formal adoption, but were not. As to ‘sensitive and confidential credit risk assessment reports’, the basic Regulation offers procedural guarantees that such information would be protected against further dissemination. Finally, even if the Commission accepted the provision of information ‘in other documents’, such documents represented only a small part of the list.

(54) Following disclosure, the GOC also argued that the Commission applied facts available for the non-provision of ‘certain documents’ without linking these documents to the information needed by the Commission. The GOC alleged that the Commission thus applied facts available on the basis of unknown content, which would be incoherent with WTO provisions. The Commission observes that the reasons for requesting the documents have been set out in the questionnaire, during the verification visit, in the Commission's letters to the GOC dated 22 January 2016 and 23 September 2016, and in the disclosure document.

(55) Following the on-the-spot verification visit, on 23 September 2016, the Commission notified the GOC that it was considering the application of facts available for the missing information and made it aware of the consequences of non-cooperation in accordance with Article 28(1) and (6) of the basic Regulation.

(56) In its letter of 13 October 2016 the GOC objected to the Commission's consideration to apply the provisions of Article 28 of the basic Regulation, arguing that it was not justified on legal and factual grounds. The GOC also stated that the fact that banks had not provided the requested information to the Commission showed that the GOC does not exercise meaningful control over them. It also repeated previous explanations as to why the requested information could not be provided.

(57) The GOC stated that the Commission had failed to explain why the information provided by the GOC was insufficient and why additional information was needed. The Commission did explain to the GOC why it was considered necessary to have the requested information (see above recital 40).

(58) The GOC further stated that the Commission's letter on the intention to apply facts available had been extremely unclear and imprecise. The GOC re-iterated in its comments following disclosure that the Commission's letter contained ‘extremely brief information on the reasons for the application of facts available’. The Commission notes that deficiencies were listed per subject, subsidy scheme and/or entity (e.g. financial entities) and that a list of documents not provided had been established by common agreement (see recital 51).

(59) The GOC argued that the Commission could not impute the responsibility upon the GOC regarding the non-cooperation of exporting producers from China as these companies are independent and the GOC has no control over them. It did not provide any information at all on them.

(60) The Commission does not impute the responsibility upon the GOC for the non-cooperation. However, the GOC is responsible for its own questionnaire reply, which, as concerns the requested company-specific information, covered only the three sampled exporting producers. The Commission therefore considers that the GOC did not act to the best of its ability by not providing the requested information.

(61) The GOC also questioned how the unavailability of copies of certain documents could in any way prejudice or discredit the information on file or impede the investigation. The GOC qualified in its letter the evidence not provided as having relative low probative value (without being precise which ‘unavailable evidence’ the GOC was referring to) and therefore, the unavailability of such evidence should not put in doubt the legal framework of China. The Commission disagrees with the statement that the information not provided by the GOC has low probative value. It is only once information is provided that its probative value can be assessed. The verification process aims to ascertain that the questionnaire reply is accurate. In this regard, it is confirmed that the verification visits did not allow the Commission to fully ascertain the information on file.

(62) The GOC also claimed that the Commission had wrongly identified six documents which were not provided in the course of the verification process and that the application of Article 28 was unwarranted. In that regard, it suffices to recall that the list of documents not provided had been established by common agreement.

(63) The GOC referred to Annex II to the WTO Anti-dumping Agreement and Article 28(3) of the basic Regulation according to which ‘all information which is verifiable, which is appropriately submitted so that it can be used in the investigation without undue difficulties, which is supplied in a timely fashion, and, where applicable, which is supplied in a medium or computer language requested by the authorities, should be taken into account when determinations are made.’ It also referred to several WTO panel rulings (15) whereby the term ‘verifiable’ does not mean that the information should be actually verified on-the-spot. It claimed that the Commission cannot reject information and apply facts available irrespective of the context and nature of the circumstances, whenever some information was unavailable during the verification.

(64) The Commission notes that the information to be taken into account should first be verifiable. Also, in the US — Steel Plate panel report, the word ‘verify’ is defined as ‘ascertain or test the accuracy or correctness of, esp. by examination or by comparison of data etc.; check or establish by investigation’. In this specific case, the Commission considers that it complied with the panel reports mentioned in the previous recital.

(65) Following disclosure, the GOC commented that the Commission had expanded its grounds and reasoning on the application of facts available, which according to the GOC would not be in line with the WTO Subsidies and Countervailing Measures (SCM) agreement and Article 28(4) of the basic Regulation. The Commission notes that in accordance with Article 28(4) of the basic Regulation, the GOC was informed of the reasons by letter dated 23 September 2016 and that the GOC was granted the opportunity to provide its comments on the letter by 6 October 2016. After having requested and obtained an extension to that deadline, the GOC did so by letter dated 13 October 2016. Article 28(4) of the basic Regulation also states that ‘if the explanations are considered unsatisfactory, the reasons for rejection of such evidence or information shall be disclosed and given in published findings’, which was adhered to by way of the general disclosure document dated 20 December 2016.

(66) The GOC also stated that the Commission's application of facts available is legally incoherent, as the Commission would on the one hand focus on changes since the original investigation while on the other hand, the questionnaire and attached Appendices were too burdensome in terms of request for information. The GOC also criticized the fact that the Commission did not state in the questionnaire that it would focus on the possible changes since the original investigation. Furthermore, the GOC stated that the Commission had asked for more information compared to the original investigation. The Commission rejects these comments, as firstly, in order to analyse the possible changes the Commission also has to gather information on the status quo during the review investigation period. Second, the questionnaire was no different from any other standard government questionnaire in an anti-subsidy investigation though naturally, it was adapted to the schemes mentioned in the request. This means that information on subsidy items not yet identified in the original investigation but identified in the meantime was indeed requested in the questionnaire.

(67) The GOC insisted in its comments to the disclosure that information on five, not seven, exporting producers were lacking. The Commission accepted this claim with the following qualification: from the ten largest exporting producers to the Union, three were sampled. An additional two had submitted a sampling reply, while the remaining five had not. In the government questionnaire, the Commission had requested the GOC to respond to its questions for the PV industry, which was then, in order to lessen the burden, limited to the ten largest exporting producers. However, the GOC responded to the government questionnaire only taking into account the three sampled companies and did not provide information on the other seven exporting producers.

(68) As regards the level of representativity, the Commission disagrees with GOC's comment that the Commission's insistence on the GOC providing information on the ten largest exporting producers would imply that its sample is not representative for the determinations in this investigation. The Commission intends to clarify that the sample is representative, because it fulfils the conditions set out in the basic Regulation: It covers the largest producers by volume that have cooperated. The GOC questioned in its submission after disclosure what difference the additional information would have made. The Commission observes that it could not exclude from the outset that it would be necessary to apply Article 27(4) of the basic Regulation. In such a situation, information on the ten largest exporting producers would have only further increased the quality of the determinations as the information base would have been larger.

(69) The Commission at no point violated its ex officio investigatory duties, as commented by the GOC after disclosure. On the contrary, the Commission investigated the information that was available despite it being incomplete, and made all efforts possible to fill the lacunae in the information available.

(70) The Commission therefore rejects the GOC's comments that the information requested was irrelevant.

(71) The GOC also alleged that in the general disclosure document the Commission had misrepresented the vastness of the information lacking and pointed to the body of information the GOC did provide.

(72) As for the financial institutions and input suppliers, the GOC commented that it considers it illogical for the Commission to require the cooperation of 3 800 banks as well as all input suppliers. The Commission notes that this comment is incorrect. The Commission only requested the GOC to forward the specific questionnaires to the financial institutions and the input suppliers as stated above in recital 28.

(73) With respect to the GOC's comments on its alleged full cooperation, the Commission observed that the following main deficiency points were not adequately addressed until the end of the investigation. The GOC did not provide any of the information requested in the letter sent by the Commission to the GOC on 23 September 2016. It withheld information on the ten largest exporting producers. It further did not facilitate receiving the questionnaire replies from China Development Bank, Bank of Beijing, Ping An Bank and Suzhou Bank. Market share information for the polysilicon, glass and aluminium markets in the PRC was also missing. Finally, the GOC refused to forward the specific questionnaires to (i) any other financial institutions known by the GOC to have provided loans to the ten largest exporting producers and (ii) suppliers of polysilicon, glass and aluminium. As far as the latter are concerned, the GOC indicated that it had not seen the need of forwarding the Appendix.

(74) In the light of the findings in the present section, the Commission considers that the conditions for the use of facts available within the meaning of Article 28 of the basic regulation are in principle met.

(75) In order to reply to the comments on disclosure, the Commission has identified for each of the subsidy schemes analysed in the following sections precisely which information has been disregarded on the basis of facts available, and by which information it has been replaced.

(76) One sampled exporting producer criticised the use of Article 28 of the basic Regulation, because it perceived that use as directed against it. It pointed out that the Commission had vis-à-vis it not followed the procedure foreseen in that Article. The Commission cannot agree with that view. The Commission has not disregarded any information provided by that exporting producer. Rather, it has used all information available, including information from that exporting producer.

3.2. Government plans, projects and other documents

(77) All subsidy schemes under assessment have their source in the implementation of central planning, as was the case in the original investigation.

(78) In view of the reduced duration of the countervailing measures on imports of the product under review, the Commission concentrated its analysis on the possible amendments to the policies, planning documents and legal/practical implementations that such amendments would induce.

(79) Following disclosure, the GOC indicated that the Commission had not acted with an appropriate degree of diligence to arrive at a reasoned conclusion on continued subsidisation as it had relied significantly on its findings of subsidisation in the original investigation which the GOC had contested during that investigation. It also referred to the US — AD and CVD AB report (para. 354), according to which a mere reference to findings of an investigation will not suffice as a reasoned and adequate explanation.

(80) The comments raised by the GOC in the original investigation were analysed and addressed in the original Regulation and the conclusions drawn in the original investigation were not challenged in court (16). In this context, the Commission fails to see on which grounds such findings cannot form part of the basis on which the Commission relied to draw its conclusions in the current investigation, provided that facts underlying those conclusions have not in the review investigation been found to be altered, as this means they were assessed anew. Furthermore, as evidenced by the analysis of the information collected throughout the investigation and reflected in this Regulation, the Commission disagrees with the statement that the Commission relied significantly on conclusions drawn in the original investigation. In this regard, and in view of the partial application of Article 28 of the basic Regulation to the GOC, the Commission resorted to facts available, which, in certain instances, led to base its findings on the conclusions drawn in the original investigation.

(81) The applicant alleged that the PRC continues to heavily subsidise its photovoltaic industry and referred to a number of policy and planning documents as well as legislation which are the basis for the State support to the industry. The Commission reviewed and analysed the documents mentioned in the request as well as additional documents submitted by the GOC and the sampled exporting producers in the course of the investigation.

(82) In the original investigation, it was established that the GOC had included the PV industry amongst ‘strategic’ industries in the 12th Five-year Plan (17). The GOC had also issued a specific plan for the solar photovoltaic industry (subordinate to the main 12th Five-year Plan), i.e. the 12th Five-year Plan for the Solar Photovoltaic Industry. In this plan the GOC had expressed its support for ‘superior enterprises’ (18) and ‘key enterprises’ (19), committed itself to ‘promote the implementation of various photovoltaic support policies’ (20), and ‘formulate overall preparation of supporting policies on industry, finance, taxation …’ (21). These plans covered the period 2011-2015 and thus also the review investigation period.

(83) In March 2016, the 13th Five-Year plan was released, which covers the period 2016-2020. In reaction to the second deficiency letter, the GOC only submitted the Chinese version, accompanied by an English translation of the table of contents. The 13th Five-Year plan includes the PV industry in this strategic plan (22). The 13th Five-Year Plan's emphasis on technological breakthroughs extends to energy-related products and services, specifically including new generation photovoltaic cells.

(84) Following disclosure the GOC claimed that it had provided the 13th Five-Year plan and that this document showed that the solar industry is not encouraged.

(85) The English version of the 13th Five-Year plan was requested during the verification visit and included in the list of documents not provided. A printed sample of the English version was available to the GOC during the verification visit, which the GOC committed to submit once it could be made available to the Commission. As evidenced by the website of the NDRC (23), the English version of such document was released on 7 December 2016 and was never provided to the Commission. In the absence of any submission of a complete and official English version of the plan submitted by the GOC, the Commission had to rely on an internal translation of such document and confronted the GOC during the verification visit with the extracts referred to in recital 83. Although the GOC indicated that these references set the direction for technological innovation, it did not deny the existence of such references. Eventually, it should be noted that, in the absence of any complete English version of the Plan submitted by the GOC, the Commission relied on its internal English translation in the disclosure document (see footnote 22).

(86) The GOC further claimed that the extracts referred above at recitals 83 and 87 below relate to the development of domestic modern infrastructure networks, including the use/generation of solar power but not the production of material to generate it. The GOC also indicated that Chapter 23, which outlines the emerging and strategic industries, does not refer at all to the solar industry and denied the existence of a reference to photovoltaic cells in Box 8 of the same Chapter.

(87) Chapter 30 of the Plan states that ‘We will continue to give impetus to the development of wind and photovoltaic power’. A plain reading of this statement suggests that support for ‘photovoltaic power’ includes support for the Chinese PV industry. This interpretation is confirmed by Box 8 ‘Development of Strategic Emerging Industries’ in Chapter 23 ‘Develop Strategic Emerging Industries’. This Box refers to ‘Make breakthroughs in and promote the industrial application of key technologies such as next generation photovoltaics’ which is a clear reference to the material needed to generate energy. Another reference in this regard can be found in Section 1 of the same Chapter which reads: ‘We will support the development of next generation information technology, … green and low-carbon technology’. In this regard, green technology is commonly associated in China with the PV industry. Furthermore, and as indicated in recitals 378 and 389, the PV industry is listed as an encouraged industry in the Catalogue of key industries, products and technologies the development of which is encouraged by the State. On the basis of the above, the Commission confirmed that the PV industry is included in this strategic plan.

(88) As far as the specific 13th Five-year Plan for the Solar Photovoltaic Industry is concerned, the GOC indicated in its reply on 22 July 2016 that the document had not been published yet. During the verification visit, i.e. less than 20 days later, the GOC pretended instead that it would not issue such a policy document, without providing any further evidence. Eventually the GOC referred to the absence of 13th Five-Year plan for the solar industry as another indicator that such industry is not encouraged.

(89) However, the Decision 40 of the State Council, the State Council Decision of 10 October 2010 and the National Outline for the Medium and Long-term Science and Technology Development (2006-2020) which support the development of the PV industry and encourage financial and fiscal support to the PV industry in various ways, as outlined in recital 102 of the original Regulation, are still in force. Also the Law of the PRC on Scientific and Technological Progress which lists a number of measures for the support of the PV industry is still in force. Hence, even if no specific 13th Five-Year plan for the solar industry is issued, that does not constitute a termination of government support for the PV industry, as all the remaining government plans, projects and other documents suffice to support that conclusion.

(90) In conclusion, the original investigation (24) had concluded that the GOC has a policy to provide preferential lending to the photovoltaic sector. The GOC did not provide any evidence in the course of this investigation that this situation had changed. The investigation did not bring to light any element contradicting the above finding, but produced fresh evidence confirming the earlier finding.

(91) In addition, the China Monetary Policy Reports issued by a State body, the ‘Monetary Policy Analysis Group of the People's Bank of China’ confirmed that the existence of GOC policy as they reported throughout the RIP that the ‘the role of the financial sector will be enhanced to provide better financial services and to promote the reform and development of the railway, …and other key industries’ (25), that ‘there will be enhanced support to ... the strategic emerging industries, and other key areas in the national economy’ (26), that the ‘PBOC will follow the strategic arrangements of the Party Central Committee and the State Council’ (27), and that ‘Better financial services will be provided to support the strategy of innovation-driven development, financing products tailored to the needs of enterprises in technology innovation will be designed, and financial institutions will be encouraged to enhance support to … the strategic emerging industries, and other key areas.’ (28), or that ‘Financial institutions will be encouraged to enhance support to the strategy of transforming China from a manufacturer of quantity to a manufacturer of quality by providing good financial services for the strategic adjustment of the industrial structure, infrastructure construction, ship building, logistics, energy, science and technology, culture, and other key areas’ (29).

(92) During this investigation, the above was also confirmed by findings made for the three sampled exporting producers. For example, the 2014 annual report submitted to the United States Securities and Exchange Commission (SEC) by one of the sampled exporting producers stated: ‘Historically, China Development Bank and China Minsheng Bank have provided us with loans for our solar power project financing. As these loans are driven, in part, by policy considerations, to the extent that the government changes their position on the solar industry, the terms and availability of these loans may change. If we cannot obtain funding on commercially attractive terms from these banks or other banks going forward, we may have difficulty funding our projects. We cannot guarantee that we will be successful in locating additional suitable sources of financing in the time periods required or at all, or on terms or at costs that we find attractive or acceptable, which may make it difficult or impossible for us to execute our growth plans’ (30).

(93) Following disclosure, the GOC claimed that the PV industry is not included in key, strategic, or emerging industries and that the above mentioned policies do therefore not refer to it.

(94) In this regard, reference is made to recital 87 where it is concluded that the PV industry is considered a key/strategic industry.

(95) As indicated in recitals 333 and 400 of the original Regulation and confirmed by this investigation in, inter alia, recital 83, the photovoltaic industry is regarded as a key/strategic industry and the conclusions established in the original Regulation remain valid and are therefore confirmed.

3.3. Specific schemes

(96) The Commission analysed all subsidy schemes identified in the review request and asked the authorities of China to provide information on any other possible related subsidy schemes. On the basis of the information contained in the review request, the Commission sought information related to the following schemes, which allegedly involved the granting of subsidies by the Governmental authority: (i) Preferential policy loans, credit lines, other financing, guarantees and insurance — Preferential policy loans — Provision of credit lines — Export credit subsidy programmes — Export Guarantees and Insurances for Green Technologies (ii) Grant Programmes — Subsidies for development of ‘Famous Brands’ and ‘Well-known Trademarks in China’, ‘Export Brand Development Fund’, and similar programmes — The Golden Sun demonstration programme — Various grants (iii) Direct Tax Exemption ad Reduction programmes — The two free/three half programme for foreign invested enterprises (FIEs) — The two free/three half programme for New and High Technology Enterprises — Tax offset for research and development — Tax reduction for high and new-technology enterprises involved in designated projects — Income tax reductions for FIEs purchasing Chinese-made equipment — Tax exemption on income from certain dividends, bonuses and other equity investments between qualified resident companies — Other tax programmes: Preferential Tax Policies in the Western Regions, City maintenance and Construction Taxes and education surcharges for Foreign Invested Enterprises and Tax Preference Available to Companies that Operate at a Small Profit (iv) Indirect Tax and Import Tariff Programmes — VAT exemptions and import tariff rebates for the use of imported equipment and technology — VAT rebates on FIE purchases of Chinese-made equipment — VAT exemption for products sold by FIEs (v) Government provision of goods and services for less than adequate remuneration — Government provision of polysilicon for less than adequate remuneration — Government provision of aluminium extrusions for less than adequate remuneration — Government provision of glass for less than adequate remuneration — Government provision of power for less than adequate remuneration — Government provision of water for less than adequate remuneration — Government provision of land and land-use rights for less than adequate remuneration (vi) Support to mergers and restructuring in the PV sector.

3.4. Subsidisation of imports during the RIP

3.4.1. Preferential policy loans, other financing, guarantees and insurance

3.4.1.1. Preferential policy loans

— Introduction

(97) The request contained allegations that the GOC continued to subsidize its PV industry through preferential policy loans.

(a) Legal basis

(98) The legal basis for preferential loans is identical to that in the original investigation, i.e. Law of the PRC on Commercial Banks (‘Bank law’), General Rules on Loans (implemented by the People's Bank of China), Decision 40 of the of the State Council on Promulgating and Implementing the Temporary Provisions on Promoting the Industrial Structure Adjustment.

(99) Those legal provisions are implemented by decisions of State-owned banks, which are public bodies in the sense of Article 2 letter b of the basic Regulation read in conjunction with Article 3 (1) (a) (i) of the basic Regulation (see following section) or, in the alternative, are entrusted and directed by the State in the sense of Article 3 (1) (a) (iv) first indent of the basic Regulation.

(b) State-owned banks as public bodies

(100) The subsidies in form of policy loans have been granted by State-owned banks. It is therefore necessary to establish that those banks are public bodies.

(101) According to the WTO Appellate Body (DS 379, paragraph 318), the applicable test to establish that a State-owned undertaking is a public body is as follows: ‘What matters is whether an entity is vested with authority to exercise governmental functions, rather than how that is achieved. There are many different ways in which government in the narrow sense could provide entities with authority. Accordingly, different types of evidence may be relevant to showing that such authority has been bestowed on a particular entity. Evidence that an entity is, in fact, exercising governmental functions may serve as evidence that it possesses or has been vested with governmental authority, particularly where such evidence points to a sustained and systematic practice. It follows, in our view, that evidence that a government exercises meaningful control over an entity and its conduct may serve, in certain circumstances, as evidence that the relevant entity possesses governmental authority and exercises such authority in the performance of governmental functions. We stress, however, that, apart from an express delegation of authority in a legal instrument, the existence of mere formal links between an entity and government in the narrow sense is unlikely to suffice to establish the necessary possession of governmental authority. Thus, for example, the mere fact that a government is the majority shareholder of an entity does not demonstrate that the government exercises meaningful control over the conduct of that entity, much less that the government has bestowed it with governmental authority. In some instances, however, where the evidence shows that the formal indicia of government control are manifold, and there is also evidence that such control has been exercised in a meaningful way, then such evidence may permit an inference that the entity concerned is exercising governmental authority.’

(102) In the present case, the conclusion that the State-owned banks that have provided the three sampled producers with preferential policy loans are vested with authority to exercise governmental functions is based on the following considerations.

(103) The Commission sought information about State ownership of financial institutions, because it constitutes a formal indicium which, combined with evidence that such formal control has been exercised in a meaningful way, may permit an inference that the entity concerned is exercising governmental authority. In its questionnaire reply, the GOC submitted shareholding information for 17 financial institutions whose balance sheet total allegedly accounts for 80 % of the total banking industry. The information provided was based on various sources. In particular the GOC maintained that four banks are State-owned (ICBC, Agricultural Bank, Bank of China and China Construction Bank). According to the GOC, it held less than 50 % shares in four other banks (Bank of Communications, China Everbright Bank, Industrial Bank and Shanghai Pudong Development Bank). The remaining nine banks were claimed to have no government-held shares.

(104) During the verification, it appeared that the provided shareholding information was incorrect as it excluded the shares that were indirectly owned by the government although some of the publicly available information reported it as such. The GOC was requested to revise its questionnaire reply in this respect and to report both direct and indirect ownership. The GOC refused to do so. Consequently, the Commission was unable to verify the accuracy and correctness of the reported data concerning the State ownership stakes in the banks and other financial institutions.

(105) The GOC commented after disclosure that the shareholding information provided related to institutions which already covered 80 % of the total banking industry, that information on indirect shareholding by the State is not available and therefore, the Commission's request was unreasonable. The GOC also alleged that the Commission would have found the cooperation of the GOC inadequate, no matter how it cooperated. The Commission refutes the latter allegation. In addition, it needs to be clarified that without any other information provided to the Commission the statement that the shareholding information provided by the GOC allegedly ‘covered 80 % of the total banking industry’ was not verifiable to the Commission. However, if this unverified statement was true, the shareholding information would not prove the GOC's point about the legal qualification of those banks.

(106) The Commission therefore came to the following conclusions. First, it found that ICBC, Agricultural Bank, Bank of China and CCB were publicly owned according to the questionnaire reply of the GOC. Second, it applied facts available with respect to Bank of Communications, China Everbright Bank, Industrial Bank and Shanghai Pudong Development Bank by including indirect shareholdings, using information available on the file in this regard. Out of the nine remaining banks, which were identified as allegedly in majority privately owned by the GOC, only three provided loans to the sampled companies. The six other banks were therefore not further investigated. One of them was MEB which was found to be publicly owned after verification (see recitals 167 to 187) on the basis of an assessment of all elements on the file. The other two banks, Hua Xia Bank and Ping An Bank were not further investigated by the Commission, as their percentage of loans to the sampled producers was insignificant. For the purpose of this investigation, the Commission hence concluded that the nine banks ICBC, Agricultural Bank, Bank of China, CCB, MEB, Bank of Communications, China Everbright Bank, Industrial Bank and Shanghai Pudong Development Bank were publicly owned.

(107) The Commission requested from the GOC information concerning the proportion of loans provided by the banks where the GOC is the largest or sole shareholder, banks where the GOC has a shareholding stake but is not the largest shareholder, banks where the GOC is not a shareholder and banks which are foreign owned, to both industry as a whole and to the PV industry. The GOC did not provide any meaningful reply to this question, even once it had been reduced in scope to the banks providing financing to the ten largest (groups of) exporting producers. The GOC did not suggest any alternative source for this information. The purpose of this request has been to establish whether the lending pattern shows differences depending on the ownership. If indeed that information would have shown that State-owned banks have a larger proportion of industry sectors that are to be favoured according to central planning, that would constitute an indicium that governmental authority is exercised in a meaningful way.

(108) When discussing the information request during the verification visit, the GOC responded that the banks in the PRC did not provide any preferential lending and/or credit lines to the PV industry. This statement is in contradiction to the findings for the three sampled exporting producers, all of which received preferential lending and/or credit lines from the four verified banks as well as the other banks listed in recital 29.

(109) Therefore, the Commission based its findings regarding State-owned banks as public bodies on the questionnaire replies received via the GOC for EXIM, CCB, ICBC, MEB and MiB and from the three sampled exporting producers, the verification visits, information available from other sources, the request for review as well as findings of the original investigation that were found not to be altered.

(110) The specific questionnaire for financial institutions (‘Appendix A’) had as purpose to verify allegations in the complaint that Chinese State-owned banks are public bodies. The Commission sought information about whether the State-owned banks were vested with authority to exercise government functions with respect to the photovoltaic industry, e.g. through the composition of the board of directors and board of shareholders as laid down in the Articles of Association, minutes of shareholders/directors meetings, nationality of shareholders/directors, lending policies and assessment of risk with respect to loans provided to the PV industry and the sampled cooperating exporting producers.

— Verification at banks

(111) In its pre-verification letter the Commission envisaged the verification of the four banks which submitted replies to the Appendix A to the questionnaire and provided loans to the sampled exporting producers (EXIM, ICBC, CCB and MEB). It included a detailed non-exhaustive list of subjects that would be addressed during the verification. In the pre-verification letter the Commission had stated that the GOC was ‘requested to make all supporting documents available that were used to prepare [its…] substantive response, including original source documents and applications’.

— EXIM

(112) In its second deficiency letter, the Commission informed the GOC that the reply of EXIM to Appendix A was incomplete and that EXIM failed to submit a document which was specifically requested, i.e. the Chinese and English versions of the Articles of Association. EXIM indicated in its questionnaire reply that the Articles of Association are an internal management document and did not provide them. The reply to the deficiency letter indicated that EXIM was in the process of being reformed and that the revision of the Articles of Association was not yet complete. During the on-the-spot verification, EXIM indicated that the reform started in March/April 2015 and the applicable version of the Articles of Association being revised dated back to 1994 but did not provide the 1994 version. When requested to provide supporting evidence concerning the ongoing reform, EXIM referred to its website. In the absence of any internet connection, such information could however not be verified on-the-spot.

(113) The GOC argued in its comments on the disclosure that the Commission could have checked EXIM's website in Brussels prior to the on-the-spot verification visit in order to obtain evidence on the ongoing reform or should have foreseen own means to connect to the Internet while being on-the-spot. In this context, the Commission reiterates that, despite several requests, EXIM failed to provide any version of its Articles of Association, whether in its original or revised version.

(114) During the verification, the Commission requested to have a copy of the Notice of Establishing EXIM issued by the State Council and of the Measures for the management of Export Sellers's Credit for Hi-Tech products of EXIM. EXIM refused to provide these documents.

(115) The GOC commented after disclosure that details on the establishment of EXIM could also be found on EXIM's website and that the second document mentioned in the above recital had been repealed. The GOC therefore considered that the two documents mentioned in the previous recital could not constitute grounds for the application of facts available. The Commission re-iterates that in its pre-verification letter, the GOC and the financial institutions were asked to make readily available the information that is requested on-the-spot. The Commission recalls that EXIM itself had made reference to the first document in its questionnaire reply. In order to verify the questionnaire response, the Commission thus needed to receive the document. As for the second document, the Commission takes note of GOC's comment as regards its repeal.

(116) As far as the shareholding is concerned and as indicated in its questionnaire reply, the Commission established that EXIM is a 100 % State-owned export credit agency. As far as the Board of Directors and its composition is concerned, EXIM provided contradictory information during the verification visit as it indicated that the Board of Directors had not been formed yet due to the ongoing reform process. However, in its questionnaire reply, EXIM referred in several instances to such Board of Directors. The composition of the Board of Supervisors was not provided and could not be verified either. As a consequence, the Commission was not in a position to verify the existence or the composition of the Board of Directors and composition of the Board of Supervisors.

(117) The GOC explained in the questionnaire reply that the 1994 Articles of Association govern the functioning of EXIM, and described that functioning. However, the GOC failed to provide that document.

(118) Following disclosure, the GOC disagreed with the Commission's assessment in recital 113, noting that in the 2015 annual report of EXIM, it was mentioned that the setting up of the Board of Directors had been accelerated, but that no Board of Directors was otherwise mentioned. The Commission notes that the questionnaire and the second deficiency letter requested details on the composition (not appointment) of the Board of Directors. It was not clarified until the on-spot verification that EXIM allegedly had no Board of Directors during the RIP.

(119) In application of facts available, the Commission comes to the following conclusion: The State, as 100 % owner of EXIM, controls EXIM by nominating the Members of its Board of Supervisors. Those Members represent the interest of the State, including policy considerations, in the meetings of EXIM. In the absence of a Board of Directors, the Board of Supervisors or the State directly nominates the management of EXIM.

(120) Based on Articles 3 and 5 of the Interim Regulations on the Boards of Supervisors in Key State-owned Financial Institutions, the Commission established that Members of the Board of Supervisors are dispatched by and accountable to the State Council.

(121) Furthermore, States typically vest export credit agencies with authority to exercise government functions. The government function vested is the promotion of export to countries and for goods for which commercial insurance either does not provide insurance cover, or does so at premium rates that are not accessible to all exporters. Governments typically provide a State guarantee to the export credit agency, in order to lower its borrowing costs on the capital markets. The existence of that State guarantee is justified by and proof for being vested with authority to exercise government functions. The activities of those agencies pursue public policy goals, namely to promote export. More specifically, the title and content (as summarized in the questionnaire reply) of the Notice of Establishing EXIM issued by the State Council indicates that EXIM is carrying out the Chinese export policy. Moreover, as described in section 3.4.1 the PV industry, as strategic/key industry, is benefitting from such export support.

(122) On the basis of those considerations, it is inferred, on the basis of facts available, that the State has exercised its formal control, established by virtue of its ownership, in the daily business activities of EXIM in a meaningful way and that the State has vested EXIM with authority to exercise government functions.

(123) That conclusion is further corroborated by the examination of the lending policy, as established on the basis of the annual reports, which demonstrates that EXIM feels bound to implement State policy when making lending decisions, for the following reasons.

(124) When requested to explain its lending policy, i.e. how government plans and projects are reflected, whether EXIM considers the Catalogue of Chinese High-Tech Products for Export (or other catalogues, lists or plans) in its lending policy, EXIM indicated that it analyses the influence of the plans on loan programs or borrowers and that it supports enterprises that produce products from this catalogue. After analysis of the annual report, it appeared that EXIM's reply purposely devalued the impact of the government plans and projects on its lending policy. Indeed, the 2015 annual report says that EXIM's main mandate is to ‘facilitate the export and import of Chinese mechanical and electronic products, complete sets of equipment and new-and high-tech products’ and more importantly that ‘The Bank fully leveraged its role of policy financing in implementing China's national development strategy’.

(125) The GOC submitted after disclosure that the facilitation of exports does not necessarily imply preferential lending and the national development strategy covers all aspects of the Chinese economy. The point of recital 124 is however to demonstrate that government plans and projects do influence EXIM's lending policy, which is reflected in its mandate. The comment made by the GOC is therefore rejected.

(126) Concerning the statistics on the export of different categories of products already requested in the questionnaire, EXIM did not provide the requested information and called upon confidentiality clauses. During the verification visit EXIM changed its view and indicated that the information was not available. While the Commission fails to understand why EXIM changed its reasoning, it is also unclear to the Commission how providing non-customer specific consolidated data can breach confidentiality clauses. Still EXIM provided overall commercial values for three years but did not submit this information for the RIP neither before nor during the verification visit. Consequently, the Commission was not in a position to verify the overall commercial values of export credit in the RIP, nor the data concerning the proportion of export credits to the PV industry.

(127) The GOC expressed surprise on the, in the Commission's view, contradictory statements made in recital 113. The Commission notes that no statistics on the export of different categories of products were provided by EXIM. What was provided during the verification visit concerned overall commercial values. The first would have allowed the Commission to isolate the figures for the product concerned, which was not possible with the figures eventually provided during the verification visit (overall figures only). The GOC also claims that the Commission could have extrapolated the figures for the review investigation period by using the overall commercial values for the three years provided, which is incorrect as these figures were not provided on a monthly basis (as explained in recital 11, the review investigation period is 1 October 2014 to 30 September 2015).

(128) During the verification, the Commission attempted to verify the creditworthiness assessment for the ten largest exporting producers of the product under review, including the three sampled producers. EXIM stated that access to such information could not be granted for confidentiality reasons. When attempting to verify the creditworthiness assessment system of EXIM by way of even a blank assessment form, EXIM refused access to such a blank document as it claimed it would contain business secret information.

(129) After disclosure, the GOC pointed to the questionnaire reply and the 2015 annual report of EXIM, in which the importance of risk assessment prior to making lending decisions would be evident. Even when accepting that such a notion forms part of the bank's general policy, EXIM had not been providing examples how this was carried out with respect at least to the sampled companies. This comment therefore did not change the findings of the Commission.

(130) The Commission also requested to have a copy of EXIM's 2015 annual report. EXIM first indicated that such document could not be provided or discussed although it had become apparent that the requested document was already publicly available on its web site. The Commission could eventually take a look at the requested document via the internet, but was initially not allowed to take a hard copy of the document or take any notes. The requested document was eventually submitted but only after the EXIM representatives had left the verification premises and the document could not be discussed further.

(131) Following the Commission's sending of the letter regarding the consideration to apply Article 28, the GOC claimed that the application of Article 28 is not warranted even though access to a publicly available document was originally refused by the EXIM bank during the verification process but eventually provided by the GOC after the verification. The GOC noted that whoever provided the document is irrelevant.

(132) The Commission notes that the delay in providing the annual report of 2015 was only part of the reasons for applying Article 28 (see recitals 112 to 118). It needs to be underlined that by refusing access to and refusing to discuss a publicly available document during the time allocated to the corresponding financial institution, the EXIM bank obstructed and delayed the verification process. Also, the fact that the document was submitted after the representatives of the EXIM bank had left did not allow the Commission to discuss and verify the document at stake in a satisfactory manner. The Commission therefore considers that this financial institution significantly impeded the verification process.

(133) As far as documents pertaining to the establishment and management of the operations of the EXIM bank are concerned, i.e. the Notice of Establishing EXIM issued by the State Council and the Articles of Association, the GOC claimed that the requested documents bore no relationship to the subsidy scheme or to the exporting producers, that the request was a fishing expedition and that there were no legal grounds to investigate a scheme which was not countervailed in the original investigation.

(134) In this regard, the Commission notes that the requested documents were needed for the purpose of the investigation, in particular to establish whether EXIM was vested with authority to exercise government functions, and that similar documents were requested and provided by the GOC for other cooperating financial institutions. Further, it is noted that the EXIM bank made several references to these documents in its questionnaire reply as far as its ownership, management, supervision and operations are concerned and thus, these documents needed to be verified. Also, some of the sampled exporting producers indicated that they had financial dealings with this financial institution, which was another aspect that the Commission wished to verify and which shows that the EXIM bank was involved in subsidies related to those countervailed in the original investigation.

(135) The title and content of the Notice of Establishing EXIM issued by the State Council, to the extent that it can be deduced from the questionnaire reply, finally demonstrate that EXIM is a vehicle for the GOC to pursue public policy objectives and therefore vested with authority to exercise government functions.

(136) For those reasons, applying facts available, the Commission concludes that EXIM is a public body.

— ICBC

(137) The Commission established, on the basis of the ICBC questionnaire reply as confirmed by its 2015 Annual report that the State owns more than 50 % of the shares. ICBC is therefore formally controlled by the State.

(138) The Commission could also determine, on the basis of the Articles of Association and more specifically Chapter 8 to 10 thereof and ICBC's questionnaire reply, that the GOC, through its shareholding and via the Central Committee of the Communist Party of China, has the power to appoint the most important positions within the management of the bank such as the Chairman of the Board of Directors, Vice chairman of the Board of Directors, Executive Director, Chairman of the Board of Supervisors, President and Vice President. Moreover, according to ICBC's Articles of Association, the Board of Directors, inter alia, convenes shareholder's meetings, decides on the business strategy and budget of the bank, take investment (and merger) decisions, decides on the dismissals of senior management, formulates the risk management system, decides on the establishments of departments and branches, etc. This non-exhaustive list of responsibilities illustrates the meaningful control of the State on ICBC's daily business.

(139) Article 34 of the Bank law which applies to all banks operating in China and which provides that ‘Commercial banks shall conduct their business of lending in accordance with the needs of the national economic and social development and under the guidance of the industrial policies of the State’. The needs of the national economic and social development and the guidance of the industrial policies of the State are established through central planning, as set out above in section 3.2. The promotion of the PV industry forms part of them.

(140) The pursuit of goals of economic policy is considered by the Union Courts to form part of the exercise of public authority (31).

(141) Article 34 of the Bank law hence vests all banks with authority to exercise government function. In the case of ICBC, the formal control by the shareholding and the powers conferred upon the GOC through the shareholding in view of the Articles of Association have enabled the GOC to exercise that government function.

(142) Finally, the Commission has sought to establish that control has been exercised in a meaningful way by examining the de facto lending policy of ICBC.

(143) The Commission requested relevant information from the GOC in order to assess how the banks in the PRC are performing credit risk assessment of PV companies before deciding whether to grant them loans (and/or credit lines) or not and deciding on the conditions of the loans which are granted. In the Appendix A to the questionnaire the Commission requested information on how the banks take account of risk, how the creditworthiness of the borrower is assessed, what the risk premiums charged for different companies/industries in the PRC are, and which factors banks take into account when assessing loan or credit line applications. The Commission also requested a description of a loan application and its approval process. While ICBC provided a narrative reply to the questions raised above, neither the GOC nor ICBC provided satisfactory supporting evidence in this respect. During the verification visit, the Commission requested supporting evidence for the narrative reply. However, the GOC provided only replies of a general nature not supported by any evidence whatsoever that any kind of credit risk assessment actually takes place.

(144) The Commission also requested similar information from the sampled exporting producers and attempted to verify it during the on-the-spot verification visits of sampled exporting producers. Most of the exporting producers replied that banks request certain documents (such as the financial statements) and perform some kind of credit risk analysis before the loans are granted. However, they could not support their claims with any evidence for example of the documents they had provided. During the on-the-spot verification, the Commission asked for evidence (such as correspondence etc.) that the banks had indeed requested such documents or that such documents were provided to the banks by the companies, or any kind of report issued by the banks proving that such credit risk analysis was indeed performed. The sampled groups of exporting producers were however not able to provide such evidence, neither were they able to provide any other evidence supporting their claims.

(145) The first obstacle in that regard was that the GOC refused to provide the information set out above in Section 3.1. The second obstacle was that the GOC refused any access to the creditworthiness assessment carried out by ICBC.

(146) In its deficiency letter of 14 March 2016 the Commission informed the GOC that the reply of the ICBC to the Appendix A was incomplete as it did not include the following required information: loans provided to the ten largest exporting producers of the product under review; a complete reply concerning creditworthiness assessment; support by the bank for implementation of the government plans and projects.

(147) As far as loans and/or credit lines provided to the ten largest exporting producers of the product under review are concerned, ICBC did not provide any information and referred to legal and contractual obligations with regard to confidentiality whereby it cannot disclose company-specific loan information without their consent. However, the Commission could ultimately, for the purpose of establishing the benefit for the three cooperating sampled producers, rely on the verified submissions in their questionnaire replies.

(148) During the verification, the Commission attempted to verify the creditworthiness assessment of the sampled exporting producers, of the ten largest exporting producers and of the PV sector as a whole. ICBC did not provide any information in this regard and referred to confidentiality issues. It also indicated that it does not keep reports pertaining to producers in the PV sector at its headquarters. While ICBC allowed the Commission to briefly look at an assessment report that it had selected, it is noted that this document did not relate to any of the cooperating companies or to the PV sector. In addition, in view of the timing of its submission (in Chinese), the Commission was not in a position to comprehend the content in the timespan available during the verification visit. Furthermore, the Commission was not allowed to take a copy of the document. In its replies to the questionnaire and deficiency letter, ICBC had claimed that ‘it did not take government industrial policy, plans or projects, or other laws into account when assessing a loan/credit line’. However, the annual report of the bank seemed to demonstrate the contrary as it stated that ICBC ‘adjusted and improved industrial credit policy to provide financing support to the real economy in accordance with the macroeconomic policy, the prevailing trends of industry policy and the characteristics of the operation of the industry as well as the important strategic initiatives of the country’ and that ICBC ‘supported energy saving and environmental protection enterprises and ‘Going Global’ of prominent product facilities’.

(149) The GOC commented after disclosure that the Commission had interpreted the quotes, and in particular the term ‘support’ in those quotes, as provided in recital 148 wrongly. The GOC also provided a number of quotes of annual reports of two Belgian banks (namely KBC and Belfius) and a German bank (namely Deutsche Bank), where the term ‘support’ was also used. While the wording ‘support’ can indeed have many meanings in different contexts, the quoted phrase in the ICBC annual report refers to ‘financial support’. This in tandem with the other quotes in recital 139 and other findings, such as the fact that ICBC had provided preferential loans and credit lines to some of the sampled exporting producers during the review investigation period, has led to the conclusion that the ICBC does take government industrial policy, plans or projects, or other laws into account when assessing a loan/credit line. The Commission therefore maintains its findings in recitals 139 to 148.

(150) The assessment of all facts available on the file leads the Commission to the conclusion that ICBC has lent to the three sampled producers, which are representative for the PV industry, without carrying out a creditworthiness assessment, as the bank has been unable to prove the existence of such an assessment. This allows drawing the inference that the ICBC has been vested with government authority and exercised such authority by providing lending in line with the requirements of central planning, thus it performed governmental functions. That conclusion is further confirmed by the extracts from the annual reports.

(151) In conclusion, the Commission found that ICBC is a public body.

— CCB

(152) The Commission has established on the basis of the 2015 Annual reports of CCB that the State owns more than 50 % of the shares. CCB is therefore formally controlled by the State.

(153) As confirmed by CCB during the administrative procedure and mentioned in Chapter 11 and 12 of the Articles of Association, the GOC, in its capacity of main shareholder, has the power to appoint a majority of the members on the Board of Directors, which is the executive agency of the shareholders' General Meeting carrying out the management of CCB and shall be responsible to it. The same applies for the Board of Supervisors; i.e. the supervisory body of the Bank as provided by Chapter 16 of the Articles of Association. Moreover, according to CCB's Articles of Association and minutes of a Board of Directors' meeting, the Board of Directors, inter alia, decides on the budget of the bank, takes investment decisions, decides on the dismissals of the chief executive auditor and the secretary of the Board of the Directors. The 10 non-executive members of the Board of Directors out of a total of 15 members, represent the management of CCB. This non-exhaustive list of responsibilities illustrates the meaningful control of the State on CCB's daily business.

(154) During the verification the Commission attempted to verify the creditworthiness assessment of the sampled exporting producers and the PV sector as a whole. CCB did not provide any information in this regard and referred to confidentiality issues. Further to the Commission's insistence, creditworthiness documents could be briefly viewed. In this regard, it should be noted that, in view of the practical arrangements, i.e. the fact that the documents, which were in Chinese, could only be briefly viewed and not taken as an exhibit, the Commission was not in a position to satisfactorily verify the information contained in the questionnaire reply. Furthermore, it is also noted that the documents did not relate either to the sector concerned or to the RIP. Upon the Commission's suggestion to make available an anonymised version of the documents requested for the Commission to take as exhibits, the financial entity in question refused. Therefore, it cannot be stated, as the GOC claimed, that this financial entity acted to the best of its ability.

(155) The GOC stated in its reply to the Commission's letter regarding the consideration of applying Article 28 that the Commission cannot expect bank officials to allow it to take copies of all sorts of documents and have unrestricted access to such information as they are bound by confidentiality rules. Furthermore, it argued that the Commission was imposing an unreasonable burden of proof on the exporting country and on allegedly independent banks.

(156) The Commission did not request ‘all sorts of documents’ or request to have ‘unrestricted access’ to such documents. Therefore, the comment that the Commission imposed an unreasonable burden of proof on the GOC or the financial institutions has to be rejected.

(157) Following disclosure, the GOC submitted a general remark for the four banks visited on-the-spot by the Commission that the Commission's analysis is manifestly biased, as the annual reports of the concerned banks would contain evidence that those banks are not granting preferential loans to encouraged industries.

(158) The GOC added to this comment that in the general disclosure document, the Commission pointed to Decision 40 which lists the encouraged industries, as established in recital 191 of the original Regulation. The GOC found contradiction to this finding in the annual reports of two of the four verified banks, which mention stricter entry standards or the reduction of loans granted to sectors that are listed as encouraged in Decision 40.

(159) The Commission would like to underline that the investigation found that the four banks the Commission verified in fact provided preferential loans and/or credit lines to the three sampled exporting producers. These findings, which are in contradiction to GOC's comments in the two recitals above, are based on the information provided by the sampled exporting producers. None of the banks provided figures on loans and/or credit lines granted to the three sampled companies or the PV industry in general during the review investigation period. There was thus a discrepancy between the verified information from the sampled companies and the annual reports of the two cited banks. The Commission gave preference to the information received on spot from the sampled companies and thus rejected the GOCs comment. In its replies to the questionnaire and deficiency letter, CCB had indicated that government industry policy may be considered by the bank for reference, but that this does not bind the bank's decision with regard to its lending policy. However, the annual report of the bank confirmed that CCB implements government plans as evidenced by the following extracts: ‘Group proactively responded to the State's structural reform on the supply side, and aptly reacted to the development strategies…. We provided support to … strategic emerging industries.’; ‘In 2015, in line with the national industry policies and changes in external operation environment, the Group duly optimized credit policies…’.

(160) In its comments to the disclosure, the GOC noted that the following quote ‘In 2015, in line with the national industry policies and changes in external operation environment, the Group duly optimized credit policies…’ does not reflect that the bank gave preferential loans to certain industries. The Commission rejects this comment as the quoted sentence needs to be read in conjunction with the other quotes in the previous recital. In any case, the point made by the GOC is not clear, as it refers to MEB, while the quoted sentence was taken from the annual report of the CCB. The Commission assumes for the sake of the argument that ‘MEB’ was a typographical error.

(161) The GOC also took issue with the quote ‘Group proactively responded to the State's structural reform on the supply side, and aptly reacted to the development strategies….’ stating it was taken out of context and it has nothing to do with the encouraged, strategic or emerging industries or sectors and that the Commission has in any case misinterpreted the use of the word ‘emerging’ in CCB's annual report. The Commission notes that the full quote including the sentence that follows immediately reads as following (italics added): ‘We vigorously boosted the development of real economy. The Group proactively responded to the state's structural reform on the supply side, and aptly reacted to the development strategies including ‘One Belt and One Road’, free trade zones, coordinated development of the Beijing-Tianjin-Hebei region and the Yangtze River Economic Belt. We provided support to the national key construction projects, new-type urbanisation, new countryside construction and strategic emerging industries’. Therefore, as these quotes also need to be read in conjunction with each other, the Commission saw no reason to change its findings in recital 159.

(162) The GOC also noted that the credit risk analysis and management system of the bank are described at length in the annual report of CCB. However, no new elements have been put forward by the GOC in this respect. In any event, those are abstract, and do not allow the assessment of individual cases, nor do they constitute proof that such assessment actually takes place. Therefore, the Commission did not see any reason to change its findings in recitals 152 to 159.

(163) In its reply to the Commission's letter regarding the consideration to apply Article 28, the GOC claimed that the documents requested were in any case not relevant in the framework of the verification and that the Commission should have relied on the information that it could collect or that was already contained in the questionnaire reply. It also argued that the documents that were not provided by the CCB (or the GOC) were no grounds to apply Article 28.

(164) In this regard, it is noted that the requested documents were necessary to verify the claims made in the questionnaire reply and that the Commission could not be satisfied with the provided documents as they did not relate to the claims made or could only partially support them. In the absence of any verified document showing that the bank carried out a proper risk assessment, the Commission maintained its conclusion the CCB was not carrying out creditworthiness assessments. Rather, its lending was guided by the objective of implementing government policy by giving the sampled companies preferential loans.

(165) The assessment of all facts available on the file leads the Commission to the conclusion that CCB has lent to two sampled producers, which are representative for the PV industry, without carrying out a creditworthiness assessment, as the bank has been unable to prove the existence of such an assessment. This allows drawing the inference that CCB has been vested with government authority and exercised such authority by providing lending in line with the requirements of central planning. Thus, it performed governmental functions. That conclusion is further confirmed by the extracts from the annual reports.

(166) The Commission therefore concludes that CCB is a public body.

— MEB

(167) The Commission established that MEB is part of the China Merchants Group, a State-owned conglomerate under direct supervision of State-owned Assets Supervision and Administration Commission of the State Council (32). On the basis of its 2014 and 2015 Annual reports, it also established that is indirectly owned by the State. MEB is therefore formally controlled by the State.

(168) As provided by Chapters 10 and 13 of the Articles of Association, the State, as a majority shareholder, has the power to appoint a majority of the members of Board of Directors and Board of Supervisors. According to MEB's Articles of Association, the Board of Directors, inter alia, convenes shareholder's meetings, formulates the bank's business and investment plans, sets up the capital management strategy and the budget plan, decides on profit distribution, and approves or dismisses senior management. This non-exhaustive list of responsibilities illustrates the meaningful control of the State on MEB's daily business.

(169) During the verification the Commission attempted to v