Proposal for a COUNCIL IMPLEMENTING REGULATION imposing a definitive countervailing duty on imports of crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned from the People's Republic of China
Date: 2013-11-04
Institutions: European Commission
Subjects: China, anti-dumping legislation, import (EU), originating product, semi-metal, solar collector

EUROPEAN 
COMMISSION 

Brussels, 4.11.2013  
COM(2013) 760 final 

2013/0370 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING REGULATION 

imposing a definitive countervailing duty on imports of crystalline silicon photovoltaic 
modules and key components (i.e. cells) originating in or consigned from the People's 
Republic of China 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Grounds for and objectives of the proposal 

This proposal concerns the application of Article 10 of Council Regulation (EC) No 597/2009 
of 11 June 2009 on protection against subsidised imports from countries not members of the 
European Community. 

General context 

This proposal is made in the context of the implementation of the basic Regulation and is the 
result  of  an  investigation  which  was  carried  out  in  line  with  the  substantive  and  procedural 
requirements laid out in the basic Regulation. 

Existing provisions in the area of the proposal 

Provisional  anti-dumping  measures  were  imposed  on  the  same  product  by  Commission 
Regulation (EU) No 513/2013 (OJ L 152, 5.6.2013, p. 5). 

Parallel proposal to impose definitive anti-dumping measures. 

Consistency with other policies and objectives of the Union 

Not applicable. 

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

Consultation of interested parties 

Interested  parties  concerned  by  the  proceeding  have  had  the  possibility  to  defend  their 
interests during the investigation, in line with the provisions of the basic Regulation. 

Collection and use of expertise 

There was no need for external expertise. 

Impact assessment 

This proposal is the result of the implementation of the basic Regulation. 

The  basic  Regulation  does  not  provide  for  a  general  impact  assessment  but  contains  an 
exhaustive list of conditions that have to be assessed. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

Summary of the proposed action 

On  8  November  2012,  the  Commission  initiated  an  anti-subsidy  proceeding  concerning 
imports of crystalline silicon photovoltaic modules and key components (i.e. cells and wafers) 
originating in the People's Republic of China. 

The  investigation  found  subsidisation  of  the  product  concerned,  which  caused  injury  to  the 
Union  industry.  The  investigation  also  found  that  it  was  not  against  the  Union  interest  to 
impose anti-subsidy measures. 

Therefore,  it  is  proposed  that  the  Council  adopts  the  attached  proposal  for  a  Regulation  in 
order to impose definitive anti-subsidy measures on imports of crystalline silicon photovoltaic 
modules and key components (i.e. cells) originating in the People's Republic of China. 

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The product scope subject to measures does not include wafers which were initially part of the 
investigation. This is because wafers have specific characteristics different from the product 
concerned. 

Legal basis 

Council  Regulation  (EC)  No  597/2009  of  11  June  2009  on  protection  against  subsidised 
imports from countries not members of the European Community (‘the basic Regulation’). 

Subsidiarity principle 

The  proposal  falls  under  the  exclusive  competence  of  the  Union.  The  subsidiarity  principle 
therefore does not apply. 

Proportionality principle 

The proposal complies with the proportionality principle for the following reasons: 

The form of action is described in the above-mentioned basic Regulation and leaves no scope 
for national decision. 

Indication  of  how  financial  and  administrative  burden  falling  upon  the  Union,  national 
governments, regional and local authorities, economic operators and citizens is minimized and 
proportionate to the objective of the proposal is not applicable. 

Choice of instruments 

Proposed instrument: Regulation. 

Other  means  would  not  be  adequate  because  the  basic  Regulation  does  not  provide  for 
alternative options. 

4. 

BUDGETARY IMPLICATION  

The proposal has no implication for the EU budget. 

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2013/0370 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING REGULATION 

imposing a definitive countervailing duty on imports of crystalline silicon photovoltaic 
modules and key components (i.e. cells) originating in or consigned from the People's 
Republic of China 

THE COUNCIL OF THE EUROPEAN UNION, 

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

Having  regard  to  Council  Regulation  (EC)  No  597/2009  on  protection  against  subsidised 
imports from countries not members of the European Community1, and in particular Article 
17 thereof, 

Having  regard  to  the  proposal  submitted  by  the  European  Commission,  after  consulting  the 
Advisory Committee, 

Whereas: 

1. 

1.1. 

(1) 

(2) 

(3) 

PROCEDURE 

Initiation 

On 8 November 2012, the European Commission (the ‘Commission’) announced by a 
notice published in the Official Journal of the European Union2 ('Notice of Initiation'), 
the  initiation  of  an  anti-subsidy  proceeding  with  regard  to  imports  into  the  Union  of 
crystalline  silicon  photovoltaic  modules  and  key  components  (i.e.  cells  and  wafers) 
originating in the People's Republic of China ('PRC' or the 'country concerned'). 

The  anti-subsidy  proceeding  was  initiated  following  a  complaint  lodged  on 
26 September  2012  by  EU  ProSun  ('the  complainant')  on  behalf  of  producers 
representing in this case more than 25 % of the total Union production of crystalline 
silicon  photovoltaic  modules  and  key  components.  The  complaint  contained 
prima facie  evidence  of  subsidisation  of  the  said  product  and  of  material  injury 
resulting  therefrom,  which  was  considered  sufficient  to  justify  the  initiation  of  a 
proceeding.  

Prior  to  the  initiation  of  the  proceeding  and  in  accordance  with  Article  10(7)  of 
Council  Regulation  (EC)  No  597/2009  of  11  June  2009  on  protection  against 
subsidised  imports  from  countries  not  members  of  the  European  Community  (‘the 
basic Regulation’)3, the Commission notified the Government of the PRC ('the GOC') 
that it had received a properly documented complaint alleging that subsidised imports 
of crystalline silicon photovoltaic modules and key components originating in the PRC 
were  causing  material  injury  to  the  Union  industry.  The  GOC  was  invited  for 
consultations  with  the  aim  of  clarifying  the  situation  as  regards  the  contents  of  the 
complaint and arriving at a mutually agreed solution. The GOC accepted the offer of 

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3 

OJ L 188, 18.7.2009, p. 93. 
OJ C 340, 8.11.2012, p. 13. 
OJ L 188, 18.7.2009, p. 93. 

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1.2. 

(4) 

(5) 

(6) 

1.3. 

(7) 

(8) 

1.4. 

(9) 

(10) 

consultations  which  were  subsequently  held.  During  the  consultations,  no  mutually 
agreed solution could be arrived at. However, due note was taken of comments made 
by  the  GOC  regarding  the  non-countervailability  of  the  schemes  listed  in  the 
complaint. Following the consultations, submissions were received from the GOC.  

Parallel anti-dumping proceeding 

On  6  September  2012,  the  Commission  had  announced  by  a  notice  published  in  the 
Official Journal of the European Union4, the initiation of an anti-dumping proceeding 
concerning imports into the Union of crystalline silicon photovoltaic modules and key 
components (i.e. cells and wafers) originating in the PRC.  
On  6  June  2013,  the  Commission,  by  Regulation  (EU)  No  513/20135,  imposed  a 
provisional anti-dumping duty on imports of crystalline silicon photovoltaic modules 
and key components (i.e. cells and wafers) originating in or consigned from the PRC 
(“Provisional anti-dumping Regulation”). 

The  injury  analyses  performed  in  the  present  anti-subsidy  and  the  parallel  anti-
dumping  investigation  are  based  on  the  same  definition  of  the  Union  industry,  the 
representative  Union  producers  and  the  investigation  period  and  led  to  identical 
conclusions  unless  otherwise  specified.  This  was  considered  appropriate  in  order  to 
streamline the injury analysis and to reach consistent findings in both proceedings. For 
this reason, comments on injury aspects put forward in any of these proceedings were 
taken into account in both proceedings. 

Registration 

Following  a  request  by  the  complainant  supported  by  the  required  evidence  the 
Commission  adopted  on  1  March  2013  Regulation  No  182/2013  making  imports  of 
crystalline silicon PV modules and key components (i.e. cells and wafers) originating 
in or consigned from the PRC subject to registration as of 6 March 2013.  

Some  interested  parties  claimed  that  the  decision  for  registration  of  imports  was 
unfounded,  as  the  conditions  were  not  met  pursuant  to  Article  24(5)  of  the  basic 
Regulation.  However,  these  claims  were  not  substantiated  or  based  on  factual 
evidence. At the time the decision was taken to register imports the Commission had 
sufficient prima facie evidence justifying the need to register imports, in particular a 
sharp  increase  both  in  terms  of  absolute  imports  and  in  terms  of  market  share.  The 
claims in this regard had therefore to be rejected. 

Parties concerned by the proceeding 

The  Commission  officially  advised  the  complainants,  other  known  Union  producers, 
the known exporting producers in the PRC, the PRC authorities and known importers 
of  the  initiation  of  the  proceeding.  Interested  parties  were  given  the  opportunity  to 
make their views known in writing and to request a hearing within the time limit set in 
the Notice of Initiation. 

In  view  of  the  apparent  high  number  of  exporting  producers,  Union  producers  and 
unrelated  importers,  all  known  exporting  producers  and  unrelated  importers  were 
asked  to  make  themselves  known  to  the  Commission  and  to  provide,  as  specified  in 
the  Notice  of  Initiation,  basic  information  on  their  activities  related  to  the  product 
concerned  during  the  investigation  period  as  defined  in  recital  (38)  below.  This 
information was requested under Article 27 of the basic Regulation in order to enable 

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5 

OJ C 269, 6.9.2012, p. 5. 
OJ L 152, 5. 6.2013, p. 5. 

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the  Commission  to  decide  whether  sampling  would  be  necessary  and  if  so,  to  select 
samples. The authorities of the PRC were also consulted.  

(a)  Sampling of exporting producers 

(11) 

Initially 121 Chinese exporting producers/groups of producers provided the requested 
information  and  agreed  to  be  included  in  a  sample.  The  cooperating  companies 
represent  more  than  80  %  of  the  total  Chinese  export  volume.  On  the  basis  of  the 
information received from the exporting producers and in accordance with Article 27 
of the basic Regulation the Commission initially proposed a sample of seven exporting 
producers/groups of exporting producers.  

(12)  The  selected  sample  of  seven  groups  of  companies  consists  of  the  three  cooperating 
exporters with the largest volume of exports of modules, the two cooperating exporters 
with the largest volume of exports of cells and the two cooperating exporters with the 
largest  volume  of  exports  of  wafers.  The  sample  of  these  seven  groups  of  exporting 
producers served as the basis to determine the level of subsidisation for those groups 
as  well  as  the  level  of  subsidisation  for  all  cooperating  exporting  producers  not 
included  in  the  sample,  as  required  by  Articles  15(2)  and  15(3)  of  the  basic 
Regulation. As explained in recital (46) below, the Commission excluded wafers from 
the product scope in the definitive stage of the investigation. Certain companies were 
selected  into  the  sample  on  the  basis  of  their  largest  volumes  of  exports  of  wafers. 
However,  taking  into  account  the  fact  that  the  Commission  had  already  investigated 
these companies, verified the data submitted by them and also the fact that all of these 
companies  had  significant  exports  of  modules  and/or  cells  it  was  not  deemed 
necessary to amend the sample 

(13)  The  number  of  sampled  exporting  producers  was  eventually  deemed  to  be  eight 
companies/groups.  This  is  because,  although  it  was  initially  reported  that  the  Jinko 
Solar Co. Ltd and Renesola Jiangsu Ltd were related, it was subsequently established 
that they were not.  

(b)  Sampling of Union producers  

(14)  The  Commission  announced  in  the  Notice  of  Initiation  that  it  had  provisionally 
selected  a  sample  of  Union  producers.  All  known  Union  producers  and  known 
producers' association were informed about the selection of the provisional sample of 
Union  producers.  This  provisional  sample  consisted  of  nine  Union  producers  out  of 
the  around  215  Union  producers  that  were  known  prior  to  the  initiation  of  the 
investigation  to  produce  the  like  product,  selected  on  the  basis  of  the  largest 
representative  volume  of  production,  taking  into  account  the  sales  volume  and  the 
geographical location that could reasonably be investigated within the time available. 
It  was  ensured  that  the  sample  covers  both  vertically  integrated  and  non-integrated 
Union  producers.  Interested  parties  were  also  invited  to  make  their  views  known  on 
the provisional sample.  

(15)  Several  interested  parties  raised  the  following  objections  concerning  the  provisional 

sample of Union producers: 

(i) 

Some parties submitted that the limited information provided with regard to the 
provisionally  selected  sample  was  insufficient  and  prevented  them  from 
making any meaningful comments on the proposed sample. In particular, they 
criticised  that  the  identity  of  the  Union  producers  was  kept  confidential  and 
requested  that  the  Member  States  where  the  sampled  Union  producers  were 
located should be disclosed, as well as the selected Union producers’ share of 

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production  in  the  total  production  volume  of  PV  modules  and  cells  and  the 
percentage  of  production  and  sales  represented  by  the  sampled  companies 
individually and by the sample as a whole.  

(ii)  The  method  used  for  the  selection  of  the  sample  was  contested  on  the  grounds 
that it ‘confuses three different steps’, namely the support for the initiation of 
the investigation, definition of the Union industry and sampling. Therefore, it 
was  claimed  that  it  was  unclear  whether  the  Union  industry  was  already 
defined  at  the  time  of  the  selection  of  the  sample,  and  therefore  whether  the 
sample  could  be  considered  as  representative.  Without  defining  the  Union 
industry  at  sampling  stage,  interested  parties  were  prevented  from  verifying 
whether  the  provisional  sample  was  representative,  and  thus  whether  on  the 
basis of the sample, the situation of the Union industry during the investigation 
period  as  defined  in  recital  (38)  below  could  be  correctly  assessed. 
Furthermore, it was claimed that it was inappropriate to select the provisional 
sample on the basis of the replies of the Union producers to the examination of 
the support for the initiation of the investigation. 

(iii)  It  was  also  claimed  that  the  provisional  sample  was  selected  merely  on  the 
basis  of  companies  which  have  expressed  their  support  to  the  present 
investigation. 

(iv)  One  party  claimed  that,  since  vertically  integrated  companies  are  included  in 
the provisional sample, the production volume of cells may be double or triple 
counted which casts doubts on the overall representativity of the sample. It was 
requested that for vertically integrated producers only the production volume of 
modules should be counted, but not the volume of cells. 

(v)  The same party alleged that the data on which the selection of the sample was 
based  were  at  least  partly  unreliable  which  could  have  an  impact  on  the 
representativity of the provisional sample as a whole. 

(vi)  One  party  provided  a  list  containing  allegedly  around  150  additional  Union 
producers of  the  like  product,  claiming that they should have been taken into 
consideration for the purposes of selecting a sample of Union producers. 

(16)  The arguments raised by the parties were addressed as follows: The Union producers 
requested  that  their  names  be  kept  confidential  due  to  the  risk  of  retaliation.  There 
were  indeed  real  threats  against  Union  producers  to  harm  their  business  both  in  the 
Union and outside. The Commission considered that these requests were sufficiently 
substantiated to be granted. The disclosure of the location or share in production and 
sales  of  individual  Union  producers  selected  in  the  sample  could  easily  reveal  the 
identity of the producer concerned and the requests in this regard had to be rejected. 

(17)  The Commission did not ‘confuse’ the determination of the support for the initiation 
of  the  investigation,  the  determination  of  the  Union  industry  and  the  selection  of 
provisional  sample  as  these  steps  remained  independent  from  each  other  and  were 
decided upon separately. It was not demonstrated to what extent the use of production 
and sales data provided by the Union producers in the context of the examination of 
the  support  for  the  initiation  of  the  investigation  had  affected  the  representativity  of 
the sample. At initiation the Union industry had indeed been provisionally defined. All 
available information concerning the Union producers, including information provided 
in the complaint and data collected from Union producers and other parties before the 

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initiation  of  the  investigation,  was  used  in  order  to  provisionally  establish  the  total 
Union production for the investigation period, as defined in recital (38) below. 

(18)  All Union producers that replied to questions related to the support for the initiation of 
the  investigation  were  considered  for  the  sample,  regardless  of  whether  they 
supported,  opposed  or  expressed  no  opinion  on  the  investigation.  This  claim  was 
therefore rejected. 

(19)  The  question  of  double/triple  counting  has  been  considered  when  the  provisional 
sample  was  selected.  It  appeared  that  excluding  production  and  sales  of  cells  of  the 
vertically integrated Union producers would not take into consideration the part of the 
production of cells sold on the free market. It was therefore considered that excluding 
sales of cells from the total production volume would not necessarily lead to a more 
representative sample. Furthermore, the representativity of the sample was established 
not  only  on  the  basis  of  the  production  volume  but  also  on  the  basis  of  the 
geographical  spread  and  a  balanced  representation  of  vertically  integrated  and  non-
integrated  producers.  The  relative  representativeness  of  the  production  volume  was 
calculated at the level of each type of the like product. On this basis, it was considered 
that the methodology to select the provisional sample was reasonable and the sample 
is  therefore  considered  representative  for  the  Union  industry  of  the  product  under 
investigation as a whole. Therefore, this claim was rejected. As far as the reliability of 
data is concerned, the sample was selected on the basis of the information available at 
the  time  of  the  selection  of  the  sample  as  provided  for  in  Article  27  of  the  basic 
Regulation.  Concerning  the  reliability  of  data  used  in  the  support  of  the  initiation  of 
the investigation,  the investigation found no  evidence  that the data collected prior to 
the initiation was significantly deficient. Therefore, it can be reasonably assumed that 
the  basis  on  which  the  provisional  sample  was  selected  was  sufficiently  reliable. 
Therefore, this claim was rejected. 

(20)  Concerning the list of around 150 additional Union producers, it should be noted that 
this  information  was  submitted  far  outside  the  deadline  set  for  interested  parties  to 
comment on the selection of the provisional sample and for Union producers to come 
forward and to request to be selected in the sample. Moreover, about 30 of the Union 
producers contained in this list were in fact known to the Commission at the time of 
the  selection  of  the  sample.  Furthermore,  all  Union  producers  that  made  themselves 
known after the publication of the Notice of Initiation were considered when selecting 
the  sample.  On  this  basis,  the  representativity  of  the  sample  has  not  been  affected. 
Therefore, this claim was rejected. 

(21)  Following  receipt  of  comments,  the  composition  of  the  sample  was  revised  on  the 
ground that there were indications that one of the selected companies would not have 
been  in  the  position  to  fully  cooperate.  In  order  to  maintain  the  level  of 
representativity of the sample an additional Union producer was selected. This revised 
sample  consisted  thus  of  ten  companies,  selected  on  the  basis  of  the  largest 
representative volume for each level of production, taking into account sales volume 
on the Union market and geographical location that could reasonably be investigated 
within the time available. Further to the exclusion of wafers from the definition of the 
product  concerned,  and  thus  from  the  scope  of  this  investigation  (see  recitals  (42)  - 
(46)  -  and  (349)  below),  the  sample  consisted  of  eight  companies.  As  a  result,  the 
revised sample of Union producers accounted, expressed as a percentage of out of the 
total Union production, between 18% and 21 % for modules and between 17% and 24 
% for cells and covered vertically integrated and non-integrated producers. Given that 
a  precise  percentage  would  allow  calculating  the  production  volume  of  the  above 

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mentioned  additional  Union  producer  and  thus  its  identity  could  be  determined,  no 
such precise percentages could be disclosed.  

(22)  The Union producers who supplied the Commission with information required for the 
selection of a sample in the present anti-subsidy proceeding coincide with the Union 
producers who supplied the relevant information in the parallel on-going anti-dumping 
investigation. Furthermore, all Union producers selected in the final sample in the anti-
dumping  investigation  have  supplied  the  relevant  information  in  the  present  anti-
subsidy investigation which allowed the Commission to select a sample. Therefore, it 
was  considered  appropriate  that  the  final  samples  of  Union  producers  in  both 
proceedings were identical. 

(23)  The  GOC  reiterated  its  claim  that  the  use  of  confidentiality  of  the  names  of  the 
Complainants  and  sampled  Union  producers  is  not  warranted.  As  already  stated  in 
recital  (9)  to  the  provisional  Regulation,  the  Union  producers  requested  that  their 
names be kept confidential due to the risk of retaliation. The Commission considered 
that these requests were sufficiently substantiated to be granted. The information that 
has  been  provided  to  the  Commission  in  order  to  substantiate  the  risk  of  retaliation 
cannot be disclosed to third parties, as such disclosure would defeat the purpose of the 
request  for  confidentiality.  Moreover,  in  a  case,  where,  as  reported  by  the  GOC,  a 
Union  producer  re-evaluated  its  position  and  revealed  its  identity  by  filing  an 
application  for  a  Court  case  against  the  provisional  regulation,  there  is  no  longer 
ground  to  disclose  information  on  the  basis  of  which  anonymity  was  granted,  as  the 
identity has been revealed.  

(24)  Following  the  final  disclosure,  the  China  Chamber  of  Commerce  for  Import  and 
Export  of  Machinery  and  Electronic  Products  (hereinafter  CCCME)  reiterated  the 
arguments  about  the  method  used  for  the  selection  of  the  provisional  sample  of  the 
Union  producers.  It  claims  in  particular  that  the  Institutions  have  not  taken  into 
account 120 producers. The Commission already addressed this issue in recital (9) to 
the  provisional  Regulation.  Moreover,  the  Institutions  have  verified  the  activities  of 
the  companies  provided  on  that  list.  It  turned  out  that  that  list  mostly  includes 
installers, distributors, related importers and exporting producer in China, Taiwan, and 
India.  It  therefore  was  not  apt  to  demonstrate  that  the  Institutions  had  overlooked  a 
significant number of Union producers. Moreover, the CCCME has not contested the 
total  Union  production  by  providing  alternative  figures,  nor  has  it  put  forward  any 
evidence that the representativity of the sample could have been affected, as none of 
the alleged additional Union producers would have been selected into the sample, had 
it been known to the Commission. 

(c)  Sampling of unrelated importers 

(25)  Of  the  around  250  unrelated  importers  put  forward  by  the  complainant,  that  the 
Commission  contacted,  twenty  parties  replied  to  the  sampling  form  attached  to  the 
Notice of Initiation, twelve for modules, one for cells. In addition, seven other parties 
made themselves known but reported no imports or resales of the product concerned. 
The  sample  was  selected  in  accordance  with  Article  27  of  the  basic  Regulation  to 
cover  the  largest  representative  volume  of  imports  which  could  reasonably  be 
investigated  within  the  time  available.  On this  basis  a  sample  of  unrelated  importers 
was  selected  consisting  of  two  importers  for  modules  and  one  importer  for  cells, 
representing around 2 % - 5 % of the total imports from the country concerned. After 
the  receipt  of  the  questionnaire  reply,  it  became  however  apparent  that  the  core 
activity of one of the three importers was in fact solar installations and not trading of 

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the  product  concerned.  As  to  the  activity  of  a  second  importer,  this  was  that  of  an 
importer of modules and not of an importer of cells. Nevertheless, the quality of the 
information provided in its reply to the questionnaire was not sufficient to include it in 
the  analysis  of  unrelated  importers.  In  addition,  the  investigation  revealed  that  a 
majority  of  imports  of  the  product  concerned  entered  the  Union  market  through 
companies  related  to  the  exporting  producers  in  the  PRC  or  through  installers  or 
project developers. 

(26)  Following  the  imposition  of  provisional  anti-dumping  measures  in  the  parallel  anti-
dumping  investigation,  the  Commission  contacted  additional  importers  that  had 
already  cooperated  in  the  investigation  at  the  initiation  stage  by  providing  basic 
information  on  their  activities  related  to  the  product  under  investigation  during  the 
investigation  period,  as  specified  in  the  Notice  of  Initiation.  The  purpose  was  to 
determine  whether  the  size  of  the  sample  of  unrelated  importers  could  be  increased. 
Six  companies  qualified  as  unrelated  importers  trading  the  product  concerned  (i.e. 
purchasing and reselling it) came forward and were willing to cooperate further in the 
investigation. Out of these six, five replied within the deadline. Out of the five replies 
received,  only  three  were  sufficiently  complete  and  allowed  for  a  meaningful 
assessment.  On  this  basis,  the  sample  of  the  unrelated  importers  was  enlarged  and 
consisted  of  four  importers  for  modules,  representing  around  2  %  -  5  %  of  the  total 
imports  from  the  country  concerned.  Given  the  structure  of  the  unrelated  importers, 
which were mostly small and medium-sized companies, it was not possible to have a 
sample  representing  a  larger  share,  given  the  limited  resources  at  the  disposal  of  the 
Institutions. 

(d)  Questionnaire replies and verifications 

(27)  The  Commission  sent  questionnaires  to  the  representatives  of  the  PRC  (including 
specific  questionnaires  for  the  China  Development  Bank,  Export  Import  Bank  of 
China,  Bank  of  China,  Bank  of  Shanghai,  Sinosure,  other  relevant  financial 
institutions  and  state-owned  producers  of  polysilicon,  glass  and  aluminium  which 
supplied  these  raw  materials  to  the  industry  concerned  during  the  investigation 
period), the eight sampled exporting producers in the PRC, other exporting producers 
in the PRC that requested so, as well as to the sampled Union producers, the sampled 
unrelated importers and upstream and downstream operators and their associations that 
made themselves known within the time limits set out in the Notice of Initiation. The 
Commission also contacted a representative consumer association. 

(28)  Replies  were  received  from  the  GOC,  all  the  sampled  exporting  producers  and  their 
related  companies  in  the  PRC,  five  exporting  producers  which  requested  individual 
examination, from all the sampled Union producers, all the sampled unrelated Union 
importers and 21 upstream and downstream operators and three of their associations. 

(29)  The  Commission  sought  and  verified  all  information  deemed  necessary  for  the 
determination of subsidisation, resulting injury and Union interest. Verification visits 
were  carried  out  at  the  premises  of  the  following  State  authorities  and  financial 
institutions,  the  sampled  companies,  one  unrelated  importer,  two  upstream  and  four 
downstream operators, associations and independent consultant:  

(a)  Government of the People’s Republic of China 

– 

– 

– 

Chinese Ministry of Commerce, Beijing, China 

Huaxia Bank, Beijing, China 

China Development Bank, Beijing, China 

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– 

– 

Export Import Bank of China, Beijing, China 

China  Export  &  Credit  Insurance  Corporation  (SINOSURE),  Beijing, 
China 

(b)  Union producers 

– 

eight sampled Union producers 

(c)  Groups of Exporting producers (and related companies) in the PRC 

– 

– 

– 

– 

Changzhou Trina Solar Energy Co. Ltd, China 

Delsolar (Wujiang) Ltd. (Wujiang) Co. Ltd., China 

Jiangxi LDK Solar Hi-tech Co. Ltd., China 

JingAo Group, China 

–  Wuxi Suntech Power Co. Ltd, PRC Power Co. Ltd, China 

– 

– 

– 

Yingli Green Energy Holding Company, China 

Zhejiang Yuhui Solar Energy Source Co. Ltd and Renesola Jiangsu Ltd, 
China 

Jinko Solar Co Ltd, China 

(d)  Unrelated importer in the Union 

– 

IBC SOLAR AG, Bad Staffelstein, Germany 

(e)  Upstream operators  

– 

Roth & Rau AG, Hohenstein-Ernsthal, Germany 

–  WACKER Chemie AG, Burghausen, Germany 

(f)  Downstream operators  

– 

– 

– 

– 

Juwi Solar GmbH, Worrstadt, Germany 

ValSolar SL, Badajoz, Spain 

Jayme de la Costa, Pedroso, Portugal 

Sunedison, Spain Construction, Madrid, Spain 

(g)  Associations  

– 

European Photovoltaic Industry Association (‘EPIA’), Brussels, Belgium 

(h) 

Independent consultant 

– 

Europressedienst, Bonn, Germany 

(30)  The  comments  submitted  by  the  interested  parties  were  considered  and  taken  into 

account where appropriate. 

(31)  The  Association  for  Affordable  Solar  Energy  (‘AFASE’),  representing  importers, 
downstream and upstream operators questioned the legal basis for the visit carried out 
at the premises of Europressedienst, by claiming that an independent consultant is not 
an interested party under Article 26 of the basic Regulation. However, findings should 
be  based  on  reliable  and  verifiable  data  wherever  possible.  Europressedienst  has 
provided  information  on  macroeconomic  indicators  on  the  basis  of  a  contract.  The 
Commission carried out an on-the-spot verification at its premises for the sake of the 

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principle  of  good  administration  to  verify  the  reliability  and  correctness  of  data  on 
which the Commission has based its findings. 

(32)  The GOC claimed that its rights of defence in relation to access to the files open for 
inspection  by  interested  parties  were  violated  because  (i)  information  was  missing 
from  the  non-confidential  files  without  “good  cause”  being  shown  or  providing 
sufficiently detailed summaries, or exceptionally, the reasons for the failure to provide 
the  non-confidential  summary,  (ii)  the  non-confidential  version  of  an  entire 
questionnaire response of a Union producer was missing and (iii) the delays to make 
non-confidential  versions  of  the  Union  producers’  questionnaire  responses  available 
for interested parties were excessive. 

(33) 

(34) 

(i) Regarding the claim that information was missing from the open file, the interested 
party  did  not  specify  to  which  information  it  was  referring  to.  (ii)  Its  claim  that  the 
non-confidential  version  of  an  entire  questionnaire  response  has  not  been  made 
available was incorrect. (iii) As to the delays in making available the non-confidential 
replies of the questionnaires of the sampled Union producers, it had been explained to 
the  party  concerned  that  the  questionnaires  were  only  added  to  the  non-confidential 
file  after  having  been  checked  as  to  their  completeness  and  reasonableness  of  the 
summaries.  In  order  to  ensure  the  Union  producers’  right  to  anonymity,  it  was  also 
ascertained  that  the  non-confidential  versions  of  the  questionnaires  did  indeed  not 
reveal  the  identity  of  the  Union  producer  concerned.  In  some  cases,  the  non-
confidential  versions  needed  therefore  to  be  corrected  accordingly  by  the  party 
submitting it before they could be made available for other interested parties.  

In any event, it is considered that this did in no way affect the interested parties’ rights 
of  defence.  The  Commission  has  given  all  the  interested  parties  the  opportunity  to 
respond to the information included in the file open for inspection in time so that their 
comments could be taken into consideration, when substantiated and warranted before 
any  conclusions  were  made  in  the  investigation.  The  interested  party  had  every 
opportunity  to  comment  on  the  questionnaires  from  sampled  Union  producers  also 
following  the  provisional  and  the  final  disclosure.  Therefore,  even  if  the  disclosures 
and  the  access  to  the  file  open  for  inspection  by  interested  parties  are  based  on 
different  legal  provisions,  it  should  be  noted  that  there  were  ample  opportunities  for 
the interested parties to comment on all information made available by any party to the 
investigation. Therefore, this claim had to be rejected.  

(35)  All  interested  parties  were  informed  of  the  essential  facts  and  considerations  on  the 
basis of which it was intended to recommend the imposition of 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  (‘the  final 
disclosure’).  All  parties  were  granted  a  period  within  which  they  could  make 
comments on the final disclosure.  

(36)  The  comments  submitted  by  the  interested  parties  were  considered  and  taken  into 

account where appropriate.  

1.5. 

Acceptance of an undertaking in view of definitive duties 

(37)  Following  final  disclosure,  the  Commission  received  an  amended  offer  for  an 
undertaking  by  exporting  producers  together  with  the  China  Chamber  of  Commerce 
for  Import  and  Export  of  Machinery  and  Electronic  Products,  which  covers  also  the 
parallel  anti-dumping  investigation.  By  Commission  Decision  2013/XXX/EU  of  XX 
November 2013, the Commission has confirmed the acceptance of that undertaking.  

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1.6. 

Investigation period and period considered 

(38)  The investigation of subsidisation and injury covered the period from 1 July 2011 to 
30 June 2012 (the  ‘investigation period’ or  ‘IP’). The examination of  trends relevant 
for the assessment of injury covered the period from 1 January 2009 to the end of the 
IP (‘the period considered’).  

2. 

PRODUCT CONCERNED AND LIKE PRODUCT  

2.1. 

Product concerned  

(39)  The  product  concerned  was  defined  at  initiation  stage  as  crystalline  silicon  PV 
modules  or  panels  and  cells  and  wafers  of  the  type  used  in  crystalline  silicon  PV 
modules  or  panels,  originating  in  or  consigned  from  the  PRC.  The  cells  and  wafers 
have  a  thickness  not  exceeding  400  micrometres.  This  product  is  currently  falling 
within  CN  codes  ex  3818  00  10,  ex  8501  31  00,  ex  8501  32  00,  ex  8501  33  00,  ex 
8501 34 00, ex 8501 61 20, ex 8501 61 80, ex 8501 62 00, ex 8501 63 00, ex 8501 64 
00 and ex 8541 40 90. 

(40)  The  following  product  types  are  excluded  from  the  definition  of  the  product 

concerned: 

– 

– 

– 

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). 

2.2. 

Like product  

(41)  The  investigation  has  shown  that  the  product  concerned  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.  They  are 
therefore  considered  as  alike  within  the  meaning  of  Article  2(c)  of  the  basic 
Regulation. 

2.3. 

Claims regarding product scope 

2.3.1.  Exclusion of wafers 

(42) 

Interested parties claimed that wafers should be removed from the product scope since 
wafers do not share the same basic physical, chemical and technical characteristics as 
cells and modules. In addition to the arguments brought forward before the publication 
of  the  Provisional  anti-dumping  Regulation,  two  additional  arguments  were  brought 
forward in this respect thereafter. 

(43)  Firstly, interested parties claimed that wafers can be used for other purposes than for 
the production of cells, notably the production of integrated  circuits and other micro 
devices. In this respect, it is noted that not all wafers are included in the product scope 
of this investigation, which is limited to "wafers of the type used in crystalline silicon 
PV  modules  or  panels",  and  that  those  wafers  have  "a  thickness  not  exceeding  400 
micrometres". While wafers certainly do exist in other applications, the investigation 
never  covered  wafers  which  are  used  in  the  production  of  other  products  such  as 
integrated circuits. In addition, no producers, importers or users involved in the market 

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for these different types of wafers came forwards alleging that their wafers would be 
subject to registration or provisional anti-dumping duties. It is therefore concluded that 
these other types of wafers are not subject to the product scope of this investigation. At 
the same time, this shows that wafers do not necessarily have the same end use as cells 
and modules. 

(44)  Secondly,  it  is  claimed  that  an  unprocessed  wafer  possesses  none  of  the  essential 
electric  properties  which  distinguish  solar  cells  and  modules  from  other  products.  In 
particular, wafers lack the ability to generate electricity from sunlight, which is the key 
function of crystalline photovoltaic cells and modules. 

(45) 

Indeed,  the investigation showed that only once  the  wafer  is  transformed  into a  cell, 
the  functionality  to  generate  electricity  from  sunlight  arises.  The  conversion  is 
operated by cells which absorb light and convert it into electricity through crystalline 
silicon.  Cells  have  a  positive-negative  junction  to  collect  and  forward  the  electricity 
that is generated by the cell. To assemble the modules, cells are soldered together with 
flat wires or metal ribbons to produce a string of cells. Those are laminated between 
sheets.  Mostly  glass  is  used  on  top  and  a  polymeric  backing  sheet  to  the  bottom. 
Frames are usually created to allow the mounting in the field (e.g. on rooftops). The 
module may or may not have an inverter. 

(46)  Due  to  the  different  basic  physical  and  technical  characteristics,  defined  during  the 
investigation inter alia as the functionality to generate electricity from sunlight, it was 
concluded  on  balance  that  wafers  should  be  excluded  from  the  definition  of  the 
product concerned, and thus from the scope of this investigation. 

2.3.2.  Physical, chemical and technical characteristics and end uses 

(47)  Several  interested  parties  claimed  that  the  investigation  cannot  cover  two  products 
with different physical, chemical and technical characteristics, and therefore modules 
and cells should be subject to two separate investigations. Moreover, they claimed that 
it  is  unclear  whether  the  investigation  covers  one  single  product  or  two  separate 
products and therefore they have no full opportunity to defend their interests.  

(48)  The cell-module production is one single production process with different production 
steps.  Cells  determine  the  characteristics  of  the  finished  product  (i.e.  modules).  The 
investigation showed that the cells production is directly and exclusively dedicated to 
produce modules; modules and cells share the same physical, chemical and technical 
characteristics  (determined  by  the  raw  material  used)  and  have  the  same  basic  end 
uses, i.e. are sold for integration into PV solar systems. The modules performance is 
directly linked to the performance of the cells. 

(49)  The Notice of Initiation clearly expressed that modules and cells constitute the product 
under  investigation.  Interested  parties  had  therefore  full  opportunity  to  defend  their 
interests  on  the  basis  of  the  product  concerned  as  defined.  On  these  grounds,  the 
arguments were rejected. 

2.3.3.  Different nomenclature 

(50) 

It  was  further  claimed  that  modules  and  cells  could  not  be  considered  as  a  single 
product as they have several different eight-digit CN codes, six-digit subheading and 
four-digit  HS  heading.  In  this  respect  it  is  noted  that  both  cells  and  modules  can  be 
declared  under  customs  heading  8541  40  90,  while  the  customs  headings  under 
heading  8501  are  for  electric  generators  in  general  and  not  in  particular  for  solar 
products. On these grounds, the argument was rejected.  

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2.3.4.  Value added of cells 

(51)  Several parties claimed that the value added in the cell conversion process accounts for 
the largest part of the value of a module and therefore cells must be considered as a 
separate product. 

(52)  The  investigation  revealed  that  the  cells  production  is  the  most  technologically 
sophisticated  part  in  the  production  process.  However,  it  also  showed  that  the  two 
processing steps are linked to each other and the value added is not concentrated in a 
particular  stage  of  the  production  process  but  is  spread  over  the  whole  production 
process. On these grounds, the claim was rejected. 

2.3.5.  Separate merchant markets 

(53)  Some  interested  parties  claimed  that  modules  and  cells  have  separate  merchant 
markets and therefore they should be treated as different products which would also be 
demonstrated by the fact that a large number of producers are not vertically integrated. 

(54)  Modules  and  cells  cannot  be  considered  as  separate  products  whose  prices  fluctuate 
only  depending  on  market  factors.  As  a  matter  of  fact  their  prices  are  strictly 
interconnected  and  affected  by  the  polysilicon  price.  Likewise,  as  it  has  been 
explained  above  in  recitals  (49)  above,  the  product  concerned  is  produced  in  one 
single  production  process  with  different  steps.  The  fact  that  some  producers  are  not 
vertically integrated is due only to business decision and economies of scale and does 
not reverse this conclusion. On these grounds, this argument had to be rejected. 

2.3.6.  End use and interchangeability 

(55)  Several interested parties claimed that modules and cells must be treated as different 

products given that they have different end uses and they were not interchangeable. 

(56)  As mentioned above the investigation showed that the cell-module production process 
is  one  single  production  process  and  therefore  the  question  of  interchangeability 
between  different  steps  of  a  single  production  process  is  not  applicable.  Moreover, 
modules  and  cells  have  the  same  end  use,  converting  sunlight  into  electricity  and 
therefore cannot be used in other applications. 

2.3.7.  Distribution channels 

(57)  One interested party claimed that modules and cells do not share the same distribution 
channels  and  should  therefore  not  be  considered  as  one  single  product.  The 
investigation  showed  that  modules  and  cells  can  be  distributed  within  different  or 
similar distribution channels. However, the main criteria to define a single product are 
the  same  physical,  chemical  and  technical  characteristics  and  end  uses.  Considering 
recitals (47) to (49) above, it is concluded that therefore different distribution channels 
are  not  considered  as  a  determining  element.  The  argument  should  therefore  be 
rejected. 

2.3.8.  Consumer perception 

(58) 

It  was  claimed  that  modules  and  cells  differ  substantially  in  terms  of  consumer 
perception and therefore they should not be considered as one single product. 

(59)  Likewise as above the main criteria to define a single product are the same physical, 
chemical and technical characteristics and end uses. Considering recitals (47) to (49) 
above it is concluded that therefore different consumer perception is not considered as 
a determining element. The argument should therefore be rejected. 

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2.3.9.  Separate investigations for cells and modules 

(60) 

Interested parties reiterated that cells and modules are not a single product, and should 
therefore be assessed separately. Unlike wafers, however, cells and modules do share 
the  same  basic  property,  i.e.  the  ability  to  generate  electricity  from  sunlight.  These 
arguments were therefore rejected. 

(61)  Following  final  disclosure,  one  exporter  argued  that  cells  by  themselves  cannot 
produce  electricity.  Allegedly,  they  need  to  be  integrated  into  modules  to  do  so. 
However,  each  cell  by  itself  has  a  capacity  to  generate  electricity  from  sunlight  of 
typically  around  4W.  While  this  power  may  be  insufficient  for  most  applications 
which  require  an  assembly  of  multiple  cells  into  modules,  this  does  not  mean  that  a 
cell by itself does not already have the capacity to generate electricity. 

(62)  Following final disclosure, one exporter further argued that cells are not just another 
type of module, but an entirely different product. In effect, a cell is the key component 
of a module. As a key component, a cell is clearly not "an entirely different product", 
as modules and cells share the same basic characteristics of generating electricity from 
sunlight, as indicated in recital (60) above. 

(63)  The  same  party  argued  in  addition  that  when  the  samples  for  Union  producers  and 
Chinese exporters were selected, the difference between cells and modules was taken 
into  account.  Therefore,  different  duty  rates  for  modules  and  cells  should  have  been 
established.  In  this  respect,  it  is  confirmed  that  the  difference  between  modules  and 
cells  was  indeed  taken  into  account  when  sampling  Union  producers  and  Chinese 
exporters,  as  indicated  in  recitals  (10)  and  (14)  to  the  provisional  anti-dumping 
Regulation. This, however, was only done to ensure that the sample is representative 
and does  as  such not mean that cells and modules should not be considered a single 
product  concerned,  or  that  separate  duty  rates  should  be  established  for  cells  and 
modules. Indeed, in order to ensure that the sample was representative for all product 
types,  it  was  important  to  distinguish  between  cells  and  modules  when  selecting  the 
sample. Furthermore, as there was a certain degree of uncertainty with regards to the 
question as to whether cells and modules were to be regarded as one product or as two 
separate  products,  it  was  necessary  to  ensure  representativity  for  both  possible 
outcomes.  

(64)  Exporting  producers  claimed  that  the  fact  that  the  undertaking  imposes  different 
minimum  import  prices  and  volumes  for  cells  and  modules  allegedly  confirms  that 
modules  and  cells  are  distinct  products  requiring  two  distinct  investigations.  The 
different  minimum  import  prices,  however,  are  merely  an  indication  that  cells  and 
modules  are  different  groups  of  product  types  which  are  sold  at  different  prices. 
Therefore, it is necessary to define different prices to make the minimum import prices 
meaningful. 

(65)  Also, the fact that cells and modules are distinct groups of product types is not as such 
relevant for the definition of the product concerned. For the definition of the product 
concerned, it is sufficient that the products share the same basic characteristics and end 
uses,  which  is  the  case  for  modules  and  cells  as  described  in  recitals  (46)  and  (71) 
respectively. 

(66)  The GOC argued that the assessment whether cells and modules are a single product 
concerned does not address a number of criteria defined by the Appellate Body in EC 

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–  Asbestos6.  These  criteria  are  used  for  the  definition  of  the  "like  product",  not  the 
product  concerned.  In  other  words,  these  criteria  have  to  be  used  to  define  the  like 
product,  for  example  the  like  product  produced  by  Union  Industry,  which  is  then 
compared  with  the  product  concerned  exported  by  the  Chinese  exporting  producers. 
These criteria are therefore not pertinent when defining the product concerned. In any 
event, the Institutions observe that the application of the criteria used in EC – Asbestos 
to  the  definition  of  the  product  concerned  in  the  present  case  would  not  lead  to  a 
different  outcome.  The  first  and  the  second  criteria  (properties,  nature  and  quality 
respectively  end-uses)  are  identical  to  the  criteria  physical,  chemical  and  technical 
properties and end-uses used in the preceding recitals. The third criterion (consumers 
taste  and  habits)  is  not  really  useful  for  the  present  case,  as  cells  are  the  key 
component of modules; as regards the fourth criterion, tariff classification, it is noted 
that both cells and modules can be declared under customs heading 8541 40 90, while 
the customs headings under heading 8501 are for electric generators in general and not 
in particular for solar products. 

(67)  Other interested parties argued that an objective application of the criteria developed 
by  the  Court  of  Justice  in  previous  cases7  allegedly  leads  to  the  conclusion  that 
modules and cells are different products. In this respect, it is noted that the court only 
indicated a number of criteria which may be taken into account - there is no obligation 
to use all criteria in all cases, since not all of them may be relevant. These criteria were 
assessed in recitals (27) to (39) to the provisional anti-dumping Regulation, where it 
was  found  that  a  number  of  criteria  are  not  relevant  in  the  present  case.  In  the 
Brosmann case the assessment whether different types of shoes belong to the "product 
concerned" was also made on the basis of only three criteria which were found to be 
relevant.  As  the  interested  parties  did  not  provide  any  reasoning  why  an  objective 
application  of  the  criteria  leads  one  to  conclude  that  modules  and  cells  are  distinct 
products, the argument cannot be accepted. 

(68) 

In addition, it is recalled that cells and modules have the same basic end uses, i.e. they 
are  sold  for  integration  into  PV  solar  systems.  The  modules  performance  is  directly 
linked  to  the  performance  of  the  cells,  as  indicated  in  recital  (28)  to  the  provisional 
anti-dumping Regulation. 

(69)  One interested party argued that with the exclusion of wafers from the product scope, 
and  due  to  the  significant  processing  involved  to  make  modules  from  cells,  the 
argument that cells and modules have the same end uses also stands refuted. It is also 
argued that the assessment that modules and cells have the same end uses is based on 
the assumption that wafers, modules and cells have the same production process. 

(70)  Firstly, the conclusion that the assessment that modules and cells have the same end 
uses is based on the production process is wrong. While both statements are indeed in 
the same recital (36) to the provisional anti-dumping Regulation, this does not mean 
that one conclusion is based on the other assumption. The word "moreover" separating 
the two statements makes it clear that the second statement is not based on the first. In 
addition,  the  two  statements  are  made  to  address  separate  issues  under  the  heading 
"End  use  and  interchangeability".  The  first  statement  concerning  the  production 
process  addresses  interchangeability,  while  the  second  statement  addresses  end  use. 

6 

7 

Appelate  Body  Report,  European  Communities  –  Measures  Affecting  Asbestos  and  Asbestos-
Containting Products, WT/DS135/AB/R, adopted 5 April 2001 
Case T-401/06 Brosmann Footwear (HK) Ltd and others vs Council; Case T-314/06 Whirlpool Europe 
vs Council 

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The underlying assumption that the assessment that modules and cells have the same 
end  uses  is  based  on  the  assumption  that  wafers,  modules  and  cells  have  the  same 
production process is therefore incorrect. 

(71)  As to the actual end use of cells and modules, it is not disputed by interested parties 
that modules and cells are sold for integration into PV solar systems. The conclusion 
that modules and cells have the same end use is therefore confirmed. 

2.3.10.  Thin film products 

(72)  One  interested  party  claimed  that  thin  film  PV  products  should  be  included  in  the 
definition  of  product  concerned,  arguing  that  they  share  the  same  basic  physical, 
chemical and technical characteristics and the same basic end uses. 

(73)  Thin  film  PV  products  are  clearly  excluded  from  the  product  definition  (see  recital 
(40)  above).  Indeed,  thin  film  PV  products  have  different  physical,  chemical  and 
technical characteristics compared to the product concerned. They are produced via a 
different  production  process  and  not  from  crystalline  silicon  which  is  the  main  raw 
material to produce modules and cells. They have lower conversion efficiency and a 
lower  wattage  output  and  therefore  they  are  not  suitable  for  the  same  types  of 
applications than those of the product concerned. On these grounds, the arguments had 
to be rejected. 

2.3.11.  Semi-finished products 

(74)  Furthermore  it  was  claimed  that  cells  should  be  considered  as  semi-finished  feeder 
products while modules are end products, therefore they should not be considered as 
one single product. 

(75)  As mentioned above, the main criteria to define a single product are the same physical, 
chemical and technical characteristics and end uses. Considering recitals (47) to (49) 
above  it  is  concluded  that  therefore  the  difference  between  semi-finished  or  finished 
products is not considered as a determining element. The argument should therefore be 
rejected. 

2.3.12.  Solar chargers 

(76)  One  interested  party  requested  the  exclusion  of  solar  panels  dedicated  solely  to  12V 
battery charging on the basis that they have a different end use than the modules for 
grid connection due to the fact that they generate much lower voltage and therefore are 
not suitable for grid connection. 

(77)  According to the Notice of Initiation solar chargers that consist of less than six cells, 
are portable and supply electricity to devices or charge batteries are excluded from the 
product under investigation. Modules of more than six cells dedicated only to battery 
charging have the same basic characteristics and performance as the modules for grid 
connection. They use an open voltage circuit which has a lower voltage than the circuit 
used  in  modules  for  grid  connection.  Despite  this  difference  the  investigation  has 
revealed that this type of modules can be connected to the grid. The lower voltage can 
be easily compensated by an increase in dimension and/or number of cells. Therefore 
modules  dedicated  to  battery  charging,  and  consisting  of  more  than  six  cells,  fall 
within the definition of the product concerned. 

(78) 

Interested parties also claimed that the definition of "solar chargers that consist of less 
than  six  cells"  is  too  narrow,  and  should  be  extended  to  products  with  a  similar 
function which are not covered by this definition such as products with a similar size 
using a larger number of smaller cells. 

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(79) 

(80) 

In addition, interested parties claimed that the definition of "silicon PV products that 
are permanently integrated into electrical goods" is too narrow, as only the complete 
electrical good is excluded, while solar components for integration into the electrical 
goods are not necessarily excluded. 

Indeed, an analysis of the arguments brought forward by the various interested parties 
showed that it is more appropriate to define the exclusion of such products on the basis 
of technical standards rather than the number of cells. In particular, it was established 
that the definitions of standard "IEC 61730-1 Application Class C" more appropriately 
define the products which should be excluded from the scope of the measures. 

(81)  Following  definitive  disclosure,  comments  were  received  concerning  the  exclusion 
based  on  the  international  standard  mentioned  above.  It  was  argued  that  rather  than 
referring to the standard, it would be more appropriate to define the exclusion on the 
basis of the output voltage and the power output as "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". This claim could be accepted, and the exclusion is finally determined 
according to this definition. 

2.3.13.  Roof-integrated solar modules 

(82)  Another  interested  party  claimed  that  roof-integrated  solar  modules  should  be 
excluded  from  the  product  scope  of  the  investigation,  since  they  combine  the 
functionality of a solar module with that of a roof tile or slate. As such, they are not 
directly interchangeable with a standard solar module. 

(83)  The  investigation  has,  however,  shown  that  both  standard  modules  and  the  roof-
integrated solar module have to comply with the same electrical standards. And while 
the roof-integrated solar module cannot be simply replaced with a standard module, it 
can be replaced by a standard module plus roof tiles or slate. These products therefore 
have  the  same  basic  technical  property  of  generating  electricity  from  sunlight.  The 
added  functionality  (which  is  otherwise  provided  by  roofing  material)  is  not 
considered  substantial  and  does  not  warrant  an  exclusion  of  roof-integrated  solar 
modules from the product scope. 

(84)  Following  definitive  disclosure,  the  same  interested  party  argued  that  the  absence  of 
dual-interchangeability  between  roof-integrated  solar  modules  and  standard  solar 
modules is an indication that roof-integrated solar modules should  be excluded from 
the  scope  of  the  measures,  referring  to  the  footware8  case  in  general  and  special 
technology  athletics  footwear  'STAF'  in  particular.  However,  the  reasons  for  the 
exclusion  of  STAF  were  numerous,  and  the  absence  of  dual  interchangeability  by 
itself was not considered a sufficient ground by the General  Court  in  the Brosmann9 
case, which confirmed that very different product such as city trotters and hiking boots 
can  indeed  be  considered  product  concerned  in  a  single  anti-dumping  investigation 
despite their differences. 

(85) 

In addition, the interested party argued that due to the absence of production in the EU 
and  the  fact  that  the  interested  party  holds  intellectual  property  rights  is  allegedly  a 
confirmation that roof-integrated solar modules are innovative and different from any 

8 

9 

Footwear  with  uppers  of  leather  originating  in  the  People's  Republic  of  China  and  Vietnam, 
Commission Regulation (EC) No. 553/2006 of 23 March 2006 (prov.); 
Council Regulation (EC) No. 1472/2006 of 5 October 2006 (def.). 
Case T-401/06 , Brosmann Footwear (HK) Ltd. vs Council of the European Union, para 133. 

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other  product.  However,  referring  again  to  the  footwear  case  mentioned  by  the 
interested party, the General Court held in Brosmann that "the absence of Community 
production of that type of footwear and the existence of a patent are not conclusive."10. 
As  a  result,  patented  technology  footwear  was  considered  product  concerned  in  that 
case. 

(86)  The interested party also argued that roof-integrated solar modules should be excluded 
from the definition of the product concerned, since they are sold at substantially higher 
prices than standard modules. Also, in the footwear case STAF above a certain price 
were excluded from the definition of the product concerned. In this respect, it is noted 
that a roof-integrated solar module does combine the functionality of a solar module 
and  roof  tile  or  slate,  as  indicated  in  recital  (83).  A  direct  comparison  of  prices  is 
therefore not meaningful, as the added functionality naturally leads to higher prices. 

(87) 

the  exclusion  from 

In  response  to  this  argument,  the  interested  party  argued  that  on  the  basis  of  this 
argumentation, it would be impossible to ever invoke price differences as an additional 
indicator  warranting 
this 
interpretation is too far-reaching. What is said in the previous recital is merely that in 
this particular case where the roof-integrated modules combine the functionality of the 
product  concerned  plus  another  product  (in  this  case  roof  tile  or  slate),  the  price  is 
naturally not meaningful. This in no way means that in other cases the price difference 
cannot  be  a  useful  indicator  to  establish  whether  a  product  should  be  excluded  from 
the definition of the product concerned. 

the  product  scope.  However, 

(88)  Lastly,  the  interested  party  argued  that  its  supplier  of  roof-integrated  solar  modules 
should be granted access to the minimum price undertaking. However, it appears that 
the Chinese exporter did not co-operate in the investigation, and as a non-cooperating 
party is not eligible to participate in the undertaking. These requests can therefore not 
be accepted. 

2.3.14.  Mono and multi-crystalline cells 

(89)  One interested party claimed that there was no production of mono crystalline cells in 
the Union, and that its exports of mono crystalline cells were not competing with the 
EU industry. Investigation showed however that there was indeed production of mono 
crystalline  cells  in  the  Union.  This  argument  is  therefore  rejected.  In  any  event,  the 
General  Court  held  in  Brosmann  that  the  absence  of  Community  production  of  a 
particular product type is not decisive. 

2.3.15.  "Consigned from" clause 

(90)  Some interested parties argued that the extension of the scope of the investigation to 
products "consigned from" the PRC, while the case was initiated only against products 
originating in the PRC was unjustified. 

(91)  However, goods consigned from the PRC were already covered at the initiation stage. 
In point 5 of the Notice of Initiation it is stated that "companies which ship the product 
concerned  from  the  People's  Republic  of  China  but  consider  that  part  or  even  all  of 
those exports do not have their customs origin in the People's Republic of China are 
invited to come forward in the investigation and to furnish all relevant information". It 
is  therefore  clear  that  all  companies  consigning  goods  from  the  PRC  had  the 
opportunity  to  co-operate  in  this  investigation.  Furthermore,  since  the  product  under 
investigation frequently incorporates components and parts from different countries, it 

10 

Case T-401/06 , Brosmann Footwear (HK) Ltd. vs Council of the European Union, para 135. 

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was also announced in point 5 of the Notice of Initiation that "special provisions may 
be adopted" to address this issue. 

(92) 

It is therefore considered that all affected economic operators were duly informed of 
the possibility that special provisions in respect of goods consigned from the PRC may 
be adopted, if appropriate, and were invited to co-operate in the investigation. Thus the 
scope  of  the  investigation  was  not  extended  to  products  "consigned  from  the  PRC", 
since these were covered from the outset. 

(93)  Following disclosure, interested parties argued that irrespective of the provisions in the 
Notice  of  Initiation  referred  to  in  recital  (91),  the  investigation  was  limited  to  goods 
originating  in  the  PRC  and  did  not  assess  the  impact  of  goods  consigned  from  the 
PRC. 

(94) 

In this respect, it is noted that the following steps were taken to ensure that all goods 
consigned  from  the  PRC  were  assessed  during  the  investigation,  and  not  only  goods 
originating in the PRC: 

• 

• 

• 

• 

All companies which ship the product concerned from the PRC were invited to 
come forward in the investigation irrespective of the origin of the goods. 

In  Annex  A  of  the  Notice  of  initiation,  exporters  were  asked  to  report 
information  for  all  products  manufactured  by  the  company.  This  information 
was not limited to goods originating in the PRC. 

On  the  basis  of  this  information,  which  contained  all  exports  to  the  EU 
irrespective of the origin of the goods, a representative sample was selected. 

The sampled producers received a questionnaire for "producers exporting to the 
European  Union",  and  the  PRC  was  referred  to  as  "country  concerned",  not 
country of origin. It was therefore clear that all goods irrespective of the origin 
of the goods were investigated. 

(95)  On this basis, it is concluded that the investigation covered all goods originating in or 
consigned  from  the  PRC,  and  that  the  findings  of  the  investigation,  including 
subsidization and injury, cover all goods originating in or consigned from the PRC. 

(96)  Following final disclosure, interested parties argued that the complaint contained only 
prima  facie  evidence  concerning  imports  of  solar  panels  originating  in  the  PRC,  not 
goods  consigned  from  the  PRC.  In  this  respect,  it  needs  to  be  clarified  that  the 
complaint  indeed  covered goods "from the PRC", which can be seen from the  cover 
page submitted by the applicant bearing the stamp. Before this page, there is another 
page on the file which indeed uses the wording "originating in the People's Republic 
of China". But this case was not part of the document submitted by the complainant, 
but  added  as  a  cover  page  by  the  Commission  Services,  using  the  name  of  the 
investigation rather than repeating the title of the complaint. It is therefore considered 
that the complaint covered all goods from the PRC, whether originating in the PRC or 
not. 

(97)  Chinese exporting producers further argued that exporting producers in third countries 
cannot  reasonably  be  expected  to  have  known  that  their  products  could  also  be 
targeted by the investigation. In this respect it is noted that the measures do not apply 
to  goods  which  are  in  transit  in  the  sense  of  Article  V  GATT.  Therefore,  exporting 
producers  which  have  no  operations  in  the  PRC  are  not  affected  by  the  measures. 
Furthermore, no exporting producers in third countries came forward raising the issue 
that the products they export are subject to the measures. 

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(98)  The same exporting producers argued that exporting producers in third countries were 
not asked to come forward, and not given the opportunity to show that their products 
are  not  subsidised.  The  Institutions  consider  that  those  exporting  producers  without 
any  operations  in  the  PRC  are  not  affected  by  the  measures,  as  their  goods,  if 
consigned from the PRC, will have been in transit. All other exporting producers were 
informed by the Notice of Initiation that their operations are part of the investigation. 

2.3.16.  Conclusion 

(99) 

In view of the above, the product scope is definitively defined as crystalline silicon PV 
modules  or  panels  and  cells  of  the  type  used  in  crystalline  silicon  PV  modules  or 
panels, originating in or consigned from the People’s Republic of China, unless they 
are in transit in the sense of Article V GATT. The cells have a thickness not exceeding 
400 micrometers. This product is 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.  

(100)  The  following  product  types  are  excluded  from  the  definition  of  the  product 

concerned: 

– 

– 

– 

– 

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.  

3. 

SUBSIDISATION 

(101)  The complainant alleged that the PRC is heavily subsidising its photovoltaic industry 
(“PV industry”) and referred to a number of policy and planning documents as well as 
legislation  which  are  the  basis  for  the  state  support  in  the  sector.  The  Commission 
reviewed and analysed the documents mentioned in the complaint as well as additional 
documents  submitted  by  the  GOC  and  sampled  exporting  producers  in  the  course  of 
the investigation and found that many of them indeed show that the PV industry in the 
PRC receives preferential treatment in many areas. 

(102)  GOC  included  the  PV  industry  amongst  “strategic”  industries  in  the  12th  Five-year 
Plan11.  The  GOC  has  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  expressed  its  support  for  “superior 
enterprises”12  and  “key  enterprises”13,  committed 
the 
implementation  of  various  photovoltaic  support  policies”14,  and  “formulate  overall 

to  “promote 

itself 

11 

12 
13 
14 

Chapter 10, Section 1, of the 12th 5-Year Plan: “In the new energy industry, focus on the development 
of… … solar energy utilisation, photovoltaic and photo-thermal power generation”. 
Section III.ii.1 of the 12th Five-year Plan for the Solar Photovoltaic Industry. 
Section III.iii.1 of the 12th Five-year Plan for the Solar Photovoltaic Industry. 
Section III.ii.3 of the 12th Five-year Plan for the Solar Photovoltaic Industry. 

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preparation of supporting policies on industry, finance, taxation …”15. The Decision 
No  40  of  the  State  Council  suggests  that  the  GOC  will  actively  support  the 
development of new energy industry and expedite the development of solar energy16, 
instructs all financial institutions to provide credit support only to encouraged projects 
(the  category  in  which  the  PV  projects  belong)  and  promises  the  implementation  of 
“other  preferential  policies  on  the  encouraged  projects”17.  Another  State  Council 
Decision  of  10  October  2010  talks  about  expansion  of  the  “intensity  of  fiscal  and 
financial  policy  support”,  encourages  the  financial  institutions  to “expand  the  credit 
support”  and  promises  to  “make  use  of  the  fiscal  preferential  policies  such  as  risk 
compensation”18 for new strategic industries, a category where the solar PV industry 
belongs.  The  National  Outline  for  the  Medium  and  Long-term  Science  and 
Technology  Development  (2006  –  2020)  promises  to  “give  the  first  place  to  policy 
finance”,  “encourage  financial  institutions  to  grant  preferential  credit  support  to 
major national scientific and technological industrialisation projects”, to “Encourage 
financial  institutions  to  improve  and  strengthen  financial  services  to  high-tech 
enterprises”  and  to  “implement  the  preferential  tax  policies  to  promote  the 
development of high-tech enterprises”  19. Also the Law of the PRC on Scientific and 
Technological  Progress  lists  a  number  of  measures  for  the  support  of  strategic 
industries  including  the  solar  PV  industry.  Inter alia,  it  shows  that  the  state  shall 
encourage and give guidance to financial institutions in supporting the development of 
high  and  new  technology  industries  by  granting  loans20,  instructs  the  policy  oriented 
financial institutions to give priority to the development of high and new technology 
industries in offering financial services21, provides for “discount interest and guaranty 
to the loans” received by certain enterprises and “special aid” by the policy oriented 
financial  institutions  to  projects  encouraged  by  state22.  The  practical  applications  of 
these measures are detailed below. 

3.1. 

Preliminary remarks  

(103)  Both the GOC and the sampled Chinese exporting producers submitted questionnaire 

replies and accepted on-spot visits23 in order to verify the replies.  

(104)  With  respect  to  the  GOC,  following  the  analysis  of  the  questionnaire  reply,  the 
Commission  sent  a  deficiency  letter  and  a  pre-verification  letter,  followed  up  with 
subsequent  correspondence  concerning  the  agenda  of  the  verification  visit.  The 
Commission provided to the GOC ample time  for  the preparation and submission of 
its  representations  whenever  this  was  requested  and  justified.  Indeed,  a  substantial 
deadline extension was granted to the GOC, i.e. 30 days extension for the reply to the 
questionnaire which resulted in an eventual deadline of 69 days for the submission of 
the questionnaire reply and the Commission gave the GOC 25 days for the reply to the 

15 
16 

17 

18 

19 

20 
21 
22 
23 

Section VI.i of the 12th Five-year Plan for the Solar Photovoltaic Industry. 
Chapter  Orientation  and  Priorities  of  Industrial  Restructuring,  Article  5  of  the  Decision  No  40  of  the 
State  Council  on  Promulgating  and  Implementing  the  Temporary  Provisions  on  Promoting  the 
Industrial Structure Adjustment. 
Chapter III, Article 17 of the Decision No 40 of the State Council on Promulgating and Implementing 
the Temporary Provisions on Promoting the Industrial Structure Adjustment. 
Articles  7.1  and  7.3  of  the  State  Council  Decision  of  10  October  2010  to  encourage  development  of 
7 new strategic industries. 
Section  VII,  Chapters  1  and  5  of  the  National  Outline  for  the  Medium  and  Long-term  Science  and 
Technology Development (2006 – 2020). 
Article 18 of the Law of the PRC on Scientific and Technological Progress. 
Ibid. 
Article 34 of the Law of the PRC on Scientific and Technological Progress. 
With the exception of certain state-owned financial institutions. 

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deficiency  letter.  Therefore,  overall,  the  GOC  has  had  more  than  three  months  to 
provide the requested information requested by the Commission. 

(105)  During the on-spot verification visit to the Chinese Ministry of Commerce in Beijing 
and  four  financial  institutions  (China  Development  Bank,  Export  Import  Bank  of 
China,  Huaxia  Bank  and  SINOSURE)  the  Commission  endeavoured  to  verify 
information  provided  on  the  basis  of  the  supporting  documents  that  were  used  to 
prepare the GOC's response, in line with  the provisions of Articles 11 and 26 of the 
basic  Regulation.  In  doing  so,  the  Commission  came  preliminarily  to  the  conclusion 
that the lack of information and supporting documents available from the GOC did not 
allow  a  proper  verification  of  the  reply  to  the  questionnaire.  Moreover,  certain 
information was not submitted at all although it was specifically requested and certain 
questions were simply not replied to. Consequently, the GOC was made aware of the 
consequences of non-cooperation in accordance with Article 28(1) and (6) of the basic 
Regulation. 

(106)  The GOC also submitted that the Commission was imposing an unreasonable burden 
on  the  GOC  and  that  it  had  requested  irrelevant  and  unnecessary  information  in  the 
questionnaire and subsequent deficiency letter.  

(107)  With  respect  to  the  requested  information  it  is  noted  that  the  Commission  requested 
only information concerning allegations in the complaint that is deemed necessary for 
the  purposes  of  arriving  at  a  representative  finding  and  remained  consistent  in  its 
requests by asking for the same data and information during the investigating process 
and requesting the GOC to explain the submitted information and its implication  for 
the investigated schemes. In other words, the Commission only requested information 
that  was  necessary  to  assess  the  existence  and  level  of  subsidisation  available  to  the 
product concerned pursuant to the subsidy schemes alleged in the complaint. 

3.2. 

Non-cooperation 

(108)  As already referred to in recital (106) above, following the on spot verification visits, 
on  23  May  2013,  the  Commission  notified  the  GOC  that  it  was  considering  the 
application  of  facts  available  in  accordance  with  Article  28  of  the  basic  Regulation. 
The Commission sent this letter, since it had come to the preliminary conclusion that 
the lack of information and supporting evidence available from the GOC did not allow 
for a proper verification of the reply to the anti-subsidy questionnaire, deficiency letter 
and  other  submissions  made  by  the  GOC  in  the  course  of  the  proceeding  at  hand. 
Moreover,  it  was  found  on  spot  that  certain  information  was  also  withheld  in  the 
questionnaire  reply  and  subsequent  submissions  by  the  GOC,  although  it  had  been 
specifically  requested  by  the  Commission.  In  addition  certain  questions  were  simply 
not replied to.  The potential application  of facts available concerned the government 
plans,  projects,  various  legislation  and  other  documents;  Preferential  policy  loans, 
other  financing,  guarantees  and  insurance;  PBOC  circulars;  verifications  at  banks; 
Export  credit  insurance  and  Sinosure  verification;  the  Golden  Sun  Demonstration 
programme; direct tax exemption and reduction programmes; indirect tax and import 
tariff programmes; provision of inputs at less than adequate remuneration: polysilicon, 
aluminium extrusions and glass; and the provision of Land Use Rights. 

(109)  In its letter of 3 June 2013 the GOC objected the Commission’s preliminary intention 
to  apply  the  provisions  of  Article  28  of  the  basic  Regulation,  reasoning  that  the 
conditions  required  to  disregard  the  information  submitted  or  even  to  “fill  in 
information gaps” had not been met in this case.  

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(110)  GOC claimed that “doubts” as to the accuracy of information, which arise solely from 
the fact that information submitted could not be verified to the Commission’s “utmost” 
satisfaction,  should  not  lead  to  that  information  being  disregarded.  The  Commission 
disagrees with this claim as it does not represent the reality. Indeed, the Commission 
did not “disregard” any of the information solely on the basis that it could not verify it 
during the on-the-spot verification visit. However, if the information and explanation 
provided  by  the  GOC  was  found  to  be  either  contradictory  and/or  incomplete  when 
compared to the other information available to the Commission and, at the same time 
it  was  not  possible  to  verify  it  during  the  on  spot  verification  visit,  the  Commission 
could not take such information at its face value. Due weight is attached to each piece 
of information depending on the degree of non-cooperation from the GOC. It is also 
noted  that  the  Commission  did  not  take  an  issue  with  the  format  in  which  the 
information  was  provided,  as  the  GOC  alleged,  but  rather  with  its  inaccuracy  and/or 
incompleteness. 

(111)  The  GOC  also  claimed  that  some  of  the  information  requested  by  the  Commission 
involved such a burden that the GOC did not have the practical ability to provide it. In 
this  respect  it  is  noted  that  the  Commission  requested  only  information  which  was 
necessary to verify the allegations made by the complainant (and supported by prima 
facie  evidence)  and  gave  the  GOC  ample  time  and  opportunity  to  submit  such 
information. In addition, the Commission is fully aware that the significant number of 
detailed allegations of the complainant in this case obliged it to request a substantial 
amount of information from the GOC. However, as explained above (recitals (104) to 
(107)), the information sought was not excessive and due time was allowed for it to be 
provided. 

(112)  Further  the  GOC  pointed  to  the  distinction  between  disregarding  the  submitted 
information  and  supplementing  the  information  received  with  facts  actually  on 
records. While the Commission is fully aware of this distinction and acts in line with 
the  relevant  provisions  of  Article  28  of  the  basic  Regulation  it  must  point  out  that 
when the submitted information is in contradiction with other information available on 
the same matter to the Commission it is not possible to supplement this information. 
On  such  occasions  (e.g.  submitted  information  on  the  ownership  of  banks)  the 
Commission  had  to  decide  which  information  is  more  reliable.  In  doing  so  the 
Commission ensured that the use of facts available is not punitive and is based on facts 
actually available. 

(113)  The GOC claimed that the Commission had no grounds on which to consider the GOC 
as  being  non-cooperative  in  this  case  as  it  either  ignored  or  misunderstood  its 
obligation  to  consider  the  “practical  ability”  of  the  GOC  to  respond  to  its  demand. 
According to the GOC, the investigation as a whole has been unduly burdensome such 
that cooperation in general has been rendered impossible, and the Commission as an 
investigating authority has continually refused to work with the GOC so as to mitigate 
such  burdens.  This  claim  is  a  clear  misinterpretation  of  facts.  The  Commission,  to 
meet its legal obligations following the receipt of properly documented complaint and 
at the same time to respect relevant WTO jurisprudence, requested from the GOC only 
the  information  necessary  to  verify  and  assess  the  allegations  in  the  complaint 
supported  by  sufficient  evidence.  The  Commission  offered  assistance  to  the  GOC  in 
the cover letter to the questionnaire as well as in the questionnaire itself. Also in the 
deficiency letter, the GOC was invited to contact the Commission should it have any 
questions  concerning  the  requested  information.  The  Commission  also  granted 
exceptionally long deadline extensions for the information to be submitted (see recital 

EN 

25 

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in 

this 

investigation, 

(104)  above).  Furthermore, 
the  Commission  requested 
transaction-specific information from GOC only with regard to the sampled exporters, 
not to all solar panel producers in China, thus narrowing down the potential volume of 
required information to a major extent. The Commission notes that the GOC appears 
to conflate arguments concerning its practical ability to provide data with other issues. 
For  example,  when  discussing  the  Commission’s  allegedly  excessive  request  for 
information  on  banks  and  financial  institutions,  it  bases  it  argument  mainly  on  the 
alleged  insufficiency  of  the  complaint,  claiming  that  it  is  based  on  “illegal 
determinations”  in  the  Coated  Fine  Paper  case.  Therefore,  the  GOC’s  complaint 
seems  to  relate  to  the  quality  of  evidence  for  initiation,  not  its  practical  ability  to 
provide  information.  Indeed,  in  its  letter  of  3  June  2013  the  GOC  repeated  its  claim 
from the previous submissions that initiation of many of the programmes did not meet 
the evidentiary threshold of the Article 11.2 of the WTO SCM Agreement and that by 
initiating on these programme the Commission violated Article 11.3 of the WTO SCM 
Agreement.  The  Commission  already  replied  to  these  claims  in  a  letter  and 
Memorandum to the GOC and since no new claims were raised in the letter of 3 June 
2013 there is no need to re-address the same claims for second time in this regulation.  

(114)  The GOC also claimed that the Commission did not provide the GOC enough time to 
complete  the  questionnaire.  This  is  simply  incorrect.  As  explained  in  recital  (104) 
above  the  Commission  granted  to  the  GOC  substantial  extensions  of  deadlines, 
providing the GOC maximum possible time without this having a substantial negative 
impact on the timely completion of the case. The time allowed for the completion of 
the  questionnaire  and  reply  to  the  deficiency  letter  was  substantially  more  than  the 
time required by Article 11(2) of the basic Regulation. 

(115)  The GOC claimed that the Commission ignored its request for aid in determining the 
relative  necessity  of  the  questionnaire  responses  for  the  purposes  of  avoiding  facts 
available determinations. In its submission it referred to its request to the Commission 
to  explain  the  purpose  of  particular  requested  information  and  to  which  factual 
determinations it would lead, in order to “ensure that it could cooperate to the best of 
its practical ability while at the same time providing the most essential information”. 
Naturally, the Commission could not know before the actual information is provided 
to what conclusions it will lead. The GOC also claims that the Commission structured 
the  questionnaire  so  as  to  make  it  “functionally  impossible”  to  complete  and  the 
Commission engaged in “fishing expeditions.” The Commission categorically rejects 
these  allegations.  As  explained  above,  the  questionnaire  only  requested  the 
information which was necessary to make its determination. 

(116)  It  was  also  claimed  by  the  GOC  that  the  Commission  insisted  on  the  provision  of 
documents which the GOC could not by law produce or compel to be produced and in 
this context referred to relevant EU and WTO law which make it clear that only false 
or misleading information should be disregarded and that it had no “practical ability” 
to provide certain information of which, as state secret or otherwise, its internal laws 
strictly prohibit dissemination. It further claimed that the relevant provisions of WTO 
ADA  and  ASCM  which  envisage  ways  in  which  confidential  information  can  be 
provided  to  investigating  authorities  and  granted  “confidential  treatment”  do  not 
always apply in the case where the information is to be provided by the authority of 
third country, in this case the GOC. The GOC also claimed that the Commission will 
fall  foul  of  the  ASCM  if  it  refuses  to  recognise  the  legal  distinction  between  a 
government’s  practical  ability  to  provide  information  which  it  is  legally  prohibited 

EN 

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from releasing, on one hand, and other sorts of confidential information for which it 
may request confidential treatment in the normal course of an investigation.  

(117)  The Commission did not disregard any information which the GOC did not produce, 
whatever the reason, because it is simply not possible to disregard something that was 
not provided. On the other hand in a situation where the GOC did not provide, or make 
available for inspection, certain information, and information of a similar nature was 
available  to  the  Commission  from  other  sources  (mostly  publicly  available,  but  also 
from  cooperating  exporting  producers  or  submitted  by  certain  banks  during  on-spot 
investigations); the Commission included this information in the case file and used it 
in  its  determination.  The  Commission  does  not  agree  with  the  claim  that  the  WTO 
ADA  and ASCM  provisions  which  envisage ways in which confidential information 
can  be  provided  to  investigating  authorities  and  granted  “confidential  treatment”  do 
not apply to the GOC. In this regard, the GOC is claiming that governments should be 
held to a different standard of cooperation than that of exporters and that situation of 
governments  warrants  a  “modicum  of  comity”  to  which  exporters  are  not  entitled. 
With regard to the conduct of countervailing duty investigations, the Commission does 
not agree. GOC is one of the interested parties in the proceeding for the purpose of the 
basic Regulation and at the same time, as an “interested Member”, the PRC is bound 
by the WTO provisions and jurisprudence. Article 28(1) of the basic Regulation states: 
“In  cases  in  which  any  interested  party  refuses  access  to,  or  otherwise  does  not 
provide  necessary  information  within  the  time  limits  provided  in  this  Regulation,  or 
significantly  impedes  the  investigation,  provisional  or  final  findings,  affirmative  or 
negative, may be made on the basis of the facts available.“ Article 12.7 of the WTO 
SCM  Agreement,  explicitly  refers  to  the  consequences  of  non-cooperation  by 
governments  ("Interested  Member):  “In  cases  in  which  any  interested  Member  or 
interested  party  refuses  access  to,  or  otherwise  does  not  provide,  necessary 
information  within  a  reasonable  period  or  significantly  impedes  the  investigation, 
preliminary  and  final  determinations,  affirmative  or  negative,  may  be  made  on  the 
basis of the facts available.” Therefore when the investigating country, in this case, the 
EU,  exercises  its  WTO  rights  in  a  countervailing  duty  investigation  and  requests 
information deemed necessary for the purpose of the investigation, governments and 
exporters are under the same obligation to cooperate. In the course of the investigation 
the  GOC  often  referred  to  rules  on  confidentiality  as  a  reason  for  not  providing 
requested information, for example, the PBOC circulars, for verification purposes It is 
noted that even if the GOC was, as it claims, “legally prohibited from releasing such 
information” it is still bound by its WTO obligations to provide information deemed 
necessary  for  the  investigation.  In  this  regard,  provisions  of  the  municipal  law  or 
internal  rules  of  a  WTO  Member  cannot  absolve  it  from  its  WTO  obligations  to 
cooperate with investigations; in such cases of conflict, it is incumbent upon the GOC 
to  suggest  ways  in  which  access  can  be  afforded  to  information  so  that  it  can  be 
adequately verified. Notwithstanding the above, the GOC never actually explained this 
claim and never provided any evidence (e.g. the legal provision by which it is “legally 
prohibited” from releasing such information) in this regard.  

(118)  Furthermore  the  GOC  claimed  that  the  pre-verification  letter  of  25  March  2013  was 
not  sufficiently  detailed  and  it  did  not  contain  specific  questions  which  will  be 
addressed during the on-the-spot verification visit. In this respect it must be noted that 
while there is no requirement for the Commission to send a list of all questions which 
will be asked during the on spot verification (and the Commission does not consider 
this appropriate), the pre-verification letter of 25 March 2013 contained a very specific 
and  detailed  list  of  issues  and  documents  which  would  be  addressed  in  line  with 

EN 

27 

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Article  26(3)  of  the  basic  Regulation  and  WTO  requirements.  However,  the  letter 
made it clear that the list was non-exhaustive and that other issues and evidence may 
be addressed if appropriate. In this respect it should also be noted that the GOC did not 
object the contents of this letter prior to the verification, although on the other hand it 
refused to discuss some points not explicitly raised in the letter, such as information on 
biggest  banks  in  the  PRC,  involvement  of  China  Communist  Party  (“CCP”)  in  the 
management of certain banks or access of some banks to the foreign currency reserves 
of  State  Administration  of  Foreign  Reserves,  claiming  not  to  be  ready  to  reply  to 
questions on these issues. 

(119)  The  GOC  also  argued  that  the  Commission  was  not  flexible  during  the  on-spot 
verification visit and in fact “fixed a peremptory time-limit in regard to any requests 
for  changes  by  the  GOC”.  In  the  same  vein  it  claimed  that  the  Commission  did  not 
accept  any  of  the  “workable”  solutions  proposed  by  the  GOC  concerning  the 
verification  at  National  Bureau  of  Statistics  (NBS)  and  refused  to  extend  the 
verification until Monday 22 April 2013 to verify NBS. Furthermore, the Commission 
officials  started  the  verifications  with  a  delay  virtually  each  working  day  because, 
according to the GOC, of their late arrival.  

(120)  In respect of the above claims, the Commission underlines that the degree of flexibility 
shown  by  its  officials  on  the  spot  has  been  full  and  unconditional.  The  Commission 
officials have exceptionally offered to verify documents and evidence the GOC sought 
to introduce well after the close of a certain subject, well beyond the regular working 
hours on a number of occasions. This was done several times, even if it meant having 
to move at a very late hour to other verifications sites and/or return to sites where the 
Commission  officials  had  already  been  and  had  already  provided  an  opportunity  to 
verify documents. Unfortunately, however, the GOC did not take up these offers in the 
cases  in  question,  which  strongly  suggest  that  the  failure  to  submit  the  documents 
requested by the Commission during the regular hours had not been due to their time 
constraints or to the unwillingness of the Commission to verify them. As regards the 
delay on the start of the verification visit, the Commission notes that the officials were 
present  on  time  every  day  but  that,  unfortunately,  some  delays  were  caused  by  the 
daily  registration  procedures  to  access  the  different  verification  sites  required  by  the 
GOC or simply by the lack of GOC representatives to accompany the officials when 
they arrived at verification sites which forced them to wait long time before the start. 
The  Commission  also  notes  that  the  verification  visits  lasted  every  day  well  beyond 
the  normal  working  hours,  and  that  it  was  the  GOC  that  cancelled  the  afternoon 
session of the verification visit the first day as the representatives of the Ministry of 
Technology  decided  not  to  participate  in  the  visit  (see  recital  (122)).  In  fact,  if  the 
GOC  had  accepted  all  the  repeated  offers  by  the  Commission  officials  to  verify 
documents beyond the working hours, the visits would have lasted longer and it was 
because of the GOC failure to fully cooperate that this was not the case. 

(121)  The  GOC  further  contested  the  Commission’s  practice  not  to  accept  new  documents 
and  evidence  which  require  verification  after  the  end  of  the  verification  session  to 
which they belong. In this respect it must be clarified that it is not and never was the 
intention  of  the  Commission  to  disregard  information  provided  in  this  way  outright. 
The  Commission  took  account  of  all  the  information  submitted,  analysed  its  quality 
(e.g.  the  extract  of  audited  financial  statements  is  treated  in  different  way  from  a 
simple  excel  table  or  word  document  with  figures  not  supported  by  any  official 
source)  and  attributed  it  the  appropriate  weight  given  the  fact  that  it  was  unable  to 
verify this information during the on-the-spot verification visit. 

EN 

28 

   EN 

(122)  Concerning  the  six  documents24  submitted  by  the  GOC  in  the  course  of  the 
investigation and the content of which the GOC refused to discuss during the on-the-
spot  verification  visit,  the  GOC  claimed  that  the  Commission  has  no  basis  to  apply 
facts available in line with Article 28 of the basic Regulation. It also claimed that the 
Commission  failed  to  assist  the  GOC  in  understanding  the  requirement  to  provide 
these  documents  and  to  demonstrate  that  all  the  documents  concerned  were  relevant 
despite that the GOC “had specifically invited the Commission before the start of the 
verification  to  assist  the  GOC  in  understanding  the  requirement  to  provide  these 
documents and to demonstrate that that all the documents concerned were relevant”. 
In  this  respect,  firstly,  it  is  noted  that  all  the  documents  directly  pertain  the  industry 
concerned25  and  therefore  their  inclusion  within  the  scope  of  verification  was  highly 
relevant.  Secondly,  the  wording  the  GOC  used  in  its  letter  to  the  Commission  of  11 
April 2013 was different than the one referred to in its letter of 3 June 2013. In fact the 
GOC stated, in its letter of 11 April 2013, that the verification of said documents “is 
suspended unless the Commission can convincingly demonstrate to what extent these 
documents  are  considered  relevant  to  the  current  investigation,  in  particular  the 
alleged subsidies”. Since all these documents directly concern the industry concerned 
and  even  particular  subsidy  schemes  such  as  preferential  lending  or  preferential  tax 
schemes,  as  is  obvious  from  their  wording  the  Commission  did  not  understand  what 
could  be  added  to  demonstrate  their  relevance  even  more.  It  was  surprising  for  the 
Commission  that  the  GOC  did  not  appear  to  have  a  problem  with  the  relevance  of 
these documents when they were submitted, but only when the Commission requested 
explanations. 

(123)  In  its  letter  of  23  May  2013  the  Commission  stated  that  it  was  prevented  from 
verifying  most  of  the  submitted  information  to  original  documentation  and  cross-
checking it with the source data which were used to prepare the replies of the GOC in 
respect to the information on the financial market and financial institutions in the PRC. 
The GOC objected that given the “very general and unspecific quote” the Commission 
has not provided the GOC an opportunity to meaningfully comment and therefore does 
not enable the GOC to exercise its right of defence in proper way. This claim does not 
represent  reality.  In  the  questionnaire  the  Commission  asked  very  specific  questions 
and,  in  line  with  normal  practice  of  many  investigating  authorities  it  attempted  to 
verify the GOC answers during the on spot verification visit.  

24 

25 

National  Outline  for  Medium  and  Long-term  Science  and  Technology  Development  (2006-2020); 
Catalogue of Chinese High-Tech Products for Export; Export list of High- and New-tech products; Law 
of  the  PRC  on  Scientific  and  Technological  Progress  (Order  N.82  of  the  President  of  the  PRC); 
Provisional  Regulations  on  Management  of  National  Science  and  Technology  Plan  and  Provisional 
Measure on Management of National Science and Technology Plan Project. 
E.g. National Outline for Medium and Long –term Science and Technology Development (2006-2020) 
identifies  the  Solar  industry  as  key  field  and  foresees  to  “give  the  first  place  to  policy  finance”  or 
“encourage  financial  institutions  to  grant  preferential  credit  support  to  major  national  scientific  and 
technological industrialisation projects” or suggests some preferential tax policies which were indeed 
used  by  the  sample  exporting  producers.  Catalogue  of  Chinese  High-Tech  Products  for  Exports  and 
Export list of High and New-Tech Products are also highly relevant for the PV industry since most of 
the sampled exporting producers are holders of the certificate of High and New Technology Enterprise. 
As for the Law of the PRC on Scientific and Technological Progress it, inter alia, instructs the Policy-
oriented financial institutions to give priority to the High – and new-technology industries (where PV 
industry  also  belongs).  Provisional  Regulations  on  Management  of  National  Science  and  Technology 
Plan and Provisional Measure on management of national science and technology plan project are also 
both directly involved in the organisation and functioning of some PV projects. 

EN 

29 

   EN 

                                                 
(124)  In  particular,  the  GOC  in  its  reply  to  the  questionnaire  stated  that  “the  loans  to  the 
industry  concerned  account  for  very  small  portion  of  the  total  loans  granted.  For 
example,  some  banks  have  described  in  their  appendix  questionnaire  that  the  loans 
granted to the industry concerned accounted for less than 1 % of total loans”. During 
the verification the GOC was not able to support this statement with any evidence at 
all and simply referred the Commission to the banks.  

(125)  The Commission also requested statistics on the loans to the industry concerned. The 
GOC  claimed  that  it  does  not  keep  such  records.  When  the  Commission  inquired 
whether the GOC attempted to compile such statistics and requested this information 
from the banks the CBRC (Banking regulatory authority in the PRC) official present 
during the verification replied that he did not know about this as another department in 
the  CBRC  would  be  responsible  for  statistics.  No  statistics  as  requested  in  the 
questionnaire  and  repeatedly  in  the  deficiency  process  were  submitted  by  the  GOC. 
The Commission indicated again in its pre-verification letter that this topic would be 
covered. 

(126)  With regard to banks, the Commission also inquired during the verification visit about 
the  risk  and  creditworthiness  assessment,  overall  operating  situation,  management 
situation,  credit  level,  financial  usage,  repayment  ability,  guarantee  pattern  and 
business cooperation between the banks and the borrowers, as the GOC made claims 
concerning  these  issues  in  its  reply  to  the  questionnaire.  Again,  despite  the  fact  that 
these  topics  were  indicated  in  the  pre-verification  letter  the  GOC  was  not  able  to 
provide  any  evidence  supporting  its  own  claims  and  referred  the  Commission  to  the 
banks. 

(127)  In  its  reply  to  the  deficiency  letter  the  GOC  submitted  some  information  concerning 
the  percentage  of  government  ownership  in  some  banks.  It  is  noted  that  initially  the 
GOC  in  the  questionnaire  reply  stated  that  it  does  not  possess  such  information  and 
that it only submitted information in this respect after the Commission pointed out that 
Article  24  of  the  Commercial  Bank  Law  actually  requires  banks  to  report  this 
information to the CBRC. When the Commission inquired during the verification visit 
what was the source of this information, the CBRC official present stated that he did 
not know as another department of the CBRC is responsible for the collection of such 
data. According to Article 2 of the Interim Regulations on the Boards of Supervisors 
in Key State-owned Financial Institutions (submitted by EXIM Bank in its reply to the 
deficiency  letter)  “the  list  of  state-owned  financial  institutions  to  which  the  State 
Council dispatches boards of supervisors shall be recommended by the administrative 
organ for boards of supervisors in state-owned financial institutions”. Since this legal 
provision  refers  to  the  administrative  organ  for  boards  of  supervisors  in  state-owned 
financial institutions, it seems that the GOC is aware of which financial institutions it 
owns. Nevertheless, the Commission was not able to verify this information or even to 
identify the source of the information because of the non-cooperation from the GOC. 
The  publicly  available  information  suggests  that  there  are  also  other  state-owned 
banks (which provided loans to the sampled exporting producers) in addition to those 
reported by the GOC in its reply to the deficiency letter26.  

(128)  In its letter of 3 June 2013 the GOC claimed that the Commission did not either in its 
questionnaire  or  in  the  deficiency  letter,  “ask  for  the  “supporting  evidence  or  data 
source” and “now suddenly alleges lack of supporting evidence or data source”. To set 

26 

E.g. China Bohai Bank, Guangdong Development Bank, Huishang Bank, Bank of Shanghai, Shenzhen 
Development Bank. 

EN 

30 

   EN 

                                                 
the record straight the Commission, like any other investigating authority, verifies the 
data  submitted  by  all  parties  in  the  proceeding  and  the  GOC  was  aware  of  this  as 
Commission  pointed  out  already  in  its  questionnaire  and  in  the  cover  letter  to  the 
questionnaire  that  the  replies  could  be  subject  to  verification.  Moreover,  in  its  pre-
verification letter the Commission included also this particular topic among the issues 
to  be  covered  during  the  verification27.  Therefore  the  fact  that  the  Commission  is 
asking for supporting evidence of the statements made by the GOC was certainly not a 
surprise for the GOC but the standard procedure followed but the Commission in each 
and every case. 

(129)  When, during the verification, the Commission asked the GOC to submit a list of 10 
biggest banks in the PRC and the share of the market they represent, the CBRC replied 
that  it  is  able  to  submit  such  information  but  that  it  could  not  answer  the  question 
before it was submitted in a written format. The Commission explained that a question 
asked  during  the  verification  visit  orally  has  the  same  validity  as  any  questions 
submitted in writing and pointed to the fact that for the other oral questions the GOC 
did  not  request  their  submission  in  writing  before  replying.  In  spite  of  this 
clarification, the GOC still did not provide the information. 

(130)  In  the  questionnaire  the  Commission  requested  documents  which  were  the  basis  for 
the establishment of the CBRC and provided it with the mandate. The GOC submitted 
a document from the National People’s Congress simply stating that the CBRC shall 
be  created.  When  the  Commission  inquired  whether  there  are  any  other  documents 
specifying  the  mandate  and  purpose  of  the  CBRC,  the  CBRC  official  present  stated 
that  there  are  many  other  laws  concerning  the  CBRC  but  that,  if  the  Commission 
wanted  to  obtain  these  documents  it  should  have  requested  them  before  the 
verification. It is noted that in the questionnaire the Commission requested the GOC to 
“provide documents which were the basis for the establishment of this authority and 
provided it with the mandate” and therefore, it had requested these documents before 
the verification. 

(131)  When the Commission requested statistics and reports from the banks which provided 
loans to the sampled exporters for the IP it pointed to Article 33 of the Law of the PRC 
on Regulation of and Supervision over the Banking Industry28 which suggests that the 
CBRC  collects  such  statistics.  The  CBRC  official  present  stated  that  he  had  to  seek 
permission from the legal department first but he did not provide any information in 
this  respect  before  the  end  of  the  verification.  Again  it  must  be  noted  that  the 
Commission requested this information in the questionnaire and deficiency letter and 
it  had  indicated  in  its  pre-verification  letter  that  statistics  would  be  a  topic  for  the 
verification. 

(132)  The  GOC  further  claimed  that  the  allegations  in  the  complaint  concerning  Chinese 
banks being public bodies are based merely on simple assertions of state shareholding 

27 

28 

Commission pre-verification letter of 25 March 2013, page 7: “The Commission will seek explanations 
concerning the information requested in Appendix A of the questionnaire. The questions raised during 
verification  will  cover  points  a)  to  r)  of  the  Appendix  A”.  Point  g)  of  the  Appendix  A:  List  each 
shareholder of the bank/financial institution who owned at least 1% of the shares or of the value of the 
company and list the activities of these shareholders in Excel table Appendix A–1. 
Article 33 of Law of the PRC on Regulation of and Supervision over the Banking Industry :The banking 
regulatory authority shall, in light of the need for performing its duties, have the power to require the 
financial  institutions  of  the  banking  industry  to  submit,  in  accordance  with  relevant  regulations,  their 
balance  sheets,  profit  statements,  other  financial  accounting  statements,  statistical  reports  and 
information concerning business operations and management, as well as the audit reports prepared by 
certified public accountants. 

EN 

31 

   EN 

                                                 
which  in  turn  are  based  on  “illegal”  determinations  in  the  Coated  Fine  Paper  case. 
This  claim  is  a  misinterpretation  of  facts  in  the  complaint.  In  the  complaint,  the 
complainant, in addition to the state ownership, refers, inter alia, to the loans provided 
by banks based on political directives, to the government agencies directing financial 
institutions  to  increase  credit  and  lending  to  enterprises  for  promoting  new 
technologies  and  products  (including  the  PV  industry).  The  Coated  Fine  Paper 
findings  on  Chinese  banks  being  public  bodies  were  based  on  more  elements  than 
merely  ownership  (e.g.  government  intervention  and  guidance  of  banks  to  direct 
preferential lending to the paper industry via Government plans) and these findings are 
fully  in  line  with  EU  and  WTO  law.  In  addition,  the  findings  on  the  status  of  state-
owned banks as public bodies were confirmed in Organic Coated Steel as well. 

(133)  The  GOC  also  continued  to  claim  that  it  was  not  in  its  practical  ability  to  provide 
information on 3,800 banks and financial institutions which exist in the PRC and that, 
in  any  event  the  CBRC  does  not  retain  records  concerning  the  percentage  of 
government ownership in banks. The Commission does not understand why the GOC 
is referring repeatedly to all banks in the PRC in connection with the GOC ownership 
in them when the information requested was explicitly limited to those banks “where 
the GOC has direct or indirect shareholdership”29. As explained in recital (127) above 
the  claim  of  the  GOC  that  the  CBRC  (or  any  other  government  authority)  does  not 
retain  records  on  its  ownership  share  of  the  banks  seems  to  be  in  contradiction  with 
several Chinese legal provisions. 

(134)  In  its  letter  of  3  June  2013  the  GOC  repeated  its  claim  that  it  does  not  have  the 
authority  to  require  “independent  banks”  to  produce  confidential  information  and 
pointed to the letter that had allegedly been sent to the banks on this matter. It is true 
that during the verification the GOC showed the original of the letter intended for the 
banks,  but  when  the  Commission  requested  the  GOC  to  submit  evidence  to  show  to 
which  banks  and  financial  institutions  this  letter  was  sent  the  GOC  was  not  able  to 
provide such evidence. The GOC also alleged that some of the institutions indicated in 
Annex 7 to the deficiency letter were not banks. In this regard the Commission notes 
that these institutions had been notified to the Commission by the sampled exporting 
producers as institutions which extended loans to them. 

in 

that 

the  Commission 

the  pre-verification 

(135)  The  GOC  claimed  that  the  Commission  never  addressed  the  issue  of  the  PBOC 
Circulars YinFa [2003] and [2004] in its questionnaire or in the deficiency letters. It is 
noted 
included  “PBOC 
letter 
regulations/circulars/internal documentation concerning interest rates regulation in the 
PRC” amongst the topics to be covered during the verification. It is obvious that both 
circulars  fall  into  this  category.  In  its  reply  to  the  deficiency  letter  the  GOC  even 
referred  to  an  article  on  the  PBOC  website  which  referred  to  one  of  the  circulars. 
However the GOC did not provide any circulars from PBOC at all and only submitted 
information  from  the  PBOC  website  which  was  incomplete  in  respect  of  the 
governance  of  interest  rates  on  loans  and  deposits  in  China  when  compared  to 
Circulars  YinFa  [2003]  and  [2004]  which  are  both  available  on  the  web.  It  is  also 
noted that the GOC did not refuse to submit these documents on the basis that it was 
not prepared for such question but rather because of the alleged confidentiality of the 
circulars.  In  this  regard  it  must  be  noted  that  the  GOC’s  claim  concerning  the 
confidentiality  of  the  PBOC  circulars  is  inconsistent  with  its  own  practice  in  this 
proceeding. In its comments to definitive disclosure the GOC submitted full version of 

29 

Commission deficiency letter of 30 January 2013, question C-III-A.A. 

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32 

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another PBOC Circular to support its claim that the special loans provided by SOCBs 
were repealed and the confidentiality alleged elsewhere did not seem to be an obstacle. 
In respect to the extracts from the PBOC website, the Commission took note of them 
and, did not disregard their content. However to have the complete information on the 
matter  also  required  the  information  in  the  two  circulars  which  complemented  the 
information submitted by the GOC. 

3.3. 

Individual Examination ('IE') 

(136)  Claims for IE were submitted by 6 cooperating exporting producers pursuant to Article 
27(3) of the basic Regulation, i.e. companies CNPV Dongying Solar Power Co. Ltd., 
Jiangsu  Runda  PV  Co.,  Ltd.,  Kinve  Solar  Power  Co.,  Ltd  (Maanshan),  Phono  Solar 
Technology Co. Ltd., Shandong Linuo Photovoltaic Hi-Tech Co. Ltd., and Shandong 
Linuo  Solar  Power  Holdings  Co.  Ltd.  It  was  not  possible  to  grant  these  companies 
individual  examinations  as,  due  to  the  high  number  of  alleged  subsidy  schemes  and 
time consuming nature of the investigation, it would be unduly burdensome and could 
prevent completion of the investigation in good time. 

3.4. 

Specific Schemes 

(137)  On  the  basis  of  the  information  contained  in  the  complaint  the  Commission  sought 
information related to the following schemes, which allegedly involved the granting of 
subsidies by the Governmental authority: 

(i)  Preferential policy loans, other financing, guarantees and insurance 

– 

– 

– 

– 

– 

Preferential policy loans 

Provision of credit lines  

Export credit subsidy programmes 

Export Guarantees and Insurances for Green Technologies 

Benefits  provided  through  granting  of  access  to  offshore  holding 
companies and loan repayments by the government 

(ii)  Grant Programmes 

– 

– 

– 

– 

Export product research development fund 

Subsidies  for  development  of  “Famous  Brands”  and  China  World  Top 
Brands Programme 

Funds for outward expansion of industries in Guandong Province 

The Golden Sun demonstration programme 

(iii)  Direct Tax Exemption ad Reduction programmes 

– 

– 

– 

– 

– 

– 

The  two  free/three  half  programme  for  foreign  invested  enterprises 
(FIEs) 

Income tax reduction for export-oriented FIEs 

Income tax benefit for FIEs based on geographical location 

Tax reduction for FIEs purchasing Chinese-made equipment 

Tax offset for research and development by FIEs 

Tax refunds for reinvestment of FIE profits in export oriented enterprises 

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33 

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– 

– 

– 

– 

Preferential  tax  programmes  for  FIEs  recognised  as  high  or  new 
technology enterprises 

Tax  reduction  for  high  and  new-technology  enterprises  involved  in 
designated projects 

Preferential income tax policy for enterprises in the northeast region 

Guandong province tax programmes 

(iv) 

Indirect Tax and Import Tariff Programmes 

– 

– 

– 

VAT  exemptions  and  import  tariff  rebates  for  the  use  of  imported 
equipment  

VAT rebates on FIE purchases of Chinese-made equipment 

VAT ad tariff exemptions for purchases of fixed assets under the foreign 
trade development funds programme 

(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 

Government provision of land and land-use rights for less than adequate 
remuneration 

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

(a) 

Non-cooperation and the use of facts available 

– 

Financial market and institutions in China 

(138)  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  industry  concerned  by  this  proceeding.  The  GOC 
replied  that  it  does  not  retain  records  of  the  amounts  and  percentages  of  the  loans 
provided by the state-owned banks and that the GOC also does not retain the records 
of loans for the PV industry. The GOC did not suggest any alternative source for this 
information. 

(139)  The  Commission  attached  a  specific  questionnaire  (Appendix  A)  intended  for  the 
banks/financial institutions to the initial anti-subsidy questionnaire and asked the GOC 
to  forward  it  to  the  banks/financial  institutions  which  provided  loans  to  the  industry 
concerned. The purpose of Appendix A was to verify allegations in the complaint that 
Chinese  state-owned  banks  are  public  bodies.  Inter  alia,  the  Commission  sought 
information  concerning  the  structure  of  government  control  in  those  Chinese  banks 
and  the  pursuit  of  government  policies  or  interests  with  respect  to  the  photovoltaic 
(i.e.  board  of  directors  and  board  of  shareholders,  minutes  of 
industry 
shareholders/directors meetings, nationality of shareholders/directors, lending policies 
and  assessment  of  risk  with  respect  to  loans  provided  to  the  cooperating  exporting 

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34 

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producers). In the reply to the questionnaire, the GOC submitted a reply to Appendix 
A  only  for  five  banks  (the  China  Development  Bank  (CDB),  the  EXIM  Bank,  the 
Bank of Shanghai, the Bank of China30 and the Huaxia Bank). In the deficiency letter, 
the  Commission  repeated  its  initial  request  for  information.  To  facilitate  the 
cooperation  of  the  GOC,  it  provided  a  list  of  banks/financial  institutions  which 
provided loans to sampled companies and asked again the GOC to forward Appendix 
A to these entities. No additional replies to Appendix A were submitted with the reply 
to the deficiency letter. 

(140)  The Commission also sought information about the state ownership of the banks and 
financial institutions. In its questionnaire reply, the GOC stated that it does not retain 
any records concerning the ownership shares and it did not provide any suggestion on 
how to obtain this information. When the Commission, in its deficiency letter, pointed 
out that it is mandatory to include this information in the Articles of Association of the 
banks  and  these  are  accessible  by  the  GOC  as  a  shareholder,  the  GOC  submitted 
shareholding information of 16 banks. However, except for five banks, for which the 
GOC  referred  to  the  annual  reports  as  a  source,  it  did  not  provide  any  supporting 
evidence for this information and neither did it disclose what the source data for this 
information  was.  Concerning  the  other  banks  which  provided  loans  to  the  industry 
concerned, the GOC did not provide any information at all concerning its ownership 
stake.  Consequently,  the  Commission  was  unable  to  verify  the  accuracy  and 
correctness of the reported data concerning the state’s ownership stakes in the banks 
and other financial institutions. 

(141)  The GOC claimed that the BB rating applied to the sampled exporting producers (for 
the  purpose  of  the  loan  benchmark)  is  “extremely  unfavourable”  and  that  the 
Commission “in light of the actual facts of the case did not explain how did it come to 
the  conclusion  that  this  is  the  accurate  or  most  reasonable  conclusion.  The  GOC 
further  claimed  that  this  methodology  amounts  to  “an  impermissible  adverse 
inference”. Although this claim was made in relation to the one of the previous cases 
(i.e.  Coated  Fine  Paper)  and  before  the  disclosure  of  the  information  concerning  the 
rating applied to the sample exporting producers in this proceeding, it should be noted 
that the Commission did not apply “adverse facts available” in this case or in any other 
cases to which the GOC referred in its submission. The Commission had only drawn 
appropriate conclusions from the facts on the record, which showed a lack of proper 
credit risk assessment, see recitals (175) to (178). It should be pointed out that during 
the  IP  the  Chinese  PV  industry  was  making  heavy  losses  and  it  was  clear  that  its 
financial  status  was  extremely  difficult.  Several  credit  risk  assessments  supplied  by 
sampled companies demonstrated that a BB assessment for the IP as a whole was not 
unreasonable.  In  fact  some  credit  risk  assessments  clearly  demonstrate  that  several 
Groups were in fact more or less insolvent. 

– 

Verification at banks 

(142)  In  its  pre-verification  letter  the  Commission  envisaged  the  verification  of  the  banks 
which submitted replies to the Appendix A to the questionnaire and provided a large 
proportion  of  loans  to  the  sampled  exporting  producers,  i.e.  the  China  Development 
Bank, the Export-Import Bank of China, the Bank of Shanghai and the Huaxia Bank 
and it included a detailed list of subjects that would be covered during the verification. 
In the initial questionnaire intended for the GOC, the Commission had already made it 
clear that the information provided in the questionnaire replies might be subject to an 

30 

Not filled in by the Bank of China, but by the GOC on its behalf. 

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35 

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on-the-spot verification. In the pre-verification letter the Commission had also stated 
that  the  GOC  was  “requested  to  make  all  supporting  documents  available  that  were 
used  to  prepare your substantive response, including original  source documents and 
applications”.  Two  other  major  providers  of  preferential  financing  to  the  sampled 
exporting  producers  either  did  not  submit  requested  information  at  all  (Agricultural 
Bank of China) or the information was submitted on their behalf without a possibility 
to verify it (Bank of China).  

– 

Bank of Shanghai 

(143)  In its pre-verification letter of 25 March 2013 the Commission notified the GOC of its 
intention to verify the Bank of Shanghai (“BoS”) and offered in order to facilitate the 
verification visit for the GOC, should it be necessary, to extend the verification visit 
until  22  April  201331.  In  its  initial  reply  to  the  pre-verification  letter  of  5  April,  the 
GOC did not confirm whether the verification of BoS would take place but enquired 
whether the Commission would be willing to verify the Bank of Shanghai in another 
location to the rest of the verification (i.e. Shanghai instead of Beijing). To facilitate 
the verification visit, the Commission exceptionally agreed to this; however, it urged 
the  GOC  to  confirm  the  verification  in  Shanghai  by  9  April  at  the  latest  (i.e.  three 
working days before the start of the verification in Beijing) in order for the team to be 
able to arrange the practicalities related to such a change in the verification planning. 
Only  on  11  April  (one  working  day  before  the  start  of  verification)  did  the  GOC 
confirm  that  the  BoS  was  available  for  verification  on  23  or  24  April  2013.  On  the 
same  day  the  Commission  communicated  to  the  GOC  that  because  of  such  late 
confirmation it was not possible to arrange for the changes in the schedule. Moreover, 
the  dates  proposed  by  the  GOC  (23  or  24  of  April)  were  beyond  the  period  agreed 
between the GOC and the Commission in which the verification was due to be carried 
out  and  even  beyond  the  extension  offered  by  the  Commission.  As  a  result  the 
Commission was unable to verify the reply to the Appendix A submitted by the BoS 
and  information  concerning  loans  provided  by  this  bank  to  the  sampled  exporting 
producers.  Consequently  the  Commission  in  its  letter  of  23  May  2013  informed  the 
GOC  that  it  is  considering  the  application  of  Article  28  of  Regulation  (EC)  No 
597/2009 in respect to the unverified information submitted by the BoS. 

(144)  In its letter of 3 June 2013 the GOC claimed that the verification of BoS did not take 
place because of the inflexibility on the Commission side, that the Commission did not 
propose any alternative dates for the verification and simply “declined to consider the 
verification of Bank of Shanghai”. These claims are simply incorrect. The Commission 
stated  clearly  in  its  pre-verification  letter  that  it  was  initially  proposed  to  verify  the 
banks  on  17  and  18  April  2013  with  a  possibility  of  additional  day  on  22  April, 
leaving it to the GOC to propose  appropriate  times  to  visit the banks throughout the 
whole period of verification (i.e. full working week plus additional day). Yet the GOC 
proposed  dates  for  verification  of  BoS  outside  this  window  and  did  so  only  one 
working  day  before  the  start  of  verification  visit.  In  the  Commission’s  view,  the 
flexibility  offered  was  more  than  sufficient  and  altogether  six  alternative  days  were 
offered for the verification of BoS, contrary to the GOC’s claim. 

– 

Hua Xia Bank 

(145)  In its letter of 23 May 2013 the Commission explained to the GOC that it was unable 
to verify certain parts of Huaixia Bank’s (“Huaxia”) reply to Appendix A, namely the 
ownership  structure,  the  creditworthiness  assessment  of  the  sampled  exporting 

31 

The verification visit was originally scheduled from 15 to 19 April 2013. 

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36 

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producers and the risk premiums charged to different industries and in particular to the 
industry concerned. 

(146)  In  its  reply  of  3  June  2013  the  GOC  claimed  that  Huaxia  explained  the  ownership 
structure and provided further details and explanations to the Commission concerning 
its  shareholders,  that  the  creditworthiness  assessment  of  clients  is  covered  by  bank 
secrecy laws and contractual agreements between the banks and its clients. 

(147)  In  respect  to  the  ownership  structure  it  is  noted  that  in  its  reply  to  the  Appendix  A 
Huaxia claimed that it was incorporated “without any government shares” and did not 
disclose  any  information  on  the  government  ownership  even  though  this  was 
specifically  requested  by  the  Commission  in  the  Appendix  A.  The  Commission 
pointed out that this is in contradiction to the other information provided by the GOC 
and that Huaxia admitted that some of the shareholders are state-owned and provided a 
paper  with  information  in  Chinese  on  some  of  them.  It  is  still  not  clear  from  the 
information  submitted  by  Huaxia  what  is  the  proportion  of  state  ownership  of  the 
bank. 

(148)  As for the creditworthiness assessment, the Commission notes that the bank was able 
to provide such document for one of the companies (after protecting the identity of the 
company  with  some  modifications  in  the  document)  while  for  the  other  requested 
documents  it  claimed  that  they  are  covered  by  secrecy  laws  and  contractual 
agreements between the banks and its clients. This discrepancy of treatments difficult 
to understand. 

– 

Export Import Bank of China 

(149)  In its letter of 23 May 2013 the Commission informed the GOC that the replies of the 
Export-Import  Bank  of  China  (“EXIM”)  to  the  Appendix  A  and  to  the  deficiency 
letters were incomplete and that EXIM failed to submit certain documents which were 
specifically requested, i.e. Articles of Association, the Notice of Establishing Export-
Import bank of China Issued by the State Council or Measures for the management of 
Export  Sellers’s  Credit  for  Hi-Tech  products  of  the  Export  –Import  Bank  of  China. 
Concerning the Articles of Association, the GOC claimed in its letter of 3 June 2013 
that  EXIM,  because  of  its  internal  policy,  could  not  submit  Articles  of  Association 
(which is an internal management document) but referred to the on-line version which 
was  allegedly  offered  to  be  consulted  on  the  laptop  provided  by  EXIM  during  the 
verification. The Commission is puzzled by this explanation which makes no sense. If 
the  document  was  available  on-line  during  the  verification  the  Commission  see  no 
reason  why  it  could  not  have  been  submitted  as  repeatedly  requested  already  in  the 
questionnaire, deficiency letter and again during the verification. In fact, the claim that 
EXIM made this document available on the laptop during the verification is incorrect. 
EXIM  stated  that  the  Commission  should  review  the  document  online  but  the 
Commission official explained that they do not have internet access on the verification 
premises.  In  addition,  EXIM  did  not  even  provide  a  link  to  the  online  version  of 
Articles of Association. 

(150)  As  for  the  other  two  documents,  EXIM  reasoned  that  they  could  not  be  provided 
because  of  their  confidential  nature  and  internal  rules.  It  was  the  EXIM  itself  which 
stated  in  its  reply  to  the  deficiency  letter  that  the  “EXIM  bank  was  formed  and 
operates in accordance with The Notice of Establishing Export-Import Bank of China 
Issued by the State Council and The Articles of Association of Export-Import Bank of 
China  “.  Therefore  this  was  deemed  an  essential  document  for  verification  of  the 
allegations in the complaint that EXIM is public body, but the Commission was denied 

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37 

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access to this document. In this context it is noted that another policy bank, i.e. CDB 
provided a similar document concerning its establishment and also several other State 
Council  notices  were  submitted  in  this  investigation.  Also  EXIM  did  not  support  its 
claims on the confidentiality by any evidence whatsoever. In addition, as explained in 
recital  (117),  governments  cannot  simply  invoke  internal  rules  in  order  to  avoid 
obligations under the SCM Agreement and basic Regulation. The same applies for the 
Measures for the management of Export Sellers’s Credit for Hi-Tech products of the 
Export–Import Bank of China where EXIM claimed  also  confidentiality without any 
supporting evidence and even refused to discuss the purpose of this document. 

(151)  EXIM also failed to provide information on the composition of the Board of Directors 
and Board of Supervisors, which was repeatedly requested, with the explanation that 
“the  composition  of  the  Board  of  Directors  is  changing”  and  that  the  Commission’s 
questions concerning the CCP affiliations of the members of the Board’s “are invasive 
and inappropriate questions in the context of an anti-subsidy investigation.” The fact 
that  the  composition  of  the  Board  of  Directors  is  changing  is  not  relevant  for  the 
purpose  of  this  investigation.  What  is  relevant  is  how  the  state  is  represented  in  the 
Boards of EXIM; however, the GOC and EXIM refused to provide this information. 
The  Commission  also  considers  the  CCP  membership  of  senior  management  of  the 
EXIM (and all banks in this matter) essential for the purpose of establishing the extent 
of state influence on the banks’ management. According to the CCP Constitution “The 
Party  must  uphold  and  improve  the  basic  economic  system,  with  public  ownership 
playing a dominant role and different economic sectors developing side by side…”32, 
therefore  the  examination  of  influence  of  the  CCP  in  EXIM  was  deemed  to  be 
necessary for the purpose of this investigation and in particular to assess the level of 
state control in the banks. 

(152)  Concerning  the  statistics  on  the  export  of  different  categories  of  products  already 
requested  in  the  questionnaire  and  which  EXIM  is  legally  obliged  to  report  to  the 
CBRC,  the  GOC  claimed  in  its  letter  of  3  June  2013  that  it  needed  more  time  to 
prepare  such  information.  In  this  respect  it  is  noted  that,  since  the  Commission 
requested this information already in the initial questionnaire, the GOC had more than 
three and a half months to prepare this information but failed to do so. EXIM alleged 
that  “this  type  of  information  can  be  found  in  annual  reports”;  however,  this  is 
incorrect. The information in the annual reports the GOC referred to covers different 
periods  than  the  information  requested  by  the  Commission  in  the  questionnaire  and 
during the verification visit. 

(153)  The  GOC  rightly  claimed  that  in  the  questionnaire  reply  it  submitted,  inter  alia,  the 
amounts  of  export  credits  for  exports  of  mechanical  and  electrical  products  and  new 
high-tech  products.  It  is  noted  the  Commission  never  contested  the  submission  of 
these  figures.  The  Commission  contested  the  fact  that,  when  it  attempted  to  verify 
these  figures  during  the  verification  visit,  EXIM  was  not  able  to  provide  any 
supporting evidence or even explain where are these figures come from. Similarly, the 
Commission  was  not  allowed  to  verify  the  data  concerning  the  proportion  of  export 
credits  to  the  PV  industry  which  the  GOC  submitted  in  the  questionnaire  reply. 
Interestingly  enough,  EXIM  did  not  consider  any  of  these  figures  confidential  but 
when  the  Commission  asked  for  the  source  data  to  verify  them,  EXIM  refused  the 
access  to  it,  citing  confidentiality  reasons.  EXIM  applied  the  same  reasoning 
concerning  the  amounts  of  export  credits  given  to  the  sampled  producers  and 

32 

Preamble of the Constitution of the Communist Party of China. 

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cooperating producers. It reported figures in the reply to the deficiency letter but did 
not allow the Commission to verify it on the basis of the confidentiality. Effectively, it 
was not possible to verify the vast majority of the statistics submitted by EXIM. 

(154)  The EXIM also refused to explain and support with relevant evidence the credit ratings 
of the sampled exporting producers and the analyses which led to these ratings. 

– 

China Development Bank (“CDB”) 

(155)  In  its  letter  of  3  June  2013  the  GOC  was  concerned  that  the  Commission  asked 
“personal  questions  concerning  the  political  party  affiliations  of  members  of  the 
Boards  and  senior  management”.  This  is  not  correct.  The  questions  concerning  the 
links  of  the  Board  members  and  senior  management  to  the  CCP  were  purely  of 
technical character and, as explained in the recital (151) above, the reason for asking 
them was to help determine the role of the CCP in Chinese economy. 

(156)  During  the  verification  the  Commission  attempted  to  verify  the  creditworthiness 
assessment  of  the  sampled  exporting  producers.  CDB  provided  some  general 
information  but  refused  to  disclose  any  information  in  relation  to  creditworthiness 
assessment  of  the  sampled  exporting  producers  or  even  the  risk  evaluation  and 
assessment report of the PV industry.  

(157)  In  the  reply  to  the  deficiency  letter  the  CDB  submitted  a  figure  concerning  the  risk 
premium  charged  for  the  industry  concerned.  During  the  verification  the  CDB 
corrected its reply in this respect but did not provide any supporting evidence for this 
figure  or  explanation  of  what  was  the  basis  for  this  figure,  despite  repeated  requests 
from the Commission during the verification visit. 

(b) 

Chinese state-owned banks are public bodies 

(158)  The complainant claims that SOCBs in the PRC are public bodies within the meaning 

of Article 2(b) of the basic Regulation. 

(159)  The  WTO  Appellate  Body  (AB),  in  its  report  in  United  States  –  Definitive  Anti-
Dumping and Countervailing Duties on Certain Products from China33 (the AB report) 
defined  a  public  body  as  an  entity  that  "possesses,  exercises  or  is  vested  with 
governmental  authority".  According  to  the  AB,  evidence  that  government  exercises 
meaningful  control  over  an  entity  and  its  conduct  may  serve  as  evidence  that  the 
relevant  entity  possesses  governmental  authority  and  exercises  such  authority  in  the 
performance  of  governmental  functions.  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  authority34.  The  AB 
also  considered  that  public  bodies  are  also  characterised  by  the  "performance  of 
functions"35  which  would  "ordinarily  be  considered  part  of 
governmental 
governmental practice in the legal order of the relevant Member"36. 

(160)  The following analysis focuses on whether the SOCBs in question perform functions 
which  are  ordinarily  considered  part  of  governmental  practice  in  China  and,  if  so, 
whether  they  exercise  government  authority  when  doing  so.  The  investigation  has 
established  that  the  Chinese  financial  market  is  characterised  by  government 

33 
34 
35 
36 

Document WT/DS379/AB/R, 11 March 2011. 
Para 317 of the AB report. 
Para 290 of the AB report. 
Para 297 of the AB report. 

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intervention because most of the major banks are state-owned. The Chinese authorities 
have  provided  only  very  limited  information  concerning  shareholding/ownership  of 
banks  in  the  PRC.  However,  as  further  outlined  below,  the  Commission  compiled 
available  information  in  order  to  arrive  at  a  representative  finding.  In  performing  its 
analysis whether banks are entities possessing, vested with or exercising government 
authority (public bodies) the Commission also sought information concerning not only 
the  government  ownership  of  the  banks  but  also  other  characteristics  such  as  the 
government  presence  on  the  board  of  directors,  the  government  control  over  their 
activities,  the  pursuit  of  government  policies  or  interests  and  whether  entities  were 
created by statute. 

(161)  From the available information it is concluded that the state-owned banks in the PRC 
hold the highest market share and are the predominant players in the Chinese financial 
market.  According  to  the  2006  Deutsche  Bank  Research  on  the  PRC's  banking 
sector37,  the  state-owned  banks'  share  may  amount  to  more  than  2/3  of  the  Chinese 
market. For the same matter the WTO Trade Policy Review of China noted that “The 
high  degree  of  state  ownership  is  another  notable  feature  of  the  financial  sector  in 
China”38 and "there has been little change in the market structure of China's banking 
sector, which is dominated by state-owned banks"39. It is pertinent to note that the five 
largest state-owned commercial banks (the Agricultural Bank, the Bank of China, the 
Construction  Bank  of  China,  the  Bank  of  Communications  and  the  Industrial  and 
Commercial Bank) appear to represent more than half of the Chinese banking sector40. 
The government ownership of the five-largest state-owned banks was also confirmed 
by the GOC in its reply to the deficiency letter. 

(162)  The  Commission  also  requested  information  concerning  the  structure  of  government 
control in those Chinese banks and the pursuit of government policies or interests with 
respect to the photovoltaic industry (i.e. board of directors and board of shareholders, 
minutes  of  shareholders/directors  meetings,  nationality  of  shareholders/directors, 
lending  policies  and  assessment  of  risk  with  respect  to  loans  provided  to  the 
cooperating  exporting  producers).  Nevertheless,  as  noted  in  recital  (139)  above,  the 
GOC  provided  only  very  limited  information  in  this  respect  and  did  not  allow  the 
verification of much of the submitted information. Consequently, the Commission had 
to  use  the  facts  available.  It  concluded  on  the  basis  of  the  available  data  that  those 
banks are controlled by the government by means of ownership, administrative control 
of  their  “commercial”  behaviour  including  the  limits  set  on  the  deposits  and  loans 
interest rates (see recitals (164) - (167) below) and in some cases even by the statutory 
documents41.  The  relevant  data  used  in  order  to  arrive  at  the  aforesaid  findings  is 
derived from information submitted by the GOC, the annual reports of Chinese banks 

37 
38 
39 
40 
41 

http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000204417.PDF. 
Document WT/TPR/S/230 p. 79, April 2010. 
Document WT/TPR/S/264 p.122, July 2012. 
Ibid. 
Article  15  of  the  Article  of  Assocation  of  China  Development  Bank  (CDB)  states  that  the  business 
purpose  of  the  CDB  is  inter  alia  “to  serve  for  middle-  and  long-term  development  strategy  of  the 
national  economy”.  Further  the  Financial  Statements  of  CDB  for  the  financial  year  2011  state  “The 
Bank  and  its  subsidiaries  (together,  the  "Group")  are  dedicated  to  the  mission  of  strengthening  the 
competitiveness of China and improving the living standards of its people in support of the State's key 
medium to long-term strategies and policies, through their medium- to long-term lending, investment, 
securities  and  leasing  activities”  and  “In  response  to  the  call  of  the  State  to  encourage  domestic 
enterprises to "Go Global" and “In response to the call of the State to encourage domestic enterprises 
to  "Go  Global",  the  Group  also  engages  in  a  wide  range  of  activities  focused  on  international 
cooperation”. 

EN 

40 

   EN 

                                                 
that were either submitted from GOC or publicly available, information retrieved from 
the 2006 Deutsche Bank Research on China's banking sector42, WTO Policy review on 
China (2012)43, China 2030 World Bank Report44 or 2010 OECD Economic survey on 
China45,  information  submitted  by  the  co-operating  exporting  producers  and 
information  existing  in  the  complaint.  As  for  foreign  banks,  independent  sources 
estimate  that  they  represent  a  minor  part  of  the  Chinese  banking  sector  and 
consequently  play  an  insignificant  role  in  policy  lending;  with  relevant  information 
suggesting  that  this  may  represent  as  little  as  2 %  of  the  Chinese  market46.  Relevant 
publicly available information also confirms that Chinese banks, particularly the large 
commercial  banks,  still  rely  on  state-owned  shareholders  and  the  government  for 
replenishment  of  capital  when  there  is  a  lack  of  capital  adequacy  as  result  of  credit 
expansion47. 

(163)  With respect to the banks that provided loans to the cooperating exporting producers, 
the  majority  of  them  are  state-owned  banks.  Indeed,  on  the  basis  of  the  available 
information48  it  was  found  that  the  state-owned  banks  and  other  state-owned  entities 
provided  the  great  majority  of  loans  to  the  cooperating  exporting  producers.  These 
included  the  major  commercial  and  policy  banks  in  the  PRC  like  the  China 
Development  Bank,  the  EXIM  Bank,  the  Agricultural  Bank  of  China,  the  Bank  of 
China,  the  China  Construction  Bank  and  the  Industrial  and  Commercial  Bank  of 
China.  With  respect  to  the  remaining  state-owned  banks  concerned,  again  the 
Commission  requested  the  same  information  mentioned  above  concerning  the 
government control and the pursuit of government policies or interests with respect to 
the  photovoltaic  industry.  No  such  detailed  information  was  provided.  It  is  therefore 
concluded that the banks are controlled by the government. Such a meaningful control 
is  evidenced  inter  alia  by  the  governmental  policy  of  support  to  the  industry  in 
question, which directs banks to act in a particular supportive manner (see recital (102) 
above).  For  these  reasons  the  state-owned  commercial  and  policy  banks  in  the  PRC 
should be considered public bodies. 

(164)  Another sign of GOC involvement in the Chinese financial market is the role played 
by  the  PBOC  in  setting  the  specific  limits  on  the  way  interest  rates  are  set  and 
fluctuate.  Indeed,  the  investigation  established  that  the  PBOC  has  specific  rules 
regulating  the  way  interest  rates  float  in  the  PRC.  According  to  the  information 
available,  these  rules  are  set  out  in  the  PBOC's  Circular  on  the  Issues  about  the 
Adjusting Interest Rates on Deposits and Loans-Yinfa (2004) No 251 ("Circular 251"). 
Financial institutions are requested to provide loan rates within a certain range of the 

42 
43 
44 

45 

46 
47 

48 

Deutsche Bank Research, China’s Banking Sector: Ripe for the next stage, 7 December 2006. 
China Trade Policy Review WT/TPR/S/264, p. 122, recital 98. 
China 2030 Building a modern, harmonious, and creative society, The World Bank and Development 
Research Center of the State Council, the PRC, pages 28-29, 125.  
OECD Economic Surveys: China 2010, p. 55 “the primary purpose of the PBoC’s lending rate floor and 
deposit rate ceiling is to safeguard the profitability of the predominantly state-owned banking sector. By 
progressively  widening  the  margin  between  benchmark  lending  and  deposit  rates,  the  PBoC  has 
effectively pushed some of the cost of bank restructuring onto Chinese borrowers and savers, though it 
narrowed  that  gap  in  2008-09.  However,  the  benchmark  rates  weaken  the  incentive  for  commercial 
banks to price risk appropriately and stifle competition in the banking sector”. 
Information retrieved from the 2006 Deutsch Bank Research on China's banking sector, pages 3-4.  
Information  retrieved  from  the  China  Monetary  Report  Quarter  Two,  2010  of  the  Monetary  Policy 
Analysis Group of the People's Bank of China, dated 5 August 2010, page 10.  
Information submitted by the GOC, information retrieved from the Articles of Association and Annual 
Reports 
(e.g. 
and 
certain 
http://www.fas.org/sgp/crs/row/R42380.pdf). 

information 

retrieved 

internet 

banks 

from 

of 

EN 

41 

   EN 

                                                 
benchmark loan interest rate of the PBOC. For commercial bank loans and policy bank 
loans  managed  commercially  there  is  no  upper  limit  range  but  only  a  lower  limit 
range. For urban credit cooperatives and rural credit cooperatives there are both upper 
and  lower  limit  ranges.  For  preferential  loans  and  loans  for  which  the  State  Council 
has  specific  regulations  the  interest  rates  are  not  allowed  to  float  upwards.  The 
Commission sought clarifications from the GOC on the definition and wording stated 
in  the  Circular  251  as  well  as  to  its  preceding  legislation  (Circular  of  the  PBOC 
concerning  expansion  of  Financial  Institution's  Loan  Interest  Rate  Float  Range  – 
YinFa  [2003]  No.  250).  However,  as  described  in  the  recital  (135)  above,  the  GOC 
refused  to  provide  these  Circulars  which  prevented  the  Commission  from  verifying 
their  content  and  seeking  explanations.  Since  the  GOC  did  not  provide  any  relevant 
information  in  this  respect  which  would  suggest  the  situation  changed  since  March 
2013  when  the  Commission  concluded  its  anti-subsidy  investigations  concerning 
Organic  Coated  Steel49  it  is  established  that  the  PBOC  is  involved  in  and  influences 
the  setting  of  interest  rates  by  state-owned  commercial  banks.  The  GOC  did  not 
provide  any  evidence  that  the  situation  as  established  in  the  Coated  Fine  Paper  and 
Organic  Coated  Steel  investigations  has  changed.  Therefore,  on  the  basis  of  facts 
available  and  the  other  evidence  cited  above,  it  was  concluded  that  the  situation 
concerning  the  methodology  for  determining  interest  rates  was  the  same  during  the 
entire IP. 

(165)  Limits on the loans interest rates together with the  ceilings imposed on deposit rates 
create a situation in which the banks have guaranteed access to cheap capital (because 
of  the  deposit  rates  regulation)  and  are  able  to  lend  to  the  selected  industries  at 
favourable rates.  

(166)  Banks are also subject to legal rules which require them, inter alia, to carry out their 
loan business according to the needs of the national economy50, provide credit support 
to  encouraged  projects51  or  give  priority  to  the  development  of  high  and  new 
technology  industries52.  Banks  are  under  an  obligation  to  follow  these  rules.  The 
sampled exporting producers belong to the categories of encouraged projects as well 
as to the high and new technology industries category.  

(167)  Various  independent  information  sources  suggest  that  the  state  involvement  in  the 
Chinese financial sector is substantial and on-going. For example the finding of the (i) 
IMF  2006  Working  Paper  suggested  that  the  bank  liberalisation  in  the  PRC  is 
incomplete  and  credit  risk  is  not  properly  reflected53;  (ii)  the  IMF  2009  report 
highlighted  the  lack  of  interest  rate  liberalisation  in  China54;  (iii)  the  IMF  2010 
Country Report stated that cost of capital in China is relatively low, credit allocation is 
sometimes determined by non-price means and high corporate saving is partly linked 
to low cost of various factor inputs (including capital and land)55; (iv) the OECD 2010 

49 
50 
51 

52 
53 

54 

55 

Recital 169 of the Council implementing regulation (EU) No 215/2013 of 11 March 2013. 
Law of the PRC on Commercial Banks (Article 34). 
Decision No 40 of the State Council on Promulgating and Implementing the Temporary Provisions on 
Promoting the Industrial Structure Adjustment. 
Law of the PRC on Scientific and Technological Progress (Order No 82). 
IMF  Working  Paper,  "Progress  in  China's  Banking  Sector  Reform:  Has  Bank  Behaviour  Changed?", 
WP/06/71, March 2006, (see pages 3-4, 13, 18-20).  
IMF Working Paper, "Interest Rate Liberalization in China", WP/09/171, August 2009, (see pages 3-4, 
21-23). 
IMF Country Report, PRC: 2010 Article IV Consultation, No 10/238, July 2010, (see pages 22, 24 and 
28-29). 

EN 

42 

   EN 

                                                 
Economic  Survey  of  China56  and  OECD  Economic  Department  Working  Paper  No. 
747  on  China's  Financial  Sector  Reforms57  stated  that  ownership  of  financial 
institutions  remains  dominated  by  the  State,  raising  issues  as  the  extent  to  which 
banks' lending decisions are based purely on commercial considerations while banks' 
traditional role appears to be that of government agencies with ties to the government.  

(168)  On the basis of the above evidence, it is concluded that state-owned commercial and 
policy banks perform government functions on behalf of the GOC, namely mandatory 
promotion  of  certain  sectors  of  the  economy  in  line  with  state  planning  and  policy 
documents. The extensive government ownership in the state-owned banks and other 
information  on  links  between  the  state-owned  banks  and  the  government  (including 
the non-cooperation of the GOC in this regard) confirms that the banks are controlled 
by  the  government  in  the  exercise  of  their  public  functions.  The  GOC  exercises 
meaningful  control  over  state-owned  commercial  and  policy  banks  through  the 
government’s  pervasive  involvement  in  the  financial  sector  and  the  requirement  for 
state-owned banks to follow government policies. State-owned commercial and Policy 
banks  are  therefore  considered  to  be  public  bodies  because  they  possess,  are  vested 
with, and exercise, governmental authority. 

(c) 

Private banks in the PRC are entrusted and directed by the GOC 

(169)  The Commission also analysed whether the privately owned commercial banks in the 
PRC are entrusted or directed by the GOC to provide preferential (subsidised) loans to 
the  photovoltaic  producers,  within  the  meaning  of  Article  3(1)(a)(iv)  of  the  basic 
Regulation. 

– 

Existence of a GOC policy 

(170)  From  the  section  above  concerning  state  involvement  in  the  photovoltaic  sector 
(recital  (101))  and  from  the  findings  described  below  it  is  clear  that  the  GOC  has  a 
policy to provide preferential lending to the photovoltaic sector, because public bodies 
(state-owned  commercial  banks)58  are  engaged  in  such  provision  and  hold  a 
predominant  place  in  the  market,  which  enables  them  to  offer  below-market  interest 
rates. 

– 

Extension of policy to private banks 

(171)  The  Commercial  banking  law  [2003]  applies  in  the  same  way  to  state-owned 
commercial banks and privately owned commercial banks. For example Article 38 of 
this law instructs all Commercial banks (i.e. also those which are privately owned) to 
"determine the loan rate in accordance with the upper and lower limit of the loan rate 
set  by  the  PBOC",  Article  34  of  the  Commercial  Banking  Law  instructs  the 
commercial  banks  to  "carry  out  their  loan  business  upon  the  needs  of  national 
economy and the social development and with the spirit of state industrial policies". 

(172)  Several  government  planning  documents  policy  papers  and  laws  refer  to  the 
preferential lending to the PV industry. For example, the State Council Decision of 10 
October  2010  to  encourage  development  of  7  new  strategic  industries  promises  the 
expansion  of  the  intensity  of  fiscal  and  financial  policy  support  to  the  strategic 

56 
57 

58 

OECD 2010 Economic Survey of China, February 2010, (see Chapter 3, pages 71, 73-81, 97).  
OECD China's Financial Sector Reforms, Economic Department Working Paper No. 747, ECO/WKP 
(2010) 3, 1 February 2010, (see pages 2, 8-15, 36).  
See finding on public bodies in paragraph recital 53. 

EN 

43 

   EN 

                                                 
industries59 (PV industry is listed amongst them), encourages financial institutions to 
“to  expand  the  credit  support”  to  these  industries  and  to  “make  use  of  the  fiscal 
preferential  policies  such  as  risk  compensation”.  Also  the  National  Outline  for 
Medium  and  Long-term  Science  and  Technology  Development  (2006-2020)  which 
identifies the Solar energy and photovoltaic cells under the Key fields and themes of 
priority60  promises  to  “encourage  financial  institutions  to  grant  preferential  credit 
support to major national scientific and technological industrialisation projects” and 
instructs the government to “guide various financial institutions and private capitals 
to  participate  in  science  and  technology  development”.  The  Law  of  the  PRC  on 
Scientific  and  Technological  Progress  (Order  N.82  of  the  President  of  the  PRC) 
defines  that  the  state  shall  encourage  and  give  guidance  to  financial  institutions  to 
support the development of high and new technology industries by granting loans and 
that the policy-oriented financial institutions shall give priority to the development of 
high and new technology industries61. According to the same law the policy-oriented 
financial  institutions  shall,  within  the  scope  of  their  business,  offer  special  aid  to 
enterprises’ projects of independent innovation encouraged by state62. 

(173)  Further  the  above-mentioned  limitation  on  the  setting  of  interest  rates  by  the  PBOC 
(recitals (164) and (165)) is also binding for privately –owned commercial banks. 

(174)  The  above  citations  from  laws  and  regulations  relevant  for  the  banking  sector  show 
that  the  GOC  policy  to  provide  preferential  lending  to  the  photovoltaic  industry 
extends also to privately-owned commercial banks and in fact the GOC instructs them 
to "carry out their loan business upon the needs of national economy  and the social 
development and with the spirit of state industrial policies"63. 

– 

Credit risk assessment 

(175)  The Commission requested relevant information from the GOC in order to assess how 
the  banks  in  the  PRC  are  performing  credit  risk  assessment  of  the  PV  companies 
before deciding whether to grant them loans 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 when granting loans, how 
the creditworthiness of the borrower is assessed, what are the risk premiums charged 
for  different  companies/industries  in  the  PRC  by  the  bank,  which  are  the  factors  the 
bank  takes  into  account  when  assessing  the  loan  application,  the  description  of  the 
loan  application  and  approval  process  etc.  However,  neither  the  GOC  nor  the 
individual banks identified in the questionnaire provided any evidence in this respect 
(with one exception referred to in recital (176) below. The GOC provided only replies 
of  general  nature  not  supported  by  any  evidence  whatsoever  that  any  kind  of  credit 
risk assessment actually takes place. 

(176)  During the verifications of one of the banks the Commission was able to review one 
risk assessment. Part of that credit risk assessment referred to government support for 
the  solar  companies  and  state  plans  to  promote  the  photovoltaic  industry  in  general 

59 

60 

61 

62 

63 

Article  VII  of  the  State  Council  Decision  of  10  October  2010  to  encourage  development  of  7  new 
strategic industries. 
National  Outline  for  Medium  and  Long-term  Science  and  Technology  Development  (2006-2020), 
Section III, chapter 1. 
Law of the PRC on Scientific and Technological Progress (Order N.82 of the President of the PRC), 
Article 18. 
Law of the PRC on Scientific and Technological Progress (Order N.82 of the President of the PRC), 
Article 34. 
Article 34 of the Commercial Banking Law. 

EN 

44 

   EN 

                                                 
and this fact was reflected positively in the credit rating awarded to this company. This 
is  an  example  of  how  the  government  policy  (and  subsidies  directed  to  a  certain 
sector)  influences  the  decision-making  of  the  banks  when  deciding  on  the  terms  of 
financing to solar companies. 

(177)  The  Commission  also  requested  similar  information  from  the  cooperating  exporting 
producers and attempted to verify it during the on-spot verification visits of sampled 
exporting  producers.  Most  of  the  exporting  producers  replied  that  banks  request 
certain documents and perform some kind of credit risk analysis before the loans are 
granted. However, they could not support their claims with any evidence. During the 
on-spot verification, the Commission asked for the evidence that the banks requested 
such documents or that these 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 
performed.  But  the  sampled  groups  of  exporting  producers  were  not  able  to  provide 
such evidence, neither were they able to provide any other evidence supporting their 
claims. 

(178)  The  information  concerning  credit  risk  assessment  was  repeatedly  requested  from 
interested parties as it is considered crucial inter alia account taken of the information 
referred to in recital (167) above. 

(179)  In  view  of  the  above,  the  findings  concerning  the  credit  risk  assessment  in  the  PRC 
apply to state-owned commercial banks, privately owned commercial banks as well as 
to  the  policy  banks.  Indeed  the  above  evidence  leads  to  the  conclusion  that  private 
banks in the PRC are required to follow government policies with regard to lending, in 
particular  to  the  PV  sector  and  to  act  in  the  same  way  as  state-owned  banks,  which 
have  been  found  in  recital  (168)  to  be  public  bodies.  It  is  therefore  concluded  that 
private banks are entrusted and directed by the GOC to carry out functions normally 
vested  in  the  government,  within  the  meaning  of  Article  3(1)(a)(iv)  of  the  basic 
Regulation. 

(180)  In addition, the above evidence demonstrates that even if the state-owned banks were 
not  considered  to  be  public  bodies,  they  would  also  be  considered  as  entrusted  and 
directed by the GOC to carry out functions normally vested in the government, within 
the meaning of Article 3(1)(a)(iv) of the basic Regulation. 

(d) 

Distortions of Chinese financial market 

(181)  From information collected throughout this investigation it can be concluded that the 
state-owned  banks'  share  amounts  to  more  than  2/3  of  the  Chinese  market.  The  five 
largest state-owned commercial banks (the Agricultural Bank, the Bank of China, the 
Construction  Bank  of  China,  the  Bank  of  Communications  and  the  Industrial  and 
Commercial  Bank  )  represent  more  than  half  of  the  Chinese  banking  sector64.  In 
addition, the China Development Bank and the China Export-Import Banks are fully 
state-owned.  These  seven  banks  provided  the  big  majority  of  loans  to  the  eight 
sampled  exporting  producers  in  the  Solar  panel  case.  This  pervasive  state-ownership 
combined  with  the  distortions  of  the  Chinese  financial  market  and  with  the  Chinese 
Government’s  policy  to  direct  cheap  money  towards  selected  industries,  undermines 
the  level  playing  field  in  international  trade  and  provides  an  unfair  advantage  to 
Chinese producers. 

(182)  Banks in the PRC are not entirely free to decide the conditions of the loans. In respect 
of interest rates they are bound to stay within the limits set by the People’s Bank of 

64 

Document WT/TPR/S/264 p. 122, July 2012. 

EN 

45 

   EN 

                                                 
China (PBOC). These limits together with the ceilings imposed on deposit rates create 
a situation in which the banks have guaranteed access to cheap capital (because of the 
deposit  rates  regulation)  and  are  able  to  lend  this  on  at  favourable  rates  to  selected 
industries.  

(183)  Banks are also subject to legal rules which require them, inter alia, to carry out their 
loan business according to the needs of national economy65, provide credit support to 
encouraged projects66 or give priority to the development of high and new technology 
industries67. Banks are under obligation to follow these rules.  

(184)  According  to  recent  findings  some  big  commercial  banks  in  the  PRC  were  granted 
access  to  state  foreign  exchange  reserves68.  This  significantly  decreases  their  cost  of 
capital  and  this  “cheap  money”  is  used  for  USD  and  EUR  loans  for  selected 
companies and projects in line with the “going out” policy. Thus, they are able to offer 
conditions which normal commercial banks cannot match. 

(185)  Another  major  distortion  in  the  financing  of  the  photovoltaic  industry  is  the  special 
privileged position of the China Development Bank (‘CDB’) which is the major lender 
to  this  industry  and  provided  big  bulk  of  loans  and  credit  lines  to  the  sampled 
exporting  producers.  The  CDB  is  financed  almost  completely  by  bond  sales  rather 
than by deposits and it is, after the Ministry of Finance, the second biggest bond issuer 
in  the  country.  Through  this  special  mechanism  the  CDB  is  able  to  finance  itself 
cheaply  and  subsequently  is  able  to  offer  loans  at  preferential  conditions  to  selected 
industries69. 

3.4.1.1.  Preferential loans 

(a) 

Introduction 

(186)  The complainant alleged that the GOC subsidizes its PV industry through preferential 

loans and directed credit.  

(b)  Legal basis 

(187)  The following legal provisions provide for preferential lending  in China:  Law of  the 
PRC  on  Commercial  Banks,  General  Rules  on  Loans  (implemented  by  the  People’s 
Bank  of  China),  Decision  No  40  of  the  of  the  State  Council  on  Promulgating  and 
Implementing  the  Temporary  Provisions  on  Promoting  the  Industrial  Structure 
Adjustment. 

(c)  Findings of the investigation 

(188)  Having regard to the totality of the evidence, it is concluded that the vast majority of 
loans to the sampled groups of exporting producers are provided by state-owned banks 

65 
66 

67 
68 
69 

Law of the PRC on Commercial Banks (Article 34). 
Decision No 40 of the State Council on Promulgating and Implementing the Temporary Provisions on 
Promoting the Industrial Structure Adjustment. 
Law of the PRC on Scientific and Technological Progress (Order No 82). 
http://english.caixin.com/2012-04-19/100381773.html. 
The  Chinese  banking  regulator  (CBRC)  decided  that  the  Commercial  Banks  in  China  can  buy  CDB 
bonds (this applies to CDB bonds only) and assign zero-risk weighting to these assets. This effectively 
means that the banks are not required to set any capital against these assets as a risk precaution when 
they hold these bonds which has an impact on the bank’s access to capital and provides access to cheap 
money. The yields on CDB bonds are usually higher than the benchmark deposit rates but lower than 
the lending rate and the result is that Chinese commercial banks can make money with buying risk-free 
CDB  bonds.  This  being  the  steady  source  of  income,  the  banks  can  afford  to  borrow  to  certain 
industries  at  preferential  rates  because  they  will  compensate  the  lost  profits  via  the  described 
mechanism. 

EN 

46 

   EN 

                                                 
which  have  been  found  to  be  public  bodies  in  recital  (168)  above,  because  they  are 
vested with government authority and exercise government functions. There is further 
evidence  that  these  banks  effectively  exercise  government  authority  since,  as  it  is 
explained in recital (164), there is a clear intervention by the State (i.e. the PBOC) in 
the way commercial banks take decisions on interest rates for loans granted to Chinese 
companies. In these circumstances, the lending practices of these entities are directly 
attributable  to  the  government.  The  fact  that  banks  exercise  government  authority  is 
also  confirmed  by  the  way  Articles  7  and  15  of  the  General  Rules  on  Loans 
(implemented by the PBOC), Decision 40 and Article 34 of the Law on Commercial 
Banks act with respect to the fulfilment of the government industrial policies. There is 
also  a  great  deal  of  circumstantial  evidence,  supported  by  objective  studies  and 
reports, that a large amount of government intervention is still present in the Chinese 
financial  system  as  already  explained  in  recitals  (172)  and  (178)  above.  Finally,  the 
GOC failed to provide information which would have enabled a greater understanding 
of the state-owned banks' relationship with government as explained in recitals (139) 
and (140). Thus, in the case of loans provided by state-owned commercial banks in the 
PRC,  the  Commission  concludes  that  there  is  a  financial  contribution  to  the  PV 
producers  in  the  form  of  a  direct  transfer  of  funds  from  the  government  within  the 
meaning of Article 3(1)(a)(i) of the basic Regulation. In addition, the same evidence 
shows that SOCBs (as well as privately owned banks) are entrusted or directed by the 
government and this consequently means that a financial contribution exists within the 
meaning of Article 3(1)(a)(iv) of the basic Regulation. 

(189)  In  view  of  the  analysis  in  recitals  (169)  to  (178)  above,  it  is  also  determined  that 
privately-owned banks are entrusted and directed by the GOC to provide loans to the 
PV  producers  and  that  a  financial  contribution  exists  under  Articles  3(1)(a)(i)  and 
3(1)(a)(iv) of the basic Regulation. 

(190)  A benefit within the meaning of Articles 3(2) and 6(b) of the basic Regulation exists to 
the extent that the government loans, or loans from private bodies entrusted or directed 
by  the  government,  are  granted  on  terms  more  favourable  than  the  recipient  could 
actually  obtain  on  the  market.  Non-government  loans  in  the  PRC  do  not  provide  an 
appropriate  market  benchmark,  since  it  has  been  established  that  privately-owned 
banks are entrusted and directed by the GOC and therefore be presumed to follow the 
lending  practices  of  the  state-owned  banks.  Therefore,  benchmarks  have  been 
constructed  using  the  method  described  in  recitals  (198)  -  (200)  below.  Use  of  this 
benchmark demonstrates that loans are granted to the PV sector at below-market terms 
and conditions. 

(191)  The  PV  industry  belongs  to  the  encouraged  category  according  to  Decision  No.  40. 
Decision  No  40,  is  an  Order  from  the  State  Council,  which  is  the  highest 
administrative body in the PRC and in that regard the decision is legally binding for 
other public bodies and the economic operators. It classifies the industrial sectors into 
'Encouraged,  Restrictive  and  Eliminated  Projects'.  This  Act  represents  an  industrial 
policy  guideline  that  along  with  the  Directory  Catalogue  shows  how  the  GOC 
maintains a policy of encouraging and supporting groups of enterprises or industries, 
such  as  the  PV/New  Energy  industry,  classified  by  the  Directory  Catalogue  as  an 
'Encouraged industry'. With respect to the number of industries listed as 'Encouraged' 
it  is  noted  that  these  represent  only  a  portion  of  the Chinese  economy.  Furthermore, 
only certain activities within these encouraged sectors are given "encouraged" status. 
Decision  No  40  also  stipulates  under  Article  17  that  the  'Encouraged  investment 
projects' shall benefit from specific privileges and incentives, inter alia, from financial 

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47 

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support. On the other hand, with reference to the 'Restrictive and Eliminated Projects', 
Decision  No  40  empowers  the  state  authorities  to  intervene  directly  to  regulate  the 
market.  In  fact,  Articles  18  and  19  provide  that  the  relevant  authority  prevents 
financial  institutions  from  supplying  loans  to  such  'Restrictive  and  Eliminated 
Projects'. It is clear from the above that Decision No 40 provides binding rules to all 
the  economic  institutions  in  the  form  of  directives  on  the  promotion  and  support  of 
encouraged industries, one of which is the PV industry. 

(192)  As explained in recital (172) above the GOC directs preferential lending to the limited 
number  of  industries  and  the  PV  industry  is  one  of  them.  Taking  all  the  above  into 
consideration it becomes clear that the authorities only allow the financial institutions 
to  provide  preferential  loans  to  a  limited  number  of  industries/companies  which 
comply with the relevant policies of the GOC. On the basis of the evidence on the file 
and in the absence of the cooperation from the GOC on this matter it is concluded that 
the  subsidies  in  form  of  preferential  lending  are  not  generally  available  and  are 
therefore specific in the meaning of Article 4(2)(a) of the basic Regulation. Moreover, 
there  was  no  evidence  submitted  by  any  of  the  interested  parties  suggesting  that  the 
subsidy is based on objective criteria or conditions under Article 4(2)(b) of the basic 
Regulation. 

(d)  Conclusion 

(193)  The  investigation  showed  that  all  sampled  exporting  producers  benefited  from  the 

preferential lending in the investigation period. 

(194)  Accordingly, the financing of the PV industry should be considered a subsidy. 

(195)  In  view  of  the  existence  of  a  financial  contribution,  a  benefit  to  the  exporting 

producers and specificity, this subsidy should be considered countervailable. 

(e)  Calculation of the subsidy amount 

(196)  The amount of countervailable subsidy is calculated in terms of the benefit conferred 
on the recipients, which is found to exist during the IP. According to Article 6(b) of 
the  basic  Regulation  the  benefit  conferred  on  the  recipients  is  considered  to  be  the 
difference between the amount that the company pays on the government loan and the 
amount that the company would pay for a comparable commercial loan obtainable on 
the market. 

(197)  As explained above (recital (190)), since the loans provided by Chinese banks reflect 
substantial government intervention in the banking sector and do not reflect rates that 
would  be  found  in  a  functioning  market,  an  appropriate  market  benchmark  has  been 
constructed  using  the  method  described  below.  Furthermore,  due  to  the  lack  of 
cooperation by the GOC, the Commission has also resorted to facts available in order 
to establish an appropriate benchmark interest rate. 

(198)  When  constructing  an  appropriate  benchmark  for  RMB  denominated  loans,  it  is 
considered  reasonable  to  apply  Chinese  interest  rates,  adjusted  to  reflect  normal 
market risk. Indeed, in a context where the exporters' current financial state has been 
established in a distorted market and there is no reliable information from the Chinese 
banks  on  the  measurement  of  risk  and  the  establishment  of  credit  ratings,  it  is 
considered necessary not to take the creditworthiness of the Chinese exporters at face 
value, but to apply a mark-up to reflect the potential impact of the Chinese distorted 
market on their financial situation. 

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(199)  The  same  situation  applies  for  the  loans  denominated  in  foreign  currencies.  The  BB 
rated corporate bonds with relevant denominations issued during the IP were used as a 
benchmark.  

(200)  With respect to the above as explained in recitals (138) to (140), both the GOC and the 
cooperating exporting producers were requested to provide information on the lending 
policies  of  the  Chinese  banks  and  the  way  loans  were  attributed  to  the  exporting 
producers.  Although  repeatedly  requested,  such  information  was  not  obtained. 
Accordingly in view of this lack of cooperation and the totality of facts available, and 
in  line  with  the  provisions  of  Article  28(6)  of  the  basic  Regulation,  it  is  deemed 
appropriate to consider that all firms in China would be accorded the highest grade of 
"Non-investment  grade"  bonds  only  (BB  at  Bloomberg)  and  apply  the  appropriate 
premium  expected  on  bonds  issued  by  firms  with  this  rating  to  the  standard  lending 
rate  of  the  People's  Bank  of  China.  The  benefit  to  the  exporting  producers  has  been 
calculated by taking the interest rate differential, expressed as a percentage, multiplied 
by  the  outstanding  amount  of  the  loan,  i.e.  the  interest  not  paid  during  the  IP.  This 
amount  was  then  allocated  over  the  total  turnover  of  the  co-operating  exporting 
producers. 

(201)  The subsidy rate established with regard to this scheme during the IP for the sampled 

exporting producers amounts to: 

Preferential policy loans 

Company/Group 

Wuxi  Suntech  Power  Co.  Ltd,  PRC  and  related 
companies 

Yingli  Green  Energy  Holding  Company  and  related 
companies 

Changzhou  Trina  Solar  Energy  Co.  Ltd  and  related 
companies 

JingAo Group and related companies 

Jiangxi  LDK  Solar  Hi-tech  Co.  Ltd  and  related 
companies 

Delsolar (Wujiang) Ltd. and related companies 

Renesola Zhejiang Ltd 

Renesola Jiangsu Ltd 

Jinko Solar Co Ltd and related companies 

3.4.1.2.  Provision of credit lines 

(a) 

Introduction 

Subsidy 
Rate 

1,14 % 

0,61 % 

0,25 % 

0,92 % 

1,80 % 

0,02 % 

0,84 % 

0,85 % 

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(202)  The complainant had alleged that the Chinese banks extended disproportionate credit 
lines to the Chinese exporters of product concerned. The investigation confirmed that 
indeed  all  investigated  companies  received  huge  credit  lines  from  Chinese  banks 
which  were  in  most  cases  provided  free  of  charge  or  subject  to  very  small  fees.  In 
normal market circumstances such credit lines are subject to substantial commitment 
and administration fees which allow the banks to compensate for the costs and risks. 

(b)  Findings of the investigation 

Credit lines are a potential transfer of funds 

(203)  The  EC-Aircraft  panel  report  confirmed  that  such  credit  lines,  over  and  above  the 
effects of the individual loans, can be potential direct transfers of funds under Article 
3(1)(a)  (i)  of  the  basic  Regulation  and  thus  financial  contributions.  The  panel  found 
that  the  benefit  of  a  potential  transfer  of  funds  arises  from  the  mere  existence  of  an 
obligation  to  make  a  direct  transfer  of  funds.  The  panel  also  found  that  a  credit  line 
could, in and of itself, confer a benefit to the recipient firm and was thus a potential 
transfer of funds separate from any direct transfers of funds in the form of individual 
loans70. 

The  banks  providing  the  credit  lines  are  public  bodies  or  are  entrusted  by  the 
government 

(204)  The credit lines were provided to the sampled exporting producers by the same banks 
as the preferential loans described above. As established above these banks are public 
bodies  (recitals  (158)  to  (166))  or  are  entrusted  and  directed  by  the  GOC  to  provide 
preferential financing to the PV industry (recitals (169) to (178)).  

(205)  As explained  above  (recitals (158) to (185)) the Chinese market is distorted by laws 
and practices of the state-owned banks and it was found that in most cases the credit 
lines  were  provided  free  of  charge  or  subject  to  very  small  fees.  In  normal  market 
circumstances  such  credit 
to  substantial  commitment  and 
lines  are  subject 
administration fees which allow the banks to compensate for the costs and risks. 

(206)  The  amount  of  benefit  is  represented  by  the  fees  normally  applicable  to  commercial 
credit  lines  extended  to  the  companies  from  which  the  sampled  exporting  producers 
were relieved in most cases. The Commission used the fees applied to the credit line 
extended to one of the sampled exporting producers by a foreign commercial bank. 

(207)  The PV industry belongs to the encouraged category according to the Decision No. 40. 
Decision No 40 is an Order from the State Council, which is the highest administrative 
body  in  the  PRC  and  in  that  regard  the  decision  is  legally  binding  for  other  public 
bodies and the economic operators. It classifies the industrial sectors into 'Encouraged, 
Restrictive and Eliminated Projects'. This Act represents an industrial policy guideline 
that  along  with  the  Directory  Catalogue  shows  how  the  GOC  maintains  a  policy  of 
encouraging  and  supporting  groups  of  enterprises  or  industries,  such  as  the  PV/New 
Energy  industry,  classified  by  the  Directory  Catalogue  as  an  'Encouraged  industry'. 
With  respect  to  the  number  of  industries  listed  as  'Encouraged'  it  is  noted  that  these 
represent only a portion of the Chinese economy. Furthermore, only certain activities 
within  these  encouraged  sectors  are  given  "encouraged"  status.  Decision  No  40  also 
stipulates under Article 17 that the 'Encouraged investment projects' shall benefit from 
specific privileges and incentives, inter alia, from financial support. On the other hand, 

70 

Report of the Panel, European Communities and Certain Member States - Measures Affecting Trade in 
Large Civil Aircraft, WT/DS316/R (30/06/2010), paras. 7.735-7.738. 

EN 

50 

   EN 

                                                 
with reference to the 'Restrictive and Eliminated Projects', Decision No 40 empowers 
the state authorities to intervene directly to regulate the market. In fact, Articles 18 and 
19  provide  that  the  relevant  authority  prevents  financial  institutions  from  supplying 
loans  to  such  'Restrictive  and  Eliminated  Projects'.  It  is  clear  from  the  above  that 
Decision No 40 provides binding rules to all the economic institutions in the form of 
directives on the promotion and support of encouraged industries, one of which is the 
PV industry. 

(208)  As  explained  in  recitals  (172)  and  (192)  above  the  GOC  directs  the  preferential 
lending of which the provision of credit lines is essential part to the limited number of 
industries.  The  PV  industry  belongs  to  this  group  of  industries  and  benefits  from 
discriminatory preferential lending. 

(209)  Taking all the above into consideration it becomes clear that the authorities only allow 
the  financial  institutions  to  provide  preferential  credit  lines  to  a  limited  number  of 
industries/companies  which  comply  with  the  relevant  policies  of  the  GOC.  On  the 
basis of the evidence on the file and in the absence of the cooperation from the GOC 
on this matter it is concluded that the subsidies in form of disproportionate credit lines 
are not generally available and are therefore specific in the meaning of Article 4(2)(a) 
of  the  basic  Regulation.  Moreover  there  was  no  evidence  submitted  by  any  of  the 
interested  parties  suggesting  that  the  subsidy  is  based  on  objective  criteria  or 
conditions under Article 4(2)(b) of the basic Regulation. 

(c)  Conclusion 

(210)  The  investigation  showed  that  all  groups  of  sampled  exporting  producers  benefited 
from credit lines provided free of charge or at below-market rates in the investigation 
period. 

(211)  Accordingly,  the  extension  of  such  credit  lines  to  the  PV  industry  should  be 

considered a subsidy. 

(212)  In  view  of  the  existence  of  a  financial  contribution,  a  benefit  to  the  exporting 

producers and specificity, this subsidy should be considered countervailable. 

(d)  Calculation of subsidy amount 

(213)  The provision of credit lines free of charge or for below-market fees is considered a 
provision  of  financial  services  (Article  3(1)(a)(iii)  of  the  basic  Regulation)  for  less 
than  adequate  remuneration.  The  amount  of  countervailable  subsidy  is  calculated  in 
terms of the benefit conferred on the recipients, which is found to exist during the IP. 
Because  of  the  market  distortions  described  in  recitals  (158)  to  (185)  above  the 
adequacy of the remuneration for the financial services (in this case provision of credit 
lines) could not be determined in relation to prevailing market conditions in the PRC. 
Therefore  in  accordance  with  Article  6(d)(ii)  of  the  basic  Regulation  the  benefit 
conferred on the recipients is considered to be the difference between the amount that 
the company pays for the provision of credit lines by Chinese banks and the amount 
that the company would pay for a comparable commercial credit line obtainable on the 
market.  Credit  lines  could  also  be  considered  as  a  potential  transfer  of  funds  under 
Article under Article 3(1)(a)(i) of the basic Regulation. 

(214)  One  of  the  sampled  exporting  producers  obtained  a  credit  line  from  the  bank  whose 
headquarters is established in a financial jurisdiction other than the PRC and this credit 
line was subject to commitment and arrangement fees as is the usual practice on world 
financial markets. Although the credit line was extended by the Chinese subsidiary of 
the bank in question, it is considered to be a reasonable proxy for a benchmark. It was 

EN 

51 

   EN 

considered  appropriate  to  use  the  fees  applied  to  this  credit  line  as  a  benchmark  in 
accordance with the Article 6(d)(ii) of the basic Regulation.  

(215)  The  level  of  the  fees  used  a  benchmark  was  applied  pro-rata  to  the  amount  of  each 
credit line in question to obtain the amount of subsidy (minus any fees actually paid). 
In cases where the duration of the credit line was more than one year, the total amount 
of subsidy was allocated over the duration of the credit line and an appropriate amount 
attributed to the IP. 

(216)  The subsidy rate established with regard to this scheme during the IP for the sampled 

exporting producers amounts to: 

Provision of credit lines 

Company/Group 

Subsidy Rate 

Wuxi Suntech Power Co. Ltd, and related companies 

1,97 % 

Yingli  Green  Energy  Holding  Company  and  related 
companies 

Changzhou  Trina  Solar  Energy  Co.  Ltd  and  related 
companies 

JingAo Group and related companies 

Jiangxi  LDK  Solar  Hi-tech  Co.  Ltd  and  related 
companies 

Delsolar (Wujiang) Ltd. and related companies 

Renesola Zhejiang Ltd 

Renesola Jiangsu Ltd 

Jinko Solar Co Ltd and related companies 

3.4.1.3.  Export credit subsidy programmes 

2,14 % 

1,09 % 

1,28 % 

0,92 % 

0,24 % 

0,50 % 

2,59 % 

(217)  The investigation confirmed that no benefits had been received under the programme 

by the sampled companies during the IP. 

3.4.1.4.  Export Guarantees and Insurances for Green Technologies 

(a) 

Introduction 

(218)  The  complaint  alleged  that  the  China  Export  &  Credit  Insurance  Corporation 
(“Sinosure”) provides export credit insurance on preferential terms to producers of the 
product concerned inter alia through a programme termed ‘Green Express’. According 
to the complaint, Sinosure’s export credit insurance is not even adequate to cover the 
long-term operating costs and losses of this programme. 

(b)  Non-cooperation and use of facts available 

(219)  As  mentioned  in  recitals  (104)  and  (105)  above,  the  Commission  requested 
information  in  the  questionnaire,  in  the  deficiency  letter  and  during  the  on-spot 

EN 

52 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
verification visit to the GOC and Sinosure that was not provided by the GOC and/or 
Sinosure. 

(220)  The  Commission  requested  the  institutional  framework  and  the  relevant  documents 
governing  the  operations  of  Sinosure  as  the  State  official  export  credit  insurer.  The 
GOC  submitted  only  a  Notice  issued  jointly  by  the  Ministry  of  Commerce 
(“MOFCOM”) and Sinosure in 2004, but failed to submit a number of other relevant 
documents including for instance the so-called 840 Plan included in the Notice by the 
State Council of 27 May 200971.  

(221)  As  regards  the  verification  of  the  questionnaire  reply  and  Annex  1  concerning 
Sinosure, the Commission was unable to obtain a number of documents and to verify a 
number  of  elements  requested  on  spot.  In  particular,  Sinosure  did  not  submit  the 
following  information  and  evidence  requested  by  the  Commission:  (a)  the  2012 
financial  statements,  which,  reportedly,  would  not  yet  be  available  yet  on  Sinosure's 
website;  (b)  the  relevant  documentation  concerning  the  export  credit  insurance  with 
two  of  the  sampled  cooperating  exporters,  including  contracts,  risk  assessment, 
correspondence  and  proof  of  payments  of  premia;  (c)  specific  information  on  the 
senior managers appointed by the State Council; (d) evidence concerning the elements 
and  advantages  listed  in  the  2004  Notice  jointly  issued  by  MOFCOM  and  Sinosure, 
including on the limitation approval, on the rate flexibility and the discount within the 
premium  floating  range;  (e)  evidence  concerning  the  long-term  operating  costs  and 
profits of the export credit insurance activity; (f) evidence concerning the assessment 
of the market situation in the photovoltaic sector. 

(222)  The  Commission  was  also  unable  to  verify  a  number  of  elements  included  in  the 
questionnaire reply concerning Sinosure operations, including in particular its answers 
concerning the risk assessment, the actual setting of the premium and the application 
and  approval  process,  given  the  refusal  by  Sinosure  to  discuss  the  specific  contracts 
with the sampled cooperating exporters. Sinosure was also unable to clarify or submit 
supporting  documents  for  some  inconsistencies  in  the  figures  or  other  elements 
contained  in  its  questionnaire  and  deficiency  letter  replies  identified  by  the 
Commission. 

(223)  The  GOC  and  Sinosure  sought  to  justify  this  lack  of  cooperation  on  the  basis  of 
confidentiality concerns during the verification visit and in the GOC letter of 3 June 
2013.  In  this  regard,  the  pre-verification  letter  and  subsequent  email  correspondence 
made it very clear that the Commission required the verification to be meaningful and 
would obviously take all necessary precautions to protect the confidential information 
submitted  or  simply  just  provided  for  inspection,  in  accordance  with  its  legal 
obligation  to  protect  this  information  ensured  by  the  relevant  strict  EU  rules.  With 
regard  to  the  documents  Sinosure  tried  to  submit  well  after  termination  of  the 
verification  visit  and  for  which  it  failed  to  allow  proper  verification  by  the 
Commission, they cannot be taken into account as they were specially prepared for the 
investigation and the Commission could not verify the source documents. 

(224)  Given this lack of cooperation by the GOC and Sinosure, the Commission was unable 
to  verify  a  number  of  elements  concerning  the  provision  of  export  credit  insurance 
cover  by  Sinosure  to  the  sampled  cooperating  exporting  producers  of  the  product 
concerned.  Therefore,  some  of  the  Commission’s  findings  are  based  on  the 
information  available  on  the  record  in  accordance  with  Article  28  of  the  basic 
Regulation. 

71 

http://www.gov.cn/ldhd/2009-05/27/content_1326023.htm.  

EN 

53 

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(c)  Sinosure is a public body 

(225)  The investigation has established that Sinosure is a public body within the meaning of 
Article  2(b)  of  the  basic  Regulation  and  of  the  relevant  WTO  jurisprudence72  as  it 
possesses  exercises  or  is  vested  with  governmental  authority.  In  particular,  the  GOC 
exercises  meaningful  control  over  Sinosure73  and  Sinosure  exercises  governmental 
authority in its performance of governmental functions. 

(226)  The  Commission  notes  that  the  activity  of  export  credit  insurance  performed  by 
Sinosure is integral part of the broader financial sector where it is established that the 
government intervention directly interferes and distorts the normal functioning of the 
financial market in the PRC (see recitals (185) and following above). 

(227)  Sinosure performs governmental functions in its role as the sole official institution for 
export  credit  insurance  in  the  PRC.  It  is  therefore  in  a  monopolistic  position  in  the 
export credit insurance market. The company confirmed that this market is not open, 
although there are some international competitors conducting business indirectly in the 
PRC. 

(228)  The  government  exercises  full  ownership  and  financial  control  over  Sinosure. 
Sinosure  is  a  State  sole  proprietorship  owned  100  %  from  the  State  Council.  The 
registered  capital  of  RMB  4  billion  comes  from  the  venture  fund  of  export  credit 
insurance in line with the state finance budget. Furthermore, the State injected in 2011 
RMB 20 billion through the China Investment Corporation, the sovereign wealth fund 
of  China.74  The  Articles  of  Association  (“AoA”)  state  that  the  business  competent 
department of the company is the Ministry of Finance, and also requires the company 
to submit financial and accounting reports and the fiscal budget report to the Ministry 
of Finance for examination and approval. 

(229)  With  regard  to  government  control,  as  a  state  sole  proprietorship  Sinosure  does  not 
have a Board of Directors. As for the Board of Supervisors, all of the supervisors are 
appointed  by  the  State  Council  and  execute  their  duties  according  to  the  “Interim 
Regulation  on  the  Board  of  Supervisors  of  Important  State-owned  Financial 
Institution.” The senior management of Sinosure is also appointed by the government. 
The  company’s  Annual  Report  2011  (“AR  2011”)  shows  that  the  Chairman  of 
Sinosure  is  the  Secretary  of  the  Party  Committee,  and  the  majority  of  the  Senior 
Management are also Members of the Party Committee. Given the refusal by Sinosure 
to submit further information on the Senior Management, it can be concluded that the 
management is direct expression of the government that directly appoints the members 
of  the  Board  of  Supervisors  as  well  as  of  the  Senior  Management.  On  this  basis, 
Sinosure is meaningfully controlled by the GOC. 

(230)  The performance of government functions and policies by Sinosure emerges so clearly 
and explicitly that it can be concluded that the company is a direct expression of the 
government itself. Sinosure’s Annual Report 2011 contains several statements in this 
respect,  namely: Sinosure  “proactively carried  out  the  policy  function  of  an  ECA  … 
and achieved a good start in the first year of the 12th “Five-Year Plan” period” (p. 4 
AR  2011);  “the  furtherance  of  corporate  reform  reinforced  the  policy  function  of 
Sinosure as an ECA. The CCCPC Conference on Economy has laid emphasis on such 
function and made clear requirements on credit insurance, which lined out our growth 

72 
73 
74 

Appellate Body report US – Anti-Dumping and Countervailing Duties (China), para. 317. 
Appellate Body report US – Anti-Dumping and Countervailing Duties (China), para. 318. 
Sources: http://en.wikipedia.org/wiki/China_Export_%26_Credit_Insurance_Corporation and 
http://uk.reuters.com/article/2011/05/26/china-cic-sinosure-idUKL3E7GQ10720110526. 

EN 

54 

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path”  (p.  5  AR  2011);  “In  the  year  of  2011,  Sinosure  implemented  CPC  Central 
Committee’s  and  State  Council’s  strategies,  decisions  and  arrangements  as  well  as 
state  policies  on  diplomacy,  foreign  trade,  industry  and  finance,  gave  full  play  to  its 
policy function and achieved a fast growth” (p. 11 AR 2011); “Sinosure fully executed 
the  state  policy  of  “Special  Arrangement  for  Export  Financing  Insurance  for  Large 
Complete-set Equipment” and fulfilled its obligations laid out by the State” (p. 11 AR 
2011). 

(231)  The  institutional  framework  and  other  documents  issued  by  the  GOC  under  which 
Sinosure operates further prove its function as a public body and that it is vested with 
the authority to carry out governmental policies. The Notice on the Implementation of 
the Strategy of Promoting Trade through Science and Technology by Utilising Export 
Credit Insurance (Shang Ji Fa[2004] No. 368 of 26 July 2004) was issued jointly by 
MOFCOM  and  Sinosure  in  2004  and  still  governs  Sinosure’s  activities.  Among  the 
objectives  of  this  Notice  is  the  promotion  of  the  export  of  high  and  new  technology 
and  of  high  value-added  products  through  the  further  use  of  export  credit  insurance. 
The Notice explicitly mandates Sinosure to support the key export industries specified 
in  the  Directory  of  Chinese  High  and  New  Technology  Products  of  2006.  This 
Directory includes ‘Solar Power Cells and Modules’ among the eligible products and 
therefore they can be considered to be directly supported by Sinosure. The following 
advantages are laid down in the Notice: a “green channel”, that is a specific support 
for products covered in the catalogue, which should receive approval within five days 
if the underwriting conditions are met and the limitation approval for insurance with 
priority;  claim  speed,  to  be  completed  within  three  months  of  receipt  of  the  claim 
documents;  rate  flexibility,  consisting  of  the  highest  discount  to  the  premium  rate 
within the floating range of Sinosure. The Notice also foresees that regional and local 
commerce  authorities  shall  take  further  measures  to  support  the  products  covered  in 
the Directory. The Notice requires Sinosure to tailor the underwriting model based on 
the  national  industrial  policy  and  the  characteristics  of  high  and  new  technology 
product  exports  and  to  provide  support  to  the  innovation  and  R&D  industries 
especially supported by the state. 

(232)  The  Commission  is  aware  of  other  documents  proving  that  Sinosure  directly  carries 
out governmental policies benefiting inter alia the exporting producers. The so-called 
840 plan is detailed in the Notice by the State Council of 27 May 200975. This name 
refers  to  the  use  of  USD  84  Billion  as  export  insurance  and  it  is  one  of  the  six 
measures  launched  by  the  State  Council  in  year  2009  to  stabilize  export  demand 
further  to  the  global  crisis  and  the  consequent  increased  demand  for  export  credit 
insurance.  The  six  measures  include  notably  an  improved  coverage  of  export  credit 
insurance,  the  provision  of  short-term  export  credit  insurance  on  a  scale  of  USD  84 
billion  in  2009  and  a  reduction  of  the  premium  rate.  As  the  only  policy  institution 
underwriting export credit insurance, Sinosure is indicated as the executor of the plan. 
As for the reduction of the insurance  premium,  Sinosure  was required  to ensure that 
the average  rate of short-term export credit insurance would be reduced by 30 % on 
the basis of the overall average rate in 2008. 

(233)  The so-called 421 plan was included in the Notice on the issues to implement special 
arrangements  for  financing  of  insurance  on  the  export  of  large  complete  sets  of 
equipment issued jointly by the Ministry of Commerce and the Ministry of Finance on 
22  June  2009.  This  was  also  an  important  policy  supporting  China’s  "going  out" 

75 

http://www.gov.cn/ldhd/2009-05/27/content_1326023.htm. 

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policy in response to the 2009 global financial crisis and provided USD 42.1 billion of 
financing  insurance  to  support  the  export  of  large  complete  sets  of  equipment. 
Sinosure and some other financial institutions would manage and provide the funding. 
Enterprises covered by this document could enjoy the preferential financial measures, 
including  export-credit  insurance.  Due  to  the  non-cooperation  of  the  Government  of 
China, the Commission was unable to request additional details on the application of 
this notice. In the absence of evidence to the contrary, the Commission has reason to 
believe that the PV equipment and the PV sector are also covered by this document. 

(234)  Other  documents  showing  government  support  to  the  provision  of  short-term  export 
credit  insurance  include  two  documents  concerning  increased  financial  support  to 
Strategic  Emerging  Industries  (“SEIs”).  The  Notice  by  the  State  Council  on 
Cultivation and development of the State Council on Accelerating Emerging industries 
of  strategic  decision,  Guo  Fa  [2010]  No.  32  of  18/10/2010,  at  Para  7(C)  encourages 
financial institutions to increase financial support. The Implementation guidelines for 
the  development  of  SEIs  issued  jointly  by  all  ministries  responsible  (i.e.  National 
Development and Reform Commission, Ministry of Commerce, Ministry of Science, 
and  Ministry  of  Industry  and  Information  Technology,  Ministry  of  Environmental 
Protection,  Ministry  of  Finance,  State  Administration  of  Taxation,  General 
Administration  of  Customs,  General  Administration  of  Quality  Supervision, 
Inspection Intellectual Property Office)  Guo  Fa [2011] No. 310  of 21 October 2011, 
also specifically refers at Para (Xxvii) to the active support by way of inter alia export 
credit  insurance  to  strategic  emerging  industries.  These  strategic  emerging  industries 
focus  on  products,  technologies  and  services  to  develop  the  international  market, 
aerospace,  high-end  equipment  manufacturing,  a  large  amount  or  stimulate  domestic 
patented  technology  and  standard  export  strategic  emerging  industrial  products. 
Therefore,  in  the  absence  of  evidence  to  the  contrary  there  is  reason  to  believe  that 
also  the  product  concerned  and  the  sampled  exporters  qualify  as  ‘strategic  emerging 
industries’ and are entitled to the ensuing benefits. 

(235)  On  the  basis  of  the  above  elements,  the  Commission  concludes  that  Sinosure  is  a 
public body as it is vested with government authority to carry out government policies, 
is meaningfully controlled by the government and exercises government functions. 

(d)  Legal Basis 

(236)  The  legal  bases  for  this  programme  are  the  following:  the  Notice  on  the 
Implementation of the Strategy of Promoting Trade through Science and Technology 
by  Utilising  Export  Credit  Insurance  (Shang  Ji  Fa[2004]  No.  368),  issued  jointly  by 
MOFCOM and Sinosure; the Export Directory of Chinese High and New Technology 
Products of 2006; the so-called 840 plan included in the Notice by the State Council of 
27 May 2009; the so-called the so-called 421 plan included in the Notice on the issues 
to  implement  special  arrangements  for  financing  of  insurance  on  the  export  of  large 
complete  sets  of  equipment,  issued  jointly  by  the  Ministry  of  Commerce  and  the 
Ministry of Finance on 22 June 2009; Notice on Cultivation and development of the 
State  Council  on  Accelerating  Emerging  industries  of  strategic  decision  (Guo  Fa 
[2010] No. 32 of 18 October 2010), issued by the State Council and its Implementing 
Guidelines (Guo Fa [2011] No. 310 of 21 October 2011). 

(e)  Findings of the investigation 

(237)  As  Sinosure  is  a  public  body  vested  with  government  authority  and  executing 
governmental laws and plans, the provision of export credit insurance to producers of 
the  product  concerned  constitutes  a  financial  contribution  in  the  form  of  potential 

EN 

56 

   EN 

direct transfer of funds from the government within the meaning of Article 3(1)(a)(i) 
of the basic Regulation. 

(238)  With regard to the rebate of part of the premium paid by the exporting producers by 
the  local  authorities,  this  also  constitutes  a  direct  transfer  of  funds  in  the  form  of  a 
grant according to Article 3(1)(a)(i) of the basic Regulation. 

(239)  A benefit within the meaning of Articles 3(2) and 6(c) of the basic Regulation exists to 
the  extent  that  Sinosure  provides  export  credit  insurance  cover  on  terms  more 
favourable than the recipient could normally obtain on the market, or that it provides 
insurance  cover  that  would  otherwise  not  be  available  at  all  on  the  market.  An 
additional  benefit  within  the  meaning  of  Article  3(2)  received  by  the  exporting 
producer is the cash rebate of part of the insurance premium paid to Sinosure by some 
of the local authorities where some exporting producers were established. 

(240)  The 2004 Notice listed all the range of benefits conferred by Sinosure and/or by the 
local authorities for enterprises falling in the 2006 Directory and complying with the 
national  policies.  The  investigation  has  shown  that  the  insurance  agreements 
concluded between Sinosure and the sampled exporting producers, and the rebates of 
part  of  the  premia  granted  by  the  local  authorities  fully  reflect  these  benefits.  The 
“Green Express” treatment consists of the simplification and the speed in dealing with 
the process of providing cover and settling the claims with a rapid assessment of the 
loss and subsequent accelerated payment to the client. 

(241)  The  investigation  also  showed  that  the  measures  taken  further  to  the  2009  financial 
crisis  and  detailed  in  the  840  plan  and  in  the  421  plan,  and  later  on  in  the  2011 
measures  in  favour  of  strategic  emerging  industries,  provided  substantial  benefits  to 
the exporting producers. These measures increased the availability of insurance cover 
and further reduced the premium charged by Sinosure, despite the difficult economic 
situation  and  the  substantially  increased  risks  for  Sinosure  in  providing  insurance 
cover, and they are fully reflected in the insurance cover provided by Sinosure to the 
exporting producers. In particular, the investigation showed that the conditions and the 
premium charged in the relevant years covering the IP have remained substantially the 
same  or  have  improved,  despite  the  increase  in  the  claims  for  default  paid  out  by 
Sinosure and the substantially deteriorating situation of the PV sector. 

(242)  With  regard  to  the  existence  of  a  benefit,  the  Commission  first  examined  to  what 
extent  Sinosure’s  premiums  covered  the  cost  of  short-term  export  credit  insurance. 
Sinosure made the argument based on Item (j) of the WTO Agreement on Subsidies 
and  Countervailing  Measures  (“SCM”),  which  considers  as  a  ‘prohibited’  export 
subsidy  under  Article  3(1)(a)  of  that  agreement  the  provision  of  export  credit 
insurance programmes at premium rates which are inadequate to cover the long-term 
operating  costs  and  losses  of  the  programmes.  In  its  questionnaire  reply,  Sinosure 
simply referred to the profits and losses realised over the last five years and concluded 
that since overall it made a profit during this period, the provision of short-term export 
credit  insurance  to  the  exporting  producers  did  not  constitute  a  subsidy  under  the 
WTO  SCM  Agreement.  As  explained  above  (see  recitals  (221)  and  (222)),  the 
Commission asked Sinosure to provide specific information and evidence concerning 
the long-term profitability of its export credit insurance activities, including premium 
income and operating costs and losses of the programme in accordance with the WTO 
SCM  Agreement.  However,  Sinosure  failed  to  submit  the  documents  and  evidence 
requested  during  the  verification  visit,  insisting  on  the  overall  profitability  data  as 
shown in its audited Annual Reports. 

EN 

57 

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(243)  The Commission notes that, even if it would simply rely on Sinosure’s Annual Reports 
without being able to verify the figures and the elements contained in these Reports, it 
would  not  be  able  to  conclude  that  Sinosure  has  achieved  long-term  profits  on  its 
export credit insurance division, which corresponds to the “programme” referred to in 
Item  (j).  Sinosure  carries  out  a  number  of  activities  in  addition  to  export  credit 
insurance, and the figures and data reported in the Annual Report are consolidated data 
for  all  these  activities  and  there  is  no  precise  breakdown  of  each  of  these  activities. 
From  some  of  the  Annual  Reports  (but  not  the  recent  one)  it  appears  that  the  short-
term export credit insurance is by far the most important activity for Sinosure, but no 
precise  percentages  are  available.  As  Sinosure  refused  to  provide  the  requested 
information and evidence with regard to this latter activity only, which is required to 
carry out the analysis of the “programme” under Item (j) of Annex 1of the WTO SCM 
Agreement,  the  Commission  has  to  base  its  findings  on  the  evidence  available  on 
record. 

(244)  The Commission notes at the outset that according to Article 11 of Sinosure’s Articles 
of Association the company operates at breakeven. In other words, by statute Sinosure 
does not aim to maximize its profits, but has to aim merely to breakeven in accordance 
to its function as the sole official export credit insurer in the PRC. As explained above, 
the  records  on  file  have  shown  that  the  legal  and  policy  environment  in  which 
Sinosure operates requires the company to execute the government policies and plans 
in  fulfillment  of  its  public  policy  mandate.  Among  the  selected  industries  and 
enterprises specifically supported by the State, the exporting producers have had full 
access to export credit insurance provided by Sinosure at preferential rates even in the 
aftermath  of  the  global  crisis  of  2009  and  even  when  the  photovoltaic  sector  has 
experienced  an  unprecedented  crisis  including  during  the  IP.  Therefore,  Sinosure 
provides unlimited availability of insurance cover for the PV sector and the extremely 
low insurance premium it offers do not reflect the actual risks incurred in insuring the 
exports  in  this  sector.  Based  on  all  these  elements  on  the record,  it  could  already  be 
concluded that it cannot be excluded that the premium rates charged by Sinosure are 
likely to be inadequate to cover its long-term operations, and in fact this would appear 
likely. 

(245)  In the absence of cooperation by Sinosure, the Commission considered even additional 
elements further supporting this conclusion. The evidence publicly available explicitly 
already  shows  that  in  fact  Sinosure  operates  in  a  situation  of  long-term  operating 
losses76. The Commission also analyzed the relevant figures in the income statement 
of  Sinosure’s  Annual  Reports  covering  the  years  2006  through  2011  submitted  by 
Sinosure  to  justify  the  profitability  figures  reported  in  its  questionnaire  reply.  These 
figures  show  that  Sinosure  included  a  significant  long-term  operating  loss  from  its 
combined insurance activities that exclude investment income and other income. More 
specifically,  in  each  single  year  between  2006  and  2011  (with  the  sole  exception  of 
2010) the claims paid out are already (almost) equal or (far) exceed the net premiums 
earned by Sinosure. If  the operating expenses and  the commission  expenses are  also 
subtracted  from  the  net  premiums,  the  result  is  an  even  more  substantial  loss.  The 
figures show that despite the modest gain in 2010, in the overall period the operating 

76 

http://www.stewartlaw.com/Article/ViewArticle/608,  Stewart  and  Stewart,  How  trade  rules  can  help 
level  the  export  financing  playing  field:  New  developments  and  a  path  forward  for  2013:  “Sinosure, 
China’s  official  export  credit  insurance  agency,  operates  at  a  significant  cumulative  loss  to  the 
government,  indicating  its  support  is  also  highly  subsidized”  and  “A  review  of  Sinosure’s  annual 
reports from 2002 through 2011 reveals a cumulative operating loss of RMB 3.3 billion. 

EN 

58 

   EN 

                                                 
loss on the insurance operations is significant. It emerges from the Annual Reports that 
the  significant  contributors  to  Sinosure’s  overall  income  are  investment  income  and 
other  income,  which  are  not  relevant  for  assessing  the  viability  of  its  export  credit 
insurance  programme.  As  short-term  export-credit  insurance  constitutes  the  bulk  of 
Sinosure’s business activity, in the absence of evidence to the contrary it is concluded 
that Sinosure has sustained a significant long-term loss from its export credit insurance 
programme.  Given  that  Sinosure  makes  losses  on  its  export  credit  insurance 
programme, the existence of a benefit is determined by comparing the premiums paid 
by  the  exporting  producers  to  those  available  on  the  market.  Sinosure  is  the  sole 
official  export  credit  insurer  and  therefore  fully  controls  the  domestic  market  In  the 
absence of any commercial benchmark in the PRC for such instruments and given that 
the  financial  market  in  the  PRC  is  distorted  by  government  intervention,  it  is 
reasonable  to  use  a  benchmark  outside  the  PRC  i.e.  premiums  charged  in  a  normal 
market situation. On this basis, as described in the section below on calculation of the 
subsidy amount, the premiums are at below-market rates and a benefit is conferred. 

(246)  The  above  subsidies  are  contingent  upon  export  performance  within  the  meaning  of 
Article  4(4)(a)  of  the  basic  Regulation  because  they  cannot  be  obtained  without 
exporting.  In  addition,  they  are  also  specific  under  Article  4(2)(a)  of  the  basic 
Regulation because access is limited to certain enterprises. The solar cells and modules 
are  explicitly  listed  in  the  2006  Directory  of  High  and  New  Technology  Products, 
which  is  the  condition  to  enjoy  the  preferential  treatment  laid  down  in  the  2004 
Notice.  Furthermore,  one  of  Sinosure’s  main  objectives  is  to  implement  the  national 
policies and  plans, including the 12th five-year plan on the PV sector. The 840 plan 
and the 421 plans also benefit the PV sector among a few other sectors singled out in 
those plans (see recitals (232) and (233)). The PV sector is also considered as one of 
the encouraged industries according to Decision No. 40 and other planning documents 
and laws (see recital (207) and (208)). This industry also falls in the category of the 
‘Strategic  and  Emerging  industries’  enjoying  a  number  of  benefits  according  to 
governmental  policies  (see  recital  (102)).  Most  of  the  exporting  producers  also  have 
the  formal  status  of  High  and  New  Technology  enterprises,  which  confers  them  a 
number of advantages because of the advantageous governmental policies. 

(247)  It is therefore evident that the benefits granted by Sinosure or by the local authorities 
reimbursing  part  of  the  insurance  premium  are  not  available  for  all  of  the  industrial 
sectors  and  for  all  of  enterprises,  but  they  are  restricted  only  to  those  sectors  and 
enterprises that specifically comply with the relevant government support policies and 
their  underlying  documents.  The  Commission  concludes  that  the  benefits  granted  by 
Sinosure and/or by the local authorities to the producers of the product concerned are 
specific  in  the  meaning  of  Article  4(2)(a)  of  the  basic  Regulation.  Furthermore,  as 
there  was  no  evidence  suggesting  that  the  subsidy  is  based  on  objective  criteria  or 
conditions under Article 4(2)(b) of the basic Regulation, the benefit is specific also in 
this respect. 

(f)  Conclusion 

(248)  The  investigation  showed  that  six  groups  of  sampled  exporting  producers  benefited 
from the export credit insurance provided by Sinosure in the investigation period. 

(249)  The  provision  of  export  credit  insurance  by  Sinosure  to  the  PV  industry  is  to  be 

considered a subsidy, to the extent that premiums are at below-market rates. 

(250)  In  view  of  the  existence  of  a  financial  contribution,  a  benefit  to  the  exporting 

producers and specificity, this subsidy should be considered countervailable. 

EN 

59 

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(g)  Calculation of the subsidy amount 

(251)  The amount of countervailable subsidy is calculated in terms of the benefit conferred 
on the recipients, which is found to exist during the IP. The calculation of the benefit 
is  akin  to  the  situation  involving  loan  guarantees.  According  to  Article  6(c)  of  the 
basic  Regulation  the  benefit  conferred  on  the  recipients  is  considered  to  be  the 
difference  between  the  amount  of  the  premium  that  the  company  pays  on  the  short-
term insurance provided by Sinosure and the amount of the premium that the company 
would pay for comparable export-credit insurance obtainable on the market. 

(252)  As  short-term  export  credit  insurance  provided  by  Sinosure  is  the  result  of 
governmental  policy  objectives  and  as  Sinosure  is  in  a  monopolistic  situation  in  the 
domestic market in its function as the sole official export credit agency, an appropriate 
market  benchmark  has  been  constructed  using  the  method  described  below. 
Furthermore,  due  to  the  lack  of  cooperation  by  the  GOC  and  Sinosure,  the 
Commission  has  also  resorted  to  facts  available  in  order  to  establish  an  appropriate 
market premium for the insurance provided to the PV producers. 

the  United  States  of  America.  According 

(253)  The Commission believes that the most appropriate benchmark for which information 
is readily available are the premium rates applied by the Export-Import Bank (“Ex-Im 
Bank”)  of 
to  publicly  available 
information,77  the  Ex-Im  Bank  is  the  official  export  credit  agency  of  the  US  federal 
government and is self-sustaining. The activities of Ex-Im Bank include export credit 
insurance and other activities, such as working capital guarantees and loan guarantees 
(buyer  financing).  Its  mission  is  to  create  and  support  U.S.  jobs  by  supporting  U.S. 
exports to international buyers. The Ex-Im bank acts as a government corporation by 
the  Congress  of  the  United  States.  There  are  therefore  a  number  of  similarities  with 
Sinosure and the bank is considered to be an appropriate benchmark institution. 

(254)  The benchmark premium has been calculated by reference to the actual fees charged 
for  exports  to  OECD  countries  for  whole  turnover  policies  with  a  90  %  coverage  of 
the  amount  insured  and  a  duration  of  120  days.  The  actual  premium  is  the  median 
average for the five different categories of foreign buyers depending on their solvency 
and  risk  of  default.  This  represents  the  closest  available  benchmark  to  calculate  the 
premium that the producers of the product concerned would need to pay on the market. 

(255)  The amount of benefit was calculated using the information supplied by the GOC and 
relates to Sinosure amounts covered by export credit insurance and the fees paid in the 
IP  for  such  insurance.  The  information  supplied  by  the  co-operating  companies  for 
Sinosure  was  not  used  because  it  was  clear  that  the  GOC  was  more  complete  (for 
example not all companies reported their Sinosure policy in the questionnaire reply or 
declared it during the on spot verification). 

(256)  With regard to the payment of part of the insurance premium by the local authorities, 
the benefit is calculated as being the level of rebates and grants made to the sampled 
companies covering the IP period. 

(257)  The subsidy rate established with regard to this scheme during the IP for the sampled 

exporting producers amounts to: 

Export Guarantees and Insurances 

77 

Source: http://en.wikipedia.org/wiki/US-Exim_Bank. 

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60 

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Company/Group 

Subsidy Rate 

Wuxi Suntech Power Co. Ltd, and related companies 

0,58 % 

Yingli  Green  Energy  Holding  Company  and  related 
companies 

Changzhou  Trina  Solar  Energy  Co.  Ltd  Solar  Group 
and related companies 

JingAo Group and related companies 

Jiangxi  LDK  Solar  Hi-tech  Co.  Ltd  and  related 
companies 

Delsolar (Wujiang) Ltd. and related companies 

Renesola Zhejiang Ltd 

Renesola Jiangsu Ltd 

Jinko Solar Co. Ltd and related companies 

0,95 % 

0,71 % 

0,50 % 

0,39 % 

0,00 % 

0,63 % 

0,00 % 

3.4.1.5.  Benefits provided through granting of access to offshore holding companies and loan 

repayments by the government 

(258)  The investigation confirmed that no benefits had been received under the programme 

by the sampled companies during the IP.  

3.4.2.  Grant programmes 

3.4.2.1.  Export product research development fund 

(259)  The investigation confirmed that no benefits had been received under the programme 

by the sampled companies during the IP.  

3.4.2.2.  Subsidies  for  development  of  “Famous  Brands”  and  China  World  Top  Brands 

Programme 

(260)  The Commission found that some sampled exporting producers benefited from these 
schemes  in  the  IP.  However,  because  of  the  small  amounts  of  benefits  received  and 
their  negligible  impact  on  the  subsidy  margin,  the  Commission  did  not  consider  it 
necessary to analyse the countervailability of the schemes. 

3.4.2.3.  Funds for outward expansion of industries in Guandong Province 

(261)  The investigation confirmed that no benefits had been received under the programme 

by the sampled companies during the IP.  

3.4.2.4.  The Golden Sun demonstration programme 

(a) 

Introduction 

(262)  The complaint alleged that the producers of the product concerned received subsidies 
under the Golden Sun Demonstration Programme (“Golden Sun”) implemented by the 
government of China in July 2009. It contained prima facie evidence that four among 
the  sampled  exporters  had  received  direct  subsidies  for  the  product  concerned  under 
this  programme.  Further,  it  showed  that  one  of  the  sampled  exporters  had  been 

EN 

61 

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selected  as  the  supplier  of  the  product  concerned  with  respect  to  70%  of  the  total 
capacity installed by project operators (i.e. companies producing and selling electricity 
produced  from  PV  systems)  in  2011.  The  complaint  also  contained  information 
suggesting that Golden Sun funding was not allocated in a transparent and competitive 
manner to project operators. 

(b)  Non-cooperation and use of facts available 

(263)  The  Commission  requested  information  on  the  Golden  Sun  programme  in  the 
questionnaire,  in  the  deficiency  letter  and  during  the  on-spot  verification  visit  to  the 
GOC which the GOC failed to provide, as specified in more details in  recitals  (104) 
and (105) above.  

(264)  As for the information requested in the questionnaire and in the deficiency letter, the 
GOC  has  persistently  maintained  that  this  grant  programme  is  not  intended  for  the 
producers of the product concerned. As a consequence, the GOC has failed to provide 
replies  to  a  number  of  questions  concerning  the  programme  and  the  benefits  for  the 
producers of the product concerned by answering 'not applicable'. The GOC also failed 
to submit all the relevant laws, regulations, administrative guidelines and other acts as 
requested in the questionnaire, limiting itself to the submission of the main legal basis 
only. 

(265)  At  the  beginning  of  the  verification  session  on  the  Golden  Sun  programme,  the 
Commission asked the GOC to submit all the annexes to the main legal basis already 
submitted and whether it intended to submit additional official documents concerning 
the programme. The GOC submitted the requested annexes but replied that it did not 
intend to submit any additional document. The Commission then showed to the GOC a 
budget document concerning the actual projects financed and corresponding amounts 
awarded  under  this  programme  issued  by  the  Ministry  of  Finance  (“MOF”)  that  had 
been  submitted  by  cooperating  exporters  (MOF  Document  No.  965  [2010]  of  2 
December  2010).  The  appendices  to  this  document  show  that  one  of  the  sampled 
exporters  received  substantial  Golden  Sun  funding  for  its  own  projects  and  also  as 
supplier  of  the  eligible  equipment  for  several  projects  funded  by  the  Golden  Sun 
programme.  The  representatives  of  MOF  present  at  verification  were  aware  of  the 
document  shown,  and  the  Commission  requested  them  to  submit  all  similar  budget 
documents  issued  by  the  MOF  for  the  years  of  implementation  of  the  Golden  Sun 
programme.  While  the  MOF  representatives  agreed  in  principle  to  submit  these 
documents, they never submitted them to the Commission. 

(266)  The  Commission  also  showed  MOFCOM  the  budget  documents  concerning  the 
Golden Sun Programme, issued by the local Department of Finance of a province and 
a municipality, submitted by one of the cooperating exporters, and asked the GOC to 
submit  the  relevant  similar  documents  (i.e.  issued  by  provinces  or  municipalities) 
concerning  the  programme.  The  GOC  replied  that  it  did  not  have  these  documents 
since  they  concerned  provinces  and/or  municipalities  and  thus  it  could  not  submit 
them. 

(267)  In  its  letter  of  3  June  2013,  the  GOC  restated  its  position  that  the  Golden  Sun 
programme  is  not  intended  for  the  producers  of  the  product  concerned  and  clarified 
that while these producers  may  have  benefitted from this programme, they  did  so as 
project  operators  of  power  plants  and  not  as  producers  of  solar  panels,  since  only 
projects operators can receive subsidies under this programme. This letter also claims 
that  the  Commission  only  asked  for  three  specifically  named  documents  that  were 
submitted by the GOC. This is incorrect as the Commission asked at verification for 

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specific  budget  documents  issued  by  MOF  (also  expressly  mentioned  in  the 
Commission  letter  of  23  May  2013)  and  by  local  departments  where  the  exporting 
producers  were  located  (referring  to  specific  documents  submitted  by  the  exporting 
producers), which the GOC decided not to provide. 

(268)  The  Commission  also  requested  specific  information  on  Golden  Sun  disbursements 
received  by  one  sampled  cooperating  exporter  where  this  exporter  had  supplied  the 
product concerned and received directly the proceeds from the government. The GOC 
again was not in a position to explain the situation and provide any details during the 
verification  visit  and  simply  contacted  the  legal  counsel  of  the  company,  who  had 
purportedly  explained  that  the  situation  had  been  clarified  with  the  Commission 
officials  during  the  verification  visit,  which  was  not  entirely  the  case.  Additional 
details on the situation are explained below in recitals (276)-(278). As further specified 
in  recitals  (275)-(278)  below,  the  investigation  has  established  that  the  sampled 
cooperating  producers  have  indeed  benefited  from  grants  under  the  Golden  Sun 
programme including specifically for the supply of the product concerned. The GOC 
position that this programme does not benefit the production of the product concerned 
has  been  indisputably  contradicted  by  the  evidence  and  facts  verified  in  the 
investigation. 

(269)  Given  this  lack  of  cooperation  by  the  GOC,  the  Commission  was  unable  to  verify 
several  crucial  aspects  of  the  Golden  Sun  programme  and  of  the  actual  benefits 
conferred to the producers of the product concerned. This was in addition to the failure 
by  the  GOC  to  submit  all  the  relevant  documents  requested,  notably  the  budgetary 
documents  on  the  Golden  Sun  appropriations  issued  by  the  MOF  for  the  years  of 
implementation of the programme. Therefore, certain findings of the investigation are 
based on the best facts available on record in accordance with Article 28 of the basic 
Regulation. 

(c)  Legal Basis 

(270)  The main legal basis is the Notice concerning the Implementation of the Golden Sun 
the  annexed  Golden  Sun 
Demonstration  Programme  of  16  July  2009  and 
Demonstration  programme  Interim  Measures  for  Financial  Assistance  Fund 
Management,  File  CaiJian  No.  397  [2009]  issued  by  the  Ministry  of  Finance,  the 
Ministry of Science, and the National Energy Board; Circular regarding the Successful 
implementation  to  Assignments  to  The  Golden  Sun  Demonstration  Programme,  File 
No.  718  [2009];  Circular  regarding  the  Successful  Fulfilment  of  the  Golden  Sun 
Demonstration  Programme  2010,  File  No.  622  [2010];  Circular  on  Instructions  on 
Finance  Subsidy  Budget  Indexes  for  Construction  Costs  to  The  Golden  Sun 
Demonstration Programmes 2010, File No. 965 [2010] of 2 December 2010 issued by 
of  the  Ministry  of  Finance;  Circular  with  respect  to  Distribution  of  the  Budgetary 
Target  for  the  Fiscal  Subsidy  Appropriated  for  The  Golden  Sun  Programmes  2011, 
JCJ File No. 336 of 1 September 2011 issued by the Hebei Department of Finance; the 
Circular  with  respect  to  Distribution  of  the  Budgetary  Target  for  the  Fiscal  Subsidy 
Appropriated  for  The  Golden  Sun  Programmes  2011,  HCJ  File  No.  135  of  8 
November 2011 issued by the Hengshui Municipal Finance Bureau. 

(d)  Findings of the investigation 

(271)  The Golden Sun programme was established in 2009 for promoting the technological 
progress  and  scaled  development  of  the  distributed  solar  PV  system  industry.  The 
authorities responsible for the programme at central level are the Ministry of Finance, 
the  National  Energy  Board.  The  Notice  on 
the  Ministry  of  Science  and 

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Implementation of the Golden Sun Programme lists a number of criteria to be eligible 
for funds under this programme, including: a) that enterprises be included in the local 
Golden Sun demonstration project implementation plan; b) have an installed capacity 
of not less than 300 kWh; c) have a construction period of no more than one year and 
an operation period of no less than twenty years; d) owners of the PV projects must 
have  total  assets  of  at  least  RMB  100  million  and  capital  of  at  least  30  %  of  the 
investment costs; e) the producers of integrated system and key equipment used for the 
PV  generation  projects  should  be  selected  via  bidding  procedures.  Eligible  projects 
can  receive  up  to  50  percent  of  the  total  investment  costs  from  the  government, 
whereas  this  ceiling  is  increased  to  70  percent  for  project  owners  located  in  remote 
areas without an established electrical grid. 

(272)  As for the procedure, enterprises willing to receive funding under the programme must 
submit  their  applications  and  supporting  documents  to  the  relevant  government 
authority.  The  finance,  technology  and  energy  departments  at  the  provincial  level 
responsible  for  the  organisation  of  the  programme  submit  a  joint  summary  report  to 
the Ministry of Finance, Ministry of Science and the National Energy Board which are 
responsible  for  reviewing  the  provincial  projects  with  regards  to,  the  technical 
programs, the building conditions, the financing and all other aspects. Following final 
approval by the government, the Ministry of Finance allocates the funds directly to the 
project owner and will keep the relevant approval and disbursement documents. 

(273)  In  practice,  project  operators  submit  funding  applications  to  the  government  after 
entering into a contract with supplier(s) of the eligible PV equipment (i.e. namely the 
product  concerned).  According  to  the  relevant  legislation  those  suppliers  of  the 
eligible PV equipment are selected via bidding procedures. However, the GOC has not 
clarified  how  it  exercises  its  discretion  in  selecting  project  operators  for  the  local 
Golden  Sun  demonstration  project  implementation  plans,  and  how  these  project 
operators  select  in  turn  the  supplier  of  the  eligible  PV  equipment.  The  GOC  and 
interested  parties  have  not  shown  that  the  selection  process  is  open,  transparent  and 
non-discriminatory, as they have failed to provide the relevant documentation. There is 
no indication that any foreign PV equipment has been purchased. A substantial part of 
the  eligible  PV  equipment  has  been  provided  by  one  single  sampled  cooperating 
producer.  On  the  basis  of  facts  available,  the  Institutions  conclude  therefore  that  the 
Golden Sun Programme has been used as a means to create artificial demand for the 
products of selected Chinese producers of the product concerned. . If the government 
considers the project eligible it is supposed to grant the funds.  

(274)  The Golden Sun programme confers a subsidy within the meaning of Article 3(1)(a)(i) 
and  Article  3(2)  of  the  basic  Regulation  in  the  form  of  a  transfer  of  funds  from  the 
GOC in the form of grants to the producers of the product concerned. 

(275)  In  particular,  the  investigation  has  established  that  several  sampled  cooperating 
producers  have  directly  received  grants  under  the  Golden  Sun  programme  for  the 
installations of solar-generated power equipment at their premises. These grants paid 
out to the  sampled  cooperating producers offset part of  the  costs  that  otherwise  they 
would incur are therefore directly linked to the product concerned.. 

(276)  Moreover, the investigation has established that sampled cooperating producers have 
also  benefited  from  funding  under  this  programme  for  the  purpose  of  supplying  the 
product concerned to unrelated project operators. In particular, during the on-the-spot 
investigation  it  was  found  that  one  sampled  cooperating  exporting  exporter  had 
received  directly  from  the  GOC  a  substantial  lump-sum  payment  for  all  of  the  40 

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projects  funded  under  the  Golden  Sun  programme  for  which  it  had  supplied  the 
product concerned. Such an amount had not been reported by the sampled cooperating 
exporting producer in its questionnaire response. The 2010 Circular from the Ministry 
of  Finance  showed  that  this  cooperating  exporter  was  chosen  to  supply  the  product 
concerned to several unrelated project operators belonging to both the private and the 
public sector. The Commission tried to seek information from the GOC with regard to 
this direct payment to the sampled cooperating exporter, as Article 13 of the Interim 
Measures on the Golden Sun programme in the 2009 Notice specifically requires that 
the  grants  be  paid  directly  to  the  project  operator  (i.e.  not  to  the  supplier  of  the  PV 
equipment)  and  the  GOC  explicitly  confirmed  this  element  at  verification.  As 
explained  above,  the  GOC  was  unable  to  provide  any  explanation  during  the 
verification visit as to why a sampled exporter had received direct funding. In its letter 
of  3  June  2013,  the  GOC  limits  its  comments  to  one  of  the  40  project  only,  simply 
stating  that  there  had  been  a  financial  arrangement  between  the  project  operator  and 
the  sampled  cooperating  exporting  producer  because  the  operator  did  not  have 
sufficient money to pay the sampled exporting producer and therefore they agreed that 
the subsidy would be paid directly to the sampled cooperating exporting producer. As 
this  unsubstantiated  and  very  concise  explanation  concerned  only  one  project 
involving the sampled  cooperating exporter out of the 40 projects listed in the MOF 
document is completely insufficient for the Commission to clarify the situation. 

(277)  The  sampled  cooperating  exporter  sought  to  justify  in  its  letter  of  24  June  2013  that 
the direct payment for 40 projects concerned was not reported as it constituted a ‘user’ 
subsidy for the project operator and not for the supplier. This exporter did confirm that 
it had received the direct lump-sum payment linked to the supplies in the 40 projects 
listed  in  the  MOF  circular,  adding  that  it  is  possible  for  the  government  to  transfer 
funds directly to the supplier and that the reason for this is to ensure that these grants 
are  used  only  for  the  authorised  PV  systems  and  to  facilitate  control.  However,  the 
exporter focused its reply on one project for which documents have been collected on 
spot  and  ignored  all  the  other  39  projects  for  which  it  directly  received  Golden  Sun 
funding.  Although  the  exporter  proved  that  the  funds  for  this  particular  project  had 
been booked as an account receivable and not as a prepayment of government grant, 
no  other  evidence  has  been  submitted  on  the  actual  completion  of  this  or  any  of  the 
other projects, including on the actual supply of the product concerned for which funds 
had been received. Its explanation also did not shed light on the inconsistency of the 
government direct payments with the relevant implementing rules cited above, which 
provide that proceeds are normally transferred by the GOC to the project operator and 
not to the equipment supplier. 

the  project  operator 

the  sampled  cooperating  exporter  and 

(278)  The Commission considers the GOC explanation concerning the financial arrangement 
between 
to  be 
unconvincing, because it seems odd that two private parties may decide autonomously 
to  enter  into  an  arrangement  involving  the  action  of  a  government  (i.e.  a  direct 
payment from the government to the supplier in derogation to Article 13 of the 2009 
Notice)  without  the  government  also  having  been  involved  or  perhaps  even  being 
aware of it. The GOC has failed to provide more substantial evidence and comments 
on this aspect of direct payments to suppliers and has decided to limit its reply to only 
1  unnamed  project  out  of  the  40  projects  carried  out  by  the  sampled  cooperating 
exporters. The explanations provided by this exporter are also silent on this comment 
by the GOC on the difficult financial situation of the operator concerning a project that 
the GOC has not specified. Furthermore, the statements by the exporter concerning the 

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possibility  for  a  direct  payment  and  the  underlying  rationale  do  not  find  any 
confirmation from other sources and from the GOC. 

(279)  In light of the above limited and contradictory comments submitted by the GOC and 
by  the  sampled  cooperating  exporter,  the  only  point  in  common  and  the  conclusion 
that  can  be  drawn  is  that  the  direct  payment  of  the  lump-sum  from  the  GOC  to  the 
sampled  cooperating  exporter  was  necessary  to  make  sure  that  this  exporter  would 
receive  the  proceeds  because  there  would  be  a  risk  of  non-payment  linked  to  the 
financial  difficulty  of  the  project  operator.  The  fact  remains  that  the  sampled 
cooperating exporter was not able to explain how it had used the lump-sum payment 
from  the government, whether the PV  equipment was  finally provided to the project 
operators  and  what  price,  if  any,  had  been  paid  by  the  project  operators.  Given  the 
absence  of  other  evidence  available  on  file  or  otherwise  reasonably  available  to  the 
Commission,  it  is  therefore  concluded  on  the  basis  of  Article  28  of  the  basic 
Regulation that the lump-sum payment to the cooperating exporter constitutes a direct 
grant within the meaning of Article 3(1)(a)(i) of the basic Regulation.. 

(280)  The  Commission  further  concludes  that  the  grants  provided  to  the  suppliers  of  the 
product  concerned,  either  as  project  operators  or  when  allegedly  supplying  PV 
equipment to unrelated project operators, confer a benefit to them in accordance with 
Article  3(2)  of  the  basic  Regulation.  As  project  operators,  the  funding  under  the 
Golden Sun programme allows producers of the product concerned to save installation 
costs  of  solar-generated  power  equipment  at  their  premises.  As  suppliers  of  PV 
equipment  to  unrelated  project  operators,  the  funding  under  the  Golden  Sun 
programme is directly kept by the producers of the product concerned without the need 
to effectively provide the equipment and/or shields them from the risk of non-payment 
of  unrelated  project  operators.  In  the  latter  case,  producers  of  the  product  concerned 
obtain  a  payment  that  otherwise  they  would  not  have  obtained  from  the  unrelated 
project operator. 

(281)  This subsidy scheme is also specific within the meaning of Article 4(2)(a) of the basic 
Regulation  given  that  the  legislation  itself,  pursuant  to  which  the  granting  authority 
operates, limits access to this scheme only to the specific project operators meeting the 
several  criteria  listed  in  the  legislation  and  more  broadly  only  to  project  operators 
involved in the solar power sector. Furthermore, as neither the selection of the supplier 
of  PV  equipment  nor  the  selection  of  the  project  operators  are  based  on  an  open, 
transparent and non-discriminatory competitive process and that direct payments from 
the  GOC  to  the  suppliers  of  PV  equipment  take  place,  the  scheme  is  also  specific 
because  only  certain  suppliers  of  PV  equipment  can  de  facto  benefit  from  it.  This 
programme  does  not  meet  the  non-specificity  requirements  of  Article  4(2)(b)  of  the 
basic Regulation, given that the eligibility conditions and the actual selection criteria 
for  enterprises  to  be  included  in  the  local  project  implementation  plans  and  for  the 
final projects to be selected on the basis of the different technical and financial aspects 
are not objective and do not apply automatically. 

(e)  Conclusion 

(282)  The  Golden  Sun  programme  is  a  specific  subsidy  in  the  form  of  grant.  The 
investigation  has  established  that  some  of  the  sampled  cooperating  exporters  have 
benefited from this subsidy. 

(f)  Calculation of the subsidy amount 

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(283)  The subsidy rate established with regard to this scheme during the IP for the sampled 

exporting producers amounts to: 

Golden Sun Demonstration Programme 

Company/Group 

Subsidy Rate 

Wuxi Suntech Power Co. Ltd, and related companies 

0,00 % 

Yingli  Green  Energy  Holding  Company  and  related 
companies 

Changzhou  Trina  Solar  Energy  Co.  Ltd  and  related 
companies 

JA Group 

Jiangxi  LDK  Solar  Hi-tech  Co.  Ltd  and  related 
companies 

Delsolar (Wujiang) Ltd. and related companies 

Renesola Zhejiang Ltd 

Renesola Jiangsu Ltd 

Jinko Solar Co. Ltd and related companies 

0,24 % 

0,09 % 

0,00 % 

0,00 % 

0,00 % 

0,02 % 

0,05 % 

3.4.3.  Direct Tax Exemption and Reduction programmes 

3.4.3.1.  The two free/three half programme for foreign invested enterprises (FIEs) 

(a) 

Introduction 

(284)  The  complaint  alleged  the  existence  of  specific  legislation  dating  back  to  1991  to 
encourage  foreign  investment  in  China  through  the  Foreign  Invested  Enterprise  and 
Foreign  Enterprise  Income  Tax  Law  (“FIE  Tax  Law”).  Among  the  benefits  for  so-
called Foreign Invested Enterprises (“FIEs”) there is a subsidy programme referred to 
as  ‘Two  Free  /  Three  Half”,  which  provides  for  a  complete  direct  tax  exemption  for 
the first two years of profitability of FIEs and for half of the applicable income tax rate 
for the following three years.  

(285)  The  two  free/three  half  programme  also  exists  in  a  different  variant  for  companies 
recognised  as  New  and  High  Technology  Enterprises  and  that  are  located  in  certain 
designated  areas.  The  benefits  under  this  variant  of  the  programme  can  also  apply 
beyond the year 2013. The investigation found  that  one of the  cooperating exporters 
[Yingli  Hainan]  enjoy  benefits  under  this  programme  starting  in  2011  with  full  tax 
exemption  for  the  years  2011  and  2012  and  50  %  reduction  of  the  tax  rate  in  the 
following three years. 

(286)  The Commission sought to verify this programme during the verification visit with the 
GOC. However, the GOC failed to provide information on this different variant of the 
two free/three half programme. In its letter of 3 June 2013, the GOC argued that this 
programme was not alleged in the complaint and is not a replacement programme of 
the  variant  of  the  two  free  three  half  programme  for  FIEs  alleged  in  the  complaint, 

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which  applies  without  geographic  limitations.  The  Commission  takes  note  of  these 
explanations given by the GOC and understands that this tax programme is formally a 
separate programme than the two free three half programme for FIEs. However, given 
that its benefits continue after the alleged expiry of the FIE scheme, the mechanics, the 
nature and the effects of its benefits are the same as the ones under the programme for 
FIEs  and  that  it  has  been  reported  by  one  of  the  sampled  cooperating  exporters,  it 
considers  that  it  has  a  close  nexus  with  the  two  free/three  half  FIE  programme,  as  a 
continuation  of  the  same  programme,  and  that  it  should  be  countervailed.  In  this 
regard,  the  Commission  notes  that  Article  10(1)  of  the  basic  Regulation  permits 
investigation of any “alleged subsidy” identified by the complainant and does not refer 
to any “alleged subsidy programme”. Since in this case both programmes involve the 
same  subsidy  i.e.  corporate  tax  revenue  foregone,  the  Commission  is  entitled  to 
investigate them as a single subsidy. 

(b)  Legal basis 

(287)  The legal basis of this programme is Article 8 of the FIE Tax Law and Article 72 of 
the Implementation Rules of the Income tax Law of the People’s Republic of China of 
Foreign-Invested  Enterprises  and  Foreign  Enterprises.  According  to  the  GOC,  this 
programme has been terminated with the adoption on 16 March 2007 of the Enterprise 
Income Tax Law (“EIT Law”) of 2008 at the 5th Session of the 10th National People's 
Congress of the People's Republic of China, namely Article 57 of the EIT Law, with a 
phase-out of its benefits until the end of the year 2012.  

(288)  The legal basis of the special two free three half program is Decree No. 40 [2007] i.e. 
Notice of the State Council on the Implementation of Transitional Preferential Policies 
on  Income  Tax  for  High-tech  Enterprise  Set  up  in  Special  Economic  Zone  and 
Shanghai Pudong New District, based on Article 57 (3) of the PRC Enterprise Income 
Tax Law, along with the Administrative Measures for the determination of High and 
New Technology Enterprises. 

(c)  Findings of the investigation 

(289)  Only productive enterprises with foreign investment scheduled to operate for a period 
of not less than ten years are exempted from income tax. The exemption starts  from 
the  year  in  which  the  enterprise  begins  to  make  a  profit  for  the  first  two  years, 
followed by a reduction of fifty per cent of the applicable tax rates for the following 
three years.  

(290)  For  the  special  variant  scheme,  eligible  enterprises  must  also  have  the  recognised 
status  of  New  and  High  Technology  enterprises  with  the  specific  administrative 
certification, that is enterprises with core intellectual property and that can also satisfy 
the conditions set out in Article 93 of the Implementation Regulations of the PRC EIT 
Law. 

(291)  Any company that intends to apply for this scheme has to file the Annual Corporation 
Income Tax Return Form and the Appendices and financial statements with the State 
Administration of Taxation. These practices also apply to the special variant scheme. 

(292)  The  GOC  argued  that  this  programme  has  been  progressively  phased  out  since  the 
entry into force of the EIT Law in 2008 and its benefits are available until the end of 
the year 2012. The GOC has also stated that there is no replacement programme for 
FIEs and the tax treatment of FIEs is now the same as for other corporate taxpayers. 
The Commission notes that this tax programme has conferred benefits during the IP as 
several PV producers have benefited from it during the IP. Furthermore, it cannot be 

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ruled  out  that  benefits  are  still  available  under  this  programme  or  that  a  similar 
replacement  programme  is  available  or  will  be  enacted  in  the  future.  Indeed,  as 
explained above, the investigation showed that there are also other variants of the “two 
free/three  half”  programme  which  continue  to  benefit  solar  panel  manufacturers. 
Therefore, this programme is found to be still countervailable.  

(293)  The  special  variant  scheme  was  used  by  one  cooperating  exporter,  i.e.  Yingli  Green 

Energy. 

(d)  Conclusion 

(294)  This  programme  constitutes  a  subsidy  within  the  meaning  of  Article  3(1)(a)(ii)  and 
Article  3(2)  of  the  basic  Regulation  in  the  form  of  foregone  government  revenue 
which confers a benefit upon the recipient companies. 

(295)  This  subsidy  scheme  is  specific  within  the  meaning  of  Article  4(2)(a)  of  the  basic 
Regulation given that the legislation pursuant to which the granting authority operates, 
limits the access to this scheme only to certain enterprises that qualify as FIEs and that 
comply with the specific criteria laid down in the relevant legislation. 

(296)  Accordingly, this subsidy should be considered countervailable.  

(297)  For the variant scheme it should be considered a subsidy within the meaning of Article 
3(1)(a)(ii) and Article 3(2) of the basic Regulation in the form of foregone government 
revenue which confers a benefit upon the recipient companies. 

(298)  This  subsidy  scheme  is  specific  within  the  meaning  of  Article  4(2)(a)  of  the  basic 
Regulation  given  that  the  legislation  itself,  pursuant  to  which  the  granting  authority 
operates,  limited  the  access  to  this  scheme  only  to  certain  enterprises  and  industries 
classified as encouraged, such as the PV industry. The scheme is also specific under 
Article 4(3) because eligibility is limited to certain regions. 

(299)  Accordingly, this variant should be considered countervailable. 

(e)  Calculation of the subsidy amount 

(300)  The amount of countervailable subsidy is calculated in terms of the benefit conferred 
on the  recipients  which is found to  exist during the IP.  The benefit conferred on  the 
recipients is considered to be the amount of total tax payable according to the normal 
tax  rate,  after  the  deduction  of  what  was  paid  with  the  reduced  preferential  tax  rate. 
The  amounts  countervailed  are  based  on  the  figures  in  the  companies’  tax  return  for 
the year 2011. As the audited tax return for the tax year 2012 was not available at any 
of  the  sampled  cooperating  exporters,  the  figures  for  the  whole  of  the  year  taxable 
2011 were taken into account. 

(301)  In  accordance  with  Article  7(2)  of  the  basic  Regulation  this  subsidy  amount 
(numerator)  has  been  allocated  over  the  total  sales  turnover  of  the  cooperating 
exporting producers during the IP, because the subsidy is not contingent upon export 
performance  and  was  not  granted  by  reference  to  the  quantities  manufactured, 
produced, exported or transported. 

(302)  The subsidy rate established with regard to this scheme during the IP for the sampled 

exporting producers amounts to: 

The two free/three half programme 

Company/Group 

Subsidy Rate 

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Wuxi Suntech Power Co. Ltd, and related companies 

0,31 % 

Yingli  Green  Energy  Holding  Company  and  related 
companies 

Changzhou  Trina  Solar  Energy  Co.  Ltd  and  related 
companies 

JingAo Group and related companies 

Jiangxi  LDK  Solar  Hi-tech  Co.  Ltd  and  related 
companies 

Delsolar (Wujiang) Ltd. and related companies 

Renesola Zhejiang Ltd 

Renesola Jiangsu Ltd 

Jinko Solar Co. Ltd and related companies 

3.4.3.2.  Income tax reduction for export-oriented FIEs 

0,35 % 

0,00 % 

0,47 % 

0,00 % 

0,00 % 

0,00 % 

1,03 % 

(303)  The investigation confirmed that no benefits had been received under the programme 

by the sampled companies during the IP.  

3.4.3.3.  Income tax benefit for FIEs based on geographical location 

(304)  The investigation confirmed that no benefits had been received under the programme 

by the sampled companies during the IP. 

3.4.3.4.  Tax reduction for FIEs purchasing Chinese-made equipment 

(305)  The investigation confirmed that no benefits had been received under the programme 

by the sampled companies during the IP. 

3.4.3.5.  Tax offset for research and development by FIEs 

(a) 

Introduction 

(306)  The complaint alleged that FIEs are entitled to preferential tax policies for their R&D 
activities by way of a 150 percent tax offset of their expenses if these were increased 
by 10 percent or more as compared to the previous year. 

(307)  The GOC claimed that this scheme has been terminated with the enactment of the EIT 
law  in  2008  and  that  no  phase-out  period  was  available.  However,  several  sampled 
cooperating  exporters  reported  that  they  have  benefitted  from  a  similar  programme 
under the 2008 EIT law, showing that the preferential R&D cost offset programme for 
FIEs has been replaced by a specific programme in 2008. The GOC has not provided 
further information on the 150 % tax offset in its questionnaire reply or in the reply to 
the deficiency letter. 

(b)  Legal basis 

(308)  This scheme is provided by Article 30(1) of the EIT Law and from Article 95 of the 
Regulations on the Implementation of Enterprise Income Tax Law of the PRC (“EIT 
Implementing  Regulations”),  and  Administrative  Measures  for  the  Determination  of 
High and New Technology Enterprises (Guo Ke Fa Huo [2008] No. 172), and Article 

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93  of  the  EIT  Implementing  Regulation,  along  with  the  Notice  of  the  State 
Administration of Taxation on the issues concerning Enterprises Income Tax Payment 
of High and New Technology Enterprises (Guo Shui Han [2008] No. 985). 

(309)  Article 95 states that an additional 50 % deduction of R&D expenditures mentioned in 
Item  1  of  Article  30  shall  be  granted  for  such  expenditures  for  high  and  new 
technology products so that they are subject to an amortization based on 150 % of the 
intangible assets costs. 

(c)  Findings of the investigation 

(310)  As noted above the GOC did not provide any relevant information for this scheme in 
the  replies  to  the  questionnaire  and  deficiency  letter.  This  scheme  was  already 
countervailed  in  the  Coated  Fine  Paper  investigation78  and  in  the  Organic  Coated 
Steel  investigation79.  The  relevant  legal  provisions  indeed  show  that  this  scheme 
provides  a  benefit  limited  to  companies  which  are  formally  recognised  as  High  and 
New Technology Enterprises. These companies also have to incur R&D expenses for 
the  purpose  of  developing  new  technologies,  new  products  and  new  crafts.  Eligible 
enterprises can offset an additional 50 % of their R&D expenses against their income 
tax liability. Also expenses from intangible R&D assets entitle eligible companies to a 
150 % deduction of the actual costs borne by these companies. 

(311)  The  investigation  established  that  companies  benefiting  from  this  scheme  shall  file 
their  Income  Tax  Return  and  relevant  Annexes.  The  actual  amount  of  the  benefit  is 
included in both the tax return and Annex V. Only companies that have obtained the 
formal  certificate  recognising  them  as  High  and  New  Technology  enterprises  are 
entitled to this scheme. 

(d)  Conclusion 

(312)  This scheme constitutes a subsidy within the meaning of Article 3(1)(a)(ii) and Article 
3(2) of the basic Regulation in the form of revenue foregone by the government which 
confers a benefit upon the recipient companies. 

(313)  This subsidy is specific within the meaning of Article 4(2)(a) of the basic Regulation 
as the legislation itself limits the application of this scheme only to certain enterprises 
formally  recognised  as  High  and  New  Technology  enterprises  and  that  incur  R&D 
expenses to develop new technologies, new products and new crafts. 

(314)  Accordingly, this subsidy should be considered countervailable. 

(e)  Calculation of the subsidy amount 

(315)  The amount of countervailable subsidy is calculated in terms of the benefit conferred 
on the recipients, which is found to exist during the IP. The benefit conferred on the 
recipients is considered to be the amount of total tax payable according to the normal 
tax rate, after the subtraction of what was paid with the additional 50 % deduction of 
the actual expenses on R&D for the approved projects. The amounts countervailed are 
based on the figures in the companies’ tax return for the year 2011. As the audited tax 

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Recital  116  of  the  Council  Implementing  Regulation  (EU)  No  452/2011  of  6  May  2011  imposing  a 
definitive anti-subsidy duty on imports of coated fine paper originating in the PRC, OJ of the EU L 128, 
14 May 2011; 
Recital 226 of the Council Implementing Regulation (EU) No 215/2013 of 11 March 2013 imposing a 
definitive anti-subsidy duty on imports of certain organic coated steel products originating in the PRC, 
OJ of the EU L 73, 15 March 2013; 

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return  for  the  tax  year  2012  was  not  available  at  any  of  the  sampled  cooperating 
exporters, the figures for the whole of the year taxable 2011 were taken into account. 

(316)  In  accordance  with  Article  7(2)  of  the  basic  Regulation,  this  subsidy  amount 
(numerator)  has  been  allocated  over  the  total  sales  turnover  of  the  cooperating 
exporting producers during the IP, because the subsidy is not contingent upon export 
performance  and  was  not  granted  by  reference  to  the  quantities  manufactured, 
produced, exported or transported. 

(317)  The subsidy rate established with regard to this scheme during the IP for the sampled 

exporting producers amounts to: 

Tax offset for research and development 

Company/Group 

Subsidy Rate 

Wuxi  Suntech  Power  Co.  Ltd,  and  related 
companies 

Yingli  Green  Energy  Holding  Company  and 
related companies 

Changzhou  Trina  Solar  Energy  Co.  Ltd  and 
related companies 

JingAo Group and related companies 

Jiangxi  LDK  Solar  Hi-tech  Co.  Ltd  and  related 
companies 

Delsolar (Wujiang) Ltd. and related companies 

Renesola Zhejiang Ltd 

Renesola Jiangsu Ltd 

Jinko Solar Co. Ltd and related companies 

0,10 % 

0,49 % 

0,00 % 

0,02 % 

0,00 % 

0,00 % 

0,29 % 

0,33 % 

3.4.3.6.  Tax refunds for reinvestment of FIE profits in export oriented enterprises 

(318)  The investigation confirmed that no benefits had been received under the programme 

by the sampled companies during the IP. 

3.4.3.7.  Preferential  tax  programmes  for  FIEs  recognised  as  high  or  new  technology 

enterprises 

(319)  The investigation confirmed that no benefits had been received under the programme 
by  the  sampled  companies  during  the  IP  as  the  companies  benefited  from  the  new 
programme which replaced this preferential treatment. The details are discussed under 
point 3.4.4.8. below. 

3.4.3.8.  Tax  reduction  for  high  and  new-technology  enterprises  involved  in  designated 

projects 

(a) 

Introduction 

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(320)  This  programme  allows  an  enterprise  recognised  as  High  and  New  Technology 
Enterprise  to  benefit  from  a  reduced  income  tax  rate  of  15  %  as  compared  to  the 
ordinary rate of 25 %. This programme has been found countervailable by the EU in 
the Coated Fine Paper investigation and in the Organic Coated Steel investigation ; it 
has also been found countervailable by the US authorities. 

(b)  Legal basis 

(321)  The  legal  basis  of  this  programme  are  Article  28  (2)  of  the  EIT  Law  along  with  the 
Administrative  Measures  for  the  Determination  of  High  and  New  Technology 
Enterprises (Guo Ke Fa Huo [2008] No. 172), and Article 93 of the EIT Implementing 
Regulation,  along  with  the  Notice  of  the  State  Administration  of  Taxation  on  the 
issues  concerning  Enterprises  Income  Tax  Payment  of  High  and  New  Technology 
Enterprises (Guo Shui Han [2008] No. 985). 

(c)  Findings of the investigation 

(322)  This  scheme  applies  to  recognised  High  and  New  Technology  Enterprises  that  need 
key support from the State. These enterprises shall have core independent intellectual 
property  rights  and  must  meet  a  number  of  requirements:  (i)  their  producers  are 
included in the scope of the products in the High-Tech Fields with Key State Support; 
(ii)  the  total  expenses  for  R&D  shall  account  for  certain  proportion  of  total  sales 
income; (iii) income from high and new technology products shall account for certain 
proportion of the total sales income; (iv) the personnel engaged in R&D shall account 
for  a  certain  proportion  of  the  total  staff;  (v)  the  other  requirements  set  by  the  2008 
Administrative Measures for High and New Tech Enterprises are met. 

(323)  Companies  benefiting  from  this  scheme  must  file  their  Income  Tax  Return  and 
relevant Annexes. The actual amount of the benefit is included in both the tax return 
and Annex V.  

(d)  Conclusion 

(324)  Accordingly, the scheme should be considered a subsidy within the meaning of Article 
3(1)(a)(ii)  and  Article  3(2)  of  the  basic  Regulation  because  there  is  a  financial 
contribution in the form of foregone government revenue which confers a benefit upon 
the recipient companies. The benefit for the recipient is equal to the tax saving enjoyed 
through this programme according to Article 3(2) of the basic Regulation. 

(325)  This subsidy is specific within the meaning of Article 4(2)(a) of the basic Regulation 
since it is limited to the enterprises receiving the certification of High and New Tech 
Enterprises  and  complying  with  all  the  requirements  of  the  2008  administrative 
measures. Furthermore, there are no objective criteria established by the legislation or 
the  granting  authority  on  the  eligibility  of  the  scheme  and  this  is  not  automatic 
pursuant to Article 4(2)(b) of the basic Regulation. 

(326)  Accordingly, this subsidy should be considered countervailable. 

(e)  Calculation of the subsidy amount 

(327)  The amount of countervailable subsidy is calculated in terms of the benefit conferred 
on the recipients, which is found to exist during the IP. The benefit conferred on the 
recipients is considered to be the amount of total tax payable according to the normal 
tax  rate,  after  the  deduction  of  what  was  paid  with  the  reduced  preferential  tax  rate. 
The  amounts  countervailed  are  based  on  the  figures  in  the  companies’  tax  return  for 
the year 2011. As the audited tax return for the tax year 2012 was not available at any 

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of  the  sampled  cooperating  exporters,  the  figures  for  the  whole  of  the  year  taxable 
2011 were taken into account. 

(328)  The subsidy rate established with regard to this scheme during the IP for the sampled 

exporting producers amounts to: 

Tax reduction for high and new-technology enterprises involved in designated 
projects 

Company/Group 

Subsidy Rate 

Wuxi  Suntech  Power  Co.  Ltd,  and  related 
companies 

Yingli  Green  Energy  Holding  Company  and 
related companies 

Changzhou  Trina  Solar  Energy  Co.  Ltd  and 
related companies 

JingAo Group and related companies 

Jiangxi  LDK  Solar  Hi-tech  Co.  Ltd  and  related 
companies 

Delsolar (Wujiang) Ltd. and related companies 

Renesola Zhejiang Ltd 

Renesola Jiangsu Ltd 

Jinko Solar Co. Ltd and related companies 

0,31 % 

0,42 % 

0,35 % 

0,13 % 

0,86 % 

0,00 % 

0,00 % 

0,00 % 

3.4.3.9.  Preferential income tax policy for enterprises in the northeast region 

(329)  The investigation confirmed that no benefits had been received under the programme 

by the sampled companies during the IP. 

3.4.3.10. Guangdong province tax programmes 

(330)  The investigation confirmed that no benefits had been received under the programme 

by the sampled companies during the IP.  

3.4.4. 

Indirect Tax and Import Tariff Programmes 

3.4.4.1.  VAT exemptions and import tariff rebates for the use of imported equipment 

(a) 

Introduction 

(331)  This  programme  provides  an  exemption  from  VAT  and  import  tariffs  in  favour  of 
FIEs or domestic enterprises for imports of capital equipment used in their production. 
To  benefit  from  the  exemption,  the  equipment  must  not  fall  in  a  list  of  non-eligible 
equipment and the claiming enterprise has to obtain a Certificate of State-Encouraged 
project  issued  by  the  Chinese  authorities  or  by  the  NDRC  in  accordance  with  the 
relevant  investment,  tax  and  customs  legislation.  This  programme  was  countervailed 
in the anti- subsidy proceedings concerning Coated Fine  Paper and Organic Coated 
Steel. 

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(b)  Legal basis 

(332)  The legal bases of this programme are Circular of the State Council on Adjusting Tax 
Policies  on  Imported  Equipment,  Guo  Fa  No.  37/1997,  Notice  of  the  Ministry  of 
Finance,  the  General  Administration  of  Customs  and  the  State  Administration  of 
the  Adjustment  of  Certain  Preferential  Import  Duty  Policies, 
Taxation  on 
Announcement of the Ministry of Finance, the General Administration of Customs and 
the  State  Administration  of  Taxation  [2008]  No.  43,  Notice  of  the  NDRC  on  the 
relevant  issues  concerning  the  Handling  of  Confirmation  letter  on  Domestic  or 
Foreign-funded  Projects  encouraged  to  develop  by  the  State,  No.  316  2006  of  22 
February  2006  and  Catalogue  on  Non-duty-exemptible  Articles  of  importation  for 
either FIEs or domestic enterprises, 2008. 

(c)  Findings of the investigation 

(333)  This  programme  is  considered  to  provide  a  financial  contribution  in  the  form  of 
revenue  forgone  by  the  GOC  within  the  meaning  of  Article  3(1)(a)(ii)  as  FIEs  and 
other  eligible  domestic  enterprises  are  relieved  from  payment  of  VAT  and/or  tariffs 
which  would  be  otherwise  due.  It  therefore  confers  a  benefit  on  the  recipient 
companies  in  the  sense  of  Article  3(2)  of  the  basic  Regulation.  The  programme  is 
specific  within  the  meaning  of  Article  4(2)(a)  of  the  basic  Regulation  since  the 
legislation  pursuant  to  which  the  granting  authority  operates  limits  its  access  to 
enterprises that invest under specific business categories defined exhaustively by law 
and belonging either to the encouraged category or the restricted category B under the 
Catalogue  for  the  guidance  of  industries  for  foreign  investment  and  technology 
transfer or those which are in line with the Catalogue of key industries, products and 
technologies the development  of  which  is  encouraged  by the State. In addition, there 
are  no  objective  criteria  to  limit  eligibility  for  this  programme  and  no  conclusive 
evidence  to  conclude  that  eligibility  is  automatic  under  Article  4(2)(b)  of  the  basic 
Regulation. 

(d)  Calculation of the subsidy amount 

(334)  The amount of countervailable subsidy is calculated in terms of the benefit conferred 
on the recipients, which is found to exist during the IP. The benefit conferred on the 
recipients  is  considered  to  be  the  amount  of  VAT  and  duties  exempted  on  imported 
equipment.  In  order  to  ensure  that  the  countervailable  amount  only  covered  the  IP 
period the benefit received was amortized over the life of the equipment according the 
company's normal accounting procedures. 

(335)  The subsidy rate established with regard to this scheme during the IP for the sampled 

exporting producers amounts to: 

VAT exemptions and import tariff rebates for the use of imported equipment 

Company/Group 

Subsidy Rate 

Wuxi  Suntech  Power  Co.  Ltd,  and  related 
companies 

Yingli  Green  Energy  Holding  Company  and 
related companies 

0,24 % 

0,44 % 

Changzhou  Trina  Solar  Energy  Co.  Ltd  and 

0,38 % 

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related companies 

JingAo Group and related companies 

Jiangxi  LDK  Solar  Hi-tech  Co.  Ltd  and  related 
companies 

Delsolar (Wujiang) Ltd. and related companies 

Renesola Zhejiang Ltd 

Renesola Jiangsu Ltd 

Jinko Solar Co. Ltd and related companies 

3.4.4.2.  VAT rebates on FIE purchases of Chinese-made equipment 

(a) 

Introduction 

0,35 % 

0,78 % 

0,07 % 

0,63 % 

0,00 % 

(336)  This  programme  provides  for  an  exemption  from  VAT  for  the  purchase  of 
domestically-produced  equipment  by  FIEs.  To  benefit  from  the  exemption,  the 
equipment  must  not  fall  in  a  list  of  non-eligible  equipment  and  the  value  of  the 
equipment  must  not  exceed  a  certain  threshold.  This  programme  was  in  the  anti- 
subsidy proceedings concerning Coated Fine Paper and Organic Coated Steel.  

(b)  Legal basis 

(337)  The  legal  bases  are  Provisional  Measures  for  the  Administration  of  Tax  Refunds  for 
Purchases of Domestically-manufactured Equipment by FIEs,  the  Trial Measures for 
Administration  of  Tax  Rebate  from  the  Purchase  of  Chinese-made  Equipment  for 
Foreign-invested  Projects  and  the  Notice  of  the  Ministry  of  Finance  and  the  State 
Administration  of  Taxation  on  the  Cancellation  of  the  Rebate  Policy  for  Domestic 
Equipment Purchased by Foreign-invested Enterprises. 

(c)  Findings of the investigation  

(338)  The GOC in its reply to the anti-subsidy questionnaire claimed that this program had 
been discontinued starting 1 January 2009 and referred to the Circular of the Ministry 
of  Finance  and  the  State  Administration  of  Taxation  on  the  Discontinuation  of  the 
Rebate Policy on the Purchase of Domestically Manufactured Equipment by Foreign 
Investment  Enterprises  (CAISHUI{2008}  No.  176).  However  the  investigation  had 
shown that several sampled exporting producers benefited from this scheme during the 
investigation period. The sampled exporters concerned submitted detailed information 
concerning  this  scheme,  including  the  amount  of  benefit  received.  Taking  this  into 
account  it  was  concluded  that  the  GOC  did  not  provide  accurate  information 
concerning  this  programme  and  as  the  situation  of  some  exporting  producers  shows 
this programme still continues.  

(339)  Since none of the requested information was provided by the GOC, the Commission 

relied on the information submitted by the sampled exporting producers. 

(340)  This  programme  is  considered  to  provide  a  financial  contribution  in  the  form  of 
revenue  forgone  by  the  GOC  within  the  meaning  of  Article  3(1)(a)(ii)  as  FIEs  are 
relieved  from  payment  of  VAT  which  would  be  otherwise  due  if  they  were  not 
exempted.  It  therefore  confers  a  benefit  on  the  recipient  companies  in  the  sense  of 
Article 3(2) of the basic Regulation. The programme is specific within the meaning of 

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Article  4(2)(a)  of  the  basic  Regulation  since  the  legislation  pursuant  to  which  the 
granting  authority  operates  limits  its  access  to  foreign  invested  enterprises  that 
purchase  domestically-manufactured  equipment  and  fall  under  the  encouraged 
category and the restricted B Category of the Catalogue of Foreign-funded Industries 
and  equipment  purchased  in  the  domestic  market  listed  in  the  Catalogue  of  key 
industries, products and technologies the development of which is encouraged by the 
State. Further, the Trial Measures for Administration of Tax Rebate from the Purchase 
of  Chinese-made  Equipment  for  Foreign-invested  Projects  and  the  Notice  of  the 
Ministry  of  Finance  limit  the  benefit  to  the  FIEs  that  belong  to  the  encouraged 
category in the Guiding Catalogue of foreign invested industries or the Catalogue of 
advantageous foreign-invested industries in the Central and Western regions in China. 
In addition, there are no objective criteria to limit eligibility for this programme and no 
conclusive  evidence  to  conclude  that  eligibility  is  automatic  under  Article  4(2)(b)  of 
the basic Regulation. The programme is also specific under Article 4(4)(b) of the basic 
Regulation because it is contingent upon the use of domestic over imported goods. 

(d)  Calculation of the subsidy amount 

(341)  The amount of countervailable subsidy is calculated in terms of the benefit conferred 
on the recipients, which is found to exist during the IP. The benefit conferred on the 
recipients is considered to be the amount of VAT exempted on domestic equipment. In 
order to ensure that the countervailable amount only covered the IP period the benefit 
received  was  amortized  over  the  life  of  the  equipment  according  the  usual  industry 
practice. 

(342)  The subsidy rate established with regard to this scheme during the IP for the sampled 

exporting producers amounts to: 

VAT rebates on FIE purchases of Chinese-made equipment 

Company/Group 

Subsidy Rate 

Wuxi  Suntech  Power  Co.  Ltd,  and  related 
companies 

Yingli  Green  Energy  Holding  Company  and 
related companies 

Changzhou  Trina  Solar  Energy  Co.  Ltd  and 
related companies 

JingAo Group and related companies 

Jiangxi  LDK  Solar  Hi-tech  Co.  Ltd  and  related 
companies 

Delsolar (Wujiang) Ltd. and related companies 

Renesola Zhejiang Ltd 

Renesola Jiangsu Ltd 

Jinko Solar Co. Ltd and related companies 

0,00 % 

0,00 % 

0,00 % 

0,07 % 

0,03 % 

0,00 % 

0,15 % 

0,05 % 

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3.4.4.3.  VAT  ad  tariff  exemptions  for  purchases  of  fixed  assets  under  the  foreign  trade 

development funds programme 

(343)  The investigation confirmed that no benefits had been received under the programme 

by the sampled companies during the IP. 

3.4.5.  Government provision of goods and services for less than adequate remuneration 

3.4.5.1.  Government provision of polysilicon for less than adequate remuneration 

(344)  The investigation confirmed that no benefits had been received under the programme 

by the sampled companies during the IP.  

3.4.5.2.  Government provision of aluminium extrusions for less than adequate remuneration 

(345)  The investigation confirmed that no benefits had been received under the programme 

by the sampled companies during the IP.  

3.4.5.3.  Government provision of glass for less than adequate remuneration 

(346)  The investigation confirmed that no benefits had been received under the programme 

by the sampled companies during the IP. 

3.4.5.4.  Government provision of power 

(a) 

Introduction 

(347)  The  complainant  alleged  that  some  Chinese  producers  of  polysilicon  have  benefited 

from the cheap electricity provided at less than adequate remuneration. 

(b)  Findings of the investigation 

(348)  The  investigation  established  that  many  of  the  sampled  exporting  producers  had  a 
related polysilicon producer within their company group. It was found that one of the 
sampled groups of exporting producers, i.e. LDK Solar, received regularly significant 
electricity  fee  subsidies  from  the  Financial  Bureau  of  Xin  Yu  Economic  Zone. 
Although in this case the company did not benefit directly from the lower electricity 
rate  than  otherwise  available  on  the  market,  the  significant  rebates  provided  by  the 
Financial Bureau of Xin Yu Economic Zone eventually resulted in a situation where 
the  company  received  benefits  from  the  provision  of  cheap  electricity  and  are  thus 
functionally equivalent to government provision at below-market prices. In any event, 
even  if  the  rebate  is  considered  as  a  grant,  the  measure  is  closely  connected  to  the 
complainant’s  allegation  and  falls  within  the  scope  of  the  investigation.  In  fact,  the 
company  concerned  in  the  LDK  Group  received  a  near  total  refund  of  its  electricity 
fees due in the IP. 

(349)  LDK  Solar  group  received,  through  its  related  polysilicon  producer,  a  financial 
contribution in the sense of Article 3(1)(a)(iii) of the basic Regulation in that that local 
government provided electricity fee subsidies, or in the sense of Article 3(1)(a)(i). This 
constitutes a government financial contribution in the form of provision of goods other 
than general infrastructure within the meaning of the basic regulation. Alternatively, it 
is a direct transfer of funds. 

(350)  LDK  Solar  received  a  benefit  within  the  meaning  of  Article  3(2)  of  the  basic 
Regulation  to  the  extent  that  the  government  has  provided  electricity  for  less  than 
adequate remuneration. It has been established that this exporter was, because of the 
electricity  fee  subsidies,  effectively  subject  to  a  rate  lower  than  the  rate  generally 
available. The direct transfer of funds confers a benefit because it is a non-repayable 
grant not available on the market. 

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(351)  The subsidy in form of provision of the cheap electricity by means of a rebate to one 
of the sampled producers is specific within the meaning of Article 4(2)(a) of the basic 
Regulation as the electricity fees subsidies have only been paid to LDK. The subsidy 
is  also  regionally  specific  to  certain  enterprises  within  the  Xin  YU  Economic  zone. 
The  non-cooperation  of  LDK  and  the  GOC  in  reporting  this  subsidy  has  led  to  the 
above findings being made on the basis of facts available.  

(c)  Calculation of subsidy amount 

(352)  The subsidy amount was equal to the amount of the rebate covering the IP period. 

(353)  The subsidy rate established with regard to this scheme during the IP for the sampled 

exporting producers amounts to: 

Electricity at LTAR 

Company/Group 

Wuxi  Suntech  Power  Co.  Ltd,  and  related 
companies 

Yingli  Green  Energy  Holding  Company  and 
related companies 

Changzhou  Trina  Solar  Energy  Co.  Ltd  and 
related companies 

JingAo Group and related companies 

Jiangxi  LDK  Solar  Hi-tech  Co.  Ltd  and  related 
companies 

Delsolar (Wujiang) Ltd. and related companies 

Renesola Zhejiang Ltd 

Renesola Jiangsu Ltd 

Jinko Solar Co. Ltd and related companies 

Subsidy Rate 

0,00 % 

0,00 % 

0,00 % 

0,00 % 

2,45 % 

0,00 % 

0,00 % 

0,00 % 

3.4.5.5.  Provision of land use rights for less than the adequate remuneration 

(a) 

Introduction 

(354)  The  complainant  alleged  that  Chinese  producers  of  the  product  concerned  receive 
land-use rights from the GOC for less than adequate remuneration in that the national 
or local governments do not provide the rights consistent with market principles.  

(355)  The GOC claimed that there is a standardised and orderly competitive land market in 
which land use rights must be publicly traded in accordance with the law in the land 
market. The GOC also stated that industrial and commercial land should be obtained 
by compensation for the use in open market by bidding, auction and competition and 
“regardless  of  the  number  of  bids  or  the  initial  price,  the  price  finally  paid  is 
representative  of  the  market  price  which  is  determined  by  free  market  supply  and 
demand”. The GOC also claimed that the LUR transfer shall not include restrictions in 

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the announcement of transfer through tendering, auction and quotation that affect fair 
competition. 

(356)  The GOC did not provide any data with respect to the actual land-use rights prices and 
initial  land  prices  formulated  by  the  government.  The  information  provided  by  the 
GOC in respect of LUR transactions as requested in the questionnaire was incomplete. 
When  correcting  its  initial  reply  to  the  questionnaire  during  the  verification  visit,  it 
also  confirmed  that  some  of  the  reported  transactions  were  subject  to  bidding 
procedure.  However,  no  details  on  the  number  of  bids  and  the  difference  between 
initial and final price, as requested in the questionnaire, was provided. 

(357)  During the verification the Commission requested from the GOC evidence to support 
its  claims  concerning  the  transfers  of  LUR  in  China  is  assigned  through  bidding, 
quotation  or  auction.  It  is  noted  that  according  to  Article  11  of  Provisions  on 
Assignment  of  the  State-owned  Construction  Land  Use  Right  through  Bid  Invitation, 
Auction  and  Quotation  the  responsible  state  authority  issues  public  notice  whenever 
the  bidding/auction/quotation  process  takes  place.  On  this  basis,  the  Commission 
requested all public notices for the transactions which were subject to these procedures 
in order to collect and verify information requested in the questionnaire. The GOC did 
not provide any of these notices as it claimed that “they do not exist anymore”. As a 
result  the  Commission  was  unable  to  verify  the  information  concerning  the  LUR 
transactions of sampled exporting producers. 

(358)  The Commission informed the GOC of its consideration to apply provisions of Article 
28  of  Regulation  (EC)  No  597/2009  in  respect  to  this  subsidy  scheme  and  since  the 
GOC in its reply to Commission letter of 23 May 2013 did not provide a satisfactory 
explanation or any new evidence concerning this issue, the Commission had to base its 
findings  on  the  best  facts  available,  i.e.  in  this  case  on  the  information  submitted  by 
the sampled exporting producers and other publicly available information. 

(359)  The Commission also requested from the GOC, under the assumption that there is no 
market price for land in the PRC, its views on possible benchmarks. Although this was 
only  an  assumption  and  by  no  means  a  finding  or  conclusion  at  the  time  when  the 
questionnaire was sent to the GOC, the GOC expressed its view that this assumption is 
false and did not provide any concrete information on possible benchmarks. The GOC 
only submitted that “to the extent that any benchmark should be used, it should be the 
prices  that Chinese industries which  are not favoured would have to pay for similar 
land”. Since the GOC did not disclose which industries are not “favoured” and neither 
did  it  provide  any  information  on  prices  which  these  industries  are  paying  for 
industrial land in China, the Commission was unable to assess whether they constitute 
a  suitable  benchmark.  In  this  respect  it  is  noted  that  in  its  previous  investigations 
concerning Coated Fine Paper and Organic Coated Steel the Commission found that 
the provision of LUR to these industries also does not respect market principles. 

(b)  Legal basis 

(360)  The  land-use  right  provision  in  China  falls  under  Land  Administration  Law  of  the 

People's Republic of China. 

(c)  Findings of the investigation 

(361)  According to Article 2 of the Land Administration Law, all land is government-owned 
since, according to the Chinese constitution and relevant legal provisions, land belongs 
collectively  to  the  People  of  China.  No  land  can  be  sold  but  land-use  rights  may  be 

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assigned  according  to  the  law.  The  State  authorities  can  assign  such  rights  through 
public bidding, quotation or auction.  

(362)  The  cooperating  exporting  producers  have  reported  information  regarding  the  land 
they hold as well as most of the relevant land-use rights contracts/certificates, but only 
very limited information was provided by the GOC about pricing of land-use rights. 

(363)  As mentioned above the GOC claimed that the land-use rights in China are assigned 
through bidding, auction and competition. This is also provided for in the Article 137 
of the Real Right Law of the People's Republic of China. 

(364)  However, it was found that this system as described by the GOC does not always work 
in the same way in practice. During the verification of sampled exporting producers, 
the Commission obtained some notices issued by relevant authorities concerning LUR 
available for transfer. While one notice specifically limits the potential buyers of the 
LUR to the photovoltaic industry80, another sets limits to the price initially set by the 
authorities  and  does  not  allow  the  market  to  determine  the  price.81  The  auctions 
themselves  were  not  seen  to  provide  a  real  competition  because  in  many  of  the 
examples  viewed  during  the  on  spot  verifications  of  exporting  producers  only  one 
company made a bid (only the sampled PV producer) and therefore their opening bid 
(the value set by the local Land Bureau) formed the final price per square metre.  

(365)  The above evidence contradicts the claims of the GOC that the prices paid for LUR in 
the  PRC  are  representative  of  the  market  price  which  is  determined  by  free  market 
supply  and  demand  and  that  LUR  transfer  shall  not  include  restrictions  in  the 
announcement  of  transfer  through  tendering,  auction  and  quotation  that  affect  fair 
competition.  It  was  also  found  that  some  sampled  exporting  producers  received 
refunds from local authorities to compensate for the (already low) prices which they 
paid for the LURs. 

(366)  In addition to the low prices, some of the sampled exporting producers received other 
funds  related  to  the  purchase  of  LURs  which  effectively  decreased  the  actual  price 
paid for the LURs even more.  

(367)  The  findings  of  the  proceeding  confirm  that  the  situation  concerning  land  provision 
and  acquisition  in  the  PRC  is  unclear  and  non-transparent  and  the  prices  are  often 
arbitrarily set by the authorities. The authorities set the prices according to the Urban 
Land  Evaluation  System  which  instructs  them  among  other  criteria  to  consider  also 
industrial policy when setting the price of industrial land82. 

(368)  Also, the independent publicly available information suggest that the land in the PRC 

is provided for below the normal market rates83 

(d)  Conclusion 

(369)  Accordingly,  the  provision  of  land-use  rights  by  the  GOC  should  be  considered  a 
subsidy  within  the  meaning  of  Article  3(1)(a)(iii)  and  Article  3(2)  of  the  basic 

80 

81 

82 
83 

Announcement on Bid Invitation for Assignment of Yangzhou Urban State-owned Construction Land 
for Industrial Use with Land Use Right (Plot Numbers 2008G017, 2008G018 and 2008G019, Yangzhou 
Municipal Land Resources Bureau, 30 January 2008. 
Notice  on  transferring  of  state-owned  Land  Use  Right  (2009-02)  in  Tianwei  issued  by  Baoding  City 
Land Bureau, Article 7. 
Council Implementing Regulation (EU) No 215/2013 of 11 March 2013, recital 116. 
George  E.  Peterson,  Land  leasing  and  land  sale  as  an  infrastructure-financing  option,  World  Bank 
Policy Research Working Paper 4043, at 7 November 2006, IMF Working Paper (WP/12/100), An End 
to China’s Imbalances, April 2012, p. 12. 

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Regulation  in  the  form  of  provision  of  goods  which  confers  a  benefit  upon  the 
recipient  companies.  As  explained  in  recitals  (364)  to  (367)  above,  there  is  no 
functioning  market  for  land  in  the  PRC  and  the  use  of  an  external  benchmark  (see 
recital  (372)  below)  demonstrates  that  the  amount  paid  for  land-use  rights  by  the 
sampled exporters is well below the normal market rate. In addition, the refunds from 
local authorities are direct transfers of funds which confer a benefit because they are 
non-repayable grants not available on the market. The subsidy is specific under Article 
4 2(a) and 4 2(c) of the basic Regulation because the preferential access to industrial 
land  is  limited  only  to  companies  belonging  to  certain  industries,  in  this  case  the 
photovoltaic  industry,  only  certain  transactions  were  subject  to  a  bidding  process, 
prices are often being set by the authorities and government practices in this area are 
unclear  and  non-transparent.  The  situation  concerning  land  in  the  PRC  is  also 
discussed  in  the  IMF  Working  Paper  which  confirms  that  the  provision  of  LUR  to 
Chinese industries does not respect market conditions84. 

(370)  Consequently, this subsidy is considered countervailable.  

(e)  Calculation of the subsidy amount 

(371)  As it was concluded that the situation in the PRC with respect to land-use rights is not 
market-driven, there appear to be no available private benchmarks at all in the PRC. 
Therefore,  an  adjustment  of  costs  or  prices  in  the  PRC  is  not  practicable.  In  these 
circumstances it is considered that there is no market in the PRC and, in accordance 
with  Article  6(d)(ii)  of  the  basic  Regulation,  the  use  of  an  external  benchmark  for 
measuring the amount of benefit is warranted. Given that the GOC did not cooperate 
or  failed  to  submit  any  proposal  for  an  external  benchmark  the  Commission  had  to 
resort to facts available in order to establish an appropriate external benchmark. In this 
respect  it  is  considered  appropriate  to  use  information  from  the  Separate  Customs 
Territory of Taiwan as an appropriate benchmark. This information was also used in 
previous investigations concerning Coated Fine Paper and Organic Coated Steel. 

(372)  The Commission considers that the land prices in Taiwan offer the best proxy to the 
areas in the PRC where the cooperating exporting producers are based. The majority 
of the exporting producers are located in the developed high-GDP areas in provinces 
with a high population density. 

(373)  The amount of countervailable subsidy is calculated in terms of the benefit conferred 
on the recipients, which is found to exist during the IP. The benefit conferred on the 
recipients is calculated by taking into consideration the difference between the amount 
actually paid by each company (reduced by the amount of local government refunds) 
for land use rights and the amount that should have been normally paid on the basis of 
the Taiwanese benchmark.  

(374)  In doing this calculation, the Commission used the average land price per square meter 
established in Taiwan corrected for currency depreciation and GDP evolution as from 
the  dates  of  the  respective  land  use  right  contracts.  The  information  concerning 
industrial  land  prices  was  retrieved  from  the  website  of  the  Industrial  Bureau  of  the 
Ministry  of  Economic  Affairs  of  Taiwan.  The  currency  depreciation  and  GDP 
evolution for Taiwan were calculated  on the basis of inflation rates and evolution of 
GDP  per  capita  at  current  prices  in  USD  for  Taiwan  as  published  by  the  IMF  in  its 
2011  World  Economic  Outlook.  In  accordance  with  Article  7(3)  of  the  basic 
Regulation  this  subsidy  amount  (numerator)  has  been  allocated  to  the  IP  using  the 

84 

IMF Working Paper (WP/12/100), An End to China’s Imbalances, April 2012, p. 12. 

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normal life time of the land use right for industrial use land, i.e. 50 years. This amount 
has  then  been  allocated  over  the  total  sales  turnover  of  the  co-operating  exporting 
producers  during  the  IP,  because  the  subsidy  is  not  contingent  upon  export 
performance  and  was  not  granted  by  reference  to  the  quantities  manufactured, 
produced, exported or transported.  

(375)  The subsidy rate established with regard to this scheme during the IP for the sampled 

exporting producers amounts to: 

Land Use Rights at LTAR 

Company/Group 

Subsidy Rate 

Wuxi  Suntech  Power  Co.  Ltd,  and  related 
companies 

Yingli  Green  Energy  Holding  Company  and 
related companies 

Changzhou  Trina  Solar  Energy  Co.  Ltd  and 
related companies 

JingAo Group and related companies 

Jiangxi  LDK  Solar  Hi-tech  Co.  Ltd  and  related 
companies 

Delsolar (Wujiang) Ltd. and related companies 

Renesola Zhejiang Ltd 

Renesola Jiangsu Ltd 

Jinko Solar Co. Ltd and related companies 

3.5. 

Comments of parties after definitive disclosure 

0,31 % 

0,77 % 

0,65 % 

1,31 % 

4,28 % 

0,32 % 

1,73 % 

1,66 % 

(376)  The  GOC  objected  the  fact  that  certain  information  from  the  definitive  disclosure 
document was cited by some media and interested parties following the disclosure. In 
this respect it is noted that the Commission did not make the document public. But it is 
not  possible  for  the  Commission  to  control  the  actions  of  several  hundred  interested 
parties which received the disclosure document. If some of the parties decided to make 
the  disclosure  document  public  or  to  express  their  opinion  on  the  document  the 
Commission had no means to prevent them to do so. 

3.5.1.  Comments  of  the  GOC  concerning  allegedly  erroneous  statements  in  the  definitive 

disclosure document 

(377)  The  GOC  claimed  that  the  Commission  has  violated  the  “ample  opportunity” 
requirement  of  Article  12.1  of  the  SCM  Agreement.  According  to  the  GOC  the 
extensive  deadline  extensions  granted  by  the  Commission  for  the  reply  to  the 
questionnaire (as detailed in recital (104) above) were not sufficient for this purpose. 
The  GOC  further  claimed  that  what  is  the  "reasonable  period"  under  Article  12.7  of 
the ASCM would also constitute "ample opportunity” under Article 12.1 of the ASCM 

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for all other questionnaire-type documents. The GOC also claimed that it could only 
reach  out  to  the  sampled  exporting  producers  once  the  sample  was  finalised  and 
therefore  the  time  granted  for  the  response  between  the  receipt  of  the  questionnaire 
and  sampling  decision  was  meaningless.  The  GOC  claimed  that  the  Commission’s 
“desire”  to  complete  the  investigation  quickly  seems  to  trump  the  “non-negotiable 
requirement”  to  accord  an  ample  opportunity  under  Article  12.1.  The  Commission 
does  not  agree  with  these  claims  as  it  did  its  utmost  to  grant  the  maximum  possible 
time to the GOC to submit replies to the questionnaire and deficiency letter. The GOC 
was  also  advised  that  it  would  be  possible  to  submit  requested  documents  up  to  the 
date  of  the  verification  visit.  The  Commission  did  not  preclude  the  GOC  from 
submitting any information throughout the proceeding and on a number of occasions 
reminded  the  GOC  of  the  possibility  to  request  hearings  where  the  information  and 
views of the GOC could be presented. It is noted that no information submitted by the 
GOC  throughout  the  proceeding  was  rejected  for  the  reason  of  timing.  The  claim  of 
the  GOC  that  the  time  granted  for  the  response  between  the  receipt  of  the 
questionnaire and the sampling decision was useless is not correct. A major part of the 
questionnaire  concerned  the  overall  level  of  subsidisation  of  the  industry/product 
concerned  and  the  GOC  was  not  in  any  way  limited  by  the  sampling  decision  to 
collect information of general nature. More importantly, following the selection of the 
sample  the  GOC  had  still  43  days  to  collect  information  specific  to  the  sampled 
exporting  producers.  The  Commission  acted  in  accordance  with  Article  12.1  of  the 
SCM  Agreement  and  granted  to  the  GOC  ample  opportunity  to  present  all  evidence 
which it considered relevant, bearing in mind that such an obligation cannot be open-
ended, in order to ensure timely completion of the investigation. 

(378)  The  GOC  also  claimed  that  the  Commission  initially  requested  detailed  information 
about non-sampled exporting producers which was not "necessary information" for the 
purpose of the investigation that is based on sampling. In this respect it is noted that at 
the time when the questionnaire intended for the GOC was dispatched, the decision on 
whether  there  will  or  will  not  be  sampling  applied  in  this  proceeding  was  not  final. 
After the Commission received sampling replies from the Chinese exporting producers 
and  it  was  apparent  that  the  cooperation  from  exporters’  side  was  high,  and  once  it 
became  clear  that  the  sampled  exporters  would  cooperate  by  replying  adequately  to 
their questionnaires, the Commission did not insist on provision of company specific 
information  on  subsidisation  from  non-sampled  exporting  producers.  Therefore  the 
Commission does not agree with this. 

(379)  The  GOC  claimed  that  in  the  definitive  disclosure  document  the  Commission 
erroneously  stated  that  the  GOC  withheld  certain  information  in  the  questionnaire 
reply  and  subsequent  submissions.  This  is  not  correct.  As  the  Commission  already 
stated,  in  its  letter  of  23  May  2013  to  the  GOC,  the  GOC  had  failed  to  provide  the 
requested  information  in  respect  to  the  state-owned  financial  institutions,  documents 
related to Sinosure and provision of export credit insurance, documents related to the 
Golden  Sun  Demonstration  Programme,  and  information  related  to  the  provision  of 
Land-Use Rights. 

(380)  According  to  the  GOC  the  Commission  had  not  applied  facts  available  as  a 
mechanism to complete the missing information as prescribed by Panels and the WTO 
disputes85  and  instead  “it  has  applied  adverse  inferences  in  a  punitive  manner  and 
further violated the provisions of SCM Agreement”. The GOC further claimed that the 

85 

AB Report Mexico-Rice, paras. 289 and 293. Panel Report , China-GOES, paras. 7.296 and 7.302 

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Commission  did  not  use  facts  available  “solely  for  the  purpose  of  replacing 
information  that  may  be  missing  but  as  the  specific  basis  for  all  its  findings  of 
subsidisation in complete disregard of the significant amount of information provided 
by  the  GOC  and  financial  institutions  involved  most  often  on  ground  of  the  alleged 
failure  to  provide  perfect  answers  or  to  prove  every  figure”.  This  is  not  what  the 
Commission  did.  All  information  including  plans  and  legislation  submitted  by  the 
GOC was considered and analysed and the findings are based on these documents as 
provided by the GOC, wherever those documents were made available and verification 
confirmed their accurateness. The frequent citations from these documents supporting 
the findings are an example of how the Commission treated the information submitted 
by  the  GOC.  In  recital  (110)  above  the  Commission  clearly  explains  the  only 
situations when the information submitted was not taken at its face value. 

(381)  The  GOC  further  claimed  that  the  Commission  contradicted  itself  when  in  the 
definitive  disclosure  document  it  claimed  that  in  this  investigation  it  did  request 
transaction  specific  information  only  with  regard  to  the  sampled  exporters  and 
elsewhere  in  the  same  document  it  stated  that  "the  government  questionnaire  is  not 
limited  to  the  sampled  exporters."  This  is  not  true.  The  Commission  did  not  make 
contradictory  statements.  As  already  explained  in  the  recital  (378)  above  the 
Commission  limited  its  initial  request  on  the  provision  of  the  company  specific 
information  to  the  sampled  exporting  producers  following  the  decision  to  apply 
sampling.  However,  in  order  to  assess  the  countervailability  of  the  alleged  subsidy 
schemes, the Commission requested also other information than information related to 
sampled  exporting  producers,  such  as  information  concerning  financial  markets  in 
China  or  market  for  land  use  rights.  It  is  therefore  mentioned  that  “the  government 
questionnaire is not limited to the sampled exporters”. 

(382)  The  GOC  also  claimed  that  the  Commission  seems  to  overlook  that  information 
cannot simply be rejected if it is not made available for verification. This is not how 
the Commission treated information in this proceeding. On no occasion was the “non-
availability of verification” the sole reason for not accepting such information in full. 
However, when other information on the file was contradicting it and at the same time 
the GOC was not able to support it with any sort of evidence, such information could 
not be accepted at its face value. 

(383)  According  to  the  GOC,  the  Commission  in  paragraph  85  of  the  definitive  disclosure 
document  (replicated  above in recital  (117)) “acknowledged” that  the  GOC  does  not 
control  banking  and  financial  institutions  and  cannot  compel  them  to  provide 
information. It is noted that the Commission is not aware of such statement and after 
reviewing the text of the recital it does not seem to be the case.  

(384)  The  GOC  claimed  that  the  Commission  seemed  to  concur  with  the  GOC  that  the 
national laws cannot be superseded in the case of an investigation by the requirements 
of the EU's basic AD Regulation or the SCM Agreement. The link the GOC made to 
the  non-provision  of  allegedly  confidential  information  is  missing  the  point.  The 
Commission  however  argued  (recital  (117)  above)  that  the  provisions  of  municipal 
law or internal rules of the WTO Member cannot absolve it from its WTO obligations 
to  cooperate  with  the  investigations  and  in  case  of  conflict  it  is  up  to  the  GOC  to 
suggest the ways in which access can be afforded to information so that 
it  can  be 
adequately  verified.  The  GOC  referred  to  the  situation  when  one  bank  official 
provided  one  credit  risk  assessment  for  a  sampled  company  as  an  example  of 
suggesting  a  way  to  verify  allegedly  limited  information  and  stated  that  “the 
Commission was still not satisfied”. On the contrary, as is clear from the wording of 

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recital (148) above), the Commission did not take an issue with the verification of this 
particular  document  and  took  this  information  fully  into  account  in  its  findings. 
However,  this  was  an  exceptional  situation  and  unfortunately  was  not  replicated  for 
most of the information of similar nature requested in this proceeding. 

(385)  In  this  regard,  the  GOC  continued  to  claim  that  “sensitive  internal  documents”  of 
banks were envisaged to be relevant information under the SCM Agreement, and their 
non-production  could  not  lead  to  the  application  of  facts  available.  The  Commission 
finds  this  statement  much  too  sweeping  and  does  not  see  how  proper  verification 
(carried  out  with  due  confidentiality  procedures  in  place)  could  be  undertaken  in  all 
cases  if  such  documents  (including  those  involving  transactions  with  clients)  are 
simply withheld. In the absence of verifications, facts available may have to be used to 
fill gaps in fact-gathering. 

(386)  The  GOC  repeatedly  claimed  that  the  pre-verification  letter  did  not  contain  specific 
questions  concerning  verification  and  referred  to  the  Commission  letter  of  23  May 
2013  which  used  this  wording.  The  Commission,  however,  in  paragraph  86  of  the 
definitive disclosure document (replicated as recital (118) above) stated  that the pre-
verification  letter  of  25  March  2013  contained  a  very  specific  and  detailed  list  of 
issues and documents which would be addressed during the verification, fully in line 
with the Article 26(3) of the basic Regulation and the WTO requirements. The absence 
of a list of specific questions, provision of which has no basis in the basic Regulation 
or WTO rules, is not an excuse for the GOC being unable to fully cooperate during the 
verification. 

(387)  The  GOC  claimed  that  the  Commission  showed  a  complete  absence  of  flexibility 
during  the  verification.  This  is  a  misinterpretation  of  facts  and  situation  before  and 
during  the  verification  visit.  As  already  explained  in  paragraphs  88  –  90  of  the 
definitive disclosure document (replicated as recitals (120) - (122) above) the degree 
of  flexibility  shown  by  the  Commission  was  full  and  unconditional.  Unfortunately, 
attempts by the GOC to provide information which there was no possibility to verify 
within  the  schedule  of  the  on-site  visits  meant  that  such  information  could  not  be 
cross-checked and given the weight of a verified document. The GOC also reminded 
the Commission of WTO case law from the EC-Salmon panel that whether documents 
are  “verifiable”  is  not  always  determined  only  by  the  possibility  of  on-the-spot 
investigations  and  claimed  that  the  Commission  cannot  reject  information  simply 
because  it  is  not  available  at  verification  visits.  The  Commission  notes  that  such 
information,  not  being  susceptible  to  on-spot  verification  to  test  is  reliability  and 
accuracy, may be given less weight that if it had been properly verified and that this 
sometimes happened in the present case. 

(388)  The  GOC  contests  the  Commission’s  alleged  practice  not  to  accept  new  documents 
and  evidence  which  require  verification  after  the  end  of  the  verification  session  to 
which  they  belong.  As  already  explained  in  the  paragraph  89  of  the  definitive 
disclosure  document  (replicated  in  recital  (121)  above)  this  is  not  and  never  was  the 
case. It is true that the Commission cannot normally accept documents as verification 
exhibits once the verification session is over and it is not practically possible to verify 
such  documents,  but  nothing  prevents  the  GOC  from  submitting  such  documents  in 
writing which in fact happened in this case as well. 

(389)  The GOC claimed that the Commission did not explain the reason for requesting the 
six documents referred to in recital (122) above and on this basis their verification was 
not permitted. This claim was already raised by the GOC in its letter of 3 June 2013 

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and  the  Commission  fully  replied  to  it  in  recital  (122)  above.  It  is  noted  once  again 
that all these documents concern the industry concerned and even relate to particular 
subsidy schemes such as preferential lending or preferential tax schemes. Therefore it 
is obvious from their names and content that they were relevant for the investigation.86 
However the GOC simply refused to answer any questions in this respect during the 
verification,  citing  the  alleged  irrelevance  of  the  document  for  the  proceeding  as  the 
only reason. 

(390)  The  GOC  claimed  that  it  could  not  provide  the  supporting  evidence  for  the 
information  it  provided  in  the  questionnaire  reply  concerning  percentage  of  loans 
granted to the industry concerned as this information was held by the banks which are 
independent entities and not GOC departments and that the Commission should verify 
the figures at the banks. GOC referred to the provisions of the Commercial Banking 
Law which stipulates that the banks shall carry out their business in accordance with 
the  law  (Article  4)  and  there  shall  be  no  interference  by  local  governments  or 
government  departments  at  various  levels,  public  organisations  or  individuals  in  the 
business operation of the banks (Article 5). The fact is that the GOC made a statement 
in  the  questionnaire  reply  and  it  was  not  able  to  support  it  all.  The  banks  which  the 
Commission  attempted  to  verify  were  also  not  able  to  support  this  information  with 
any  information  whatsoever.  If  this  is  to  be  considered  as  acceptable  practice,  the 
investigated  party  could  simply  make  any  statement  which  supports  its  case  and  the 
investigated  authority  would  have  to  accept  it  without  having  a  chance  to  verify 
whether it represents reality. This is even more important taking into account that this 
particular information is in contradiction with other information on the file. There are 
also other articles in the Commercial Banking Law which oblige the banks to carry out 
their  loan  business  upon  the  needs  of  national  economy  and  the  social  development 
and with the spirit of the state industrial policies (Article 34). As correctly pointed out 
by  the  GOC  in  its  comments,  the  banks  shall  carry  out  their  business  activities  in 
accordance with law, i.e. also with the said provisions of Article 34 of the Commercial 
Banking  Law.  Therefore,  this  supposed  bright  line  between  the  government  and  the 
banks was not borne out by the facts. 

(391)  The GOC claimed that it provided all the information in respect to the ownership of 
the banks  that  it possesses. It  also claimed that the reported figures concerning bank 
ownership  are  the  official  figures  of  CBRC  and  therefore  there  was  no  reason  to 
believe  that  the  information  provided  by  the  GOC  is  false  or  misleading  and  apply 
provisions of Article 28 of the basic Regulation. Further the GOC stated that it was not 
aware  what  the  source  for  the  Commission  statement  in  paragraph  95  (replicated  in 
recital  (127)  above)  of  the  definitive  disclosure  document  was  (“The  publicly 
available  information  suggests  that  there  are  also  other  state-owned  banks  which 
provided loans to the sampled exporting producers”), i.e. in addition to those reported 
by  the  GOC  as  being  state-owned  in  its  reply  to  the  deficiency  letter.  These  claims 
could  not  be  accepted. It  is  noted  that  the  GOC  initially  claimed  in  its  questionnaire 
reply that it does not possess any information concerning its ownership in the banks. 
Only after the Commission pointed out in the deficiency letter that, according to the 
Chinese  legislation,  the  GOC  must  collect  such  information,  did  the  GOC  provide 
some information in this respect. During the verification the CBRC official refused to 
support  the  figures  on  bank  ownership  with  any  evidence,  refused  to  provide  the 
source of the information and did not explain where it comes from. It is also noted that 

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the GOC did not contest the fact that at least 5 other banks named by the Commission 
in the definitive disclosure document (see footnote in recital (127)) are state-owned. 

(392)  The GOC disagreed with the statement in the paragraph 97 of the definitive disclosure 
document  (replicated  in  the  recital  (129)  above)  that  CBRC  refused  to  answer  the 
question  concerning  the  10  biggest  banks  in  China  because  it  was  not  submitted  in 
writing  and  claimed  that  the  Commission  misinterpreted  the  facts,  because  the  main 
reason  for  not  replying  was  that  since  this  question  was  not  in  the  pre-verification 
letter they needed time to prepare for it. In fact it is the GOC which misinterprets the 
facts concerning this issue. The Commission did not insist on immediate answer, but 
the CBRC refused to even look at the question on the pretext that it was not provided 
in  advance  in  writing.  If  the  reason  was  insufficient  time  to  prepare  the  answer  the 
GOC could have submitted the reply later during the verification or by email (although 
without possibility for the Commission to verify it) as it has done with several other 
documents. However the GOC did not do this. 

(393)  GOC claimed that it provided all the documents concerning the establishment and the 
mandate of the CBRC which the Commission requested in the questionnaire, and that 
since the Commission did not raise any issues with this in the deficiency letter and did 
not ask for this documents in the "list of documents to be provided before the start of 
verification visit" in Annex 2 to the pre-verification letter the GOC did not feel obliged 
to  provide  any  other  documents.  This  is  not  true.  The  Commission  requested  all 
documents which were basis for the establishment and the mandate of the CBRC but 
the GOC provided only some of them. It was only on the basis of the statement of the 
CBRC official that the Commission learned that there are also other documents in this 
respect.  In  fact  the  reply  of  the  GOC  in  the  questionnaire  in  this  respect  was 
incomplete and misleading as the GOC (CBRC) clearly knew about the existence of 
such  additional  documents  as  was  admitted  by  the  CBRC  during  on-the-spot 
verification. 

(394)  The GOC claimed that during the verification the Commission did not actually request 
the statistics and reports from the banks which provided loans to the sampled exporters 
for the IP. They claimed that the Commission only requested the 2012 statistical report 
submitted  to  the  CBRC  by  the  Bank  of  China  and for this the CBRC official  had to 
check  with  the  legal  services  involved  due  to  the  confidentiality  obligations.  This  is 
not  correct.  During  the  verification  the  Commission  repeated  its  request  from  the 
questionnaire  and  deficiency  letter  for  the  statistics  from  all  banks  which  provided 
loans to sampled exporters to be provided87. 

(395)  The GOC further claimed that the reference of the complainant in the complaint to the 
Coated  Fine  Paper  case  in  which  the  Commission  found  “on  the  basis  of  adverse 
inferences”  that  the  state-owed  commercial  banks  [“SOCBs”]  were  acting  as  public 
bodies  is  an  “unsubstantiated  assertion  lacking  context  with  regard  to  the  nature  and 
existence of a subsidy granted to the exporting producers of the product concerned and 
cannot therefore be considered as a sufficient evidence” of the existence of financial 
contribution by a government or public body within the meaning of Article 11.2 of the 
SCM  Agreement.  Firstly  it  must  be  pointed  out  that  the  findings  concerned  in  the 
Coated Fine Paper case were not based on adverse inferences but on facts available in 
accordance with Article 28 of the basic Regulation and there is no subsequent ruling 
which  would  confirm  the  claim  of  the  GOC  that  the  Commission  finding  in  this 

87 

The statistics of the banks were requested under section III.A.A of the initial questionnaire, page 4 of 
the Annex 1 to the deficiency letter and page 7 of the pre-verification letter 

EN 

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respect  is  based  on  the  “improper  use  of  facts  available.  On  the  contrary,  the 
Commission  made  similar  findings  in  respect  of  the  SOCBs  in  another  anti-subsidy 
case  concerning  imports  from  China,  Organic  Coated  Steel,  and  also  other 
investigating authorities have come to the conclusion that Chinese SOCB’s are public 
bodies,  notably  the  United  States,  in  a  finding  which  was  upheld  by  the  WTO 
Appellate Body.88 

(396)  The GOC continued to claim that the Commission requested certain information from 
all banks established in China and that it was not within the GOC’s practical ability to 
provide such information for “over 3800” banks. The Commission disagrees with this 
claim and once again refers to the deficiency letter where, following the GOC reply to 
the  questionnaire,  it  limited  the  scope  of  the  information  requested  only  to  banks 
where the GOC has direct or indirect shareholdership89. 

(397)  GOC also claimed that the Commission statement that it took account of the summary 
of the PBOC circulars in question from the website submitted during the verification is 
incorrect  and  that  this  is  proved  by  paragraph  133  of  the  definitive  disclosure 
documents  (replicated  in  recital  (164)  above).  This  is  not  correct.  The  recital  (164) 
does not contradict the content of the website extracts. It takes it into account but also 
relies on the actual content of the Circular which was, in fact, never contested by the 
GOC to date as not being accurate. 

(398)  The GOC claimed that the Commission “has extracted certain terms and phrases out of 
context from various documents”, misinterpreted others and tried to tie them together 
in order to establish that the GOC promotes the industry producing product concerned 
or to establish that the SOCBS are public bodies. It argues that a “complete reading” 
of  these  documents  (plans,  outlines  and  decisions)  would  demonstrate  that  the 
Commission’s  findings  lack  legal  basis  and  are  not  based  on  evidence.  This  is  not 
correct. The Commission analysed and considered all the documents, including those 
referred  to  in  recital  (102)  in  their  totality,  in  exactly  the  manner  which  the  GOC 
advocates.  

(399)  Concerning  the  Decision  No  40,  the  GOC  claimed  that  in  the  definitive  disclosure 
document  the  Commission  quoted  from  it  out  of  contexts  “to  distort  its  correct 
meaning”. According to the GOC it is clear from other provisions of Decision No 40 
that it is geared towards the development of the use of renewable energy sources rather 
than classifying solar modules and cells as target of any expected development policy 
as proposed by the Commission. It is not true that the Commission’s reference to the 
text  of  Article  V  of  the  Decision  No  40  was  out  of  context.  The  Commission  is  not 
arguing  whether  one  of  the  purposes  was  or  was  not  the  development  of  the  use  of 
renewable  energy  sources.  The  fact  is  that  in  the  Decision  No  40  the  State  Council 
identified new energy industry and solar energy as prioritised industries and therefore 
they  fell  under  the  encouraged  category  of  projects  in  the  Guiding  Catalogue  of  the 
Industrial Restructuring. Taking into account  Articles 17,  18  and  19 of the  Decision 
No  40  the  financial  institutions  may  only  grant  loans  to  industries/companies 
belonging  to this category. This is a clear indication that  the PV industry producing, 
inter alia, solar modules and cells is prioritised. 

(400)  The GOC claimed that there is no reference in the text of the State Council Decision of 
10 October to the solar modules and cells or to the PV industry and that if any fiscal 

88 
89 

See Footnote 28 
Please  kindly  provide  the  information  as  already  requested  in  the  questionnaire,  in  any  event  at  least 
those where the GOC has direct or indirect shareholdership. 

EN 

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support has been encouraged it is with regard to the objectives pertaining to the use of 
alternative  energy  which  have  no  bearing  on  the  development  of  module  and  cell 
production in general. The Commission disagrees. It must be noted that this Decision 
of  State  Council  does  not  seem  to  aim  exclusively  on  the  promotion  of  the  use  of 
alternative  energy  sources.  From  its  title  (Decision  of  the  State  Council  on 
Accelerating  the  Incubation  and  Development  of  Strategic  Emerging  Industries)  as 
well as from the content (inter alia Articles 1(1),1(2),2(2)) it is clear that he aim is to 
support  the  development  of  selected  industries  (in  this  case  strategic  emerging 
industries). This is also confirmed by the fact that the objectives set in this Decision 
pertain  directly  to  the  output  and  performance  of  the  strategic  emerging  industries 
(Article  2(3).  Also,  there  is  clear  link  in  the  Decision  between  strategic  emerging 
industries  and  the  PV  industry  which  produces,  inter  alia,  solar  modules  and  cells. 
Firstly  there  is  no  doubt  that  the  PV  industry  is  a  segment  of  alternative  energy 
industry which is referred to in Article 2 of the Decision as an industry the state should 
incubate  and  develop.  Secondly  the  sampled  exporting  producers  belong  to  the 
category of high-tech industries which are mentioned in Article 2(2) of the Decision. 
Similarly  the  12th  five-year  plan  includes  the  solar  power  industry  amongst  the 
strategic industries and also the 12th Five Year Plan for the Solar Photovoltaic Industry 
confirms  that  the  State  Council  Decision  “has  listed  solar  photovoltaic  industry  in 
important field of strategic emerging industries, which our country will develop in the 
future”.90 

(401)  According to the GOC, the Commission cited the Medium and Long-term Science and 
Technology  Plan  but  failed  to  refer  to  single  instance  or  provision  where  this 
document defines high-technology enterprises as including module and cell producing 
enterprises or the PV industry in general. According to the GOC the objectives of the 
Outline  are  only  focused  towards  developing  of  alternative  energy  sources  to  reduce 
dependence  on  fossil  fuels.  The  Commission  disagrees.  The  majority  of  the 
investigated  sampled  exporting  producers  have  been  awarded  high  and  new-
technology  enterprise  certificates  and  on  this  basis  benefited  from  subsidies  the 
provision  of  which  was  limited  to  high  and  new-technology  enterprises  (e.g.  tax 
exemptions). The same types of individual support programmes which are mentioned 
in this Plan were used by the sampled exporters. 

(402)  The GOC claimed that the statement of the Commission that the Law of the PRC on 
the Scientific and Technological Progress lists a number of measures for the support of 
strategic industries including the solar PV industry is not based on any facts and that 
this law does not mention the PV industry or strategic industries and there is no basis 
to  claim  that  the  product  concerned  is  included  in  the  scope  of  this  law.  This  is  not 
correct. The basis for this statement are Articles 18 and 34 of this law. According to 
Article  18  the  State  shall  encourage  and  give  guidance  to  financial  institutions  on 
supporting  the  development  of  high  and  new  technology  industries.  According  to 
Article  34  the  Policy-oriented  financial  institutions  shall  offer  special  aid  to 
enterprises’ projects encouraged by the State. The PV industry fall within the category 
of  high  and  new  technology  industries  and  the  also  fall  within  the  category  of 
enterprises  whose  projects  are  encouraged  by  the  State.  Moreover  Article  17  of  the 
same  law  promises  preferential  tax  policies  to,  amongst  others,  entities  which  are 
engaged  in  projects  covered  by  national  scientific  and  technological  plans.  From  the 
Article  (401)  above  it  is  clear  that  the  projects  of  companies  in  the  PV  industry  fall 
within this scope. In conclusion, there are at least three clear indications that the PV 

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The 12th Five-year Plan for the Solar Photovoltaic Industry, Preface 

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industry  and  companies  producing  and  exporting  product  concerned  are  included  in 
the scope of this law. 

(403)  The GOC also claimed that the Commission has considered plans, decisions and laws 
of  the  PRC  as  having  the  same  legal  effect  and  value  and  this  is  contrary  to  the 
principles  of  legal  interpretation,  the  legislation  law  of  China  and  the  repeated 
arguments  made  by  the  GOC.  According  to  the  GOC  the  reference  to  the  general  5 
year  plan  and  specific  PV  plan  has  no  legal  reference  because  no  positive  evidence 
that the plans are legally binding was provided. This is not correct since the claim of 
the GOC that the plans are not binding is not supported by other evidence on the file. 
To  the  contrary,  the  text  of  the  Plan  as  submitted  by  the  GOC  in  the  questionnaire 
reply clearly states: “This plan was deliberated and approved by the National People’s 
Congress, and it has the effect of law.”91 [emphasis added] The GOC in its comments 
to  the  definitive  disclosure  stated:  “According  to  the  Legislation  Law  of  China,  the 
Constitution,  laws,  administrative  legislation,  local  regulations,  and  rules  are  the 
legislation in China.“ Since the plan has an effect of law and the GOC confirmed that 
laws  are  the  legislation  in  China  the  Commission  arrived  to  the  conclusion  that  the 
plan  is  indeed  legally  binding.  According  to  the  explanation  of  the  GOC  during  the 
verification  visit  the  sectoral  and  regional  5-year  plans  stem  from  the  general  plan  5 
year  plan,  therefore  the  Commission  had  no  basis  to  treat  the  sectoral  PV  five  year 
plan (2011-2015) differently than the general 5 year Plan. 

to 

that 

the  GOC  refers 

the  “Commission  Notice  concerning 

(404)  GOC cites the “guidelines issued by the Commission on reimbursement/refunds” as an 
example  of  a  similarly  non-binding  document  in  the  EU  context.  The  Commission 
the 
supposes 
reimbursement of anti-dumping duties” (O.J. C127 of 29.5.2002 p.10). In fact, it is not 
accurate  to  characterise  these  guidelines  as  non-binding  because  they  bind  the 
Commission to the extent that they do not violate superior rules.. The Commission has 
determined  that  China’s  plans  are  legally  binding.  However,  even  assuming 
hypothetically this was not the case, it is clear that the national, sectoral and regional 
plans,  emanating  as  they  do  from  the  highest  levels  of  government  and  setting  out 
government policy with regard to economic and industrial development, would have a 
high  probative  value  with  regard  to  the  de-facto  mandatory  nature  of  their  stated 
objectives.  It  is  equally  clear  that  they  could  be  invoked  by  the  government  to 
reprimand entities that were not implementing them correctly. Therefore, they would 
still  be  highly  relevant  to  determinations  relating  to  government  intervention  in  the 
economy and to the direction and control of certain industries. 

3.5.2.  Comments  of  parties  concerning  preferential  policy  loans,  other  financing, 

guarantees in insurance 

(405)  The GOC claimed that its failure to provide responses to Appendix A should not lead 
to  the  application  of  facts  available  in  accordance  with  Article  28  of  the  basic 
Regulation.  According  to  the  GOC,  if  the  Commission  really  intended  to  verify  the 
allegations  in  the  complaint  that  the  Chinese  state-owned  banks  are  public  bodies  it 
would not have needed to load the questionnaires with requests for internal, sensitive, 
transaction-specific data concerning banks many of which were not in any way owned 
by  the  government.  In  this  regard  the  GOC  referred  to  the  information  concerning 
individual  loans  provided  by  the  bank  to  the  sampled  exporting  producers.  The 
Commission does not agree with this claim. The purpose of the information requested 

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The  12th  five  year  plan  for  national  economic  and  social  development  of  the  People’s  Republic  of 
China, Part XVI and Chapter 61 

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in Appendix A was to verify whether the Chinese banks are public bodies and whether 
they  are  entrusted  and  directed  by  the  government.  With  the  exception  to  the 
information  on  individual  loans  the  GOC  did  not  specify  which  other  requested 
information it considered not to be relevant for that purpose. 

(406)  It is recalled that the questions in Appendix A sought information on the ownership of 
the  banks,  on  the  composition  of  the  board  of  directors  and  board  of  shareholders, 
minutes of shareholders/directors meetings, links of the senior management to the state 
authorities,  sectoral  breakdown  of  the  loans,  lending  policies  and  assessment  of  risk 
with  respect  to  loans  provided  to  the  cooperating  exporting  producers.  The  GOC 
claimed  that  for  the  findings  on  public  bodies  such  request  was  “manifestly 
unreasonable”  and  the  scope  of  requested  information  was  too  broad.  GOC  also 
claimed that the “threshold” determination whether the entity is or is not a public body 
must be made before such information was even requested. The Commission does not 
agree. In the view of high standards set by the WTO AB in DS 37992 all the requested 
information is necessary, including findings on the extent of government involvement 
in  the  financial  system.  For  instance,  evidence  that  entities  act  in  a  non-commercial 
manner  can  be  to  show  entrustment  and  direction,  if  combined  with  indications  of 
government inference. In any event, it should be noted that once co-operation from the 
sampled  exporting  producers  was  forthcoming,  the  Commission  decided  to  limit  the 
requested information on loans to these firms and did not draw any inferences from the 
GOC’s failure to provide other information on individual loans which was originally 
requested.  However,  all  other  requests  for  information  remained  relevant  to  the 
investigation. Concerning the claim of the GOC that it could not have provided some 
of the information on the Appendix A it is noted that the GOC has refused to provide 
the  Appendices  A  in  their  totality  with  the  exception  of  several  banks.  Taking  the 
above into account it was concluded that the GOC failed to provide the remainder of 
requested information within the reasonable period.  

(407)  The GOC, invoking the WTO US-Hot-Rolled Steel Appellate Body Report (Para.99)93, 
argues  that  it  did  not  have  the  practical  ability  to  provide  the  Commission’s 
“unreasonable” requests for information and that the Commission’s failure to address 
this issue, and to link the various requests to the factual determinations to which they 
related,  meant  that  the  Commission  has  not  acted  in  good  faith.  Although  the  case 
cited  relates  to  cooperation  by  exporters  in  an  anti-dumping  case,  the  Commission 
accepts that, in the case of government questionnaires in CVD cases, there is a need to 
strike  a  balance  between  the  information  required  and  the  practical  ability  of  the 
respondent to comply. However, this balance must be struck in the context of all the 
facts. Determinations with regard to the status of state-owned banks in China as public 
bodies  had  already  been  made  in  the  Coated  Fine  Paper  and  Organic  Coated  Steel 
cases  and  in  this  case  the  complainant  provided  sufficient  prima  facie  evidence  to 
show that the state-owned banks remained public bodies. Therefore, the GOC should 
have  expected  a  fact-intensive  enquiry  if  it  wished  to  rebut  this  allegation. 
Unfortunately,  the  GOC  continued  to  make  claims  e.g.  that  it  had  little  or  no 
information  on  the  government  ownership  of  banks  (a  highly  relevant  factor  in  the 
public  body  determination),  that  suggested  that  it  was  not  acting  to  the  best  of  its 
ability  and  refusing  access  to  necessary  information.  This  is  one  of  the  “limited 
circumstances” where Article 12.7 of the SCM Agreement can be applied (according 

92 

93 

Appellate  Body  Report,  US-Definitive  Anti-Dumping  and  Countervailing  Duties  on  Certain  Products 
from China 
Appellate Body Report, US-Hot-Rolled Steel, para. 99 

EN 

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   EN 

                                                 
to  the  WTO  Panel  Report94.  In  addition,  while  the  Commission  was  aware  that  its 
requests for information were, of necessity, quite extensive, cooperation is a two-way 
process and the GOC’s reaction was initially to simply demand explanations of which 
factual determinations the requests were tied to (something that cannot be determined 
in advance) rather than to propose ways in which the requests for information could be 
addressed in a reasonable manner. 

(408)  Concerning  the  verification  of  the  Bank  of  Shanghai  the  GOC  claimed  that  the  fact 
that the verification did not take place is not a sufficient reason to apply facts available 
and  that  in  any  event  it  is  Commission's  own  fault  that  the  verification  did  not  take 
place.  In  reply  the  Commission  notes  that  the  factual  situation  in  respect  to  the 
organisation  of  the  verification  visit  of  the  Bank  of  Shanghai  was  described  in 
paragraphs  111  and  112  of  the  definitive  disclosure  document  (replicated  in  recitals 
(143) and (144) above). There was no change in the factual situation concerning this 
verification and the Commission does not agree with the GOC's interpretation of these 
facts  and  maintains  that  it  made  its  best  efforts  for  the  verification  to  take  place  but 
this  was  not  possible  because  of  the  obstructions  in  the  side  of  the  GOC.  The  GOC 
invokes the WTO Panel Report95, which concluded that the absence of an on-spot visit 
does  not  exhaust  all  possibilities  of  verifying  documents.  However,  in  the  present 
investigation,  the  GOC  only  informed  the  Commission  of  the  bank’s  availability  for 
verification  one  working  day  before  the  verification  of  the  GOC  started  (after  the 
already extended deadline for such a confirmation), thus closing off any possibility of 
an  on-spot  visit  because  arrangements  had  been  made  and  could  not  be  changed.  In 
these circumstances it is concluded that the GOC did not act to the best of its ability 
and the Commission does not see any way in which the checks provided by an on-spot 
visit could have been replicated by any other means. 

(409)  The GOC claimed that the Commission cannot disregard the information provided by 
the  HuaXia  Bank  in  regards  of  its  ownership  structure  for  the  reason  that  it  is  not 
“ideal  in  all  aspects”.  The  Commission  notes  that  the  reason  for  not  accepting  this 
information  was  not  that  it  was  not  ideal  in  all  aspects.  As  already  explained  in  the 
recital  (147)  above,  the  HuaXia  Bank  did  not  disclose  any  information  on  the 
government  ownership  until  the  verification  visit  even  though  this  was  requested  by 
the Commission already in the initial questionnaire. After the Commission pointed out 
that the HuaXia Bank has some state-owned shareholders the bank submitted a sheet 
of paper with the information from unknown source and in addition this information 
was  in  discrepancy  with  other  information  on  the  file.  It  was  not  possible  to  accept 
such information. 

(410)  In respect of the HuaXia Bank’s decision to provide only some of the creditworthiness 
assessments as described in recital (148) above the GOC claimed that the Commission 
received a reasonable explanation of why the other assesments could not be provided. 
The  Commission  does  not  agree.  Since  it  was  clearly  stated  in  the  pre-verification 
letter that such documents will be subject of the verification visit the explanation that 
the “two risk assessment reports were dealt with by other branches of the Bank and the 
responsible  employees  were  unavailable  at  the  moment”  was  not  satisfactory.  In 
addition,  the  GOC  raises  the  argument,  repeated  elsewhere  in  its  comments,  that 
information could not be produced because of client confidentiality. The Commission 
notes  that  there  are  provisions  for  the  treatment  of  confidential  information  in  its 

94 

95 

Panel Report, US-Definitive Anti-Dumping and Countervailing Duties on Certain Products from China, 
para. 16.9 
Panel Report, EC-Salmon, para. 7.358 

EN 

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   EN 

                                                 
countervailing duty investigations96 and that, in any event, most of the Commission’s 
requests, on this and other issues, were to inspect, rather than copy, such information. 
In  any  event,  the  Commission  notes  that  a  strict  application  of  the  “client 
confidentiality”  principle  could  make  verification  of  much  relevant  information  in 
CVD  investigations  impossible.  In  such  situations,  it  would  become  impossible  to 
cross-check  exporter’s  replies  on  many  issues  and  to  make  random  inspections  of 
recipients of certain schemes in cases where there was no cooperation from exporters 
or where the investigation was conducted on an aggregate basis. 

(411)  The GOC claimed that EXIM Bank fully cooperated with the investigation and certain 
documents requested by the Commission could not be provided due to internal policy 
rules,  state  secrecy,  confidentiality  or  other  laws.  Therefore  non-provision  of  these 
documents  cannot  lead  to  the  application  of  facts  available.  In  accordance  to  the 
Commercial Banking Law these documents could not be provided by the EXIM Bank 
officials  during  the  verification.  In  this  respect,  and  contrary  to  the  Commission 
assumption,  the  basic  Regulation  and  the  SCM  Agreement  cannot  supersede  the 
sovereign  laws  of  the  PRC.  GOC  also  claimed  that  the  questions  on  political  party 
affiliations  of  senior  officials  are  irrelevant  and  disturbing  for  the  GOC.  The 
Commission  disagrees.  While  WTO  rules  (on  which  the  basic  Regulation  is  largely 
based)  may  not  “supersede”  domestic  law,  this  does  not  prevent  inferences  being 
drawn  by  the  Commission  when  such  domestic  laws  appear  to  frustrate  reasonable 
requests  for  information.  Furthermore,  the  fact  is  that  while  EXIM  Bank  provided 
some  responses  in  the  reply  to  Appendix  A  it  refused  to  support  almost  any  of  this 
information by source data or any sort of evidence. Therefore the information has only 
a value of oral statement, not supported by verified written documents. If this practice 
were  to  be  accepted  the  EXIM  Bank  could  have  provided  virtually  any  information 
and the investigating authority would have had to accept it without being able to assess 
its  accuracy.  The  questions  on  the  political  party  affiliations  and  CCP  units  within 
EXIM Bank (an any other bank in this matter) are highly relevant for the purpose of 
establishing the extent of state influence on the banks’ management in the light of the 
particular  role  of  CCP  under  the  Constitution  of  the  PRC.  In  addition  to  the 
justification  of  such  questions  which  the  Commission  offered  in  the  recital  (151) 
above  it  is  also  noted  that  in  accordance  with  CCP  Constitution,  all  organisations, 
including  private  commercial  enterprises,  are  required  to  established  “primary 
organisations  of  the  party”  if  the  firm  employs  at  least  three  party  members.  These 
organisations guarantee and oversee the implementation of the principles and policies 
of the Party and the state and supports the meeting of shareholders, board of directors, 
board  of  supervisors,  and  managers  in  the  exercise  of  their  functions  and  powers 
according to law97. The Company Law of the PRC also obliges all companies in China 
to set up a CCP organisation within their organisational structure to carry our activities 
of the CCP98.Therefore, the CCP is demonstrably linked to the activities of the GOC 
and  to  the  operation  of  all  kinds  of  firms  and  institutions  in  China  ;  it  is  therefore 
legitimate to ask questions about party affiliations in this respect. 

(412)  Concerning the verification of CDB the GOC made the same claim in regards of the 
questions on political affiliations of management and the role of CCP in the bank. In 
this  respect  the  Commission  refers  to  the  justifications  in  recitals  (151)  and  (411) 

96 
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Article 29 of the Council Regulation (EC) No 597/2009 of 11 June 2009, OJ L188, 18.7.2009  
Article 32 of the CCP Constitution 
Article 
Law 
of 
http://www.china.org.cn/china/LegislationsForm2001-2010/2011-02/11/content_21898292.htm 

People’s  Republic 

the  Companies 

the 

19 

of 

of  China, 

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above. The GOC also claimed that the CDB could not provide the requested credit risk 
assessment  reports  because  of  the  confidentiality  reasons  and  that  it  provided  a 
template of the credit rating and also a concrete example of credit risk assessment with 
the company name blanked out. It is noted that the credit rating template and the credit 
rating for unknown company of unknown industry is not an evidence of the credit risk 
assessment  of  one  of  the  sampled  exporters  as  requested  by  the  Commission.  With 
regard  to  the  confidentiality  issues,  the  Commission  refers  to  the  explanation  in 
Recital (410). 

(413)  The  GOC  claimed  that  the  Commission’s  finding  that  the  State-owned  commercial 
banks  [SOCBs]  are  public  bodies  is  inconsistent  with  Article  1.1  of  the  SCM 
Agreement because the Commission has not based its determination on any evidence 
whatsoever and has not provided a reasoned and adequate analysis of its determination 
that  government  involvement  in  the  Chinese  financial  sector  is  so  substantial  that 
banks  are  required  to  follow  preferential  policies.  The  Commission  fundamentally 
disagrees with this claim. The independent information referred to in recitals (162) to 
(168)  shows  that  the  banks  implement  the  preferential  policies  and  this  is  also  clear 
from  several  Chinese  plans,  laws  and  policy  documents  referred  to  in  recital  (102) 
above.  The  Commission  reviewed,  analysed  and  cited  a  number  of  documents 
published  by  the  international  organisations  including  WTO,  World  Bank,  IMF  and 
OECD  all  of  which  conclude  that  the  Chinese  banking  sector  is  subject  to  the 
significant  state  interventions  in  particular  with  regards  to  privileged  recipients  of 
loans and interest-rate setting. 

(414)  The GOC challenges the relevance of several documents used as best facts available to 
which  the  Commission  referred  in  relation  to  the  public  body  determination 
concerning  the  SOCBs.  As  a  preliminary  remark,  it  must  be  pointed  out  that  the 
Commission had to resort to best facts available only because of the non-cooperation 
of GOC and its refusal to provide the requested information. 

(415)  The  GOC  claimed  that  the  Deutsche  Bank  Research  report  (‘DB  report’)  which  the 
Commission  cited  in  the  recital  (161)  describes  a  historical  situation  in  China  and 
cannot  provide  a  positive  basis  to  assess  the  Chinese  banking  sector  7  years  later. 
Firstly,  the  GOC  is  wrong  in  claiming  that  the  report  provides  a  basis  to  assess 
situation  “7  years  later”.  The  report  is  from  2007  and  the  IP,  which  is  the  relevant 
period  for  the  assessment  of  the  banking  sector  in  China  for  the  purpose  of  this 
proceeding,  starts  in  the  year  2011.  Therefore  the  report  refers  to  a  situation  4  years 
before the relevant period. Secondly the DB report is not the only document on which 
the  Commission  relies  in  its  findings  but  only  a  starting  point  of  the  Commissions 
analysis  of  the  Chinese  banking  sector  and  its  ownership  structure  in  particular. 
Thirdly  the  other  information  which  the  Commission  referred  to  for  the  purpose  of 
establishing  the  ownership  structure  of  the  Chinese  banking  sector  (WTO,  IMF  and 
OECD reports and working papers) is in line with the findings of the DB report. In this 
context  it  must  be  noted  that  the  GOC  itself  only  provided  a  minimum  of  the 
repeatedly  requested  information  in  this  respect  and  never  actually  contested  the 
Commission’s findings on the level of state ownership in the banking sector and state 
interference in the banking system on factual basis. 

(416)  The GOC also challenges the Commission’s reference to the 2012 WTO Trade Policy 
Review  report  with  the  claim  that  the  statement  that  “there  has  been  generally  little 
change in the market structure of China’s banking sector” was stated in comparison to 
the previous review period in year 2010. The Commission does not disagree with this 
claim.  In  fact  the  Commission,  in  its  definitive  disclosure  document,  cited  the  WTO 

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Trade Policy Review reports from 2010 and 2012 in the same recital (161) in order to 
demonstrate  that  very  little  has  changed  in  the  period  of  two  years.  While  the  2010 
report stated that “the high degree of state ownership is another notable feature of the 
financial sector in China” the 2012 report confirmed that little changed in this respect. 
The GOC also cited from the 2012 report and on the basis of these citations claimed 
that  the  report  contradicts  the  Commission’s  assessment  in  recital  (161)  above.  This 
claim could not be accepted. None of the citations from the report reproduced in the 
GOC’s  comments  to  definitive  disclosure  contradicts  or  even  put  in  question  the 
Commission’s assessment in recital (161). 

(417)  The  GOC  also  claimed  that  the  Commission’s  findings  in  recital  (162)  above  lack 
positive  evidence  because  the  Commission  (in  addition  to  the  DB  report  and  WTO 
Trade  Policy  Reviews  discussed  in  recitals  above) “simply  refers  to  the  World  Bank 
Report and the Economic survey etc., but does not provide any reasoned and adequate 
explanation to support its findings”. This claim could not be accepted. In this respect 
it  is  noted  that  the  World  Bank  report  states,  inter  alia,  the  following:  “Despite 
impressive progress in reforming and deepening the financial sector in the past three 
decades,  China’s  financial  system  remains repressed  and  suffers  from  key  structural 
imbalances.  The  current  system,  characterized  by  dominance  of  state-owned  banks, 
strong  state  intervention,  and  remaining  controls  on  interest  rates,  has  been 
remarkably successful in mobilizing savings and allocating capital to strategic sectors 
during  China’s  economic  take-off”,  or  “In  parallel,  direct  and  indirect  controls  of 
financial  institutions  must  give  way  to  armslength  market-based  arrangements.  This 
would mean an autonomous central bank adopting open market operations and using 
interest  rates,  rather  than  credit  ceilings,  to  manage  liquidity.  Commercial  banks 
would  use  commercial  principles  and  creditworthiness  analysis,  rather  than  follow 
government  signals,  to  guide  lending”  and  “The  government  at  all  levels  has  been 
closely involved in the commercial operations of financial institutions, either through 
holding of shares or indirect influences, mainly because it is heavily dependent on the 
use of commercial bank credit for policy goals”. The 2010 OECD Economic Survey 
on China describes the PBOC policies on lending rates floor and deposit rate ceiling as 
a  disincentive  for  the  banks  to  price  risk  appropriately  and  a  counter  productive 
measure  for  competition  in  the  banking  sector  and  states  that  the  purpose  is  to 
safeguard profitability of the predominantly state-owned banking sector. 

(418)  The  GOC  further  claims  that  the  Commission’s  determination  that  the  PBOC  is 
involved  in  and  influences  the  setting  of  interest  rates  by  State-owned  commercial 
banks lacks proper reasoning and evidentiary basis. In this respect the GOC stated that 
the Commission ought to have known that in July 2013, the floor lending rates were 
abolished. Firstly it must by noted that the Commission did not analyse the situation of 
the banking market in China in July 2013 as it was not relevant for this investigation. 
Secondly  the  claim  that  the  Commission’s  determination  lacks  proper  reasoning  and 
evidentiary basis is incorrect. The relevant circulars clearly state the PBOC sets limits 
on  lending  as  well  as  on  deposit  rates.  And  thirdly,  the  OECD  Economic  Survey: 
China 2010 cited in recital (162) above also confirms the existence of such limits. 

(419)  The GOC claimed that the “Commission knew that the circulars, including the 8 June 
and 8 July 2012 circulars issued after the Coated Fine Paper findings had altered the 
interest  rate  practice  of  the  PBOC  in  significant  way”.  This  is  incorrect.  The 
Commission  could  not  know  if  or  how  exactly  the  practice  changed  as  the  GOC 
refused  to  provide  these  circulars.  Even  the  summaries  from  the  PBOC  websites 

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submitted  during  the  verification,  but  which  the  GOC  incorrectly  claims  that  the 
Commission completely disregarded, confirm that such limits still exist.  

(420)  The  GOC  also  claimed  that  “the  Commission  did  not  appear  to  base  its  finding  on 
actual  “facts  available”  which  contradicts  the  historical  information  that  the 
Commission possessed, but rather made it incumbent upon the GOC to prove that the 
state of affairs examined during the Organic Coated Steel had changed.” In view of the 
explanation  in  the  recitals  (415)  -  (419)  above  it  is  clear  that  this  claim  is  incorrect. 
There  are  no  facts  available  on  the  file  which  contradict  Commission’s  findings  and 
the findings are not based only on the historical information but on positive evidence, 
based on all the information relevant for the IP. 

(421)  The GOC claimed that the four points claimed by the Commission in the recital (166) 
above are incorrect and lack proper legal assessment. GOC argued that the reference to 
the Article 34 of the Commercial Banking Law that banks are “to carry out their loan 
business according to the needs of the national economy” is completely neutral. It is 
not clear what the GOC meant by the term “neutral” but according to the plans, policy 
documents and laws cited in recital (102) above the development of the PV industry 
and its financial and other support seems to be amongst the needs of national economy 
in  China.  In  the  context  of  the  financial  support  encouraged  and  expressed  in  these 
documents it is clear that the banks shall support the companies belonging to the PV 
industry. Concerning the finding that the banks are subject to legal rules which require 
them  to  provide  credit  supports  to  encouraged  projects  for  which  the  Commission 
relied on the wording of the State Council Decision No 40, the GOC claimed that “it 
is absolutely misplaced” because the Decision does not state or indicate that the solar 
industry  is  an  encouraged  project.  This  claim  is  also  incorrect.  From  recital  (399) 
above,  it  is  clear  that  the  solar  industry  belongs  to  the  category  of  encouraged 
industries/ projects. The GOC made a similar claim concerning the Law of the PRC on 
Scientific  and  Technological  Progress  and  the  Commission’s  finding  that  it  requires 
the banks to  give  priority  to the  development of  high  and new  technology  industries 
and that the sampled producers fall in the high-tech category. According to the GOC, 
the  Commission  did  not  make  any  legal  analysis  on  the  issue  of  whether  the  solar 
industry of modules and cells production described as high-tech industry falls within 
the scope of this law. This is not correct. The Commission made a clear link between 
the category high-tech industries and the solar industry producing modules and cells. 
This is explained in detail in recital (402) above. 

(422)  The  GOC  claimed  that  the  Commission  statement  that  the  state  involvement  in  the 
Chinese  financial  sector  is  substantial  and  on-going  is  not  supported  by  positive 
evidence. The GOC contested the evidence cited by the Commission and claimed that 
the  2009  IMF  report  which  highlights  the  lack  of  interest  rate  liberalisation  is 
irrelevant because the interest rates have been completely liberalised in China. This is 
not  correct.  The  evidence  on  the  file  confirms  that  the  interest  rates  liberalisation  in 
China is not finished and this was also confirmed by the PBOC officials present during 
the  verification  visit.  In  regards  of  the  2010  IMF  Country  Report  referred  to  by  the 
Commission  the  GOC  claimed  that  the  Commission  completely  disregarded  IMF 
findings  on  financial  sector  liberalisation.  This  is  not  true.  The  Commission  did  not 
disregard any relevant findings of the IMF in this report which were relevant. The IMF 
findings to which the GOC referred to in its comments are not contradicting any of the 
Commission’s  findings  on  the  state  involvement  in  the  Chinese  financial  sector  and 
certainly not in respect of the state ownership or loan and deposits interest rate policy. 
The  fact  that  the  Report  stated  that  progress  has  been  made  in  recent  years  in 

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developing  a  more  market-based  financial  system  in  China  does  not  mean  that  the 
Report  said  that  there  actually  is  a  market-based  financial  system  in  China.  With 
regard to the OECD surveys cited by the Commission, the GOC claimed that it cannot 
be concluded that banks do not  operate independently in China on the basis “of one 
phrase to the exclusion of significant progress with regard to the liberalisation of the 
banking  sector”.  Concerning  this  claim  it  must  be  noted  that  the  Commission  never 
made  any  conclusion  on  the  basis  of  “one  phrase”  but  as  demonstrated  in  the  above 
text,  on  the  basis  of  several  documents  compiled  by  independent  international 
organisations. 

(423)  The  GOC  claimed  that  the  Commission’s  analysis  concerning  the  public  body 
determination  “is  completely  flawed”  and  its  conclusion  in  recital  (168)  above  is 
inconsistent with the WTO AB’s interpretation of the term “public body” in the US - 
Definitive  Anti-dumping  and  countervailing  duties  on  Certain  Products  for  China. 
One  exporting  producer  also  claimed  that  the  Commission’s  reasoning  concerning 
public  body  determination  is  “legally  erroneous”.  The  GOC  claimed  that  the 
Commission  failed  to  establish  that  SOCBs  posses,  are  vested  with,  and  exercise 
governmental authority and that it has not established i) that the functions in question 
which  are  alleged  to  be  performed  by  the  SOCBs  are  those  that  are  executed  by  a 
government  in  general,  i.e.  are  governmental  functions  in  the  first  place,  ii)  the 
common  features  which  the  SOCBs  share  with  the  government  besides  the 
shareholding  which  was  also  not  established  for  all  the  SOCBs;  and  iii)  that  all  the 
SOCBs posses the requisite governmental authority in order to be able to exercise it or 
were vested  with  the  power  to  execute the  governmental functions concerned. These 
claims had to be rejected. The Commission refers to its analysis of this issue in recitals 
(158) - (167) . Lending is mentioned in the subsidy definition under Article 3.1(a)(i) of 
the basic Regulation as a government function. In the present investigation SOCBs are 
instructed  by  a  requirement,  through  plans  and  other  policy  documents,  to  promote 
certain  sectors,  including  the  PV  sector.  On  the  basis  of  facts  available,  it  was  also 
concluded that there is substantial government ownership of banks in China and that 
the government exercises meaningful control over the SOCBs. Since the GOC did not 
provide  the  requested  information  on  the  government  ownership  of  all  SOCB’s  in 
China, the Commission made its findings on the facts available. Thus, the Commission 
concludes that the SOCBs act as an arm of government performing a public function 
in implementing the GOC’s preferential lending policies to certain sectors. 

(424)  The  GOC  also  claimed  that  the  Commission  failed  to  establish  direction  or 
entrustment  of  private  banks  in  China  and  in  particular  that  the  Commission has not 
established that the GOC gave an explicit and affirmative delegation or command or 
responsibility or authority to the private banks and the SOCBs to provide preferential 
loans. The Commission does not agree with this claim. As explained in recitals (170) - 
(173),  there  is  a  government  policy  in  China  to  provide  preferential  lending  support 
the PV industry. Private banks are obliged to implement that government policy: The 
GOC through the Law on Commercial Banks instructed all banks in China to “carry 
out  their  loan  business  upon  the  needs  of  national  economy  and  the  social 
development and with the spirit of the state industrial policies”. These needs and state 
industrial  policies  are,  inter  alia,  set  in  various  plans  and  policy  documents  and  the 
provision of preferential financing to selected industries including the PV industry is 
one  of  them.  The  GOC  also  claimed  that  the  relevant  Article  of  the  Law  on 
Commercial  Banks  has  been  extracted  out  of  context  and  that  it  does  not  explicitly 
demonstrate  any  delegation  or  command,  grant  of  responsibility  or  exercise  of 
authority by the GOC on any commercial bank. The Commission does not agree that 

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the Article 34 has been taken out of context as already explained in recital (390) above 
and considers its wording a clear, legally binding instruction to all banks in China. The 
Commission also does not agree with the GOC’s claim that the documents providing 
for  the  preferential  lending  to  the  PV  industry  referred  to  in  recital  (102)  are 
“inadequate legal basis”. This is explained in length in recitals (399) - (403) above. 

(425)  One  exporting  producer  claimed  that  the  Commission  has  not  demonstrated  foreign-
owned  banks  in  China  are  entrusted  and  directed  by  the  GOC.  This  claim  had  to  be 
rejected.  The  Commission  demonstrated  entrustment  and  direction  for  all  privately 
owned banks in China (inter alia recitals (169) - (172) and (424) above) and the banks 
with foreign ownership belong to this category.  

(426)  In  respect  of  the  entrustment  and  direction  determination  the  GOC  also  claimed  that 
the  Commission  had  made  conclusions  on  the  basis  of  credit  risk  assessment  of  one 
sampled  exporter  provided  by  one  bank  and  applied  them  to  all  banks  in  China  and 
thereby used adverse inferences in this regard. It is noted that the GOC as well as the 
banks refused to provide any other credit risk assessments of other sampled exporting 
producers. Since the Commission was forced to apply facts available in this regard and 
the  credit  risk  assessment  mentioned  above  is  best  facts  available  the  Commission 
partly based its conclusions on this document. But it is reiterated that the conclusions 
were made on the basis of facts available and not adverse inferences. 

(427)  The  GOC  objected  to  the  Commission’s  assessment  of  the  distortion  of  the  Chinese 
financial market “as it is legally flawed”. The GOC claimed that there is no evidence 
pertaining  to  the  IP  which  would  indicate  that  the  SOCBs  account  for  2/3  of  the 
Chinese financial market. The Commission disagrees with this claim. In the absence of 
the information on the banking sector ownership which was repeatedly requested but 
not  provided  by  the  GOC  the  Commission  applied  fact  available.  The  Commission 
referred  to  the  DB  report  in  this  respects  which  states  that  the  SOCBs  account  for 
more  than  2/3  of  the  Chinese  financial  market.  This  is  further  corroborated  by  the 
evidence from the WTO, IMF, OECD and World Bank documents which confirm that 
the state presence in the Chinese banking sector had not significantly changed in the 
IP.  The  GOC  also  claimed  that  the  Commission’s  statement  concerning  the  interest 
rates  (namely  that  the  banks  are  bound  to  stay  within  the  limits  set  by  the  PBOC)is 
incorrect  because  the  floor  lending  rate  has  been  completely  abolished.  This  is  not 
correct. It is true that the GOC in its comments claimed that the floor lending rates has 
been abolished in July 2013, but this is more than one year after the end of the IP. It is 
also correct to say that the ceilings on the deposits rates are still in place. Therefore the 
Commission’s finding that the banks are not entirely free to decide the conditions of 
the loans (at least in regards to the IP) is correct and supported by the evidence on the 
file. The GOC also disputed the Commission’s findings in recitals (183) - (188) on the 
basis of the alleged non-relevance of several plans, policy documents and laws cited 
by  the  Commission.  Commission  does  not  agree  with  this  claim  and  refers  to  the 
recitals (399) - (403) above where it explained why these documents are relevant for 
such findings. The GOC also stated that the Commission’s finding that certain banks 
were granted access to the SAFE foreign exchange reserves is misplaced because the 
evidence  to  which  the  Commission  referred  only  named  EXIM  Bank  and  CDB  and 
explained  that  the  loans  sourced  from  these  reserves  are  only  given  to  state-owned 
enterprises. The Commission does not agree. The evidence only states that when this 
program  started  it  was  initially  available  only  to  policy  banks  CDB  and  EXIM,  but 
also  mentions  a  major  loan  of  the  Bank  of  China,  which  indicates  that  the  initial 
restriction has been removed. Also the claim that the evidence “clearly states that the 

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loans are given to only state-owned enterprise like Sinopec” is not accurate. It actually 
stated that major state-owned enterprises are preferred, but does not indicate that the 
provision of such loans was limited to them. And in any event, given the size of the 
EXIM Bank and CDB and their impact on the financial market in China, even if the 
program  was  limited  to  them  it  would  mean  a  significant  distortion  of  the  financial 
market as a whole. 

(428)  The GOC also claimed that the Commission has not established specificity in regards 
of preferential lending and its specificity analysis is legally incoherent because it did 
not establish whether the Decision No 40 refers to projects or industries. According to 
the GOC the fact that the “extremely wide array of economic sectors and industries are 
covered  by  Decision  No.  40,  this  document  does  not  explicitly  limit  access  of  the 
alleged  subsidy  to  certain  enterprises  as  is  required  to  be  established  by  the  WTO 
jurisprudence”.  The  Commission  does  not  agree  with  this  claim.  With  respect  to 
encouraged projects, it is recalled that these cover only certain activities within limited 
number  of  industrial  sectors  and  thus  this  categorisation,  covering  only  a  subset  of 
enterprises in China, cannot be considered as of a general nature and non-specific. The 
Commission  considered  this  as  the  most  natural  interpretation  in  the  absence  of  any 
explanation (and corroborating documents) as to how the GOC precisely applied the 
notion of the PV industry e.g. for the purposes of Decision 40 and the related Guiding 
Catalogue  of  the  Industrial  Restructuring.  Moreover  as  explained  in  recital  (102) 
above  the  solar  PV  industry  also  belongs  to  the  category  of  strategic  industries  as 
defined  by  the  12th  five-year  plan  and  on  this  basis  enjoys  access  to  preferential 
financing  which  is  clear  from  the  citations  from  various  planning  and  policy 
documents and laws in the same recital. 

(429)  The  GOC  also  claimed  that  the  Commission  has  not  established  the  existence  of 
benefit concerning preferential lending because the use for the external benchmark for 
the  purpose  of  the  benefit  establishment  was  not  supported  by  the  Commission 
findings. According to the GOC, the Commission had no basis to apply the BB rating 
as it did not provide any evidence that the BB rating is more likely to be undistorted 
credit  rating  that  any  other  rating  and  its  application  “reflects  the  impermissible 
adverse  inferences  made  in  violation  of  Article  12.7  of  the  SCM  Agreement”.  This 
claim had to be rejected. Given the distortions and the lack of proper creditworthiness 
or  risk  assessment  of  the  sampled  exporting  producers  by  the  lending  banks,  the 
Commission  could  not  have  taken  the  credit  rating  (if  they  had  any  at  all)  of  the 
individual  exporting  producers  at  its  face  value.  The  BB  rating  is  in  this  case  not 
adverse inference and it is not unfavourable for the exporting producers because it is 
the best non- investment rating on the market. 

(430)  The  complainant  claimed  that  the  Commission  should  have  used  a  less  favourable 
credit  rating  than  BB  grade  for  the  benchmark  construction  for  some  exporting 
producers which were in particularly bad financial situation. For the reasons explained 
in  Recital  (429)  above,  the  Commission  considered  the  BB  rating  (non-investment 
grade)  to  appropriately  reflect  the  financial  situation  of  sampled  exporting  producers 
during the IP. 

(431)  The complaint also requested that the Commission discloses the calculation of mark-
up  for  loans  in  Chinese  currency.  The  Commission  explained  the  methodology  in 
paragraph 169 of definitive disclosure document (replicated in recital (198) above). In 
line  with  the  methodology  from  Coated  Fine  Paper  and  Organic  Coated  Steel 
proceedings the Commission adjusted the Chinese interest rates by adding the interest 

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differential between the best rated bonds and BB rated bonds traded on markets in the 
IP. 

(432)  One exporting producer claimed that the Commission, in order to establish the benefit 
from  preferential  lending  should  compare  the  lending  rates  of  the  “favoured” 
industries  with  those  of  the  “non-favoured”  industries.  In  view  of  the  Commission 
analysis of the financial market (recitals (181) - (185)) this claim had to be rejected. 
Taking  into  account  the  established  distortions  the  interest rates  in  Chinese  financial 
market are deemed to be unreliable.  

(433)  The GOC also claimed that for the EUR and USD loans the Commission should not 
resort  to  the  external  benchmark  because  one  of  the  key  elements  on  which  the 
Commission  based  its  distortion  analysis,  i.e.  the  PBOC  limitations  on  interest  rates 
does not exist for such loans. This claim had to be rejected. The PBOC limitations on 
the  interest  rates  are  just  one  of  the  key  elements  which  the  Commission  used  in  its 
analysis of the Chinese financial market. As explained in recitals (180) - (184) above 
there  is  number  of  other  distortions  which  justified  on  their  own  the  use  of  external 
benchmark also for EUR and USD denominated loans. 

(434)  Several  exporters  and  the  GOC  claim  that  the  Agreements  between  exporters  and 
certain  state-owned  banks  (referred  to  as  "the  Agreements"  in  this  section)  are  not 
equivalent to credit lines and do not amount to a financial contribution because they do 
not contain an obligation or commitment for the bank to provide future funding under 
particular terms and conditions. They also refer to the conclusions of the EC-Aircraft 
panel,  which  stated  that  the  "mere  possibility"  that  a  government  may  transfer  funds 
under  the  fulfilment  of  a  pre-defined  condition  will  not  be  sufficient  to  demonstrate 
the  existence  of  a  financial  contribution.  They  noted  the  panel's  statement  that  the 
contractual arrangement should “in and of itself, be claimed and capable of conferring 
a benefit on the recipient that is separate and independent to the benefit that might be 
conferred from any future transfer of funds.” 

(435)  With  regard  the  findings  of  the  EC-Aircraft  panel,  the  Commission  notes  that  such 
findings  are  not  exhaustive  with  regard  to  the  scope  of  credit  lines  or  other  similar 
agreements an do not bind the Commission's interpretation of the basic Regulation in 
this  case.  Nevertheless,  the  Commission  does  not  disagree  with  the  panel's 
conclusions, but with the application of those conclusions to the present investigation 
by the GOC. The Agreements normally provide for the state-owned bank to lend up to 
the requisite amount of money, sometimes in conjunction with possible improvements 
in  the  performance  of  the  firm  involved.  So,  on  the  one  hand,  the  text  of  the 
Agreements  may  contain  textually  less  explicit  or  automatic  obligations  concerning 
the  terms  and  conditions  of  future  lending  than  those  which  feature  some  types  of 
Credit Line Agreements. They are sometimes supplemented by separate loan or credit 
agreements. However, it has been noted that loans under these Agreements are usually 
made on very similar, not to say identical terms. On the other hand, the Agreements 
contain a number of provisions which go far beyond the normal language of credit line 
agreements and which amount to the creation of a guaranteed support mechanism by 
the  bank  in  question.  The  Commission  considers  that  in  this  case  the  written 
provisions of the Agreements are not necessarily conclusive, because “obligations” or 
“commitments”  to  transfer  funds  may  be  expressed in  written or unwritten form and 
that their existence should be determined on the basis of the totality of the facts on the 
record. 

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(436)  On this basis, the exact nature of the commitments or obligations of the state-owned 

banks under the Agreements depends upon: 

(a) 

(b) 

(c) 

(d) 

(e) 

The  text  of  the  Agreements:  The  Commission  notes  that  provisions  in  the  most 
significant  agreements  involving  large  state-owned  banks  and  particular  exporting 
producers  are  broadly  similar.  The  agreements  establish  a  close  link  between  the 
bank and exporter with regard to a transfer of funds. They provide for the transfer of 
the requisite amount of money, sometimes upon the fulfilment of certain conditions 
related  to  performance  and  credit  rating.  The  Agreements  entitle  the  firm  to 
“favourable treatment” when applying for a loan compared to firms which have not 
signed  such  agreements.  Some  of  the  amounts  of  potential  funding  are  huge 
compared  to  the  firms’  annual  turnover.  The  amounts  of  credit  promised  to  the 
sampled  exporters  accounted  for  more  than  3  times  their  annual  turnover. 
Furthermore,  the  Agreements  provide  for  the  bank  to  give  strong  support  to  the 
development of the company in question. There are references to “a long-term stable 
strategic partnership” between the bank and the firm, to the bank giving “priority” to 
the firm’s key construction projects, offering “long-term stable financial support” to 
the  firm  “in  respect  of  its  asset  acquisition  and  reorganization,  fundamental 
formation of each business unit, technical improvement project, “Go Global” project 
and other businesses….” and helping the firm to “formulate a medium and long term 
development  planning  by  virtue  of  its  professional  advantages,  institutional 
advantages  and  performance  advantages.”  Agreements  also  mention  that  they 
comply  with  national  macro-economic  and  industrial  policy.  Therefore,  it  would 
seem  that  the  strategic  support  given  to  the  firm,  combined  with  the  “favourable 
treatment”  accorded  by  the  Agreements  make  it  highly  likely  that  the  firm  will  be 
automatically eligible to draw down loans from the Agreements. 

The nature and objectives of the lenders: The lenders are state-owned banks which 
have  been  found  to  be  public  bodies  or  other  banks  which  have  been  found  to  be 
entrusted  and  directed  by  the  government  and  therefore  act  as  an  arm  of  the  GOC. 
They have also been found to provide loans at well below market rates. For example, 
certain  Agreements  refers  to  the  bank’s  “financing  advantage”  and  its  support  for 
“high-tech 
the  government 
concession”. 

industry…having  priority 

in  development  with 

The  government  attitude  towards  the  borrower:  Borrowers  belong  to  the  strategic 
emerging industries as shown in the recital (102) above. 

The degree of cooperation of the government with the investigation: The providers of 
the  credit  lines  (state-owned  banks  and  banks  entrusted  and  directed  by  the 
government)  have  failed  to  fully  cooperate  with  the  investigation  and  findings 
relating to them have been made on facts available. 

The market perception of the Agreements: Companies seem to value the Agreements 
as evidence that they have the state backing behind them and publicly announce the 
conclusions  of  such  agreements  to  send  a  positive  signal  to  markets  and  potential 
investors.  For  instance,  on  9  July  2010,  Yingli  Solar  issued  a  press  release 
announcing  a  “strategic  cooperation  agreement”  with  CDB,  under  which  CDB 
“expects  to  grant  credit  facilities  with  an  aggregate  maximum  amount  of  RMB  36 
million  to  support  Yingli  Group  and  its  affiliates”.  The  Chief  Financial  Officer  of 
Yingli  stated  that,  ”This  agreement  raised  two  parties'  cooperation  to  a  new  level, 
which we believe will give us the ability to pursue opportunities that will allow us to 
strengthen  our  leadership  position  in  the  PV  industry."  Jinko  Solar,  on  26  January 

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2011,  characterised  an  RMB  50  billion  credit  facility  from  the  Bank  of  China  as  a 
“strategic cooperation agreement” which would “further strengthen our position as 
a leading solar product manufacturer”. The press release went on to state that “With 
the  long-term  financial  support  of  the  BOC,  we  are  confident  we  will  deliver 
excellent results in 2011 as well as meet our long-term growth targets.” On 14 April 
2010, Trina Solar was reported as intending to use the $4.4 billion credit agreement 
with  CDB  “for  market  expansion”.  All  these  announcements  suggest  that  the 
exporting producers concerned see the Agreements as an established, rather than an 
uncertain, source of financing 

(f) 

Operation of the Agreements: Numerous individual loans have been drawn down by 
exporting producers i.e. the agreements lead to an actual transfer of funds, usually at 
well below market rates. 

this  regard, 

(437)  On the basis of all the evidence, it is concluded that the Agreements are offered by the 
banks as part of a government strategy to promote the PV industry and are considered 
to be of great value by the exporters concerned, irrespective of whether any funds are 
actually  transferred.  This  contradicts  the  arguments  of  the  parties  that  they  are 
effectively  of  no  value.  Although  the  Agreements  have  the  characteristics  of  normal 
credit  lines,  they  go  beyond  the  terms  and  conditions  of  normal  credit  lines  and  are 
effectively  strategic  partnerships  between  public  bodies  and  firms  to  pursue 
government  policy.  In 
they  operate  as  a  mechanism  of  state 
support/guarantee, which enhance the market position of the exporters concerned and 
enable  them  to  expand  their  capacity  and  output  with  the  certainty  that  they  will 
receive the required funding.. In the absence of such support/guarantee, the exporters 
would  evidently  be  perceived  by  the  markets  as  being  in  a  weaker  position. 
Consequently,  they  qualify  as  a  potential  transfer  of  funds  or  as  a  provision  of 
financial services. Such a valuable “guarantee” would have some value in the market 
and, at the very least, would involve the payment of a substantial fee. In view of this, 
the Agreements also confer a benefit which is, in the words of the EC-Aircraft panel 
“separate  and  independent  to  the  benefit  that  might  be  conferred  from  any  future 
transfer  of  funds”,  due,  inter  alia,  to  the  potential  obligation  of  payments  by  the 
Government.  They  are  more  than  just  a  vague  “promise  to  provide  “cheap” 
financing”99 and clearly make the recipients “better off” than they would be absent the 
Agreement. 

(438)  With regard to the amount of the benefit, this has been established on the basis of the 
fees charged for credit line obtained by one of the sampled exporting producers. This 
credit  line  was  granted  by  a  bank  whose  headquarters  is  established  in  the  financial 
jurisdiction other than PRC and it is shows all the elements of commercial credit lines 
available  on  world  financial  markets  and  other  agreements  found  in  the  commercial 
sector.  It  is  also  noted  that  this  credit  lines  is  not  substantially  different  in  its 
conditions from the other commercial credit lines obtained by the sampled exporting 
producers, where fees are charged, including those from foreign banks. In view of the 
above  analysis,  this  is  a  conservative  benchmark,  as  the  evidence  indicates  that  the 
Agreements  are  in  reality  more  valuable  to  firms  as  a  stand-alone  measure  than  a 
standard credit line. However, the Commission considered the required fees to serve as 
reasonably proxy for those that would be payable under the Agreements. 

(439)  The  GOC  also  claimed  that  the  banks  which  undertook  the  Agreements  with  the 
sampled exporters are not public bodies or were not entrusted by the government to do 

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EC-Aircraft panel Para 7.743 

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so.  This  claim  had  to  be  rejected.  The  banks  involved  were  the  same  banks  which 
provided  preferential  financing  and  in  the  recitals  (159)  -  (168)  and  (169)  -  (180) 
above  the  Commission  provided  a  detailed  explanation  why  they  are  public  bodies 
and/or why they are entrusted and directed by the GOC. 

(440)  The GOC claimed that the Commission’s claim that in normal market circumstances 
credit  lines  are  subject  to  substantial  commitment  and  administration  fees  is 
groundless as such fees only apply to “committed credit lines”. This claim had to be 
rejected.  As  stated  in  the  recital  above  the  credit  line  used  as  a  benchmark  is  not 
substantially different in its conditions from the other commercial credit lines obtained 
by  the  sampled  exporting  producers,  including  from  banks  outside  China.  Moreover 
one  of  the  banks  which  concluded  several  such  agreements  with  sampled  exporting 
producers seems to charge similar fees to its clients abroad100. 

(441)  The GOC also claimed that the Commission has not provided evidence to support its 
statement that the Government provision of credit lines (i.e. the Agreements) is part of 
preferential  lending.  This  is  not  correct.  The  provision  of  credit  lines  is  the  standard 
part of financing provided by banks to companies and the Agreements are separate and 
distinct  measures  falling  under  the  scope  of  preferential  lending.  As  stated  in  recital 
(102)  above  the  GOC  provides  through  a  number  of  planning  and  policy  documents 
and laws for the preferential financing to the PV industry. In addition numerous loans 
were drawn under these agreements, which clearly shows that they are an integral part 
of preferential financing of the PV industry.  

(442)  One  exporting  producer  claimed  that  the  provision  of  credit  lines  is  not  a  specific 
subsidy.  This  claim  had  to  be  rejected.  As  explained  in  recital  (441)  above  the 
provision  of  credit  lines  is  an  integral  part  of  preferential  lending  and  therefore  the 
specificity  analysis  in  recitals  (191),  (192),  (209)  and  (428)  above  equally  applies  to 
the provision of credit lines.  

(443)  According  to  the  complainant,  the  Commission  should  have  established  a  subsidy 
margin for the use of export buyers credits, as the EXIM Bank refused to cooperate. 
The Commission should have used the information in the complaint and the US DOC 
findings  in  the  similar  PV  case.  This  claim  could  not  be  accepted.  The  Commission 
investigated  the  allegations  in  the  complaint  but  no  evidence  was  found  that  the 
sampled exporting producers benefited from such measures during the IP. It is noted 
that the investigation periods for the US case and for the case at hand were different. 

3.5.3.  Comments  of  parties  concerning  Export  Guarantee  and  Insurance  for  green 

technologies 

(444)  With regard to the documents requested by the Commission at the verification visit as 
specified  in  recitals  (220)  and  (221),  the  GOC  claimed  that  it  has  not  been  clarified 
when the 840 Plan was requested, that Sinosure’s 2012 financial statements were not 
available  at  the  time  of  verification,  and  that  information  concerning  the  sampled 
companies were confidential and in any event the relevant contracts were not held at 
the  headquarters  of  Sinosure.  The  Commission  refers  to  its  explanations  included  in 
recitals (219), (220), and (223) which deal with all these arguments. With regard to the 

100 

http://www.chinaafricarealstory.com/2011/08/china-development-banks-3-billion-line.html,  “The  terms 
of the CDB line of credit differ in its two instalments. The first tranche of $1.5 billion will have a 20yr 
maturity  including  a  5yr  grace  period.  The  interest  rate  will  be  6  month  LIBOR  (London  Inter-Bank 
Offered Rate) plus a margin of 2.95%, with a commitment fee of 1% and an upfront fee of 0.25%. The 
terms  of  the  second  $1.5bn  tranche  are  15yr  maturity  including  a  5yr  grace  period,  interest  rate  of  6 
month LIBOR plus a margin of 2.28%, and probably the same fees” 

EN 

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840  Plan,  the  Commission  adds  that  it  asked  for  all  of  the  relevant  documents 
concerning the activity of Sinosure and the alleged subsidy programme benefiting the 
sampled exporters, and that this 840 Plan is certainly relevant for its findings, together 
with  all  the  other  documents  specified  in  recital  (236),  as  supported  by  the 
explanations  in  recital  (232).  As  for  the  Sinosure’s  2012  financial  statements,  the 
Commission  asked  for  the  trial  accounts,  if  the  2012  financial  statements  were  not 
finalised, but Sinosure also refused to provide any trial accounts for 2012. 

(445)  The  GOC  also  claimed  that  there  is  no  legal  or  factual  evidence  to  support  the 
conclusion that the photovoltaic industry is a “strategic industry” and that this would 
be  the  result  of  a  presumption.  The  Commission  refers  to  the  explanation  in  recital 
(231)  and  recalls  that  this  point  was  specifically  confirmed  by  the  GOC  during  the 
verification  visit.  With  regard  to  the  similar  claim  concerning  the  840  plan,  the  421 
plan and the measures to support “Strategic Emerging Industries” and to the claim that 
the plans would not be legally binding, the Commission refers to the explanations in 
recitals (232) - (234) respectively. It further notes that the GOC has failed to submit 
these documents and discuss them with the Commission, and that there is no evidence 
on the record proving that the Commission conclusions are incorrect. 

(446)  The GOC and one sampled exporter claim that the rebates and grants for the payment 
of export credit insurance premia granted by the local authorities have been illegally 
countervailed because it has not been established that they constitute subsidies within 
the meaning of the WTO SCM Agreement. The Commission refers to its analysis on 
the  findings  of  the  investigation  and  in  particular  to  recitals  (239)  and  (247).  The 
Commission further notes that the rebates and grants are inextricably interlinked with 
the export credit insurance programme because their repayment is the consequence of 
the payment of the premium to Sinosure under the main export credit insurance policy. 
Last but not least, these rebates also fall under the scope of the Notice [2004] No. 368 
issued jointly by MOFCOM and Sinosure, which provides that “the regional and local 
government authorities shall jointly make further effort to implement further support 
measures to the products included in the Directory and the high and new technological 
enterprises for export credit insurance”. 

(447)  The GOC also challenge the finding concerning Item (j) of Annex 1 of the WTO SCM 
Agreement that Sinosure short-term export credit insurance programme was operated 
at premium rates inadequate to cover the long-term operating costs and losses of the 
programme.  In  support  of  this  the  GOC  cites  the  jurisprudence  of  the  WTO  Panel 
finding  in  US-Upland  Cotton  and  presents  explanations  based  on  different  sets  of 
figures and arguments contained in Sinosure Annual Reports. The GOC also questions 
the  Commission  reference  to  Article  11  of  Sinosure’s  Articles  of  Association  and  to 
the  article  from  the  law  firm  Stewart  Law.  The  Commission  restates  all  of  its 
arguments in recitals (242) - (245) and recalls that its conclusions are based on the best 
available  evidence  in  the  file  due  to  the  lack  of  cooperation  of  the  GOC  which 
prevented  the  Commission  from  obtaining  the  relevant  information  it  had  asked  for. 
For  its  findings,  the  Commission  considered  a  number  of  elements  and  evidence  on 
file, among which were Sinosure’s Article of Association and the article from the law 
firm  Stewart  Law.  The  Commission  considers  that,  while  none  of  these  elements  is 
determinant in itself, these and all the other elements are relevant for its determination. 
As  for  the  US-Upland  Cotton  jurisprudence,  the  Commission  has  fully  taken  it  into 
account in its findings and the quotes of this jurisprudence from the GOC are indeed 
very pertinent. 

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(448)  In challenging the Commission analysis in recital (245), the GOC submits a table with 
figures  taken  from  the  Income  Statement  of  Sinosure’s  publicly  available  Annual 
Reports  for  the  period  2006-2011  and  concludes  that  it  is  evident  that  the  premiums 
received  were  higher  than  the  operating  costs  of  the  programme.  First,  the 
Commission notes that the table provided by the GOC does not include in the relevant 
row concerning amounts of the commissions paid by Sinosure but only the operating 
expenses.  Second,  the  figures  indisputably  show  that  in  each  single  year  from  2006 
until  2011  with  the  exception  of  2010  the  amounts  of  net  premium  are  never  higher 
than  the  amounts  of  the  net  claims  plus  the  operating  expenses,  even  ignoring  the 
payments  of  commissions  which  have  been  omitted  by  the  GOC.  This  includes  the 
year 2011, which partly covers the investigation period, and the amount of the loss is 
quite  substantial  in  certain  years  (e.g.  2008).  Third,  the  Commission  notes  that  for 
2010  the  GOC  has  indicated  a  disproportionately  low  amount  of  net  claims  paid 
(premiums  paid  are  stated  to  be  20  times  higher  than  the  claims  paid),  which  is  not 
reflected in the Annual Report of 2010. This amount reported by the GOC for the year 
2010  is  based  on  massive  ex-post  adjustments  concerning  recovery  of  claims  and 
change in outstanding claims reserves which only appear in the Annual Report of 2011 
with  reference  to  the  year  2010.  These  adjustments  appear  to  be  of  an  extraordinary 
and  abnormal  nature  and  are  only  reflected  in  the  report  of  the  following  year.  The 
Commission  also  notes  that  for  2011  the  GOC  has  instead  reported  the  amounts 
included  in  the  2011  Annual  Report.  The  Commission  finds  subsequent  adjustments 
difficult  to  reconcile  with  the  actual  situation,  especially  given  the  absence  of 
cooperation  and  of  further  explanation  by  the  GOC  or  Sinosure  in  the  course  of  the 
investigation.  According  to  US-Upland  Cotton  as  quoted  by  the  GOC  itself,  “the 
reference  to  “long-term”  in  item  (j)  to  refer  to  a  period  of  sufficient  duration  as  to 
ensure an objective examination which allows a thorough appraisal of the programme 
and  which  avoids  attributing  overdue  significance  to  any  unique  or  atypical 
experiences  on  a  given  day,  month,  trimester,  half-year,  year  or  other  specific  time 
period”  [emphasis  added].  The  Commission  considers  the  period  2006-2011  as  a 
sufficiently long-term period to consider, and Sinosure has incurred a loss in each year 
of this period. The situation of 2010 is either to be considered unique or atypical if one 
takes into account the adjusted figures in the 2011 Annual Report and thus of limited 
significance,  or  the  ordinary  unadjusted  figures  in  the  2010  Annual  Report  must  be 
taken into account as relevant which show that the result is just slightly above break-
even.  Given  the  significant  losses  incurred  in  other  years,  this  confirms  the 
Commission  findings that Sinosure is, overall, in a position  of long-term loss during 
the period 2006-2011. In addition, even if the data from 2010 were taken into account 
as being representative, the fact remains that Sinosure made losses in five out the six 
years from 2006 to 2011. The other tables and sets of figures submitted by the GOC to 
challenge  the  Commission  findings  on  item  (j)  WTO  SCM  Agreement  cannot  be 
reconciled  with  other  information  present  on  the  record  and/or  are  not  verifiable,  In 
any  event,  they  do  not  by  themselves  demonstrate  that  Sinosure  broke  even  on  its 
short-term export credit insurance programme during the period 2006-2011. 

(449)  As  for  the  benchmark  for  the  calculation  of  the  benefit,  the  GOC  considers  the 
establishment of an out-of-country benchmark inconsistent with the SCM Agreement, 
but  it  does  not  add  any  argument  to  justify  this  claim.  The  Commission  refers  to  its 
explanation in recital (245). 

(450)  The GOC and one sampled cooperating exporter challenge the benchmark used in that 
the  Commission  has  not  justified  why:  (i)  the  premium  calculation  is  based  on  US 
EXIM  bank  data;  (ii)  it  has  used  Italy  as  the  importing  country  and  not  Germany, 

EN 

106 

   EN 

which is the main export market for the product concerned; (iii) it has taken the time 
period of 120 days and not 60 days or any other shorter period; (iv) it has not used the 
premium  calculation  for  direct  exports  but  rather  for  the  Financial  Institution  Buyer 
Credit  (FIBC)  Export  Insurance.  With  regard  to  (i),  the  Commission  refers  to  recital 
(253).  With  respect  to  (ii),  the  Commission  believes  that  Italy  represents  the  right 
balance  between  the  EU  country  with  the  lowest  risk  and  EU  countries  with 
significantly higher risks and consequently premia charged, which are also markets for 
the product concerned. As for (iii), in the absence of a specific simulation based on a 
period of 90 days available on the EXIM Bank website the Commission considers the 
duration of 120 days as the most appropriate to represent the terms of sales during the 
investigation  period.  With  regard  to  (iv),  the  Commission  was  not  able  to  obtain  a 
simulation  for  the  calculation  of  the  premium  for  direct  exports  and  considers  this 
benchmark to reflect the general risk situation in the country of purchase. 

(451)  One sampled cooperating exporter claims that it has purchased export credit insurance 
for some of its exports but it has paid regular insurance premia and did not enjoy the 
Green Express programme or any other beneficial treatment alleged by the complaint. 
In the absence of evidence proving this claim, the Commission refers to its findings on 
this programme in Section 3.4.1.4 if this regulation. As regards ‘Green Express’, the 
Commission  refers  to  its  findings  in  recital  (240)  and  notes  that  this  constitutes  a 
specific  aspect  of  Sinosure’s  short-term  credit  insurance  programme  and  that  the 
Commission findings are not limited to this aspect but to the programme as a whole. 

3.5.4.  The Golden Sun demonstration programme 

(452)  The GOC further argues that this programme provides grants for “distributed solar PV 
systems” rather than for the producers/exporters of the product concerned and that the 
relevant criteria in the legislation are not directed to module and cell producers. In this 
respect  the  GOC  claims  to  have  provided  the  relevant  documentation  on  the 
programme and that even coordinated with the sampled companies to prove this point. 
Three sampled cooperating exporters  claim that this is a ‘user subsidy’ and does not 
confer a benefit to the product concerned, and therefore it is not countervailable within 
the  meaning  of  Articles  1(1)  and  3(2)  of  the  basic  Regulation,  Article  VI:3  GATT 
1994, and Article 19.1 of the WTO SCM Agreement. These exporters refer to the EU 
decision in  the Biodiesel from the United States case  (Recital  97  of  the  Commission 
Regulation  (EC)  No  194/2009,  OJ  L  67  of  12.03.2009  p.  50  and  to  the  WTO 
jurisprudence in U.S.-Lead Bars (Paras 6.50, 6.53, 6.56 and 6.57 of the Panel Report), 
Canada-Measures Affecting  the Export of Civilian Aircraft (Para. 9.112 of  the Panel 
Report),  Brazil-Export  Financing  Programme  for  Aircraft  (Para.  7.24  of  the  Panel 
Report),  and  Canada-Measures  Affecting  the  Export  of  Civilian  Aircraft  (Paras.  157 
and 159 of the Appellate Body Report). 

(453)  The Commission refers to its findings of the investigation and in particular to Recitals 
(243) - (246) of this Regulation, which provide exhaustive explanations on the above 
arguments  and  confirm  that  the  determination  is  consistent  with  the  relevant 
provisions and with the jurisprudence quoted by the GOC and the cooperating sampled 
exporters. The Commission restates that the grants under the programme are directly 
linked  to  the  product  concerned  because  the  eligible  “distributed  solar  PV  systems” 
specifically include the supply of modules and cells as a significant part of the projects 
and  therefore  the  nexus  between  the  benefit  conferred  by  the  government  and  the 
product concerned is direct and inextricable. As also specified particularly in Recitals 
(244)  and  (245),  the  investigation  has  confirmed  that  direct  payments  have  been 
effected  by  the  GOC  to  several  sampled  cooperating  exporters  (i.e.  the  purpose  of 

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installing solar panels to generate energy for their own use, including in the production 
process  of  the  product  concerned)  using  inter  alia  their  own  manufactured  solar 
modules  and  cells.  It  has  also  been  established  that  the  direct  payments  made  to  the 
exporters in their capacity as suppliers of the product concerned to third-party project 
operators are in fact at odds with the provisions in the relevant legislation and that the 
GOC  has  failed  to  provide  evidence  to  reconcile  the  situation  (see  namely  Recitals 
(245)  and  (246)).  The  limited  explanation  provided  by  the  GOC  and  the  sampled 
cooperating  exporter  that  the  direct  transfer  of  funds,  in  violation  of  the  Chinese 
legislation, was necessary because the project operator was in financial difficulty and 
to  ensure  that  the  grants  would  be  used  only  for  authorised  PV  systems  strongly 
indicates that, in the absence of this direct transfer from the government, the sampled 
cooperating exporter acting as supplier would not have been able to receive any money 
for the supply of the product concerned and that the government would not have been 
able  to  ensure  that  the  subsidy  would  be  used  for  its  intended  purpose.  From  this 
perspective and in the absence of further evidence these payments must be viewed as a 
direct grant from the GOC to the producer of the product concerned, which would not 
otherwise have received any money for the supply of the product concerned (assuming 
that this supply ever took place, for which again there is no evidence on the record). 
On this basis the Commission believes that the arguments raised by the GOC and by 
the sampled cooperating exporters are legally unfounded. 

(454)  The  GOC  also  claims  that  for  situations  in  which  the  benefits  from  the  programme 
concerned  the  supply  of  the  product  concerned  to  unrelated  project  operators,  the 
Commission  was  obliged  to  conduct  a  pass-through  analysis  to  establish  this  point, 
citing  the  WTO  decision  in  US-Softwood  Lumber  IV  (paras.  141  and  142  of  the 
Appellate Body Report). The Commission refers to the explanations in Recitals (244) - 
(246) and in Recital (352) above to dismiss this claim. Furthermore, due to the non-
cooperation of the GOC and interested parties, the Commission was not in a position 
to  carry  out  a  pass-through  analysis.  Therefore  there  is  no  question  of  pass-through 
and  the  WTO  jurisprudence  quoted  is  irrelevant  in  this  situation  given  that  the 
proceeds  were  directly  paid  to  the  producers  of  the  product  concerned  and  directly 
linked  to  the  supply  of  inter  alia  the  product  concerned.  Since  these  payments  were 
non-repayable grants, there is a financial contribution (a direct transfer of funds) and 
the Commission is entitled to presume that they confer a benefit to the recipient (the 
producers), in the absence of any evidence on further use made of the sums concerned. 
Had  payments  under  this  programme  been  made  by  the  government  to  third-party 
project operators and the equipment acquired for fair market value, there would be no 
benefit to the exporters concerned. However, in a situation where payments are made 
to the exporting producers, the amounts used by these companies for the installation of 
solar  panels  confer  a  benefit  because  it  relieves  them  of  costs  they  would  otherwise 
have incurred in this process. If the exporting producer is unable to demonstrate that a 
part of the grant has been transferred to third-party users, it is presumed, on the basis 
of  facts  available,  that  this  part  of  the  grant  confers  a  benefit  to  the  exporter  as  a 
general  subsidy  which  benefits  the  company’s  activities  as  a  whole.  This  is  the  case 
here. 

(455)  Two  sampled  cooperating  exporters  claim  that  the  Golden  Sun  programme  is  not 
specific because the relevant requirements in the Chinese legislation are objective and 
all enterprises meeting them can benefit from the programme, and eligibility is open to 
all  companies,  whether  or  not  manufacturers  of  the  product  concerned.  The 
Commission  refers  to  its  finding  of  specificity  in  Recital  (247)  showing  that  the 
conditions and selection criteria are not objective and do not apply automatically. The 

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relevant  required  criteria  confirm  that  the  programme  is  limited  only  to  the  limited 
subset  of  enterprises  able  to  fulfil  them,  namely  those  with  a  substantial  installed 
capacity of at least 300kWh and with substantial assets of at least RMB 100 million. 
The selection criteria also refer to the need for the recipient enterprises to be included 
in  the  local  Golden  Sun  demonstration  project  implementation  plan,  and  the 
investigation  has  established  that  the  inclusion  in  these  local  plans  depend  on  a 
discretionary  decision  of  the  competent  authorities  not  transparent  and  not  based  on 
objective criteria. The Commission adds that eligible “distributed solar systems” rely 
on  the  manufacture  and  supply  of  solar-powered  generating  equipment  the  bulk  of 
which is made by solar modules and cells. Therefore, contrary to the arguments of the 
sampled exporters this scheme is also specific in that only producers of solar systems, 
or in other words producers of the product concerned, are in practice eligible for the 
benefits  under  this  programme  either  directly  in  their  quality  as  project  owners  or 
indirectly  in  their  alleged  quality  as  suppliers  of  the  product  concerned  to  projects 
owners.  Therefore,  also  considering  the  absence  of  cooperation  of  the  GOC  that  has 
failed to provide all the budget documents requested by the Commission (see Recitals 
(234)-(239)), it is concluded that this programme is also de facto specific under Article 
4(2)(c) of the basic Regulation because mainly producers of the product concerned in 
fact benefit directly or indirectly from this programme. The subsidy is also used by a 
limited  number  of  enterprises  (the  producers  of  the  product  concerned),  or  is  used 
predominantly or disproportionately by these firms, since they are only a subset of the 
allegedly potential recipients but seem to receive all the funding. 

3.5.5.  Direct Tax Exemption and Reduction programmes 

3.5.5.1.  The two free/three half programme for foreign invested enterprises 

(456)  The  GOC  reiterates  its  argument  that  the  programme  concerning  foreign  invested 
enterprises  (FIEs)  alleged  in  the  complaint  was  terminated  as  of  2013.  The 
Commission  notes  that  the  investigation  period  ends  well  before  the  year  2013  and 
thus benefits granted under this programme during the IP are countervailable. This is 
confirmed  by  the  finding  of  the  investigation,  which  has  found  benefits  conferred 
during  the  IP  under  this  programme  to  several  sampled  cooperating  exporters.  The 
benefits  conferred  under  the  programme,  even  if  the  programme  was  terminated  in 
2013, also continue in the future. 

(457)  The GOC and one sampled cooperating exporter further claim that the variant scheme 
for  High  and  New  Technology  Enterprises  (HNTEs)  cannot  be  countervailed  on  the 
basis of  Article 10(1) of the basic Regulation as it was not alleged in the complaint. 
The  Commission  refers  to  its  detailed  rebuttal  of  this  argument  contained  in  recital 
(286). The Commission also recalls that the GOC has decided not to cooperate during 
the  investigation  concerning  the  variant  of  this  programme.  In  addition  to  these 
elements,  the  Commission  notes  that  the  complaint  lists  other  preferential  direct  tax 
schemes  for  HNTEs  in  addition  to  the  two  free/three  half  variant  for  FIEs  (section 
4.2.5.1 of the complaint), that is either the tax reductions for HNTEs (section 4.2.5.9 
of  the  complaint)  or  the  preferential  tax  programmes  for  FIEs  recognised  as  HTNE 
(section 4.2.5.8 of the complaint). Therefore, this programme may also be considered 
to have a very close nexus with either or both of these other alleged tax programmes in 
that it concerns a reduction of the direct tax rate and is specifically targeting the same 
set of beneficiaries HNTEs. Once again, cooperation by the GOC could have allowed 
the  Commission  to  assess  properly  and  thoroughly  all  the  elements  that  relate  to  the 
nexus with the programmes alleged in the complaint and to fill any information gaps 
that  are  present  in  the  complaint,  which  is  based  on  the  prima  facie  evidence 

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reasonably  available  to  the  complainant.  On  the  basis  of  these  arguments,  the 
Commission  restates  that  countervailing  this  programme  is  fully  in  line  with  Article 
10(1)  of  the  basic  Regulation,  as  this  provision  allows  for  the  investigation  of  any 
“alleged subsidy” identified by the complainant, not just to a specific programme. In 
this case, the alleged subsidy, the foregoing of government tax revenue targeting the 
same type of beneficiaries, is common to all the programmes in question. 

(458)  With  regard  to  the  calculation  of  the  subsidy  amount,  two  sampled  cooperating 
exporters argue that the Commission has erroneously used the full year figures in the 
2011 Annual Income Tax Return despite the fact that the IP covers half of 2011 and 
half  of  2012,  and  this  violates  the  calculation  method  in  Section  E(a)(ii)  of  the 
Commission Guidelines for the calculation of the amount of subsidy in countervailing 
duty investigations, OJ C 394, 17.12.1998, p. 6. One of these exporters further claims 
that,  since  the  full  2012  tax  return  was  not  available  at  the  time  of  verification,  for 
2012  the  Commission  should  have  based  its  calculation  on  the  quarterly  income  tax 
declarations concerning the first half of the year 2012 collected on spot and/or on the 
profit and loss tables for 2012, which show that the company was in a loss position. 

(459)  The Commission refers to recital (300) and restates the importance that the calculation 
of benefit be based on final audited tax returns for a certain tax year. The Commission 
adds that the final settlement of the 2011 tax return during the IP makes any benefit 
claimed  on  the  return  final,  further  underlying  the  correctness  of  its  approach.  The 
Commission cannot base its calculation on quarterly tax returns, because these returns 
reflect the on-going provisional situation at the time of filing and by definition do not 
take into account the final consolidated situation of the annual tax year. The objective 
of these returns is to ensure liquidity to the government in case taxes are provisionally 
due, but they reflect only the partial situation at the time of filing. It may well be the 
case that if the company turns a substantial profit in the last two quarters of the year 
that more than offset the losses in the initial quarters, then it will report a taxable profit 
on  the  final  tax  return.  Therefore  while  the  provisional  tax  returns  in  2012  give  a 
partial indication of the situation of the exporter at the time of filing and explains why 
the  Commission  collected  them,  their  relevance  is  not  absolute  as  it  cannot  be 
excluded  that  the  situation  at  the  end  of  the  fiscal  year  as  shown  on  the  definitive 
return  is  completely  different.  As  for  the  profit  and  loss  tables  concerning  the  year 
2012, the Commission notes that financial accounting does not always correspond to 
the fiscal accounting and it may well be that the obligation to report items of income 
and loss for direct tax purposes may substantially differ from the reporting obligations 
for accounting purposes. There  may  also be adjustment  for  tax  purposes  that  are  not 
fully reflected on the financial accounts. In sum, the fact that a company is in a loss 
position in its financial accounts does not necessarily mean that it will be in the same 
loss  position  in  its  final  tax  return.  Based  on  these  arguments  the  Commission 
confirms that the subsidy calculation for direct tax schemes must necessarily rely on 
the final figures appearing on the final audited income tax return and not on periodical 
tax statement or on definitive or trial accounting statements. 

3.5.5.2.  Tax offset for research and development by FIEs 

(460)  The  GOC  claims  to  be  informed  for  the  first  time  that  the  Commission  is 
countervailing  an  R&D  programme  which  is  not  a  replacement  programme  of  the 
R&D  programme  for  FIEs  alleged  in  the  complaint.  The  GOC  relies  on  similar 
arguments used for the previous scheme as explained in recital (457) and argues that 
countervailing this scheme violates Articles 11 and 13 of the WTO SCM Agreement. 
The GOC goes on to claim that the R&D programme for FIEs was terminated in 2008 

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and  the  new  R&D  programme  included  in  the  new  Chinese  Enterprise  Income  Tax 
Law  is  not  a  replacement  programme  since  it  does  not  refer  to  FIEs  and  it  does  not 
require the R&D expense to be 10% higher than the previous year. 

(461)  The Commission notes that the GOC did not provide information on this scheme in the 
reply to the questionnaire reply and to the deficiency letter, but that this scheme was 
already  countervailed  in  previous  investigations  (see  recital  (310)).  However,  the 
Commission also notes that this programme was discussed during the verification visit 
with  the  GOC  and  that  the  relevant  implementation  provisions  were  collected  as  an 
exhibit (they had also been submitted by one of the sampled exporters). Therefore the 
GOC’s  allegation  that  it  is  the  first  time  that  it  was  informed  of  the  potential 
countervailability  of  this  programme  is  unfounded,  also  given  that  several  sampled 
cooperating  exporters  with  which  the  GOC  coordinated  its  reply  have  reported  this 
programme in their questionnaire replies. The GOC was fully aware of this fact since 
it  inspected  several  times  the  non-confidential  file.  The  findings  of  the  investigation 
show  that  this  programme  is  countervailable  (recitals  (310)  -  (314)  above).  The 
Commission  adds  that  this  programme  is  clearly  a  replacement  of  the  previous 
programme  targeting  FIEs,  because  of  the  close  nexus  shown  by  the  same  form  and 
amount of the tax benefit (additional tax offset deductible from the taxable base), the 
same ratio and the same underlying situation (eligible costs for R&D activities) with 
only slight variations. These slight variations were brought in line with the reform of 
the  new  EIT  law  in  2008,  but  the  nature  and  substance  of  the  programme  remains 
fundamentally the same. The Commission also refers to the arguments on the standard 
of initiation set out in recital (457). 

(462)  The GOC and one sampled cooperating exporter also claim that this programme is not 
specific because the Commission has not demonstrated that obtaining the certificate of 
HNTE  is  limited  to  certain  enterprises.  The  Commission  refers  to  its  explanation  in 
recital (313) above and in recitals (321) and (325) concerning another tax programme 
for the HNTEs. The Commission adds that the implementing rules for the application 
of  this  programme  (see  recital  (321))  here  further  confirm  the  specificity  finding  of 
HNTEs as only companies in sectors supported by governmental policies and eligible 
under  the  relevant  Government  Catalogues  and  Guidelines  can  obtain  the  relevant 
certificate. For instance, only enterprises engaged in an R&D project prescribed in the 
High and New Tech Fields under the Key Support of the State and the Guidelines for 
Current Priorities for Development in Key Sectors of the Hi-Tech Industry of 2007 by 
the NDRC or R&D activities included in the scope of the Notice of the State Council 
on Implementing the Several Supporting Policies for the Outline of the State Medium 
and Long-term Scientific and Technological Development (2006-2020), No. 6 [2006] 
of  the  State  Council)  can  obtain  this  certificate.  It  is  therefore  clear  that  this  tax 
programme  is  limited  only  to  those  specific  companies  in  the  relevant  sectors  and 
R&D  activities  supported  by  the  GOC,  including  companies  in  the  encouraged  PV 
sector. 

(463)  With  regard  to  the  calculation  of  the  subsidy  amount,  two  sampled  cooperating 
exporters  argue  that  the  Commission  has  erroneously  used  the  figures  in  their  2011 
Annual Income Tax Return whereas the IP covers half of 2011 and half of 2012, and 
that  this  violates  the  calculation  method  in  Section  E(a)(iii)  of  the  Commission 
Guidelines  for  the  calculation  of  the  amount  of  subsidy  in  countervailing  duty 
investigation  of  1998.  The  Commission  refers  to  all  the  arguments  developed  in 
Recital  (459)  which  are  equally  pertinent  to  dismiss  this  claim  for  this  programme. 
Furthermore, the Commission notes that the argument concerning a purported tax loss 

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position in the 2012 tax year has limited or no relevance, because a tax deduction can 
be carried forward by five additional tax years and set off against any taxable income 
declared in the five following years. Therefore, even if the Commission would accept 
that these companies have made a tax loss in the year 2012 or the final audited 2012 
tax  return  were  available  and  would  show  a  tax  loss  (which  is  not  the  case  here),  it 
would  still  take  account  of  the  benefits  under  this  programme  as  it  could  not  be 
excluded  that  the  benefits  from  the  tax  deduction  accrued  in  2012  would  be  used  as 
soon  as  the  company  would  report  taxable  income  in  any  of  the  following  five  tax 
years. 

3.5.5.3.  Tax  reduction  for  high  and  New  Technology  Enterprises  involved  in  designated 

projects 

(464)  The GOC and one cooperating exporter argue that this programme is not specific, that 
specificity  analysis  is  not  based  on  any  facts,  and  that  the  requirements  to  obtain 
HTNE  states  should  be  considered  objective  criteria  or  conditions  governing  the 
eligibility  for  the  subsidy  and  the  eligibility  for  this  programme  is  automatic.  With 
regard to the specificity finding concerning the limitation of this programme and of the 
R&D  tax  offset  also  to  HNTEs,  the  Commission  refers  to  its  explanation  in  recitals 
(321) and (325), and also to recital (462) equally applicable for this programme. The 
Commission  restates  that  in  particular  the  implementing  measures  and  documents 
listed above show that the application of this programme and the recognition of HNTE 
status,  far  from  being  available  to  all  enterprises  and  relying  on  objective  criteria,  is 
limited only to certain sectors and enterprises supported by the GOC on the basis of 
criteria that do not appear to be objective or neutral. The eligibility for benefits under 
this programme is also not automatic but depends on the granting of HNTE certificate, 
which  is  released  after  a  discretionary  procedure  by  the  competent  authorities  and  is 
therefore not automatic. 

(465)  One  cooperating  exporter  claims  that  the  Commission  erroneously  calculated  the 
subsidy  benefit  from  this  programme  because  it  used  the  2011  audited  tax  return 
whereas  the  quarterly  tax  declarations  for  Q1  and  Q2  of  2012  were  available  and 
collected at verification, and in any event the Commission could have requested copy 
of  the  final  annual  income  tax  declaration  for  2012  as  soon  as  it  would  have  been 
available. This exporter also argues that if the 2011 tax return is used to calculate the 
subsidy  benefit,  then  the  2011  company  turnover  and  not  the  turnover  during  the  IP 
should be used. The Commission refers to its explanation in recital (459) above. The 
Commission  further  notes  that  in  its  pre-verification  letter  to  the  sampled  exporters, 
including  the  exporter  in  question,  it  had  specifically  requested  the  original  full  tax 
statements/returns  for  fiscal  years  covering  the  IP  and  the  three  preceding  years. 
Therefore this cooperating exporter could and should have submitted the 2012 return 
as soon as available, and the Commission notes that it has not done so even as recently 
as it sent its comments to the disclosure document. With regard to the argument that 
the Commission should use the 2011 turnover to calculate the benefit, it notes that the 
amount of benefit from the 2011 tax return is considered to be reasonably reflective of 
the  situation  in  the  IP,  especially  as  the  payment  of  tax  for  2011  was  due  in  the  IP 
(month) and final data for 2012 were not available at the time of verification. In any 
event,  the  Commission  cannot  use  different  denominators  to  measure  different 
subsidies, otherwise the percentage figures will not be comparable and consistency in 
the calculation is not  guaranteed. The Commission finally adds that it does not have 
verified figures for the 2011 turnover but it only has verified turnover figures for the 
IP. 

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3.5.6.  Comments  of  parties  concerning  the  provision  of  land  use  rights  for  less  than 

adequate remuneration 

(466)  The  GOC  claimed  that  the  Commission  did  not  determine  the  specificity  under 
Articles 2.1 and 2.2 of the ASCM and did not clearly substantiate its determination of 
specificity on the basis of positive evidence, as required by Article 2.4 of the ASCM. 
According to GOC the Commission had not provided any factual evidence as to which 
are  the  certain  industries  that  are  accorded  LURs  at  preferential  rates  and  the  legal 
basis of its assessment that the industry producing solar cells and modules forms part 
of these industries. One exporting producer made similar claim. These claims had to 
be rejected. The Commission cited in the recital (364) above the examples of the LUR 
notices where the relevant authorities limited the potential buyers for the set price to 
the  photovoltaic  industry  and  set  price  limits  on  the  LUR  purchased  by  the  sampled 
exporting producers. In the absence of any other information requested from the GOC 
and,  given  the  government  support  to  the  PV  industry,  along  with  discretionary  and 
non-transparent nature of the allocation of land-use rights, the Commission considered 
that this information establish the existence of specificity.  

(467)  The GOC and several exporting producers claimed that the LUR benchmark selected 
by the Commission is not adequate. The GOC also claimed that the Commission did 
not  do  its  best  to  identify  a  benchmark  that  approximates  the  market  conditions  that 
would  prevail  in  the  absence  of  the  distortion  as  required  by  the  WTO  Panel  ruling 
inthe  US  –  Definitive  Anti-Dumping  and  Countervailing  Duties  on  Certain  Products 
from China101 . This claim had to be rejected. The Commission indeed looked in detail 
in  the  various  indicators  and  compared  Taiwan  and  PRC  as  a  whole  as  well  as 
individual  Chinese  provinces  concerned.  After  such  an  analysis  the  Commission 
considers  Taiwan  as  an  appropriate  benchmark  because  of  the  totality  of  the 
information  on  the  file  i.e.  (i)  the  comparable  level  of  economic  development  and 
economic  structure  prevailing  in  Taiwan  and  big  majority  of  the  Chinese  provinces 
and cities where the co -operating exporting producers are established, (ii) the physical 
proximity  of  China  and  Taiwan,  (iii)  the  high  degree  of  industrial  infrastructure  that 
both Taiwan and these Chinese provinces have, (iv) the strong economic ties and cross 
border  trade  between  Taiwan  and  the  PRC,  (v)  the  high  density  of  population  in  the 
Chinese  provinces  concerned  and  in  Taiwan,  (vi)  the  similarity  between  the  type  of 
land  and  transactions  used  for  constructing  the  relevant  benchmark  in  Taiwan  with 
those  in  the  PRC  and  (vii)  the  common  demographic,  linguistic  and  cultural 
characteristics  in  both  Taiwan  and  the  PRC.  Furthermore,  most  of  the  provinces 
concerned are considered top manufacturing provinces in the PRC. Although the GDP 
per capita of Taiwan and these provinces and cities is not identical, the GDP of these 
provinces  and  cities  has  grown  rapidly  in  recent  years  i.e.  they  are  catching  up  with 
Taiwan. In addition, recent data suggest that the both PRC as a whole, as well as the 
provinces and cities concerned have much higher GDP growth rate than Taiwan, i.e. 
they  are  catching  up  very  fast.  However,  it  is  important  to  note  that  the  exact 
comparison made between the GDP of a non-market economy (the PRC) and the GDP 
of  a  well-  established  market  economy  (Taiwan)  is  not  a  decisive  fact  because  it  is 
normal  for  a  non-market  economy  to  lag  behind  a  functioning  market  economy  in 
terms  of  GDP.  In  addition,  many  other  factors  e.g.  planning  rules,  environmental 
policy  may  affect  the  supply  and  demand  of  industrial  land.  The  real  issue  is  what 
would  be  the  'prevailing  market  conditions'  with  regard  to  LUR  in  the  Chinese 

101 

Panel  Report,  US  –  Definitive  Anti-Dumping  and  Countervailing  Duties  on  Certain  Products  from 
China, para. 10.187 

EN 

113 

   EN 

                                                 
provinces  concerned  if  it  was  a  functioning  market  economy  and  on  the  basis  of  all 
evidence, it is concluded that they would be very similar to those of Taiwan. 

3.5.7.  Other comments 

(468)  The  complainant  claimed  that  the  Commission  should  disclose  additional  subsidy 
schemes  found  during  the  investigation  and  also  establish  subsidy  margins  for  such 
schemes  not  mentioned  in  the  complaint.  In  this  respect  it  is  noted  that  the  all  the 
subsidies  which  met  the  legal  requirements  for  initiation  were  investigated  by  the 
Commission. 

(469)  The  complainant  claimed  that  the  Commission  should  have  established  a  subsidy 
margin  with  regards  to  the  provision  of  polysilicon  for  less  than  adequate 
remuneration on the basis of the information in the complaint and on the basis of the 
US  DOC  findings  in  similar  PV  case.  The  Commission  investigated  this  programme 
and,  on  the  basis  of  the  information  received  from  sampled  exporting  producers  and 
the  GOC,  concluded  that  there  was  no  benefit  from  this  programme  during  the  IP, 
principally  because  import  prices  of  polysilicon  were  lower  than  prices  charged  by 
Chinese suppliers. It is noted that the investigation period for the US case and for the 
case at hand were different. 

(470)  The complainant also claimed that the Commission should have established a subsidy 
margin  with  regards  to  provision  of  electricity  for  less  than  adequate  remuneration. 
This  claim  had  to  be  rejected.  The  Commission  did  not  find  sufficient  evidence  that 
the  sampled  exporting  producers,  with  the  exception  of  LDK,  benefited  from 
preferential provision of electricity in the IP. 

(471)  The  GOC  claimed  that  the  Commission’s  calculation  methodology  resulted  in  the 
“double  counting  at  the  level  of  the  ant-dumping  and  anti-subsidy  margin 
calculations”.  According  to  the  GOC  the  Commission  should  have  deducted  the 
subsidy  margin  calculated  for  the  export  credit  insurance  programme  from  the 
dumping margins on the basis that it is an export subsidy. The GOC also claimed that 
the Commission should have deducted from the dumping margin the subsidy margins 
calculated  on  the  basis  of  out-of-country  benchmarks.  It  reasoned  that  “part  of 
dumping  calculated  based  on  an  analogue  country  normal  value  is  actually  same 
subsidisation 
anti-subsidy 
countervailed 
investigation". Neither  of  these  claims  would  have  any  impact  on  the  level  of  the 
resulting measures as in the present case the combined duties are limited by the injury 
margin.  The  GOC  also  confirmed  this  in  the  comments  to  definitive  disclosure 
document. Therefore it was not considered necessary to address the substance of these 
claims. 

that  has  been 

the  parallel 

in 

3.6. 

Amount of countervailable subsidies 

(472)  The  amounts  of  countervailable  subsidies  in  accordance  with  the  provisions  of  the 
basic Regulation, expressed ad valorem, for the investigated companies are set out in 
the table below: 

Exporting producer 

Definitive subsidy margin 

Wuxi Suntech Power Co. Ltd; 

Luoyang Suntech Power Co. Ltd; 

Suntech Power Co. Ltd; 

4,9 % 

EN 

114 

   EN 

Wuxi Sun-Shine Power Co. Ltd; 

Zhenjiang Ren De New Energy Science Technology Co. Ltd; 
Zhenjiang Rietech New Energy Science Technology Co. Ltd, 

Yingli Energy (China) Co. Ltd; 

Baoding Tianwei Yingli New Energy Resources Co. Ltd; 

Hainan Yingli New Energy Resources Co. Ltd; 

Hengshui Yingli New Energy Resources Co. Ltd; 

Tianjin Yingli New Energy Resources Co. Ltd; 

6,3 % 

Lixian Yingli New Energy Resources Co. Ltd; 

Baoding Jiasheng Photovoltaic Technology Co. Ltd; 

Beijing Tianneng Yingli New Energy Resources Co. Ltd; 

Yingli Energy (Beijing) Co. Ltd 

Changzhou Trina Solar Energy Co. Ltd; 

Trina Solar (Changzhou) Science & Technology Co. Ltd; 

Changzhou Youze Technology Co. Ltd; 

Trina Solar Energy (Shanghai) Co. Ltd; 

Yancheng Trina Solar Energy Technology Co. Ltd 
JingAo Solar Co. Ltd; 
Shanghai JA Solar Technology Co. Ltd, 
JA Solar Technology Yangzhou Co. Ltd; 
Shanghai Jinglong Solar Energy Technology Co. Ltd; 

Hefei JA Solar Technology Co. Ltd, 
Jiangxi LDK Solar Hi-Tech Co. Ltd; 
LDK Solar Hi-Tech (Hefei) Co. Ltd; 
LDK Solar Hi-Tech (Nanchang) Co. Ltd; 

LDK Solar Hi-Tech (Suzhou) Co. Ltd, 

Delsolar (Wujiang) Co. Ltd, 

Renesola Zhejiang Ltd 

Renesola Jiangsu Ltd  

Jinko Solar Co. Ltd and related companies 

Other co-operating companies (Annex 1) 

All other companies 

3,5 % 

5,0 % 

11,5 % 

de minimis 

4,6 % 

6,5 % 

6,4 % 

11,5 % 

(473)  In accordance with Article 15(3) of the basic Regulation, the total subsidy margin for 
the cooperating companies not included in the sample is calculated on the basis of the 
total  weighted  average  subsidy  margin  established  for  the  cooperating  companies  in 
the sample, i.e. 6,4 %. 

EN 

115 

   EN 

(474)  Given  the  high  level  of  cooperation  of  Chinese  exporting  producers,  the  “all  other 
companies”  duty  was  set  at  the  level  of  the  highest  duty  to  be  imposed  on  the 
companies,  respectively,  sampled  or  cooperating  in  the  investigation.  The  “all  other 
companies” duty will be applied to those companies which had not cooperated in the 
investigation.  

4. 

INJURY 

4.1. 

Definition of the Union industry and Union production  

(475)  The  like  product  was  manufactured  by  around  215  producers  in  the  Union.  They 
constitute  the  Union  industry  within  the  meaning  of  Article  9(1)  of  the  basic 
Regulation and will hereafter be referred to as ‘the Union industry’.  The Institutions 
have  verified  claims  by  interested  parties  that  there  was  a  higher  number;  this 
verification  has  revealed  that  the  alleged  additional  producers  were  in  reality  mostly 
exporting producers, importers related to those, distributors and installers.  

(476)  All  available  information  concerning  the  Union  industry,  including  information 
provided  in  the  complaint,  macroeconomic  data  provided  by  Europressedienst,  an 
independent  consultancy  firm  (‘the  consultant’)  and  the  verified  questionnaire 
responses  of  the  sampled  Union  producers  were  used  to  establish  the  total  Union 
production  in  the  IP  since  complete  public  information  on  production  was  not 
available. As modules and cells are imported into the Union under customs headings 
covering other products not subject to the present investigation and the reported import 
volumes  are  in  tonnes,  Eurostat  could  not  be  used  to  determine  import  volumes  and 
values, which were based on the data provided by the consultant. When possible, the 
data  received  from  the  consultant  were  cross-checked  with  other  available  public 
sources and with the verified questionnaire replies. 

(477)  On  this  basis,  the  total  Union  production  was  estimated  to  be  around  4  GW  for 

modules and 2 GW for cells during the IP. 

(478)  As indicated in recital (21) above, nine Union producers were selected in the sample 
representing 18 % - 21 % of the total Union production of modules and 17 % - 24 % 
of the total Union production of cells.  

(479)  Several  parties  contested  the  fact  that  data  provided  by  the  consultant  were  used  to 
determine,  inter  alia,  Union  production,  Union  production  capacity  as  well  as  other 
macroeconomic  injury  indicators  concerning  the  Union  industry  and  import  data. 
These parties questioned the independence of the consultant alleging that it was linked 
to the complainant. They also requested clarifications on what basis the consultant was 
selected by the Commission and questioned its expertise in collecting economic data 
related  to  the  PV  sector.  In  this  regard,  it  was  claimed  that  the  Commission  should 
have  based  its  findings  on  data  from  other  available  sources,  in  particular  known 
research  institutes.  Lastly,  a  reference  to  Best  Practices  for  the  submission  of 
economic evidence and data collection in cases concerning the application of Articles 
101 and 102 TFEU and in merger cases was made by AFASE to contest the reliability 
of the data submitted by the consultant. 

(480)  As regards the alleged links between the consultant and the complainant, the relevant 
interested  parties  did  not  submit  any  evidence  showing  that  such  links  existed. 
Likewise,  the  investigation  did  not  bring  into  light  any  evidence  of  a  relationship 
going beyond purely commercial character. Following final disclosure one interested 
party claimed that there were indications that the prima facie evidence provided by the 
complainant Union industry in the complaint were based on data provided by the same 

EN 

116 

   EN 

consultant.  Even  though  it  is  acknowledged  that  findings  for  some  indicators  were 
indeed  similar  to  the  evidence  provided  in  the  complaint  that  does  not  necessarily 
mean  that  they  were  established  on  the  basis  of  one  source  only.  In  this  regard,  the 
complaint provides the various sources used. The claims in this regard had therefore to 
be rejected.  

(481)  The  Commission  considered  it  appropriate  to  make  use  of  this  consultancy  in  the 
current investigation, due to the unavailability from other publicly available sources of 
the necessary macroeconomic data covering the total Union market as well as import 
data.  Prior  to  selecting  Europressedienst  the  Commission  assessed  the  methodology 
used by the consultant for the collection of the relevant data as well as the consultant’s 
ability to provide the necessary data separately for all product types and for the entire 
period considered. 

(482)  Furthermore,  during  the  investigation,  data  provided  by  the  consultant  were  counter 
checked  when  possible  with  other  available  sources  and  were  confirmed.  In  this 
respect,  it  is  noted  that  several  research  companies  specialised  in  collecting  PV 
statistics exist on the market and the figures reported are almost never identical. This 
is due to the fact that precise figures are difficult to derive for any research  institute 
and  therefore  the  reported  PV  market  indicators  will  always  be  based  on  estimates, 
independently  of  the  provider  of  such  figure.  In  this  context,  the  cross-checking 
exercise carried out by the Commission consisted of comparing the trends of the data 
received  from  the  consultant  with  the  trends  of  the  same  data  published  by  other 
research companies, the Commission's Joint Research Center ('JRC') and the EPIA on 
the same topics, when available. No significant differences were noticed as a result of 
the  cross-checking  exercise  and  the  trends  of  the  indicators  for  which  the  cross-
checking was done were similar. Provisional anti-dumping findings were therefore not 
solely  based  on  data  provided  by  the  consultant  but  also  on  the  Commission’s  own 
analysis and assessment of these data. In addition, as mentioned above in recital (8), 
after  the  imposition  of  provisional  anti-dumping  measures  a  verification  visit  took 
place  at  the  premises  of  the  consultant.  The  Commission  carried  out  the  on-the-spot 
check at the consultant’s premises to verify the reliability of the methodology and data 
supplied. The on-the-spot check was carried out as a follow-up of the cross-checking 
of the data by the Commission and to obtain further assurance as regards the reliability 
and  quality  of  the  data  and  related  methodology.  The  on-the-spot  verification  was 
considered appropriate in application of the principle of good administration, even if 
those data were not provided by an interested party but by a consultant. As a result, the 
Commission  was  further  reassured  of  the  reliability  of  the  data  provided  by  the 
consultant. 

(483)  One  party  claimed  that  the  methodology  of  cross  checking  used  by  the  Commission 
was not explained in sufficient detail and requested that the other sources used for the 
cross  checking  should  be  disclosed.  This  party  argued  further  that  the  methodology 
used  was  in  any  event  invalid  insofar  that  only  trends  of  various  sources  were 
compared and not absolute values.  

(484)  As far as the other sources used to cross check the data provided by the consultant are 
concerned, these were reports published by the JRC and by 'EPIA on the same topics. 
As for the comparison of data with other sources it is noted that they showed not only 
similar  trends  but  also  similar  magnitudes.  Therefore,  it  was  concluded  that  the 
methodology used was appropriate and the claims in this regard were rejected. 

EN 

117 

   EN 

(485)  The  consultant’s  main  activity  is  collecting  data  linked  to  the  PV  sector  and 
developing an up-to-date database of companies active in the PV market.. These data 
are  published  in  specialised  photovoltaic  magazines  and  also  used  by  individual 
companies  for  which  it  carries  out  specialised  research.  The  database  developed  by 
Europressedienst is regularly up-dated and re-published. In addition, the consultant has 
several  years  of  experience  in  this  sector.  More  precisely,  the  methodology  of  the 
consultant  is  to  collect,  cross-check  and  agglomerate  information  using  various 
sources  available  in  the  market.  To  this  end,  it  collects  the  data  via  standard 
questionnaires  sent  to  the  companies  listed  in  the  database  or  via  phone,  especially 
from  the  Union  producers,  or  during  the  specialised  fairs,  notably  from  producers  in 
third  countries.  When  the  information  cannot  be  obtained  through  the  channels  just 
mentioned,  Europressedienst  checks  the  financial  reports  of  companies  in  the 
photovoltaic sector or co-operates on a freely basis with other research institutes with a 
view  to  obtaining  or  cross-checking  the  data.  It  was  verified  that  these  sources  were 
used by the consultant in its daily activity. In the light of the above, it was considered 
appropriate to make use of Europressedienst’s services in the present investigation and 
the parties’ claims in this respect were therefore rejected. 

(486)  With regard to the Best Practices for the submission of economic evidence issued by 
the competent service of the Commission (‘the Best Practices’), the following remarks 
should be made. First of all, it is a document that cannot engage the Commission, as it 
has not been adopted by the College, but published by the competent service with the 
purpose  of  providing  recommendations  to  parties  as  to  how  to  present  economic 
evidence.  Secondly,  the  Best  Practices  concern  the  submission  of  economic  analysis 
and data used in competition investigations pursuant to Article 101 and 102 TFEU and 
in merger cases. The applicable rules, standards of proof and investigating powers of 
the  Commission  in  those  competition  cases  cannot  be  compared  to  trade  defence 
investigations, to which an entirely different set of rules applies.  

(487)  Several  parties  contested  the  methodology  used  by  the  consultant  claiming  that  it 
would  not  reach  recognised  scientific  standards.  However,  as  mentioned  above  in 
recital (481) above, the methodology was assessed and the resulting data were cross-
checked and verified and as a result were considered in line with other published data 
and  therefore  reasonably  reliable.  Specific  points  raised  by  certain  interested  parties, 
were  clarified  bilaterally  and  made  available  in  the  open  file  of  the  investigation  for 
inspection by interested parties. 

(488)  The CCCME argued that the methodology of data aggregation was not clarified. This 
claim  was  rejected  as  the  relevant  information  was  made  available  to  all  interested 
parties in the file open for inspection by interested parties. 

(489)  After final disclosure, several parties reiterated their concerns on the selection of the 
consultant by the Commission and on the quality of the data supplied. In this respect it 
was  claimed  that  the  consultant’s  data  can  be  ordered  and  purchased  on  an  ad  hoc 
basis to meet the specifically identified requests of potential clients and may therefore 
not  be  objective.  In  addition,  CCCME  contested  that  the  data  collected  by  the 
consultant can be considered as positive evidence within the meaning of Article 3(2) 
of the basic Regulation since the data was to a large extent based on assumptions and 
estimations.  Furthermore,  it  was  claimed  that  the  data  supplied  were  not  sufficiently 
supported  by  evidence  in  the  file  and  that  they  were  not  of  an  affirmative,  objective 
and verifiable character. 

EN 

118 

   EN 

(490)  In respect of these claims, reference is made to the recitals (481) - (482) above where 
additional  information  was  provided  regarding  the  selection  of  the  consultant.  In 
addition, it is noted that the Commission hired the consultant on the basis of the best 
available  information  at  that  moment  in  time  and  in  full  compliance  with  the 
Commission  Financial  Regulation  applicable  to  the  procedure.  Furthermore,  it  is 
recalled that the consultant’s capacity to provide all the needed data in due time was of 
great  importance  since  the  Commission  was  bound  to  statutory  deadlines  for  the 
publication of the provisional findings in the on-going investigation.  

(491)  As regards the quality of the data supplied and whether it can be considered as positive 
evidence in accordance with Article 3(2) of the basic Regulation, as mentioned above 
in  recital  (482),  the  consultant’s  methodology  for  collecting  the  data  was  examined 
and it was assessed that it was of satisfactory quality. In addition, as also mentioned 
above in the same recital, the data supplied by the consultant were cross-checked when 
possible  with  other  sources  and  found  to  be  reasonably  accurate.  Finally,  it  is  noted 
that  the  consultant  has  one  database  which  is  up-dated  on  a  regular  basis, 
independently  of  the  clients’  needs  and  requests.  The  same  database  is  used  to 
aggregate and deliver PV statistics to various clients, and therefore the allegation that 
data were not objective had to be rejected.  

(492)  After  final  disclosure,  one  interested  party  claimed  that  the  Commission  had  not 
disclosed  the  sources,  the  methodology  used  and  the  companies  with  which  the 
consultant  co-operated  to  compile  the  macroeconomic  data  supplied.  Another 
interested  party  reiterated  that  the  methodology  applied  by  the  consultant  suggests 
inaccurate results. Several interested parties requested further information concerning 
the  methodology  used  by  the  consultant  such  as  the  average  response  rates  to  the 
questionnaires/interviews, the percentage of data collected through each channel, how 
these  were  verified,  the  approximations/assumptions  used  to  generate  the  data,  the 
number of companies for which approximations were made, and at least a range of the 
number of employees of the consultant. 

findings, 

interested  parties  with 

(493)  In  respect  of  these  claims,  it  is  noted  that  subsequently  to  the  imposition  of  the 
the 
provisional 
the  Commission  provided 
methodology and with the sources used by the consultant in aggregating the data and 
addressed  specific  questions  of  the  interested  parties  in  this  regard  following  the 
provisional  anti-dumping  disclosure.  The  additional  requests  for  information  of  the 
interested parties concerned following final disclosure are considered to be covered by 
the information made available after the imposition of provisional duties to the extent 
that  the  confidentiality  limitations  allowed  it.  In  addition,  it  is  underlined  that  the 
Commission verified on-the-spot the way the data had been collected and aggregated 
by  the  consultant  and  the  relevant  underlying  assumptions  for  aggregating  the  data. 
The results of the verification were satisfactory and the Commission was reassured of 
the  reasonableness  of  the  underlying  assumptions  and  of  the  quality  of  the  data 
supplied by the consultant. Furthermore, the parties did not contest the data as such.  

(494)  After final disclosure, another party requested clarifications with regard to the number 
of Union producers considered by the consultant in its data collection and the overlap 
between these and the around 215 Union producers known to the Commission. In this 
respect, it is clarified that the Union producers considered by the consultant are largely 
the  same  than  the  ones  known  to  represent  the  Union  industry  in  this  investigation 
mentioned in recital (475) above.  

EN 

119 

   EN 

(495)  After final disclosure, one party claimed that the Commission has conducted the injury 
analysis in an inconsistent manner since it was done separately for modules and cells 
while the injury and subsidy margin calculations had been established as a weighted 
average for modules and cells together. In this respect, it is noted that while indicators 
were  shown  separately  for  each  product  type,  the  conclusions  reached  for  each 
indicator  refer  to  the  product  under  investigation  as  a  whole.  It  is  also  recalled  that 
modules  and  cells  are  one  single  product  and  therefore  the  subsidy  margins  and  the 
injury  elimination  level  were  established  on  this  basis.  Therefore,  the  claim  was 
rejected. 

(496)  Finally,  another  party  claimed  that  the  calculation  of  the  values  of  macroeconomic 
indicators during the IP was wrongly based on a simple average of the years 2011 and 
2012  as  such  methodology  would  not  be  objective  and  would  not  lead  to  results 
reflecting the reality during the IP. It is clarified that a simple average of the data was 
only  used  in  case  where  there  were  similar  trends  in  the  periods  concerned.  In  case 
trends  were  different,  the  methodology  was  adapted  accordingly  by  taking  into 
consideration market reality. The party concerned did not develop to what extend the 
results  of  the  methodology  used  would  not  reflect market reality. These  claims were 
therefore rejected. 

4.2. 

Determination of the relevant Union market 

(497)  Part of the Union industry is vertically integrated and a substantial part of the Union 
industry’s production was destined for captive use, in particular for the production of 
cells. 

(498)  In order to establish whether or not the Union industry suffered material injury and to 
determine consumption and other economic indicators, it was examined whether and 
to  what  extent  the  subsequent  use  of  the  Union  industry’s  production  of  the  like 
product (‘captive’ use) had to be taken into account. 

(499)  In  order  to  provide  a  picture  as  complete  as  possible  of  the  situation  of  the  Union 
industry, data have been analysed for the entire activity of the like product and it was 
subsequently determined whether the production was destined for captive use or free 
market.  

(500)  It  was  found  that  the  following  economic  indicators  related  to  the  Union  industry 
should be examined by referring to the total activity (including the captive use of the 
industry):  consumption,  sales  volume,  production,  production  capacity,  capacity 
utilisation,  growth,  investments,  stocks,  employment,  productivity,  cash  flow,  return 
on  investment,  ability  to  raise  capital  and  magnitude  of  the  amount  of  the 
countervailable  subsidies.  This  is  because  the  investigation  showed  that  those 
indicators  could  reasonably  be  examined  by  referring  to  the  whole  activity  as  the 
production destined for captive use was equally affected by the competition of imports 
from the country concerned. Hereinafter the captive and the free market together are 
referred to as ‘total market’. 

(501)  As  regards  profitability,  the  analysis  focused  on  the  free  market  since  prices  in  the 
captive  market  were  found  not  to  always  reflect  market  prices  and  did  not  have  an 
impact on this indicator.  

(502)  Several  parties  argued  that  the  injury  should  have  been  assessed  separately  for  the 
captive and for the free market. One party argued that data relating to cells destined for 
captive use should have been excluded from the injury assessment on the grounds that 
they were not affected by the subsidised imports. 

EN 

120 

   EN 

(503)  The investigation has shown that vertically integrated Union producers were forced to 
import  subsidised  products  (cells)  and  to  cease  production  of  these  products  at  cost 
above  the  import  price,  as  a  consequence  of  the  price  pressure  exerted  by  the 
subsidised  imports.  Furthermore,  the  investigation  also  revealed  that  the  free  market 
and  the  captive  market  displayed  the  same  trends  in  prices,  which  also  showed  that 
they were equally affected by the imports concerned.  

(504)  After final disclosure, several parties reiterated that the Commission failed to provide 
an  adequate  and  reasoned  analysis  of  the  captive  market  or  why  a  separate  analysis 
had not been carried out. One party claimed that no information was provided about 
the significance of the Union production destined for captive use. In addition, it was 
claimed that recital (106) to the provisional anti-dumping Regulation concluding that 
prices  in  the  captive  market  did  not  always  reflect  market  prices,  contradicted  the 
conclusions  set  out  in  recital  (503)  above  that  the  free  market  and  captive  market 
displayed similar trends in prices. 

(505)  It is firstly noted that recital (105) to the provisional anti-dumping Regulation sets out 
the  reasons  as  to  why  it  was  considered  appropriate  to  examine  injury  indicators 
(except for profitability) referring to the total activity of the Union industry including 
captive  use.  In  this  regard  it  is  recalled,  as  set  out  in  the  same  recital,  that  the 
investigation revealed that the production destined for captive use was equally affected 
by the competition of the imports from the PRC, which as such was not contested by 
the interested parties concerned. Therefore, the claim that no explanations were given 
as to why no separate analysis took place had to be rejected. Likewise, as it follows 
from  this  conclusion,  it  had  also  to  be  rejected  that  such  separate  analysis  of  the 
captive market should have taken place.  

(506)  Secondly,  while  on  the  basis  of  the  above  the  significance  of  the  Union  production 
destined  for  captive  use  was  not  considered  an  essential  element,  it  is  noted  that  the 
Union production of cells destined for captive use represented about half of the total 
production  in  the  IP.  Finally,  it  is  clarified  that  the  fact  that  prices  in  the  captive 
market do not reflect the prices in the free market is not necessarily contradicting the 
fact that both prices followed the same trends, as they may still be at different levels or 
price  movements  may  be  at  a  higher  or  lower  degree  and  thus  depicting  a  different 
picture.  On  the  basis  of  the  above,  the  claims  concerning  the  captive  market  were 
rejected. 

(507)  The parties concerned did not provide any information which could have devaluated 

this finding. On these grounds, the claims in this respect were rejected 

4.3. 

Union consumption 

(508)  The  Union  consumption  comprised  the  total  volume  of  imports  of  the  product 
concerned  and  the  volume  of  total  sales  of  the  like  product  in  the  Union,  including 
those  destined  for  captive  use.  No  complete  data  for  the  total  sales  of  the  Union 
industry  on  the  Union  market  were  available.  Furthermore,  imports  into  the  Union 
were  registered  under  customs  headings  covering  other  products  not  subject  to  the 
present  investigation  and  the  reported  Eurostat  import  volumes  were  in  tonnes. 
Consequently,  Eurostat  could  not  be  used  to  determine  import  volumes  and  values. 
Therefore,  the  Union  consumption  was  based  on  data  provided  by  the  consultant  as 
described above and cross-checked with public sources such as market researches and 
publicly available studies and with the verified questionnaire replies.  

(509)  Union consumption developed as follows: 

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Table 1- a 

Union consumption for modules (in MW) 

2009 

2010 

2011 

IP 

Total market   

5 465 

12 198 

19 878 

17 538

Index 
(2009=100) 

Source: Europressedienst  

100 

223 

364 

321 

Table 1-b 

Union consumption for cells (in MW) 

2009 

Total market   

2 155 

2010 

3 327 

2011 

4 315 

IP 

4 021 

Index 
(2009=100) 

Source: Europressedienst 

100 

154 

200 

187 

(510)  In the period considered, the total Union consumption increased by 221 % for modules 
and by 87 % for cells between 2009 and the IP, but decreased in the IP compared to 
2011. In overall terms the Union consumption of the product under investigation grew 
significantly when compared to its 2009 level.  

(511)  One  interested  party  argued  that  data  concerning  the  Union  consumption  of  the 
product  under  investigation  vary  significantly,  depending  on  the  source  used.  This 
party argued that reliable data can only be established on the basis of the information 
gathered from specialised institutions or research centres. In view of the explanations 
and conclusions reached in the recitals (481) to (483) above concerning the reliability 
of  the  data  provided  by  the  consultant  used  in  the  investigation,  this  argument  was 
rejected.  

(512)  The same party argued that Union consumption should not  be established by merely 
adding  up  available  module  production  capacities  in  the  Union  and  that  rather  the 
module  consumption  for  the  Union’s  industry  own  projects  should  be  deducted 
therefrom. This argument was rejected, as consumption of modules was established on 
the  basis  of  newly  installed  capacities  in  the  Union.  This  is  a  common  practice  for 
determining the module consumption. For cells, the consumption was determined on 
the basis of the Union production of modules. 

(513)  Another party argued that that the methodology described by the consultant admits the 
difficulty  to  establish  reliable  consumption  figures.  It  was  further  argued  that  import 
data as well as export sales from the Union industry were either based on unverifiable 
estimations or incomplete data and that the cross checking of the Commission was not 
sufficient to allow the conclusion that those data were indeed reliable and accurate.  

(514)  As already mentioned above in recitals (481) to (482) above the quality of the data and 
the methodologies used to collect them was verified by the Commission during an on-
spot  visit  on  the  basis  of  which  it  was  considered  that  the  methodologies  used  were 

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appropriate and the results accurate and reasonably reliable. This claim was therefore 
rejected.  

4.4. 

Imports from the country concerned 

4.4.1.  Volume and market share of the imports from the country concerned 

(515)  Imports  into  the  Union  from  the  country  concerned  developed  as  described  in  the 
tables  below.  Figures  are  reported  only  in  indexes  and  in  ranges  for  reasons  of 
confidentiality. This is because imports made by the exporting producer for which no 
subsidies  were  found  as  mentioned  in  recital  (472)  above,  have  been  deducted  from 
the total imports from the PRC. 

Table 2-a 

Imports of modules from the PRC (in MW) 

2009 

2010 

2011 

IP 

Import volumes from PRC 

Index (2009=100) 

100 

251 

Market share in total 
market  

60 % - 
65 % 

68 % - 
73 % 

462 

75 %-
80 % 

408 

78 % - 
83 % 

Source: Europressedienst 

Table 2-b 

Imports of cells from the PRC (in MW) 

Import volumes from PRC 

Index (2009=100) 

Market share in total 
market  

Source: Europressedienst 

2009 

2010 

2011 

IP 

100 

5 % - 
10 % 

273 

491 

506 

12 % - 
17 % 

17 % - 
22 % 

22 % - 
27 % 

(516)  Over the period considered, import volumes to the Union from the country concerned 
increased  considerably  by  around  300  %  for  modules  and  by  more  than  400  %  for 
cells.  This  led  to  significant  market  share  increases  of  the  imports  from  the  country 
concerned  into  the  Union.  More  specifically,  the  market  shares  of  imports  from  the 
country concerned increased from [60 % - 65 %] to [78 % - 83 %] for modules and 
from  [5  %  -  10  %]  to  [22  %  -  27  %]  for  cells.  In  overall  terms  the  imports  of  the 
product  concerned  from  the  PRC  increased  significantly  in  terms  of  volume  and 
market share between 2009 and the IP. 

(517)  It should be noted that the increase in imports from the country concerned was much 
higher  than  the  increase  in  the  Union  consumption  for  the  product  concerned. 
Consequently,  the  exporting  producers  were  able  to  benefit  from  Union’s  growing 
consumption  and  their  position  on  the  market  became  stronger  due  to  larger  market 
shares. 

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(518)  One interested party argued that data concerning import volumes of the product under 
investigation vary significantly, depending on the source used. This party argued that 
reliable  data  can  only  be  established  on  the  basis  of  the  information  gathered  from 
specialised  institutions  or  research  centres.  In  view  of  the  explanations  and 
conclusions reached in the recitals (481) to (483) above, concerning the reliability of 
the data used in the investigation, this argument was rejected. 

(519)  After final disclosure, one interested party contested the methodology to determine the 
total import value from the PRC claiming that it had been based on transactions made 
at  CIF  level  duty  unpaid  and  it  is  therefore  doubtful  whether  these  transactions  had 
been destined for Union consumption. In respect of this claim, it is clarified that the 
total  import  value from  PRC  as provided by the consultant had not been used in the 
findings and that only import volumes and import prices were determined during the 
investigation..  As  the  methodology  to  determine  import  prices  was  not  contested  as 
such  by  the  interested  party  concerned  reference  is  made  to  the  relevant  findings  in 
recitals (520) to (528) below. Therefore, the above claim was rejected  

4.4.2.  Prices of imports and price undercutting 

(520)  The average price of imports into the Union from the country concerned developed as 

follows: 

Table 3-a 

Import price of modules from PRC (in EUR/kW) 

2009 

2010 

2011 

IP 

Import prices 

2 100 

1 660 

1 350 

764 

Index (2009=100) 

100 

79 

64 

36 

Source: Europressedienst and verified sample questionnaire replies 

Table 3-b 

Import price of cells from PRC (in EUR/kW) 

2009 

2010 

2011 

IP 

Import prices 

890 

650 

620 

516 

Index (2009=100) 

100 

73 

70 

58 

Source: Europressedienst and verified questionnaire replies 

(521)  The  average  import  price  from  the  PRC  dropped  significantly  over  the  period 
considered for modules and cells. For modules, the average import price decreased by 
64 %, from 2100 EUR/kW in 2009 to 764 EUR/kW in the IP. Likewise, the average 
import price of cells from PRC dropped by 42 %, from 890 EUR/kW to 516 EUR/kW.  

(522)  In  overall  terms,  the  price  of  the  product  concerned  decreased  significantly  between 

2009 and IP. 

(523)  One  cooperating  unrelated  importer  claimed  that  import  prices  should  have  been 
established  on  the  basis  of  its  imports  of  the  product  concerned  in  the  Union  as 

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provided by this importer during the investigation. However, the data provided by this 
importer during the investigation only represented a fraction of the total imports in the 
Union and no meaningful conclusions could be drawn as to the average import price of 
all  imports  from  the  PRC  during  the  whole  period  under  consideration  covering 
several years on this basis. Therefore, this claim was rejected.  

(524)  Another  party  claimed  that  the  methodology  to  determine  the  prices  was  not 
explained,  in  particular  as  to  how  the  data  of  various  sources  had  been  merged  and 
reconciled. In addition it was argued that importation costs should have been based on 
the verified information collected during the investigation rather than on estimates.  

(525)  It  is  considered  that  the  methodology  made  available  to  interested  parties  is 
sufficiently  complete  to  understand  as  to  how  figures  were  established.  As  far  as 
‘importation’ cost is concerned, it is clarified that an adjustment was made to on-the-
spot-prices to arrive to CIF prices. The estimation made was confirmed with the data 
collected during the investigation. 

(526)  In  order  to  determine  price  undercutting  during  the  IP,  the  weighted  average  sales 
prices  per  product  type  of  the  sampled  Union  producers  charged  to  unrelated 
customers on the Union market, adjusted to an ex-works level, were compared to the 
corresponding  weighted  average  prices  per  product  type  of  the  imports  from  the 
cooperating  Chinese  exporting  producers  to  the  first  independent  customer  on  the 
Union  market,  established  on  a  CIF  basis,  with  appropriate  adjustments  for  post-
importation costs, i.e. custom clearance, handling and loading costs. The average post-
importation costs of the sampled importers of modules were used when their data were 
available. 

(527)  The price comparison was made on a type-by-type basis for transactions at the same 
level  of  trade,  duly  adjusted  where  necessary,  and  after  deduction  of  rebates  and 
discounts.  The  result  of  the  comparison,  when  expressed  as  a  percentage  of  the 
sampled  Union  producers’  turnover  during  the  IP,  showed  weighted  average 
undercutting margins within the ranges of [19,8 % - 37,5 %] for modules and [12,6 %-
53,8 %] for cells, and [19,8 %-37,5 %] in overall terms for the product concerned. 

(528)  It  should  be  noted  that  for  one  sampled  exporting  producer  a  negative  price 
undercutting  for  cells  was  calculated.  However,  as  the  exported  quantities  were  not 
significant  this  cannot  be  considered  representative.  Moreover,  another  sampled 
exporting  producer,  contested  the  source  for  the  adjustment  for  mono  cells  to  multi 
cells,  without  however  substantiating  the  argument.  Indeed  the  specific  adjustment 
was not contested by the exporting producer nor did they provide any new information 
or evidence, therefore this claim was rejected.  

4.5. 

Economic situation of the Union industry 

4.5.1.  General 

(529)  Pursuant  to  Article  8(4)  of  the  basic  Regulation,  the  Commission  examined  all 
relevant  economic  factors  and  indices  having  a  bearing  on  the  state  of  the  Union 
industry.  As  mentioned  in  recitals  (14)  to  (22)  above,  sampling  was  used  for  the 
examination of injury suffered by the Union industry. 

(530)  For  the  purpose  of  the  injury  analysis,  the  Commission  distinguished  between 
macroeconomic  and  microeconomic  injury  indicators.  The  Commission  analysed  the 
macroeconomic indicators for the period considered on the basis of the data obtained 
from  the  independent  consultant  as  cross  checked  whenever  possible  with  other 
available  sources  and  from  the  sampled  Union  producers’  verified  questionnaire 

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125 

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responses. The Commission analysed the microeconomic indicators on the basis of the 
sampled Union producers’ verified questionnaire responses. 

(531)  For  the  purpose  of  this  investigation,  the  following  macroeconomic  indicators  were 
assessed on the basis of information relating to all producers of the like product in the 
Union:  production,  production  capacity,  capacity  utilisation,  sales  volume,  market 
share, growth, employment, productivity, magnitude of the amount of countervailable 
subsidies and recovery from past subsidisation or dumping.  

(532)  The  following  microeconomic  indicators  were  assessed  on  the  basis  of  information 
relating to the sampled producers of the like product in the Union: average unit prices, 
unit  cost,  labour  costs,  inventories,  profitability,  cash  flow,  investments,  return  on 
investments and ability to raise capital. 

(533)  One  interested  party  claimed  that  market  conditions  of  the  product  concerned  differ 
per Member State and that therefore the injury analysis should be made at the level of 
each Member State separately. This allegation was not substantiated. In addition, the 
investigation did not reveal any particular circumstances justifying an injury analysis 
per Member State. This claim was therefore rejected.  

(534)  Some  parties  questioned  the  overall  reliability  of  macroeconomic  injury  indicators 
used  by  the  Commission  for  the  purpose  of  this  investigation.  They  argued  that  the 
trends  established  for  a  number  of  these  indicators  diverged  from  the  trends  for  the 
same indicators established for the sampled Union producers. Particular reference was 
made to Union production, productivity, sales, average labour costs and employment.  

(535)  The  macroeconomic  indicators  were  established  in  relation  to  all  producers  in  the 
Union. In case the same data are compiled in relation to individual Union producers or 
a  group  of  Union  producers  (i.e.  the  sampled  Union  producers),  the  trends  are  not 
necessarily identical, as e.g. the weight of each company considered is not taken into 
consideration in such comparison. Therefore, the results of the exercise of comparing 
the  macroeconomic  indicators  for  all  Union  producers  and  those  for  sampled  Union 
producers are not necessarily meaningful and do not allow for the conclusion that the 
one or the other set of data is unreliable. In any event, when comparing the trends of 
the  macroeconomic  indicators  of  the  Union  industry  with  the  same  consolidated 
indicators  of  the  sampled  Union  producers,  differences  in  trends  can  be  noted  for 
several  indicators,  such  as  the  production,  production  capacity,  sales  volumes, 
employment and productivity of the Union industry between 2011 and the IP. For all 
these indicators, the sampled Union producers performed better than the overall Union 
industry.  The  reason  is  that  in  the  IP  many  Union  producers,  not  included  in  the 
sample, stopped their production or became insolvent, thus having a negative impact 
on  the  macroeconomic  indicator  calculated  at  the  Union  level.  These  claims  were 
therefore rejected. 

(536)  One  interested  party  claimed  that  the  conclusion  as  set  out  in  recital  (153)  to  the 
Provisional  anti-dumping  Regulation  that  the  analysis  of  the  situation  of  the  Union 
industry  showed  a  clear  downward  trend  of  all  main  injury  indicators  was  based  on 
data provided by the consultant. In this respect, it is clarified that, on the one hand, the 
macroeconomic  indicators,  as  listed  in  Tables  4-a  to  6-c  to  the  Provisional  anti-
dumping  Regulation,  were  based  on  data  obtained  from  the  consultant  and  cross-
checked  when  possible  with  other  available  sources.  On  the  other  hand,  the 
microeconomic indicators, as listed in the Tables 7-a to 11-c  to the Provisional  anti-
dumping Regulation, were based on data collected from the sampled Union producers 
and verified on-the-spot by the Commission. It should also be noted that determinant 

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factors for the injurious situation of the Union industry such as the profitability levels 
of  the  Union  industry,  the  average  sales  price  in  the  Union  as  well  as  price 
undercutting  calculations  were  based  on  data  collected  from  the  sampled  Union 
producers  and  exporting  producers  as  verified  on-the-spot.  The  above  claim  was 
therefore rejected. 

4.5.2.  Macroeconomic indicators 

4.5.2.1.  Production, production capacity and capacity utilisation 

(537)  The total Union production, production capacity and capacity utilisation developed as 

follows over the period considered: 

Table 4-a 

Modules – production, production capacity and capacity utilisation (MW) 

Production volume 

Index (2009=100) 

2009 

2 155 

100 

2010 

3 327 

154 

2011 

4 315 

200 

Production capacity  

4 739 

6 983 

9 500 

Index (2009=100) 

100 

Capacity utilisation  

45 % 

147 

48 % 

200 

45 % 

IP 

4 021 

187 

9 740 

206 

41 % 

Source: Europressedienst 

Table 4-b 

Cells – production, production capacity and capacity utilisation (MW) 

Production volume 

Index (2009=100) 

2009 

1 683 

100 

2010 

2 376 

141 

2011 

2 723 

162 

Production capacity  

2 324 

3 264 

3 498 

Index (2009=100) 

100 

Capacity utilisation  

72 % 

140 

73 % 

151 

78 % 

IP 

2 024 

120 

3 231 

139 

63 % 

Source: Europressedienst 

(538)  The  overall  Union  production  of  modules  increased  by  87  %  during  the  period 
considered. Production reached a peak in 2011 and then dropped in the IP. The Union 
production  of  modules  increased  at  a  much  slower  pace  than  the  growth  in 
consumption, which more than tripled during the same period. Against the background 
of a significant increase in consumption, the Union producers doubled their production 
capacity  for  modules  during  the  period  considered.  However,  in  spite  of  higher 

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production  levels,  the  Union  industry’s  capacity  utilisation  rate  decreased  by 
4 percentage points, reaching only 41 % during the IP.  

(539)  The  Union  production  of  cells  increased  by  20  %  in  overall  terms  during  the  period 
considered.  It  reached  a  peak  in  2011  and  decreased  after  that  in  the  IP.  The  Union 
production  of  cells  followed  the  trend  of  Union  consumption  with  a  slower  increase 
until  2011  and  then  a  more  pronounced  fall  in  the  IP.  In  line  with  the  evolution  of 
Union  consumption,  the  Union  industry  first  increased  their  capacity  by  51  %  until 
2011 and then this decreased during the IP. In overall terms, the capacity increased by 
39 % during the period considered. The capacity utilisation rate increased until 2011 
reaching  a  peak  of  78  %  and  then  decreased  by  15  percentage  points  during  the  IP. 
Overall,  the  capacity  utilisation  of  the  Union  industry  of  cells  decreased  over  the 
period considered reaching 63 % during the IP. 

(540)  Therefore,  the  Union  industry  expanded  their  capacity  in  response  to  an  increased 
consumption.  However,  the  Union  industry’s  production  levels  increased  at  a  much 
slower pace than the consumption, which led to a decrease of the capacity utilisation 
rates for the product concerned during the period considered.  

(541)  AFASE  claimed  that  the  production  volume  established  for  modules  and  cells  in 
recital (537) above and the production capacity of the Union industry established for 
modules and cells in the same recital were overestimated and provided data from other 
sources (i.e. EPIA, IMS and BNEF) showing lower volumes. These figures are those 
retained in recital (537) above. 

(542)  The  production  volume  established  in  recital  (537)  above  is  based  on  information 
covering  both  publicly  listed  companies and non-listed companies. The development 
of  the  Union  production  as  established  in  recital  (537)  above  is  furthermore  in  line 
with  the  development  of  Union  consumption  established  in  recital  (509).  To  the 
contrary the data provided by AFASE on production volumes showed different trends 
with  the  Union  consumption  as  established  in  recital  (509)  and  with  the  statistics  of 
Union consumption published by the EPIA. 

(543)  As far as production capacity is concerned, the investigation revealed that the findings 
as set out in recital (537) included the production capacities of companies that filed for 
insolvency  or  stopped  production  during  the  IP,  while  they  had  not  sold  their 
production  plants  and  machinery  and  thus  able  to  resume  production  very  quickly. 
Likewise, as mentioned above in recital (542), the figures in recital (537) included data 
from non-listed companies.  

(544)  Finally,  the  data  provided  by  the  independent  consultant  were  counter-checked  and 
verified  and  found  to  be  reasonably  accurate.  On  the  basis  of  the  above,  the  data 
provided by AFASE based on other available sources were not found to be necessarily 
in contradiction with the findings of the Provisional anti-dumping Regulation.  

(545)  In any event, accepting the figures provided by AFASE would not have an impact on 
the overall finding that the Union industry suffered material injury as the trend of these 
indicators, i.e. Union production and Union production capacity would be even more 
pronounced. 

(546)  One  cooperating  unrelated  importer  argued  that  production  volume,  production 
capacity and capacity utilisation should have been established on the basis of the data 
of the sampled Union producers only. However as these are macroeconomic indicators 
they  should  be  established  at  the  level  of  all  Union  producers  in  order  to  establish  a 

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meaningful and complete picture of the situation of the Union industry. This claim was 
therefore rejected. 

(547)  After final disclosure, one party requested the Commission to clarify how the annual 
Union production had been calculated by the consultant. Another party requested the 
Commission to give further explanations concerning the reconciliation of the different 
data available related to the total Union production capacity. Another party suggested 
that  the  total  Union  production  and  production  capacity  should  have  been  obtained 
from  the  Union  producers  selected  in  the  sample  as  this  would  have  given  a  more 
reliable result. In this regard, it was alleged that publicly available data were imprecise 
due  to  the  confidential  character  of  these  data  and  that  any  research  centre  or 
consultant had to base its analysis on a number of estimations and assumptions. 

(548)  It  is  clarified  that  the  annual  Union  production  was  calculated  on  the  basis  of  the 
figures reported by the Union producers to the consultant. When the annual production 
of  a  certain  Union  producer  could  not  be  obtained  for  a  specific  year,  this  was 
estimated by applying the capacity utilisation rate from the previous year to the new 
production  capacity  of  that  year.  The  Institutions  have  also  compared  the  figure 
obtained  by  the  consultant  with  the  figures  reported  in  the  replies  of  the  Union 
industry to the standing questionnaires prior to initiation. Both figures are similar. 

(549)  As regards the request to provide further explanations concerning the reconciliation of 
the  different  data  available  for  Union  production  capacity,  it  is  noted  that  this 
information  had  already  been  provided  in  the  open  file  open  for  inspection  to  the 
interested parties. Therefore, this request was rejected. 

(550)  Finally, the Union production and production capacity are macroeconomic indicators 
and  therefore  have  to  be  established  at  the  level  of  the  entire  Union  industry  rather 
than on the level of the sampled Union producers.  

(551)  After  final  disclosure,  one  party  argued  that  the  methodology  used  to  collect 
production  data  (mainly  interviews  and  visits  of  production  sites)  did  not  allow  for 
reliable results due to the confidential character of these data and as a consequence the 
reluctance  of  companies  to  disclose  them.  Such  methodology  cannot  therefore  be 
considered as adequate. This was allegedly confirmed by the fact that although a much 
higher number of Union producers was used by the consultant than the one taken into 
account by the Commission during the examination of standing at initiation stage, the 
total  production  volume  established  by  the  consultant  is  lower  than  the  total 
production volume established by the Commission for the purpose of the examination 
of the standing. This party further claimed that consequently the information related to 
this injury indicator cannot be considered as positive evidence within the meaning of 
Article 8(1) of the basic Regulation.  

(552)  It  is  first  clarified  that  the  number  of  producers  taken  into  consideration  by  the 
consultant  on  the  one  hand  and  the  Commission  on  the  other  hand  was  largely  the 
same and that the argument that results were inconsistent had therefore to be rejected. 
It is further recalled that the data collected by the consultant were cross checked with 
other sources wherever possible and it was found that the estimations were sufficiently 
reliable. It is therefore confirmed that the information on production data provided by 
the consultant was considered as positive evidence within the meaning of Article 8(1) 
of the basic Regulation.  

4.5.2.2.  Sales volumes and market share  

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(553)  The  Union  industry’s  sales  volume  and  market  share  developed  as  follows  over  the 

period considered: 

Table 5-a 

Modules - sales volume and market share (in MW) 

2009 

2010 

2011 

IP 

Sales volume on the 
Union market 

1 037 

1 890 

2 683 

2 357 

Index (2009=100) 

Market share  

100 

19 % 

182 

15 % 

259 

13 % 

227 

13 % 

Source: Europressedienst 

Table 5-b 

Cells - sales volume and market share (in MW)  

2009 

2010 

2011 

IP 

1 470 

1 913 

2 245 

1 545 

100 

68 % 

130 

57 % 

153 

52 % 

105 

38 % 

Sales volume total 
market 

Index (2009=100) 

Market share  

Source: Europressedienst 

(554)  During  the  period  considered,  the  sales  volume  of  modules  increased  by  127  %. 
However, in the context of an increase in consumption of 221 %, this was translated 
into  a  decrease  of  the  Union  industry’s  market  share  from  19  %  in  2009  to  13  % 
during  the  IP. As  regards cells, the Union  industry’s sales increased only marginally 
by  5  %  while  consumption  increased  by  87  %  resulting  in  a  market  share  reduction 
from 68 % in 2009 to 38 % in the IP. In response to a growing consumption, the Union 
industry’s  sales  of  modules  and  cells  grew  much  less  than  the  imports  from  the 
country  concerned.  Thus,  the  Union  industry  could  not  benefit  from  the  growing 
consumption.  As  a  consequence,  the  market  shares  for  modules  and  cells  decreased 
over the period considered. 

(555)  One interested party claimed that the market share of the Union industry for modules 
was already only 19 % in 2009 and that a decrease by 6 percentage points during the 
period considered cannot be considered as injury.  

(556)  The decrease in market share by 6 percentage points over the period considered has to 
be seen against the background of an increase of the Union consumption for modules 
by over 200 % over the same period. As mentioned above, even under the scenario of 
an  increased  consumption  it  could  not  increase  its  sales  volume  accordingly  and 
suffered losses in market share. This argument had therefore to be rejected. 

EN 

130 

   EN 

 
 
(557)  One  party  argued  that  the  methodology  used  to  collect  sales  data  (mainly  interviews 
and visits of production sites) did not allow for reliable results due to the confidential 
character of these data and as a consequence the reluctance of companies to disclose 
them.  Such  methodology  cannot  therefore  be  considered as adequate. Likewise, they 
cannot  be  considered  as  positive  evidence  within  the  meaning  of  Article  8(1)  of  the 
basic Regulation. As mentioned above in recital (482) above the data collected by the 
consultant were cross checked with other sources wherever possible and it was found 
that  the  estimations  were  sufficiently  reliable.  It  is  therefore  confirmed  that  the 
information  on  sales  data  provided  by  the  consultant  was  considered  as  positive 
evidence within the meaning of Article 8(1) of the basic Regulation. 

4.5.2.3.  Employment and productivity  

(558)  Employment and productivity developed as follows during the period considered:  

Table 6-a 

Modules –employment and productivity  

2009 

2010 

2011 

IP 

Number of employees 

11 779 

15 792 

17 505 

16 419 

(Index 2009 = 100) 

Productivity  

(kW/employee) 

(Index 2009 = 100) 

Source: Europressedienst 

100 

183 

100 

134 

211 

115 

149 

247 

135 

139 

245 

134 

Table 6-b 

Cells – employment and productivity  

2009 

2010 

2011 

IP 

Number of employees 

5 281 

5 937 

5 641 

4 782 

(Index 2009 = 100) 

Productivity  

(kW/employee) 

(Index 2009 = 100) 

Source: Europressedienst 

100 

319 

100 

112 

400 

126 

107 

483 

151 

91 

423 

133 

(559)  Employment  for  modules  increased  between  2009  and  the  IP  by  39  %,  while  it 
decreased by 9 % for cells. However, it is noted that employment increased until 2011 
and then decreased during the IP for modules. For cells, employment increased until 

EN 

131 

   EN 

 
 
2010 and then decreased during 2011 and IP. The total productivity showed positive 
trends for modules and cells increasing by 34 % and 33 %. This is partly due to the 
efforts of the Union industry to respond to the pressure of the subsidised imports from 
the PRC.  

(560)  Therefore, in line with the decrease in Union production of modules between 2011 and 
the IP, employment for modules also decreased during the same period. For cells, the 
employment increased until 2010 and then decreased in 2011 and in the IP while the 
Union production of cells grew steadily until 2011 and then started to fall. 

(561)  Following  final  disclosure,  one  party  claimed  that  the  methodology  to  establish  total 
employment  in  the  Union  during  the  period  considered  was  incorrect.  This  party 
alleged  that  wherever  the  employment  rate  of  a  specific  Union  producer  was  not 
available,  the  average  employment  of  those  Union  producers  for  which  this 
information was available was taken into consideration instead. This had to be rejected 
as  the  methodology  to  establish  total  employment  was  different,  i.e.  in  case 
employment  data  for  a  certain  Union  producer  was  not  available,  this  figure  was 
estimated  on  the  basis  of  data  of  that  same  company  from  the  previous  year(s).  As 
mentioned above in recital (482) this methodology was verified and found reasonable. 
Therefore, the claim was rejected. 

4.5.2.4.  Magnitude  of  the  amount  of  the  countervailable  subsidies  and  recovery  from  past 

subsidisation or dumping 

(562)  All  subsidy  margins  are  significantly  above  the  de  minimis  level.  As  regards  the 
impact of the magnitude of the amount of the countervailable subsidies on the Union 
industry,  given  the  volume  and  prices  of  imports  from  the  country  concerned,  the 
impact can be considered substantial. 

(563)  Since this is the first anti-subsidy proceeding regarding the product concerned, no data 

are available to assess effects of possible past dumping or subsidisation. 

4.5.3.  Microeconomic indicators 

4.5.3.1.  Prices and factors affecting prices 

(564)  The average sales prices of the sampled Union producers to unrelated customers in the 

Union developed as follows over the period considered: 

Table 7-a 

Modules - average sales prices in the Union 

Average sales price in the 
Union on free market 
(EUR/kW) 

2009 

2010 

2011 

IP 

2 198,75 

1 777,15 

1 359,35 

1 030,83 

(Index 2009 = 100) 

100 

81 

62 

47 

Cost of production 

2 155,02 

1 599,44 

1 400,13 

1 123,60 

EN 

132 

   EN 

 
(Index 2009 = 100) 

100 

74 

65 

52 

Source: verified questionnaire replies 

Table 7-b 

Cells- average sales prices in the Union  

Average sales price in the 
Union on free market 
(EUR/kW) 

2009 

2010 

2011 

IP 

1 525,09 

1 160,99 

777,62 

474,91 

(Index 2009 = 100) 

100 

76 

51 

31 

Cost of production 

(EUR/kW) 

(Index 2009 = 100) 

1 647,10 

1 021,67 

1 057,56 

745,61 

100 

62 

64 

45 

Source: verified questionnaire replies 

(565)  Sales  prices  fell  sharply  i.e.  by  53  %  for  modules  and  by  69  %  for  cells  during  the 
period considered. Sales prices fell continuously throughout the period considered, but 
the decrease in prices was particularly pronounced during the IP where they collapsed 
to unsustainable levels. Over the period considered the cost of production fell by 48 % 
for modules and by 55 % for cells. The Union industry could neither benefit from its 
continuous efforts to increase its cost efficiency nor from the impact of the decrease in 
cost of the main raw material, polysilicon. This was mainly due to the increasing price 
pressure of the subsidised imports which had a negative effect on the sales prices of 
the Union industry which decreased even more than efficiency gains. This can be seen 
in the negative trend of the Union industry’s profitability as described in recital (579) 
below. Overall there was a significant decrease of the average sales price and the cost 
of  production  of  the  like  product  with  devastating  effect  on  Union  industry’s 
profitability.  

(566)  One interested party contested the findings that the decrease of the average sales prices 
had a devastating effect on the profitability of the Union industry. It claimed that the 
average cost of the Union industry decreased equally and that therefore a decrease in 
price  is  natural.  However,  as  described  in  recital  (565)  above,  the  investigation 
established that Union industry sales price decreased even more than its average cost 
of  production  and  therefore  such  decrease  in  costs  was  not  reflected  in  the  Union 
industry’ profitability. It is therefore confirmed that the decrease in sales price of the 
Union industry had a devastating effect on the profitability of the Union industry and 
the claims in this regard were rejected.  

(567)  Another party contested the conclusion in recital (138) to the provisional anti-dumping 
Regulation that prices were at unsustainable levels in the IP, claiming that this would 
be for market forces to decide. The same party also objected to the conclusion in the 
same recital that the Union industry was not able to benefit from cost decreases due to 
the price pressure of the subsidised imports. In this regard, the Institutions observe the 

EN 

133 

   EN 

 
 
following: "unsustainable level" refers to the fact that the Union industry was selling at 
loss, and therefore could not survive in the long term. The question whether the price 
level is sustainable is therefore only a question of the relationship between production 
costs and prices. By "not being able to benefit from cost decreases", it is referred to the 
fact that costs fell less quickly than prices. Both those statements are backed up with 
evidence  in  recital  (138)  to  the  provisional  anti-dumping  Regulation.  Therefore,  this 
argument had to be rejected. 

4.5.3.2.  Labour costs 

(568)  The average labour costs of the sampled Union producers developed as follows over 

the period considered: 

Table 8-a 

Modules- average labour costs per employee 

2009 

2010 

2011 

IP 

Average labour cost per 
employee (EUR) 

38 194 

40 793 

41 781 

42 977 

(Index 2009 = 100) 

100 

107 

110 

113 

Source: verified questionnaire replies 

Table 8-b 

Cells - average labour cost per employee 

2009 

2010 

2011 

IP 

Average labour cost per 
employee (EUR) 

49 677 

49 357 

49 140 

49 350 

(Index 2009 = 100) 

100 

99 

99 

99 

Source: verified questionnaire replies 

(569)  Between  2009  and  the  IP,  the  average  labour  cost  per  employee  for  modules 
continuously  increased  overall  by  13  %.  Regarding  cells,  the  average  labour  cost 
remained  stable  throughout  the  period  considered  and  slightly  decreased  by  1  % 
between 2009 and 2010 but then remained stable until the IP. The overall increase of 
labour  cost  can  be  partly  explained  by  the  simultaneous  increase  in  productivity 
(modules and cells) and the evolution of inflation.  

(570)  One  interested  party  claimed  that  there  has  not  been  any  inflation  during  the  period 
considered and that therefore the overall increase of labour costs could not have been 
caused by this factor.  

(571)  In contrast to what was claimed by the party concerned, the investigation revealed that 
there  has  been  inflation  during  the  period  considered  and  that  the  increase  in  labour 
cost,  limited  to  modules,  can  be  explained  by  the  inflation  and  the  increase  in 
productivity.  

EN 

134 

   EN 

 
 
(572)  One  interested  party  claimed  that  the  injurious  situation  of  the  Union  industry  was 
caused  by  the  increase  in  labour  costs  and  the  parallel  decrease  in  productivity. 
However,  first  it  should  be  noted  that  labour  cost  remained  stable  in  case  of  cells, 
while productivity increased both for cells and modules. Therefore, the increase of the 
latter  can  be  explained  by  increased  productivity.  Moreover  the  investigation  has 
shown that labour costs do not represent a significant part of the cost of production, as 
already  cited  in  recital  (203)  to  the  provisional  anti-dumping  Regulation.  Therefore, 
this argument had to be rejected.  

4.5.3.3.  Inventories 

(573)  Stock  levels  of  the  sampled  Union  producers  developed  as  follows  over  the  period 

considered:  

Table 9-a 

Modules - inventories 

2009 

2010 

2011 

IP 

Closing Stocks (in kW) 

28 612 

40 479 

74 502 

65 415 

(Index 2009 = 100) 

100 

141 

260 

229 

Source: verified questionnaire replies 

Table 9-b 

Cells - inventories 

2009 

2010 

2011 

IP 

Closing Stocks (in kW) 

16 995 

23 829 

76 889 

68 236 

(Index 2009 = 100) 

100 

140 

452 

402 

Source: verified questionnaire replies 

(574)  Stocks increased significantly i.e. by 129 % for modules and by 302 % for cells over 
the  period  considered.  Concerning  modules,  stocks  increased  continuously  reaching 
very high levels in 2011 (by 160 %), while it decreased in the IP but still remaining at 
very  high  levels  in  comparison  with  the  beginning  of  the  period  considered. 
Concerning  cells,  the  development  was  even  more  pronounced,  with  an  increase  in 
stocks  between  2009  and  2011  more  than  350  %.  Likewise,  the  stocks  decreased 
during the IP but remained at very high levels in comparison with the beginning of the 
period considered. 

(575)  The  investigation  showed  that  given  the  adverse  current  situation,  Union  producers 
would  tend  to  hold  limited  stocks  for  the  like  product,  basing  their  production  on 
orders. Therefore, the increase in stocks for the like product over the period considered 
is not a relevant factor in establishing if the Union industry suffered material injury. 

(576)  One  party  argued  that  the  presentation  of  the  stock  values  in  recital  (141)  to  the 
provisional anti-dumping Regulation was misleading as stocks were expressed in kW 
rather than MW unlike the Union industry’s production volume.  

EN 

135 

   EN 

 
 
(577)  Whether stocks are expressed in kW or in MW as such  was considered irrelevant in 
the  determination  whether  or  not  the  Union  industry  suffered  material  injury.  The 
argument was therefore rejected. 

(578)  After final disclosure, several parties claimed that stocks should have been determined 
for the whole Union industry and that the figures of only ten Union producers were not 
representative.  It  is  clarified  that  the  stocks  were  considered  as  a  microeconomic 
indicator and should therefore be established on the basis of the information collected 
on a per company basis, in this case from the sample of Union producers considered as 
representative for the whole Union industry. The above claim was therefore rejected. 

4.5.3.4.  Profitability, cash flow, investments and return on investments, ability to raise capital  

(579)  Profitability and cash flow developed as follows over the period considered: 

Table 10–a 

Modules - profitability and cash flow  

2009 

2010 

2011 

IP 

Profitability of sales in the 
Union to unrelated 
customers (% of sales 
turnover) 

2 % 

10 % 

-3 % 

-9 % 

Cash flow 

13 % 

10 % 

12 % 

3 % 

Source: verified questionnaire replies 

Table 10-b 

Cells - profitability and cash flow  

2009 

2010 

2011 

IP 

-8 % 

12 % 

-36 % 

-57 % 

Profitability of sales in the 
Union to unrelated 
customers (% of sales 
turnover) 

Cash flow 

75 % 

52 % 

-0,3 % 

-46 % 

Source: verified questionnaire replies 

(580)  Profitability of the sampled Union producers was established by expressing the pre-tax 
net profit of the sales of the like product to unrelated customers in the Union, as the 
percentage of the turnover of such sales.  

(581)  The profitability decreased sharply and turned to losses over the period considered for 
the like product. The profitability dropped by 11 percentage points for modules and by 
49 percentage points for cells.  

EN 

136 

   EN 

 
 
(582)  Profitability for the like product increased between 2009 and 2010 but then decreased 
significantly  in  2011  where  Union  industry  realized  losses  and  further  decreased 
significantly in the IP. Losses were particularly high for cells.  

(583)  The trend of net cash flow, which is the ability of the sampled Union producers to self-
finance  their  activities,  likewise  followed  a  negative  trend  between  2009  and  the  IP. 
Thus, decreasing by 10 percentage points for modules with a slight increase in 2011, 
the highest decrease of the cash flow occurred between 2011 and the IP. The decline 
of  cash  flow  for  cells  was  more  pronounced  than  modules  and  reached  significantly 
negative levels during the IP. Therefore, the cash flow for the like product decreased 
over the period considered. 

(584)  The figures below represent the evolution of investments and return on investments of 
the  sampled  Union  producers  in  relation  to  the  total  market  during  the  period 
considered: 

Table 11-a 

Modules - investments and return on investments 

2009 

2010 

2011 

IP 

Investments (EUR) 

12 081 999 

50 105 017 

64 643 322 

32 730 559 

(Index 2009 = 100) 

100 

Return on investments  

-15 % 

415 

19 % 

535 

271 

-15 % 

-17 % 

Source: verified questionnaire replies 

Table 11-b 

Cells - investments and return on investment 

2009 

2010 

2011 

IP 

Investments (EUR) 

31 448 407 

34 451 675 

10 234 050 

6 986 347 

(Index 2009 = 100) 

100 

Return on investments  

-4 % 

110 

10 % 

33 

22 

-20 % 

-19 % 

Source: verified questionnaire replies 

(585)  The table above shows that the Union industry increased its investments by 171 % for 
modules between 2009 and the IP. This was mainly linked to the significant additions 
of  capacity.  However,  during  the  same  period,  the  Union  industry  decreased  its 
investments by 78 % for cells; the investments made were mainly linked to R&D as 
well  as  improving  and  maintaining  production  technology  and  process  in  order  to 
improve  efficiency.  Since  the  Union  industry  could  not  afford  making  additional 
investments for cells during the period considered, the level of investments during the 
IP  was  rather  low.  As  investments  were  financed  basically  by  cash  flow  and 
intercompany loans, the decrease in the cash flow had immediate effect on the level of 
investments made.  

EN 

137 

   EN 

 
 
(586)  The return on investments (‘ROI’) was expressed as the profit in percentage of the net 
book  value  of  investments.  ROI  of  the  like  product  followed  the  similar  negative 
trends as the other financial performance indicators between 2009 and the IP for all the 
three types of product. For cells, while there was an increase in 2009 and 2010, ROI 
decreased  significantly  in  2011  reaching  negative  levels.  For  modules,  ROI  was  at 
negative levels throughout the period considered, except in 2010 where it reached 19 
%.  Overall,  it  decreased  during  the  period  considered  reaching  -17  %  in  the  IP  for 
cells,  i.e.  by  1  %,  however  still  remaining  at  significant  negative  levels,  i.e.  -19 %. 
Overall ROI for the like product showed negative trends during the period considered.  

(587)  The ability to raise capital was analysed in relation to the total market and it has been 
found  that  there  was  a  constant  deterioration  of  the  ability  of  the  Union  industry  to 
generate  cash  for  the  like  product  and,  consequently,  a  weakening  of  the  financial 
situation of the Union industry. 

(588)  One  interested  party  alleged  that  investment  figures  as  shown  above  were  too  low 
when compared to the production capacity of the Union industry as shown in recital 
(538). In support of this claim the party submitted to be aware of the investment made 
by  one  Union  producer  in  capacity  increases  which  was  at  a  much  higher  cost.  The 
party  concerned  concluded  that  therefore  the  established  production  capacity  of  the 
Union  industry  must  have  been  overestimated.  It  is  noted  that  this  claim  was  not 
supported by any evidence, in particular as regards the investment made by the Union 
producer  in  question.  In  contrast,  the  investment  figures  in  the  provisional  anti-
dumping Regulation were based on actual and verified information from the sampled 
Union producers. It should be noted that this claim was also based on the comparison 
between the total investments of the sampled Union producers and the total production 
capacity of the whole Union industry, which cannot be considered an appropriate basis 
for comparison as not the total investments of the whole Union industry was taken into 
consideration. Therefore, this argument had to be rejected.  

4.5.3.5.  Conclusion on injury 

(589)  The analysis of the situation of the Union industry showed a clear downward trend of 
the  main  injury  indicators.  Against  a  generally  increasing  consumption,  overall 
production  increased  for  modules  and  cells  in  the  period  considered.  Although  the 
volume of sales increased, the market share of the Union industry shrank in the IP due 
to the higher increase of the consumption during the period considered. Average sales 
price  fell  sharply  throughout  the  period  considered,  negatively  impacting  on  all  the 
financial performance indicators such as profitability, cash flow, return on investments 
and ability to raise capital. 

(590)  Over  the  period  considered,  the  overall  Union  industry's  sales  volume  increased. 
However, the increase in sales volumes of the Union industry was accompanied by a 
tremendous decrease in average sales price.  

(591)  During the period considered, imports of the interested parties from the PRC increased 
in terms of volumes and market share. At the same time, import prices  continuously 
decreased, undercutting significantly the Union industry’s average price on the Union 
market.  

(592)  Several interested parties claimed that the Union industry and in specific the sampled 
Union  producers  were  performing  well.  It  was  claimed  that  the  evolution  of  certain 
injury  indicators,  namely  production  volume,  production  capacity,  sales  and 
employment  but  even  in  some  sampled  producers’  profitability,  were  increasing  and 

EN 

138 

   EN 

would not show material injury. These allegations were not confirmed by the results of 
the investigation, which has shown clear downward trends of many injury indicators, 
relevant for the conclusion that the Union industry suffered material injury. 

(593)  In view of the above, the investigation confirmed  in  particular the fact that the sales 
prices  are  below  the  production  costs,  thus  having  a  negative  effect  on  the  Union 
industry’s  profitability,  reaching  negative  levels  during  the  IP.  It  is  concluded  that 
should subsidised imports continue to enter the Union market, the losses of the Union 
industry  would  be  likely  to  lead  to  the  permanent  discontinuation  of  any  sizeable 
Union production of the like product. This seems to be confirmed by the developments 
during  and  after  the  IP,  i.e.  some  companies  has  declared  insolvency  and/or  stopped 
temporarily or permanently production.  

(594)  In the light of the foregoing, it is concluded that the Union industry suffered material 

injury within the meaning of Article 8(4) of the basic Regulation. 

5. 

CAUSATION  

5.1. 

Introduction 

(595)  In  accordance  with  Article  8(5)  and  (6)  of  the  basic  Regulation  it  was  examined 
whether  the  material  injury  suffered  by  the  Union  industry  was  caused  by  the 
subsidised imports from the country concerned. Furthermore, known factors other than 
subsidised  imports,  which  might  have  injured  the  Union  industry,  were  examined  to 
ensure that any injury caused by those factors was not attributed to subsidised imports. 

(596)  Some interested parties claimed that market conditions of the product concerned differ 
per Member State and that therefore the causality analysis should be made at the level 
of each Member State separately.  

(597)  National support schemes determine to a certain extent the size of the Member States’ 
markets.  The  investigation  has  however  also  revealed  that  demand  does  not 
exclusively  depend  on  support  schemes.  Depending  on  geographical  location  (sun 
exposure)  and  the  electricity  price  at  a  given  location,  solar  panels  appear  to  have 
reached,  or  were  at  least  close  to,  grid  parity  (i.e.  when  the  cost  to  produce  solar 
energy  equals  the  cost  to  produce  conventional  energy),  which  means  that  certain 
investments  take  place  independently  of  support  schemes.  Therefore,  it  could  not  be 
established  that  market  conditions  depend  exclusively  on  support  schemes  and  this 
claim was therefore rejected.  

(598)  Several  interested  parties  claimed  that  the  causation  analysis  conducted  did  not 
separate, distinguish and quantify the injurious effects of the subsidised imports from 
the  effects  of  other  known  factors  which  at  the  same  time  are  injuring  the  Union 
industry.  Moreover,  it  was  claimed  that  the  Commission  failed  to  undertake  a 
collective analysis of these other known factors.  

(599)  In  reply  to  this  claim  it  should  be  noted  that  the  Commission,  as  per  established 
practice, first examined whether there is a causal link between the subsidised imports 
and the injury suffered by the Union industry and secondly examined whether any of 
the  other  known  factors  had  broken  the  causal  link  established  between  the  material 
injury suffered by the Union industry and the subsidised imports. In this analysis, the 
effects of the other known factors on the situation of the Union industry were assessed, 
distinguished  and  separated  from  the  injurious  effects  of  the  subsidised  imports  to 
ensure  that  injuries  caused  by  these  factors  were  not  attributed  to  the  subsidized 
imports.  It  was  found  that  none  of  them  had  a  significant  impact,  if  any,  on  the 
situation  of  the  industry  that  could  reverse  the  fact  that  the  material  injury  assessed 

EN 

139 

   EN 

must  be  attributed  to  the  subsidised  imports.  On  these  grounds  the  argument  was 
dismissed.  

(600)  Following  the  final  disclosure,  several  interested  parties  reiterated  the  above 
arguments.  In  this  regard  it  was  claimed  that  the  Commission  should  establish 
explicitly,  through  a  reasoned  and  adequate  explanation,  that  the  injury  caused  by 
factors other than the subsidised imports is not attributed to these imports.  

(601)  In this investigation, it was concluded, after examining all the facts, that the subsidised 
imports  taken  in  isolation  have  caused  material  injury  to  the  Union  industry.  In  this 
respect, quantifying the effects of other known factors was not possible and therefore a 
qualitative  assessment  was  carried  out  as  set  out  in  recitals  (164)  to  (222)  to  the 
provisional anti-dumping Regulation. In conclusion, it was confirmed that the material 
injury of the Union industry was caused by the subsidised imports. Indeed the effects 
of other factors on the Union’s industry’s negative development were considered to be 
limited. It should be noted that, under Article 8(5) and (6) of the basic Regulation, no 
obligation  is  imposed  as  to  the  form  of  the  attribution  and  non-attribution  analyses 
which should be carried out. On the contrary, under Article 8(5) and (6) of the basic 
Regulation, those analyses must be carried out in such a way as to enable the injurious 
effects of the subsidised imports to be separated and distinguished from the injurious 
effects caused by other factors. The investigation did not reveal any evidence that all 
other known factors which may have contributed to the injury suffered, together or in 
isolation, broke the causal link between the subsidised imports and the material injury 
suffered by the Union industry. Given the above analysis, it was confirmed that other 
known factors were not such as to reverse the finding that the material injury suffered 
by the Union industry must be attributed to the subsidised imports. On these grounds 
these arguments were dismissed.  

(602)  Some  interested  parties  claimed  that  the  national  support  schemes,  the  sun  exposure 
and the electricity prices  (including regulatory charges) differ per Member State and 
that  furthermore  there  are  different  market  segments  in  each  market  (the  residential- 
installations  of  less than 40  kW, commercial and industrial- installations between 40 
kW  and  1MW  and  the  utility  market  segment-  installations  between  1  MW  and  10 
MW).  In  view  of  this,  they  claimed  that  the  causation  analysis  should  be  conducted 
separately  for  each  Member  State  on  the  one  hand  and  for  the  large-scale  and  the 
residential segments on the other hand. 

(603)  After  the  final  disclosure  some  interested  parties  reiterated  their  claim  that  the 
causation analysis should be conducted on a per Member State basis, without however 
providing further arguments or new evidence in this respect.  

(604)  The investigation has shown that sales and import prices are similar across the Union. 
It  can  therefore  be  considered  that  there  is  indeed  one  market  for  the  product  under 
investigation.  The  investigation  did  also  not  reveal  that  producers  in  each  Member 
State  or  region  concentrated  their  activities  in  this  specific  market  or  that  the 
subsidised imports concentrated in one Member State or region. Moreover, none of the 
interested  parties  argued  that  subsidization  and  injury  should  be  analysed  on  a  per 
Member  States  basis  which  would  however  be  a  pre-condition  for  conducting  a 
separate  causation  analysis  per  Member  State.  The  investigation  did  not  reveal  any 
evidence  that  this  would  have  been  an  appropriate  approach,  in  particular  given  that 
there were similar prices across the Union of the product under consideration at Union 
level. Moreover, it is noted that the sun exposure can be different in different regions 
of  the  same  Member  States,  e.g.  Southern  France  has  more  sun  exposure  than 

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Northern  France,  or  different  regions  within  one  Member  State  can  have  different 
support  schemes  (e.g.  Belgium)  and  that  therefore  the  impact  of  these  factors  on  the 
demand  may  vary  from  one  region  to  another  within  the  same  Member  State. 
However,  the  differences  in  the  regulatory  framework  of  each  Member  State  and/or 
region and the differences in conditions such as sun exposure do not warrant a separate 
causation  analysis,  and  thus  separate  injury  and  subsidization  analysis.  Therefore, 
these arguments had to be rejected.  

(605)  Another  interested  party  argued  that  while  other  factors  are  relevant,  the  national 
support  schemes  remain  the  main  factor  in  determining  the  demand.  The  same  party 
also  contested  that  grid  parity  was  reached  at  least  in  some  locations  arguing  that 
prices of modules increased since the IP while electricity prices decreased. It further 
argued that, in any event, at least in certain Member States, the regulatory, economic 
and  technical  conditions  do  not  allow  for  the  connection  to  the  grid  and  for  those 
Member States it was therefore irrelevant whether or not grid parity was reached. This 
party  however  did  not  provide  any  supporting  evidence  for  the  above  allegations.  In 
any  event  the  above  arguments  confirm  that  the  situation  with  regard  to  national 
support  schemes  as  well  as  grid  parity  may  be  different  to  a  certain  extent  between 
Member States. Moreover, none of the information submitted was of such a nature to 
show  that  an  analysis  separately  per  Member  State  would  be  warranted.  The 
arguments were therefore rejected. 

(606)  Following  the  final  disclosure,  the  same  interested  party  reiterated  the  claim  and 
provided  some  information  allegedly  showing  the  different  market  conditions  per 
Member  State  and  per  segment.  However,  the  information  submitted  could  not  be 
considered  as  conclusive  as  it  consisted  of  a  power  point  presentation  without  any 
supporting  evidence,  and  therefore,  did  not  show  that  an  analysis  separately  per 
Member State would be warranted. The claim of this party was therefore rejected. 

(607)  On  this  basis,  it  was  concluded  that  an  analysis  of  the  causation  per  Member  State 

and/or region and per segment would not correspond to market reality.  

(608)  The  GOC  claimed  that  the  Commission  has  conducted  the  causation  analysis  in  an 
inconsistent manner as the injury analysis was done separately for modules and cells, 
while the causation analysis did not separate between product types. In this respect, it 
is noted that while the injury indicators were indeed shown separately for each product 
type,  the  conclusions  reached  for  each  indicator  refer  to  the  product  under 
investigation  as  a  whole.  It  is  also  recalled  that  modules  and  cells  are  one  single 
product  and  therefore  the  causation  analysis  was  conducted  on  this  basis.  Therefore, 
the claim was rejected. 

5.2. 

Effect of subsidised imports  

(609)  The investigation showed that subsidised imports from the PRC increased dramatically 
over the period considered, increasing their volumes significantly by around 300 % for 
modules  and  around  400  %  for  cells  and  their  market  share  from  [60  %  -  65 %]  in 
2009 to [78 % - 83 %] in the IP for modules, and from [5 % - 10 %] in 2009 to [22 % - 
27 %] in the IP for cells . Therefore, it is confirmed that volume of imports and market 
share for the product concerned increased dramatically during the period considered. 
There was a clear coincidence in time between the increase in subsidised imports and 
the loss of market share of the Union industry. The investigation also established that, 
as mentioned in recital (527) above, the subsidised imports undercut the prices of the 
Union industry during the IP.  

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(610)  The investigation showed that the prices of the subsidised imports decreased by 64 % 
for modules and by 42 % for cells during the period considered and led to an increase 
of  undercutting.  Against 
industry  underwent 
considerable  effort  to  decrease  its  production  costs.  Despite  these  efforts  the 
exceptionally low level of Chinese import prices forced the Union industry to further 
decrease  its  sales  price  to  unprofitable  levels.  Thus,  the  profitability  of  the  Union 
industry  decreased  dramatically  during  the  period  considered  and  showed  losses 
during the IP.  

this  price  pressure, 

the  Union 

(611)  Based  on  the  above,  it  is  concluded  that  the  presence  of  Chinese  imports  and  the 
increase of the market share of subsidised imports from the PRC at prices constantly 
undercutting those of the Union industry have had a determining role in the material 
injury  suffered  by  the  Union  industry,  which  is  reflected  in  particular  in  its  poor 
financial situation and in the deterioration of most of the injury indicators.  

(612)  One  interested  party  contested  that  there  was  a  sufficient  correlation  between  the 
subsidised  imports  of  the  product  concerned  from  the  PRC  and  the  material  injury 
suffered by the Union industry. It was argued that this would be supported, on the one 
hand, by the fact that from 2009 to 2010 the Union industry’s profit margin for cells 
significantly increased (from loss making to 12 % profit) while Chinese imports were 
36 % lower priced than Union industry’ prices and doubled their market share during 
the  same  period.  On  the  other  hand,  between  2010  and  2011  Chinese  imports  only 
gained 6 percentage points of market share, even though consumption increased much 
more during the same period, while the Union industry realised nonetheless a loss of 
36  %.  This  party  argued  further  that,  as  regards  the  IP,  imports  of  cells  from  other 
third countries were at the same price level as Chinese imports but gained more market 
share corresponding to the loss of market share of the Union industry.  

(613)  The investigation showed that there was a constant increase of Chinese market share 
for  modules  and  cells  over  the  period  considered  (17  percentage  points  for  modules, 
17 percentage points for cells). Indeed, as mentioned above in recital (609), subsidised 
imports  from  the  PRC  increased  significantly  while  import  prices  decreased.  In 
parallel,  the  Union  industry  lost  market  share  over  the  period  considered  and,  as 
described in recitals (589) to (593) above, all main injury indicators showed a negative 
trend. Therefore it is confirmed that there is a clear coincidence in time between the 
increase in subsidised imports and the loss of market share of the Union industry.  

(614)  The  above  mentioned  correlation  in  time  was  established  for  all  product  types 
separately.  In  addition,  the  analysis  of  the  impact  of  the  imports  on  the  Union 
industry’s profit margin separately for each year of the period considered does not lead 
to meaningful results as the existence of subsidy and material injury as well as a causal 
link  between  them  does  not  need  to  be  established  for  each  year  separately.  The 
correlation  between  the  subsidised  imports  and  the  material  injury  is  sufficiently 
demonstrated when analysing the developments over the whole period considered. 

(615)  It  is  also  noted  that  the  profitability  of  the  Union  industry  is  one  of  the  factors 
mentioned in Article 8(4) of the basic Regulation which should be investigated when 
examining the impact of the subsidised imports on the Union industry’s situation. The 
fact  alone  that  the  Union  industry  was  profitable  during  a  specific  year  does  not 
necessarily mean that it  did not suffer any material injury. Moreover, the loss of the 
market share of the Union industry should not correspond exactly to the increase of the 
market share of the subsidised imports in order to establish a causal link between the 
injury  and  the  subsidised  imports.  Finally,  other  factors  (e.g.  imports  of  other  third 

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countries or development of the consumption) which could have had an impact on the 
injurious  situation  of  the  Union  industry  were  examined  and  addressed  separately  in 
recitals (619) to (732) below. 

(616)  The  coincidence  between  the  increasing  subsidised  imports  in  significant  quantities, 
which undercut prices of the Union industry and, the increasingly precarious situation 
of  the  Union  industry  is  a  clear  indicator  of  causation  in  the  present  case,  as 
established in recitals (609) to (611) above. The claims with regard to the lack of any 
correlation  between  the  subsidised  imports  and  the  material  injury  suffered  by  the 
Union industry were therefore rejected. 

(617)  Following  the  final  disclosure,  the  same  interested  party  continued  to  contest  the 
causation  analysis  as  the  profitability  of  the  Union  industry  was  not  analysed 
specifically  in  relation  to  certain  years  (in  particular  2010),  but  for  the  whole  period 
considered.  

(618)  In this regard, it should be noted that no valid conclusions can be drawn concerning 
causality  by  isolating  one  specific  year  of  the  period  considered  while  ignoring  the 
development  of  the  Union  industry  during  the  entire  period  considered  and  its 
correlations  with  the  development  of  the  subsidised  imports.  Such  analysis  can  only 
lead to a partial picture and no sound conclusions can be drawn therefrom. Thus, the 
profitability  rates  that  drove  also  other  financial  indicators  that  the  Union  industry 
achieved  during  2010,  was  high  because  of  the  particularly  strong  jump  in  Union 
consumption, driven by very generous support schemes, that allowed Union industry 
to  have  their  strongest  sales  improvement  that  same  year,  but  only  of  a  temporary 
nature  and  in  any  event  not  sustainable  for  this  type  of  industry.  Therefore,  this 
argument had to be rejected. 

5.3. 

Effect of other factors  

5.3.1. 

Imports from other third countries  

(619)  The  volume  of  imports  from  other  third  countries  during  the  period  considered  for 
modules  increased  by  19  %  while  the  market  share  decreased  over  the  period 
considered from 18,4 % to 6,8 %. Taiwan is the second largest exporter after the PRC. 

(620)  The volume of imports from other third countries for cells increased by 186 % during 
the period considered which translated in an increase of market share from around 24 
%  in  2009  to  around  36  %  during  the  IP.  As  for  cells,  Taiwan  is  second  largest 
exporter after the PRC, by far exceeding import quantities and market shares from the 
other third countries, but still below those from the PRC. 

(621)  The import prices of third countries of modules and cells were on average higher than 
the  average  unit  price  of  the  Chinese  imports.  The  information  available  as  regards 
imports from Taiwan shows that the average import price for modules was higher than 
the average Chinese import price for modules, while the average import price for cells 
was in the same range as the average Chinese import price for cells. However, since no 
detailed price information per product type was available, the price comparison on an 
average basis can only be used as an indication but no firm conclusions can be drawn 
on  this  basis.  Throughout  the  period  considered,  volume  of  imports  of  cells  from 
Taiwan  increased  continuously,  resulting  in  a  gain  of  market  share  of  around  14 
percentage  points.  Therefore,  even  if  it  is  acknowledged  that  imports  of  cells  from 
Taiwan may have contributed to the injury suffered by the Union industry, it cannot be 
concluded  that  they  broke  the  causal  link  between  the  subsidised  imports  from  the 
PRC and the injury suffered by the Union industry, as the import volume of cells from 

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the  PRC  was  slightly  higher  than  the  import  from  Taiwan.  As  far  as  the  prices  are 
concerned, although the average indicative prices are in the same range, no conclusion 
can be drawn on that basis since no information are available concerning the specific 
types  of  the  imported  cells.  However,  overall  for  the  product  under  investigation, 
despite their increase in market share, the volumes were lower than the PRC and their 
price levels were generally higher with the exception of cells during the IP. On these 
grounds,  in  particular  in  view  of  the  import  volumes  and  market  shares  from  other 
third countries as well as their price levels, which are on average similar or higher than 
those from the Union industry it can be concluded that third country imports did not 
break  the  causal  link  between  the  subsidised  imports  and  the  injury  suffered  by  the 
Union industry. 

(622)  Several interested parties made comments following the final disclosure with regard to 
the findings concerning imports from other third countries. However, these parties did 
not bring into light new information and supporting evidence which could have altered 
the relevant findings.  

(623)  Those  parties  underlined  in  particular  the  volume  of  imports  of  cells  from  Taiwan. 
However,  the  absolute  volume  of  imports  of  the  product  concerned  from  Taiwan 
(1132  MW)  represents  only  a  very  small  share  (less  than  5%)  of  the  overall  Union 
consumption  (21559  MW)  and  compared  to  imports  from  the  PRC  (15005  MW). 
Therefore, imports from Taiwan have, if at all, only marginally contributed to injury of 
the Union industry, and not broken the causal link. 

Table 12 

Imports and market shares from other third countries  

MODULES 

Volume of imports from all 
other third countries (MW) 

2009 

1 003 

2010 

1 702 

2011 

1 385 

IP 

1 195 

(Index 2009 = 100) 

100 

169 

138 

119 

Market share of imports from 
all other third countries  

18,4 % 

14,0 % 

7,0 % 

6,8 % 

Average import price 
EUR/kW 

(Index 2009 = 100) 

Volume of imports from 
Taiwan (MW) 

(Index 2009 = 100) 

Market share of imports from 
Taiwan 

Average import price 
EUR/kW 

2 385,34 

1 852,23 

1 430,90 

1 218,41 

100 

49 

100 

78 

144 

294 

60 

140 

286 

51 

135 

276 

0,9 % 

1,2 % 

0,7 % 

0,8 % 

2 102,04 

1 659,72 

1 350,00 

1 125,93 

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(Index 2009 = 100) 

Volume of imports from 
USA (MW) 

(Index 2009 = 100) 

Market share of imports from 
USA 

Average import price 
EUR/kW 

(Index 2009 = 100) 

Volume of imports from rest 
of Asia (MW) 

(Index 2009 = 100) 

Market share of imports from 
rest of Asia 

Average import price 
EUR/kW 

(Index 2009 = 100) 

Volume of imports from rest 
of the World (MW) 

(Index 2009 = 100) 

Market share of imports from 
rest of the World 

Average import price 
EUR/kW 

100 

140 

100 

79 

180 

129 

64 

51 

36 

54 

60 

43 

2,6 % 

1,5 % 

0,3 % 

0,3 % 

2 400,00 

1 872,22 

1 431,37 

1 233,33 

100 

720 

100 

78 

60 

1.140 

1.029 

158 

143 

51 

879 

122 

13,2 % 

9,3 % 

5,2 % 

5,0 % 

2 400,00 

1 870,18 

1 440,23 

1 229,81 

100 

94 

100 

78 

238 

253 

60 

165 

176 

51 

121 

129 

1,7 % 

2,0 % 

0,8 % 

0,7 % 

2 404,26 

1 869,75 

1 442,42 

1 231,40 

(Index 2009 = 100) 

100 

78 

60 

51 

Source: Europressedienst 

CELLS 

Volume of imports from all 
other third countries (MW) 

2009 

510 

2010 

884 

2011 

1 100 

IP 

1 457 

(Index 2009 = 100) 

100 

173 

216 

286 

Market share of imports from 

23,7 % 

26,6 % 

25,5 % 

36,2 % 

EN 

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all other third countries  

Average import price 
EUR/kW 

(Index 2009 = 100) 

Volume of imports from 
Taiwan (MW) 

(Index 2009 = 100) 

1 166,67 

1 072,40 

751,82 

553,88 

100 

235 

100 

92 

400 

170 

64 

540 

230 

47 

997 

424 

Market share of imports from 
Taiwan 

10,9 % 

12,0 % 

12,5 % 

24,8 % 

Average import price 
EUR/kW 

(Index 2009 = 100) 

Volume of imports from 
USA (MW) 

(Index 2009 = 100) 

948,94 

1 100,00 

670,37 

514,54 

100 

40 

100 

116 

40 

100 

71 

40 

100 

54 

33 

83 

Market share of imports from 
USA 

1,9 % 

1,2 % 

0,9 % 

0,8 % 

Average import price 
EUR/kW 

(Index 2009 = 100) 

Volume of imports from 
Japan (MW) 

(Index 2009 = 100) 

Market share of imports from 
Japan 

Average import price 
EUR/kW 

(Index 2009 = 100) 

Volume of imports from rest 
of the world (MW) 

(Index 2009 = 100) 

1 350,00 

1 050,00 

825,00 

636,36 

100 

60 

100 

78 

154 

257 

61 

170 

283 

47 

145 

242 

2,8 % 

4,6 % 

3,9 % 

3,6 % 

1 350,00 

1 051,95 

829,41 

641,38 

100 

175 

100 

78 

290 

166 

61 

350 

200 

48 

282 

161 

Market share of imports from 

8,1 % 

8,7 % 

8,1 % 

7,0 % 

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rest of the world 

Average import price 
EUR/kW 

1 348,57 

1 051,72 

831,43 

638,30 

(Index 2009 = 100) 

100 

78 

62 

47 

Source: Europressedienst 

5.3.2.  Non subsidised imports from the PRC  

(624)  Non subsidised imports from the PRC were carefully analysed and were found not to 
have  any  significant  impact  on  the  situation  of  the  Union  industry,  susceptible  of 
breaking  the  causal  link  established  between  the  subsidised  imports  and  the  injury 
suffered by the Union industry. 

5.3.3.  Development of the Union consumption  

(625)  As  mentioned  in  recital  (509)  above,  Union  consumption  increased  by  221  %  for 
modules and by 87 % for cells during the period considered. Consumption reached a 
peak in 2011 and dropped during the IP while still remaining far above the level at the 
beginning of the period considered in 2009. The Union industry could not benefit from 
this increase in consumption as its market share fell from 19 % to 13 % for modules 
and from 68 % to 38 % for cells during the same period. At the same time, the market 
share  of  the  PRC  was  increasing  sharply,  until  2011  and  then  remained  stable  at 
significant high level during the IP, when consumption fell. Therefore, in view of the 
fact  that,  despite  a  decrease  in  Union  consumption  in  the  IP,  the  subsidised  imports 
from the PRC either maintained their market share (modules) or increased it (cells) to 
the detriment of the Union industry over the period considered, it cannot be concluded 
that  the  decrease  in  consumption  was  such  as  to  break  the  causal  link  between  the 
subsidised  imports  and  the  injury  suffered  by  the  Union  industry.  Moreover,  the 
investigation  showed  that,  as  the  capacity  of  the  Union  industry  was  in  any  event 
much lower than the levels of consumption, the shrinking consumption in the IP could 
not have had an impact on the injurious situation of the Union industry. 

(626)  Based  on  the  information  available  it  is  difficult  to  establish  to  what  extend  the 
demand is driven by the Member States support schemes. Indeed, as mentioned below 
in recital (632) a variety of support schemes exists and interaction between those and 
demand  is  highly  complex  and  therefore  their  precise  impact  is  difficult  to  quantify. 
However,  the  evidence  available  also  indicates  that  even  in  the  absence  of  support 
schemes the demand for solar energy will continue to exist and will even grow over 
time,  albeit  at  lower  levels  than  in  the  context  of  support  schemes.  In  this  context, 
several  parties  argued that  grid  parity  had  already  been  reached  or  nearly  reached  in 
some regions of the Union. 

(627)  One interested party argued that the imports from the PRC did not capture the entire 
increase in consumption and that, while in the case of modules the Union industry lost 
market share between 2009 and 2010, it still increased its profitability during the same 
period. Furthermore, it was argued that in 2009 when imports for cells from PRC had 
only 8 % market share, the Union industry still suffered 8 % loss.  

(628)  As already mentioned in recitals (609) to (616) above, despite the decrease in Union 
consumption  in  the  IP,  the  subsidised  imports  from  the  PRC  either  maintained  their 
market share  (modules) or increased it  (cells)  to  the  detriment  of the  Union industry 
over  the  period  considered.  Therefore,  it  cannot  be  concluded  that  the  decrease  in 

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consumption was such as to break the causal link between the subsidised imports and 
the injury suffered by the Union industry. Moreover, the investigation showed that as 
the  capacity  of  the  Union  industry  was  in  any  event  much  lower  than  the  levels  of 
consumption, the shrinking consumption in the IP could not have had an impact on the 
injurious situation of the Union industry. Therefore, this claim was rejected.  

(629)  Another interested party contested that the demand in the Union will continue to exist 
even in the absence of the national support schemes. This party argued that there is a 
correlation  between  demand  and  support  schemes  and  that  in  the  absence  of  such 
schemes projects in the PV sector it would not be profitable anymore and therefore the 
demand for solar panels will disappear as well. However, the party did not provide any 
evidence which could devaluate the findings above under recital (626). In the absence 
of any new information in this regard, this claim was rejected. 

(630)  Following  final  disclosure,  the  GOC  argued  that  the  fact  that  the  Union  industry’s 
capacity  did  in  any  event  not  meet  the  Union  demand  is  irrelevant  since  the  sales 
volume  of  modules  of  the  Union  industry  decreased  in  line  with  the  decrease  in 
consumption and reiterated that the decrease in consumption between 2011 and the IP 
caused the material injury suffered by the Union industry. While indeed between 2011 
and  the  IP  the  Union  consumption  decrease  and  the  sales  volume  of  modules 
decreased with a similar trend, this has to be seen in relation to the development of the 
Chinese  subsidised  prices,  significantly  undercutting  the  Union  industry  prices,  thus 
forcing the Union industry selling at losses. In this regard it is recalled, as mentioned 
in recital (111) to the provisional anti-dumping Regulation that imports from the PRC 
either  maintained  their  market  share  (modules)  or  increased  it  (cells)  when  the 
consumption  was  decreasing.  At  the  same  time  Chinese  import  prices  decreased 
significantly  and  substantially  undercut  the  Union  industry’s  sales  prices.  Therefore, 
this claim was rejected. 

5.3.4.  Feed-in-tariffs ('FITs') as the main example of support schemes 

(631)  It has been claimed by several interested parties that the cause of the injury suffered by 
the Union industry was linked to the reductions in the feed-in-tariffs implemented by 
the Member States. Those cuts had allegedly led to a decrease of the solar installations 
and  reduced  demand  for  the  product  under  investigation  in  the  Union  market,  thus 
causing material injury to the Union industry.  

(632)  Member  States  introduced  FITs,  quota  obligations  with  tradable  green  certificates, 
investment grants and tax incentives to support renewable energy generation. Support 
is  also  granted  in  certain  Member  States  from  EU  structural  funds.  The  most 
frequently implemented support instruments for solar energy were FITs. The analysis 
of the Commission focused on this type of support scheme. 

(633)  FITs are a financial support instrument aiming to achieve mandatory national targets 
for  the  use  of  renewable  energy,  as  prescribed  by  the  Directive  2009/28/EC  on  the 
promotion of the use of energy from renewable sources. The level of support and the 
way FITs operate vary by Member State. By means of FITs grid operators are bound 
to  buy  solar  energy  at  prices  which  ensure  that  solar  energy  producers  (usually  the 
owners  of  the  solar  installations)  recover  their  costs  and  earn  reasonable  rates  of 
return.  FITs,  as  other  support  schemes,  are  in  most  cases  also  subject  to  State  aid 
control  pursuant  to  articles  107,  108  TFEU,  which  ensures  the  absence  of 
overcompensation for electricity producers. 

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(634)  In spite of the national differences, three phenomena could be observed as regards the 
evolution of FITs in the Union: (i) the reduction of the FIT rates, (ii) the suspension of 
the  FIT  scheme  as  a  whole  (Spain)  and  (iii)  the  introduction  of  capacity  thresholds 
(‘caps’) for the installations eligible for financing as well as overall caps on the yearly 
installed new supported capacity at the Member State level. As regards the caps, they 
appear to have been introduced mainly during 2012 and, most likely, do therefore not 
have any effect on the consumption during the IP. Consequently, the analysis focused 
on the  recent  FIT  suspensions in Spain and reductions of FIT rates in most Member 
States. It was analysed whether they had an impact on the demand in the Union market 
and whether this could have caused the material injury suffered by the Union industry. 
In this regard, it was considered that the impact of the evolution of FITs with regard to 
the demand of modules was also representative for the situation with regard to cells. 
Indeed,  as  cells  are  indispensable  for  the  production  of  modules  and  as  they  are  not 
used  in  other  production  processes,  a  decrease  in  demand  for  modules  triggers 
automatically a decrease in demand for cells.  

(635)  While  the  investigation  confirmed  the  link  between  the  evolution  of  FITs  and 
consumption,  the  investigation  established that the decrease in consumption between 
2011  and  the  IP  did  not  contribute  to  break  the  causal  link  between  the  subsidised 
imports  from  the  PRC  and  the  material  injury  suffered  by  the  Union  industry  as 
described in detail in recital (625) above. Indeed, the investigation showed that while 
the  situation  of  the  Union  industry  was  deteriorating,  the  exporting  producers  were 
able to maintain their high market shares for modules (80 %) and even increased their 
market shares slightly for cells (from 20 % in 2011 to 22 % during the IP). In addition 
it  should  be  noted  that  the  average  price  of  modules  charged  by  the  Union  industry 
dropped by 53 % over the period considered, mainly due to the significant increase of 
subsidised  imports  and  the  substantial  price  pressure  they  exerted  on  the  Union 
market.  Therefore,  the  loss  in  profitability  suffered  by  the  Union  industry  cannot  be 
mainly attributed to the FIT cutbacks. 

(636)  Consequently,  it  is  acknowledged  that  FITs  generated  demand  for  solar  energy  and 
that  recent  FIT  suspensions  (as  in  Spain)  and  reductions  in  other  Member  States 
lowered  the  consumption  for  the  product  under  investigation  during  the  IP,  thus 
possibly having contributed to the injury suffered by the Union industry. However, the 
decrease  in  consumption  during  the  IP  was  not  such  as  to  break  the  causal  link 
between the subsidised imports and the injury suffered by the Union industry. 

(637)  Several parties argued that FITs cutbacks rendered the solar investment opportunities 
unattractive  for  investors  and  thus  lowered  the  demand  for  the  product  concerned  in 
the Union.  

(638)  While  the  investigation  confirmed  a  link  between  the  FIT  rates  and  the  level  of 
investments in the solar industry, it also showed that investments in the solar energy 
are less dependent in regions with high sun exposure where production of solar energy 
is  more  efficient  and  in  regions  with  high  electricity  prices.  Indeed,  showed  that 
investments are still being made (e.g. in Spain) in spite of the suspension of the FIT 
scheme.  Moreover, 
investment 
opportunities still remained attractive  even  with lower  FIT  rates. On the basis  of  the 
above, this claim was rejected.  

investigation  showed 

that  solar  energy 

the 

(639)  Several  parties  claimed  that  the  FIT  developments  exercised  a  strong  downward 
pressure  on  prices  and  therefore  on  the  profitability  of  the  Union  industry.  One 
interested  party  claimed  that  only  the  impact  of  the  development  of  FITs  on  the 

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demand  was  examined,  while  the  impact  on  prices  should  also  have  been  analysed 
instead. In the same context, several interested parties argued that most of the Member 
States implemented major cutbacks already in 2010 thus putting a downward pressure 
on the prices for modules. 

(640)  In  respect  of  this  claim  it  should  be  noted  that  the  Member  States  implemented  FIT 
cutbacks  at  different  moments  in  time  and  at  different  speeds  and  that  drawing  a 
general picture for the entire Union is rather difficult. Irrespective of the moment when 
the FIT rates reached very low levels, the significant decrease in the Union prices and 
profitability during the period considered cannot be solely or mainly explained by the 
reduction  of  FITs.  First,  on  the  basis  of  the  information  collected  for  Germany  and 
Italy  that  represented  together  around  75%  of  the  Union  consumption  in  2011,  the 
drop in the average sales price was more pronounced than the decrease in the FIT rates 
during the IP. Second, the evidence collected shows that, for some countries such as 
Italy,  even  in  the  context  of  very  generous  FIT  rates,  the  Union  industry  had  to 
decrease significantly their prices. Finally, during the IP, the Union industry had to sell 
at prices below their cost of production, which was mainly a consequence of the fact 
that the Chinese exporting producers had 80% of the Union consumption and therefore 
the power to influence the price-setting mechanism. 

(641)  The investigation further established that up to 2011 the higher FIT rates together with 
the decrease in the prices of modules in the Union rendered the investments in solar 
energy  extremely  attractive  as  investors  were  earning  very  high  rates  on  return. 
Therefore,  this  resulted  in  a  high  number  of  investments  and  consequently  high 
demand of solar panels. As a consequence of the increased demand, the total amount 
of FITs paid increased significantly and most Member States revised the existing FIT 
schemes downwards to avoid inter alia an increase of electricity costs. This shows that 
FIT cutbacks may also have been the result of the decreasing prices and not vice versa. 
Therefore, this claim was rejected.  

(642)  After  final  disclosure  one  party  claimed  that  there  was  a  contradiction  between  the 
recital  (640)  above,  that  an  assessment  of  the  demand  for  the  Union  as  a  whole  is 
difficult, and the recital (608) above stating that a causation analysis per Member State 
would  not  lead  to  meaningful  results.  In  this  respect,  it  is  clarified  that  in  the 
assessment  made  as  described  in  recital  (640)  above,  reference  is  made  to  the 
difficulty to draw a general picture of the FIT developments for the entire Union and 
not  to  the  Union  demand  as  claimed  by  the  interested  party.  As  a  consequence,  it 
follows  that  no  contradiction  exists  between  the  two  recitals  and  therefore  the  claim 
was rejected. 

(643)  After final disclosure, one party claimed that even in the context of high FIT rates, the 
module price may decrease significantly due to technological development, economies 
of  scale,  cost  reductions  and  growing  global  production  capacity.  In  respect  of  this 
claim,  it  is  noted  that  the  evidence  collected  shows  that  the  Italian  producers  had  to 
reduce their prices below the cost of production even when FIT rates were high. While 
the factors mentioned above may indeed have had an impact on the average costs they 
cannot  explain  why  Union  producers  had  to  reduce  their  prices  below  their  cost  of 
production. Therefore, it is concluded that it was mainly the subsidised imports from 
the PRC that pushed the prices to unsustainable levels and this claim was rejected. 

(644)  After  final  disclosure,  one  party  claimed  that  the  conclusion  drawn  in  recital  (641) 
above,  that  FIT  cutbacks  may  have  also  been  the  result  of  the  decreasing  prices  and 
not vice versa, is not supported by any evidence. 

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(645)  It  is  noted  that  the  conclusions  drawn  in  recital  (641)  above  were  based  on  the 
information available during the investigation and the scenario described was indeed 
considered  as  reasonable  given  the  circumstances  in  this  specific  market.  Therefore, 
this argument was rejected. 

(646)  After  final  disclosure,  one  party  disagreed  with  the  conclusion  that  the  downward 
price pressure on Union producers was mainly exerted by the subsidised imports and 
claimed that, to the contrary, it was the FIT cutbacks that forced the Union producers 
to reduce their prices. The same party reiterated that when FITs were reduced, the PV 
system  prices  decreased  in  line  with  the  decrease  in  FITs  so  that  costs  for  project 
developers do not increase, which ultimately caused  the price pressure  on the  Union 
producers.  

(647)  Since no conclusive evidence was brought in support of these claims, the Commission 
maintained its analysis and conclusions as stated in recitals (640) to (641) above.  

(648)  The  same  party  claimed  that  markets  are  driven  by  the  development  of  FITs  and 
provided information showing the number of PV installations for the years 2012 and 
2013 in the UK. The information provided by this party was a publication of the UK 
government based on the weekly registrations in the UK Central FiT Register (CFR). 
It is noted that this information related mostly to a period outside the IP and referred 
only to one Member State, while the current investigation focused on the situation of 
the Union market as a whole. In any event, it is not contested that FIT levels influence 
demand,  as  the  profitability  of  investments  in  locations  with  less  solar  radiation 
depends on the FIT level. However, in order to show that the level at which FIT were 
set during the IP has caused the injury, interested parties would have had to show that 
a price increase of the Union producers to the non-injurious level would have meant 
that  the  Union  producers  would  not  have  been  able  to  sell  the  product  concerned 
because investments into PV systems would not have been viable at those price levels. 
No such evidence has been provided. This argument was therefore rejected. 

(649)  Several  parties  claimed  that  in  the  context  of  the  low  FIT  rates,  investments  in  PV 
projects  were  economically  viable  only  when  supplied  with  the  lower  priced  solar 
panels imported from the PRC. Therefore, it was argued that the FIT cutbacks caused 
material injury to the Union industry. Another party argued that the level of the FIT 
rate influences the price setting mechanism for modules. 

(650)  It  should  be  noted  that  the  cost  of  a  module  at  which  a  project  would  still  be 
economically  viable  varies  by  Member  State  or  by  region  in  function  of  numerous 
factors  such  as  FITs,  other  regulatory  incentives,  sun  exposure,  conventional 
electricity  prices,  etc.  In  addition,  the  investigation  showed  that  current  installations 
depend less and less on the FITs as PV grid parity is likely to have been reached for 
certain  types  of  installations  in  several  regions  in  Europe,  such  as  a  large  portion  of 
Italy, Spain, Portugal, southern France and Greece. On the above grounds, the claims 
made in this regard were rejected. 

(651)  One interested party claimed that the Commission did not investigate whether Union 
industry  failed  to  anticipate  that  government  support  schemes  would  be  abruptly 
withdrawn  or  decreased.  No  arguments  were  brought  in  support  of  this  claim. 
However,  it  should  be  noted  that,  based  on  the  evidence  collected,  there  is  no 
information  indicating  that  the  Union  industry  responded  to  the  market  signals  (i.e. 
development  in  consumption)  and  other  available  information  (i.e.  reduction  in 
support schemes) in an unreasonable way. Therefore, this claim was rejected.  

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   EN 

(652)  One interested party argued that the FIT cutbacks caused Union industry sales decline 
because  investments  had  been  viable  only  at  the  affordable  Chinese  prices.  The 
evidence  collected  in  fact  shows  only  a  slight  decrease  in  the  sales  of  the  Union 
industry during  the IP, in contrast to what it  would  be expected had the  PV projects 
been feasible only with Chinese modules. On the contrary, the sales of module of the 
Union  industry  increased  until  2011  and  then  slightly  decreased  in  the  IP,  following 
the same trend as of the consumption. Therefore, this claim was rejected. 

(653)  One  interested  party  argued  that  the  decrease  in  FITs  forced  Union  industry  to 
decrease  their  prices  to  keep  the  interests  of  the  investors  in  PV  energy  and  to  keep 
developing demand and growth.  

(654)  The  investigation  showed  that  the  Union  industry  was  forced  to  decrease  its  prices 
mainly due to the pressure of the subsidised imports and not to the FIT cutbacks. This 
is  indicated  by  the  fact  that  the  most  significant  decrease  in  the  prices  of  the  Union 
industry occurred in 2010 and 2011, before the major FIT cutbacks took place. Indeed, 
the increase in subsidized imports from the PRC significantly undercutting the Union 
industry’s prices forced the Union industry to cut down their prices to increasingly low 
levels. On these grounds, the claim was therefore rejected. 

(655)  Another interested party argued that the findings as set out in recitals (174) and (175) 
to  the  provisional  anti-dumping  Regulation  that  the  FIT  changes  did  not  break  the 
causal  link  has  no  factual  or  legal  basis  and  is  inconsistent  with  Article  8(5)  of  the 
basic Regulation because the Commission failed to assess the level of injury caused by 
the  FIT  reductions  and  because  it  considered  that  the  significant  drop  in  the  Union 
industry’s price had been a consequence only of the subsidised Chinese imports. The 
same  party  argued  that  the  decrease  in  the  price  of  modules  and  cells  was  a  global 
phenomenon and not due to the pressure of the Chinese imports. 

(656)  In respect of the claim that the Commission failed to assess the level of injury caused 
by  the  FIT  cutbacks,  reference  is  made  to  recitals  (628)  and  (629)  above  as  well  as 
(640) and (641), where the Commission concluded that neither the decrease in demand 
nor  the  impact  of  FITs  on  Union  prices  were  as  such  as  to  break  the  causal  link 
between the injury suffered by the Union industry and the subsidized imports from the 
PRC,  irrespective  of  whether  and  to  which  extent  they  were  possibly  caused  by  the 
FITs  cutbacks.  Therefore,  the  claim  that  the  Commission’s  findings  have  no  factual 
basis was rejected. As regards the claim that the decrease in the price of modules and 
cells  was  a  global  phenomenon,  reference  is  made  to  recitals  (619)  to  (621)  above 
where import volumes and prices from other countries than the PRC into the Union are 
assessed.  While  indeed  there  was  a  global  downward  trend  in  the  prices  of  modules 
and cells, the subsidized import prices from the PRC have exacerbated the downward 
trend to loss making levels. On the basis of the above, this claim was rejected. 

(657)  In summary, FITs have been an important factor for the development of the PV market 
in the Union and the evolution of consumption of the product under investigation was 
influenced  by  the  existence  of  the  FITs.  However,  the  investigation  showed  that  the 
consumption  did  not  decrease  significantly  despite 
important  FIT  cutbacks. 
Furthermore, the investigation showed that the decrease in Union prices did not occur 
mainly  due  to  the  FIT  cutbacks.  Therefore,  it  is  concluded  that  the  developments  of 
FITs were not such as to break the causal link between the subsidised imports and the 
material injury suffered by the Union industry.  

5.3.5.  Other financial support granted to the Union industry 

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(658)  Some interested parties claimed that the material injury suffered by the Union industry 
was due to a decrease of financial support granted to the Union industry. In support of 
this claim, information was provided based on subsidies granted to one of the Union 
producers prior to the period considered (between 2003 and 2006).  

(659)  The evidence provided did not reveal any link between the material injury suffered by 
the  Union  industry  and  any  alleged  subsidy  received  by  one  of  the  Union  producers 
during  the  period  preceding  the  period  considered.  Moreover,  as  this  information 
predates the period considered, it seems to be irrelevant. Therefore, no link could be 
established  between  any  alleged  subsidy  received  by  the  Union  industry  and  the 
material injury suffered. On this ground, the argument was rejected.  

5.3.6.  Overcapacity 

(660)  It has been claimed that the material injury suffered by the Union industry was due to 
an overcapacity in the Union market and in the global market in general. It was also 
argued that the overcapacity in the global market led to the consolidation of the Union 
industry that is currently taking place and that any injury suffered was a consequence 
of too many production facilities. Moreover, several interested parties claimed that the 
material  injury  suffered  by  the  Union  industry  was  linked  to  the  self-inflicted 
overexpansion  of  capacity  of  the  Union  industry.  On  the  contrary,  some  interested 
parties  claimed  that  the  injury  suffered  by  the  Union  industry  is  due  to  the  Union 
industry’s failure to make the necessary investments in capacity additions. 

(661)  While the Union industry indeed increased its production capacity, its total production 
volume  did  not  cover  the  increasing  consumption  levels  in  the  Union  market  during 
the  period  considered.  Thus,  the  increase  of  the  Union  industry  production  capacity 
was reasonable and followed market developments, i.e. the increase in consumption. It 
cannot therefore be considered as a cause of the injury suffered.  

(662)  Likewise, on this basis, the argument that the Union industry did not invest in capacity 
expansion  was  not  confirmed  during  the  investigation.  To  the  contrary  however,  as 
mentioned above, throughout the period considered the Union industry progressively 
increased capacity and had available excess capacity throughout the period considered, 
indicating  that  it  was  capable  of  supplying  additional  demand.  Therefore,  this 
argument had to be rejected.  

(663)  Some interested parties claimed that all operators in the market, including the ones in 
the downstream and upstream sectors were in a difficult situation which was due to the 
overcapacity in the global market and the resulted change of the market. In this regard 
it  was  argued  that  the  product  under  investigation  has  become  a  commodity  where 
individual producers are not able anymore to set prices but where prices are subject to 
worldwide  demand  and  supply.  It  was  alleged  that  this  situation  has  caused  the 
material injury of the Union industry rather than the subsidised imports. 

(664)  The investigation confirmed the existence of overcapacity in the global market, mainly 
originating in the PRC. Concerning the market change that would allegedly bring the 
product  under  investigation  to  be  a  commodity,  this  would  not  justify  unfair  price 
behaviour and unfair trade practices. In this respect, it should be noted that the Union 
industry has been producing and selling the product under investigation for more than 
20  years,  while  the  PRC  industry  of  the  product  concerned  developed  only  recently 
(around  mid  of  last  decade),  mainly  attracted  by  the  feed-in-tariffs  and  other  policy 
incentives  in  Union  and  the  subsequent  increase  in  demand.  On  these  grounds,  the 
arguments above were rejected. 

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(665)  One interested party claimed that the overcapacity led to price rationalization. In this 
regard, it should be noted, on the one hand, that the overcapacity led in fact to a ‘race 
to the bottom’ and the suppression of the prices of Union industry, which on average 
exceeded  the  reduction  of  the  costs  of  production.  On  the  other  hand,  the  capacity 
increases  by  the  Union  industry  followed  the  market  developments  and  were 
considered reasonable. Moreover, the increase in production capacity of cells was at a 
lower level than modules. The claim in this regard had therefore to be rejected.  

(666)  Another interested party claimed that the injury suffered by the Union industry is due 
to the Union industry’s focus only on specialized investments and its failure to make 
the  necessary  investments  in  capacity  additions  and  cost  reductions.  Likewise,  this 
claim could not be confirmed by the findings of the investigation which showed that 
the Union industry increased its production capacity and efficiency during the period 
considered. This claim was therefore rejected. 

(667)  Moreover, an interested party claimed that the Union industry increased its production 
capacity in spite of already low capacity utilisation rates, thus resulting in self-inflicted 
injury.  However  this  claim  was  based  on  the  comparison  between  the  trend  of 
investments of the sampled Union producers and the trend of the capacity utilisation of 
the  whole  Union  industry,  which  is  not  an  appropriate  basis  for  comparison. 
Furthermore,  the  investigation  showed  that  the  Union  industry  had  not  expanded  its 
production  capacities  on  a  scale  which  exceeded  the  development  of  Union 
consumption, therefore this argument was rejected.  

(668)  Moreover,  the  evidence  collected  indicates  that  through  investments  in  new 
machinery, the Union industry could reduce its cost of production and become more 
cost competitive. Therefore, this argument had to be rejected.  

(669)  Following  the  final  disclosure,  some  interested  parties  contested  that  the  capacity 
additions  of  the  Union  industry  were  reasonable  and  followed  market  developments 
and  in  particular  the  development  of  the  Union  consumption.  However,  as  far  as 
modules  are  concerned  the  production  capacity  increased  by  106%,  while  the  Union 
consumption  increased  by  221%  over  the  period  considered,  i.e.  more  than  double. 
Likewise,  as  far  as  cells  are  concerned,  the  production  capacity  increased  by  39%, 
while  the  Union  consumption  increased  by  87%  during  the  period  considered.  This 
shows  that  the  increase  in  capacity  was  substantially  below  the  increase  in 
consumption  and  can  therefore  not  be  considered  as  unreasonable  given  that  there 
never  was  overcapacity  in  the  Union.  Moreover,  the  analysis  whether  the  capacity 
additions were reasonable should not be based on a year to year analysis, but should 
take  into  consideration  the  trend  during  the  whole  period  considered.  Thus,  capacity 
additions  will  typically  only  become  fully  operational  after  a  certain  period  of  time 
after the investment made and the isolated analysis of one year may lead to a distorted 
picture. This argument was therefore rejected. 

5.3.7. 

Impact of raw material prices  

(670)  Several  interested  parties  claimed  that  the  material  injury  suffered  by  the  Union 
industry was linked to the evolution of prices of polysilicon, the main raw material for 
the production of wafers. It was argued that the Union industry concluded long term 
fixed  priced  supply  contracts  and  could  therefore  not  benefit  from  the  decrease  in 
polysilicon prices during the period considered. 

(671)  The  investigation  showed  that  although  the  Union  industry  had  long  term  supply 
contracts for polysilicon, the terms of these contracts were mostly renegotiated based 

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on the price developments of polysilicon and contract prices reached levels close to or 
sometimes even lower than prices on the spot market. 

(672)  Some interested parties argued that the Union industry or at least part of it could not 
benefit from the decrease in prices of polysilicon, during the IP, because of long term 
contracts for raw material. These parties claimed that the renegotiations or termination 
of  long  term  contracts  of  polysilicon  and/or  wafers  resulted  in  penalties.  To  support 
this  argument,  these  parties  provided  press  articles  reporting  that  some  Union 
producers  were  facing  litigation  or  that  they  terminated  their  contracts.  Some  parties 
provided  information  allegedly  confirming  that  the  long  term  contracts  could  not  be 
re-negotiated.  

(673)  Polysilicon  is  the  main  raw  material  for  the  wafers  producers.  The  investigation 
revealed  that  polysilicon  prices  increased  in  2008  when  they  reached  their  peak  at 
around 500$/kg, but decreased again in 2009 reaching about 50-55 $/kg at the end of 
2009  with  only  a  slight  upwards  trend  in  2010  and  early  2011.  Prices  dropped 
significantly during the IP resulting in the 30$/kg (JRC Scientific and Policy Reports, 
PV Status Report 2012). It should be noted that the impact of polysilicon prices on the 
Union industry could only be rather marginal as any effect on the cost of production of 
cells  and  modules  was  diluted  through  the  value  chain.  Moreover,  the  above 
mentioned  press  articles  referred  to  post-IP  developments,  which  did  not  affect  the 
situation of the Union industry concerned during the IP, and cannot therefore be taken 
into  account.  It  can  be  confirmed  that  the  Union  industry  was  indeed  able  to 
renegotiate  not  only  the  prices  of  the  long-term  contracts  but  also  any  contractual 
penalties relating to these long-term contracts.  

(674)  One  interested  parties  argued  further  that  it  is  sufficient  that  only  some  Union 
producers have been affected by the long term contracts and that the situation of the 
overall  Union  industry  is  irrelevant.  It  claimed  that  higher  costs  do  not  necessarily 
have  to  affect  all  operators  in  the  same  way.  This  argument  ignores  the  finding  that 
overall, for the Union industry, the average polysilicon prices were in many cases not 
found to be higher than the market prices or than the spot prices and that therefore the 
issue  whether  higher  costs  affect  all  or  only  few  operators  was  not  considered 
pertinent. This argument was therefore rejected. 

(675)  Another  interested  party  requested  that  the  Commission  separate,  distinguish  and 
quantify  the  effects  of  each  factor  having  an  impact  on  the  situation  of  the  Union 
industry; in particular the effect of the significant drop in polysilicon prices should be 
considered  separately.  In  this  regard,  it  was  argued  that  it  was  the  decrease  in  the 
polysilicon prices rather than the price pressure from the Chinese imports that caused 
the  decrease  in  sales  prices.  As  far  as  the  Union  industry  is  concerned  its  average 
selling  prices  decreased  much  further  than  the  decrease  of  the  average  cost  of 
production,  on  which  the  decline  of  raw  material  prices  could  have  an  impact.  This 
argument was therefore rejected. 

(676)  Following the final disclosure, some interested parties reiterated that the impact of the 
decrease of polysilicon prices on the Union industry’s cost was not limited or diluted 
through  the  value  chain  as  concluded  in  the  investigation.  However,  as  already 
mentioned  in  recital  (255)  above,  polysilicon  is  the  main  raw  material  for  wafers 
producers, thus any impact on the production cost of cells or modules was found to be 
diluted in the value chain. The interested parties did not provide any evidence which 
could  have  devaluated  this  finding.  Moreover,  the  investigation  showed  that  the 
decrease of polysilicon prices over the period considered was reflected in the average 

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cost  of  production  of  cells  and  modules  of  the  sampled  Union  industry  which 
decreased  to  a  similar  degree  than  the  polysilicon  prices.  One  interested  party 
questioned the impact of  alleged  penalties that the Union industry had to pay due to 
the re-negotiation of the supplier contracts. In this regard, it cannot be excluded that 
some  producers  may  have  had  to  pay  penalties  for  the  cancellation  of  wafers  supply 
contracts  during  the  period  considered.  However,  the  Commission  did  not  find  any 
evidence  that  these  penalties  could  have  had  an  effect  on  the  situation  of  the  Union 
industry as a whole or would be representative. Such evidence was also not provided 
by the interested party in question. While it can therefore not be completely excluded 
that  penalties  could  have  had  a  certain  negative  impact  on  limited  number  of  Union 
producers,  the  overall  impact  on  the  Union  industry  is  at  best  marginal  and  hence 
could not break the causal link between the subsidised imports and the material injury 
suffered by the whole Union industry. Therefore, these arguments had to be rejected. 

(677)  Another interested party claimed that the decrease of sales prices of the product under 
investigation  in  the  Union  is  partly  due  to  the  reduction  in  the  price  of  polysilicon. 
However,  in  this  regard,  it  should  be  noted  that  the  investigation  showed  that  the 
imports from the PRC were subsidised and substantially undercutting the prices of the 
Union industry. The price decrease therefore goes beyond the reduction in production 
costs  that  can  be  explained  by  the  decrease  in  the  raw  material  prices.  If  the  price 
decrease was  merely the  effect  of  the decrease  of the raw material prices,  the Union 
industry would not have been forced to decrease their sales prices below their cost of 
production. Therefore, this claim has to be rejected.  

(678)  Another interested party reiterated that the litigation of one Union producer after the IP 
may  has  affected  the  situation  of  at  least  this  Union  producer  already  during  the  IP. 
This party did not explain however how and to what extend such event that occurred 
after the IP could indeed have had an effect on this producer’s situation during the IP. 
Likewise,  the  investigation  did  not  reveal  any  evidence  showing  such  effects. 
Therefore this claim had to be rejected. 

(679)  Moreover,  the  same  interested  party  questioned  the  above  mentioned  findings,  as 
allegedly  no  evidence  was  shown.  However,  the  findings  of  the  investigation  were 
based  on  facts  and  positive  evidence,  non-confidential  versions  of  which  were 
available to all interested parties.  

(680)  On the basis of the above, it is concluded that even if some specific Union producers 
may  have  been  affected  by  long  term  contracts,  the  Union  industry,  overall,  did  not 
suffer  from  these  long  term  contracts  and  was  able  to  fully  benefit  from  the  price 
decrease in raw material prices. The long term contracts were therefore not found to 
break the causal link between the subsisdised imports and the material injury suffered 
by the Union industry.  

5.3.8.  Self-inflicted  injury:  impact  of  automation,  size,  economies  of  scale,  consolidation, 

innovation, cost efficiency, imports of the Union industry 

(681)  Several interested  parties claimed that the injury suffered  by the Union  industry  was 
due to the high degree of automation of the production process. It was claimed that the 
small-scale producers had a disadvantage compared to the larger vertically integrated 
producers  and  therefore  any  injury  suffered  by  the  small  scale  producers  cannot  be 
attributed  to  the  subsidised  imports.  In  this  context  it  was  also  claimed  that  in  any 
event,  overall,  the  Union  industry  was  of  a  small  size  and  therefore  was  not  able  to 
benefit from economies of scale.  

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(682)  The  investigation  showed  that  also  the  small-scale  producers  in  Union  market  had  a 
high  level  of  automation  in  their  production  process  with  a  positive  effect  to  their 
production costs. Most Union producers have specialised in one part of the production 
process 
their 
competitiveness  with  regard  to  the  specific  product  type  they  were  producing.  The 
argument that impact of the high degree automation caused the injury suffered by the 
Union industry, had therefore to be rejected.  

(cells  or  modules),  which, 

through  specialisation, 

increased 

(683)  Some interested parties claimed that the price pressure resulted in the consolidation of 
the Union industry and the Chinese industry, the latter being the cause of the material 
injury  suffered  by  the  Union  industry.  However,  the  investigation  showed  that  the 
consolidation was rather a consequence of the subsidised imports and the unfair trade 
practices. Furthermore, this party did not support with any evidence to what extend the 
consolidation process could have been the cause of the injury suffered.  

(684)  Moreover, it was claimed that the lack of vertical integration of the Union industry is 
the  cause  of  the  injury  suffered.  In  general  the  vertically  integrated  producers  in 
normal  market  conditions  should  have  more  security  over  their  supply  chain. 
However, the investigation showed that the advantage of vertical integration by part of 
the  Union  industry  that  was  vertically  integrated  could  not  be  fully  exploited  as  the 
price  pressure  from  subsidised  imports  was  extremely  high.  Moreover,  the  Union 
industry, even the vertically integrated Union producers, due to the subsidized imports 
could  not  fully  benefit  from  high  capacity  utilisation  rates  to  achieve  economies  of 
scale.  Furthermore,  the  investigation  did  not  reveal  any  correlation  between  vertical 
integration  and  better  profitability  rates,  as  the  high  price  pressure  has  altered  this 
correlation.  

(685)  Some interested parties claimed that the Union industry lacked technical innovation as 
well  as  investments  in  new  technology.  However,  the  investigation  did  not  bring  to 
light  any  factual  evidence  confirming  these  allegations.  To  the  contrary,  the 
investigation showed that the majority of the investments made by the Union industry 
were  dedicated  to  new  machinery  and  R&D  and  that  there  are  no  meaningful 
differences in technology between the products world-wide. 

(686)  Moreover, one interested party claimed that the material injury suffered is due to the 
poor  project  execution  (failed  projects).  In  this  respect,  it  should  be  noted  that  the 
argument  was  not  substantiated.  In  addition,  any  failed  project  could  rather  be 
considered as a consequence of the subsidised imports. The argument had therefore to 
be rejected. 

(687)  Several interested parties claimed that the Union industry was not able to rationalize 
its  costs  in  time  to  respond  to  the  developments  in  the  world  market.  Other  parties 
claimed that labour and overhead costs are higher in the Union than in the PRC. 

(688)  The  investigation  showed  that  the  cost  of  production  of  the  Union  industry  was 
steadily  decreasing  during  the  period  considered.  Productivity  increased  for  modules 
and cells. As mentioned above, due to the surge of subsidised imports from the PRC 
and the consequent significant price pressure on the Union market, the Union industry 
was not able to benefit from the reductions in cost.  

(689)  It  is  noted  that  the  exporting  producers  in  the  PRC  do  not  enjoy  any  comparative 
advantage with regard to raw materials (polysilicon) and the machinery used as both 
were mostly imported from the Union. As far as labour and overhead costs, including 
depreciation  are  concerned,  they  represented  on  average  less  than  10  %  of  the  total 

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cost of a module in the IP and are not considered to have played any significant role. 
As far as electricity costs are concerned, they represented on average less than 1 % of 
the  total  cost  of  a  module  in  the  IP  and  are  not  considered  to  have  played  any 
significant  role.  Moreover,  the  claim  that  the  Chinese  were  using  the  newest 
equipment was not substantiated. 

(690)  Moreover,  it  was  claimed  that  some  Union  producers  sourced  cells  and/or  modules 
from the country concerned, and re-sold those products on the Union market as their 
own. Injury resulting from these transactions should not be attributed to the subsidized 
imports. However, the investigation revealed that imports from the Union industry of 
the  product  concerned  were  complementary  in  nature  as  well  as  limited  in  terms  of 
volume when compared to the total Union production and therefore their effect, if any 
would only be marginal and could not be considered breaking the causal link between 
the subsidized imports and the injury suffered by the Union industry.  

(691)  Therefore, in order to match the decreasing price trend of the imports from the PRC, 
the  Union  industry  had  to  make  considerable  efforts  to  rationalize  its  cost  of 
production.  Despite  the  efforts  of  the  Union  industry,  this  cost  rationalization  could 
not  be  reflected  in  the  sales  price  due  to  the  significant  undercutting  exerted  by  the 
subsidised imports.  

(692)  Certain interested party claimed that the injury suffered by the Union industry was due 
to the Union industry’s lack of sufficient economies of scale. It was argued that small-
scale producers had a disadvantage compared to larger vertically integrated producers 
and  therefore  any  injury  suffered  by  these  producers  cannot  be  attributed  to  the 
subsidised  imports.  Another  interested  party  argued  that  the  automation  of  the 
production  process  is  costly  and  that  therefore  economies  of  scale  are  even  more 
important to reduce the cost of production. 

(693)  The  investigation  showed  that  the  Union  industry,  even  the  larger  and  vertically 
integrated  ones,  due  to  the  subsidised  imports,  could  not  fully  benefit  from  high 
capacity utilization rates to achieve economies of scale. In any event, the investigation 
did not reveal any correlation between size, vertical integration and better profitability 
rates,  as  the  high  price  pressure  from  subsidised  imports  has  altered  this  correlation. 
The investigation has showed that the benefit of economies of scale no longer existed 
in a market where the utilization rates were low, which was also true for the Chinese 
producers. Therefore, these arguments were rejected.  

(694)  Furthermore, one interested party claimed that investors and banks would not finance 
projects  if  the  module  manufacturer  is  too  small,  as  larger  producers  provide  better 
guarantees and are more ‘bankable’. In other terms, investors and banks are reluctant 
to  finance  PV  related  projects  using  modules  produced  in  the  Union.  However,  the 
investigation  showed  that  any  possible  preference  of  investors  and  banks  to  finance 
Chinese  producers  which  have  larger  production  capacities  is  the  result  of  the 
distortion  that  subsidised  imports  have  created  on  the  Union  market.  As  mentioned 
above, the size of the production lines does not play a role if utilisation rates remain 
low. Therefore, this argument was dismissed  

(695)  One  interested  party  claimed  that  the  Union  industry  had  an  unfavourable  cost 
structure  compared  to  its  Chinese  competitors,  as  the  latter  enjoyed  lower  labour, 
electricity and depreciation costs, and in addition had the newest equipment. However, 
the  party  concerned  was  unable  to  provide  new  information  or  supporting  evidence 
that  could  reverse  the  findings  of  this  investigation  in  this  regard.  In  particular,  the 
claim that the Chinese producers were using the newest equipment was addressed by 

EN 

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the  findings  in  recital  (203)  to  the  Provisional  anti-dumping  Regulation,  stating  that 
the  exporting  producers  in  the  PRC  did  not  enjoy  any  comparative  advantage,  in 
particular because machinery and equipment was imported from the European Union. 
The above claims were therefore rejected. 

(696)  Another party claimed that the Chinese enjoyed a comparative advantage with regard 
to  polysilicon  prices  and  to  economies  of  scales  which  resulted  in  lower  cost  of  the 
machinery. This party did not provide any new information or supporting evidence in 
this regard. The claim of this party had therefore to be rejected.  

(697)  Moreover,  one  interested  party  claimed  that  some  Union  producers  sourced  cells 
and/or modules from the country concerned, and re-sold those products on the Union 
market  as  their  own.  It  requested  that  injury  resulting  from  these  transactions  is  not 
attributed to the subsidised imports. However, the investigation revealed that imports 
from  the  Union  industry  of  the  product  concerned  were  complementary  in  nature  as 
well as limited in terms of volume when compared to the total Union production and 
therefore their effect, if any, would only be marginal and could not be considered as 
breaking the causal link between the subsidised imports and the injury suffered by the 
Union industry.  

(698)  One  unrelated  importer  argued  that  the  fact  that  the  number  of  employees  increased 
should  be  considered  in  the  analysis.  In  respect  of  this  claim,  it  is  noted  that 
employment increased between 2009 and 2011 for modules and then decreased during 
the IP. For cells, the employment increased until 2010 and then decreased in 2011 and 
further decreased in the IP. It is further noted that for modules, employment followed 
the  trend  of  the  Union  production.  For  cells,  as  the  Chinese  imports  increased  their 
market share during the entire period to the detriment of the Union industry, the Union 
industry could not benefit from the growing consumption as expected. Therefore, the 
employment decrease in 2011 and in the IP corresponds to companies that either had 
become insolvent or stopped their cell production. 

(699)  Following the final disclosure one interested party reiterated that the injury suffered by 
the Union industry was due to the small scale and the lack of economies of scale. As 
already  explained  in  the  recital  (682)  above  and  in  recitals  (195)  and  –(196)  to  the 
provisional anti-dumping Regulation, even in the global market, the size and therefore 
the benefit of economies of scale cannot longer exist where the utilization rates were 
generally low, and where enormous overcapacities existed world-wide. Therefore this 
claim had to be rejected.  

(700)  Moreover, the same party reiterated that the injury suffered by the Union industry was 
due  to  the  inability  of  the  Union  industry  to  realize  any  cost  advantage.  This  party 
claimed that this was in particular due the fact that most of the Union producers were 
vertically  integrated.  However,  this  party  did  not  provide  any  further  information  to 
what extend the fact that producers are vertically integrated could have had a negative 
impact on their cost structure. Therefore this claim had to be rejected 

(701)  On these grounds, all the above mentioned arguments had to be rejected. 

5.3.9.  Competition from thin film PV products and other PV technologies 

(702)  Several interested  parties claimed that the injury suffered  by the Union  industry  was 
caused by the competition from thin film PV products and other PV technologies, as 
these  technologies  were  interchangeable  and  with  same  end  use.  It  was  also  argued 
that  thin  film  was  competing  with  the  product  under  investigation  especially  for 

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ground-mounted  and  commercial/industrial  rooftop  systems,  which  constitute  a 
substantial part of the total Union PV market.  

(703)  The investigation showed that thin film PV products are produced from different raw 
materials and do not use crystalline silicon wafers. In general, they have much lower 
conversion  efficiencies  and  a  lower  wattage  output  than  crystalline  silicon  modules. 
As a result, they cannot be used on restricted areas such as roof-tops, i.e. they are not 
fully interchangeable with the product concerned. The investigation also showed that 
although  thin  film  PV  products  are  less  expensive  than  the  product  under 
investigation, they only capture a limited market share of the total Union solar market, 
during  the  period  considered.  Therefore,  although  there  may  be  some  competition 
between  the  thin  film  products  and  the  product  concerned,  this  competition  is 
considered to be limited. 

(704)  Following the final disclosure, one interested party reiterated that the competition from 
thin film products likely caused the material injury suffered by the Union industry. In 
this regard, the party submitted that in Germany the market share of thin film products 
in  the  total  solar  market  was  substantial  during  most  of  the  IP  and  only  declined 
towards the beginning of 2012. 

(705)  The investigation showed indeed that the average prices of thin film products were at 

lower levels than the average price levels of the product under investigation.  

(706)  However,  as  set  out  in  recital  (703)  above  thin  film  products  have  much  lower 
conversion  efficiencies  and  a  lower  wattage  output  than  crystalline  silicon  modules 
and  therefore  competition  between  these  product,  if  any,  could  not  contribute  to  the 
injury  of  the  Union  industry,  as  crystalline  silicon  modules  are  the  dominant 
technology in the Union solar market. The JRC PV Status Report 2012 stated that as a 
consequence  of  the  drop  in  polysilicon  prices,  thin  film  has  in  the  last  years  lost 
market share to crystalline silicon modules.  

(707)  On these grounds, these arguments were rejected.  

5.3.10.  Financial crisis and its effects 

(708)  It  was  claimed  that  the  financial  crisis  and  the  economic  recession  had  a  negative 
effect  on  the  access  to  finance  for  the  Union  industry  and  thus  caused  the  injury 
suffered by the Union industry. 

(709)  The  ability  of  the  Union  industry  to  raise  capital  decreased  significantly  during  the 
period considered. As the solar industry is capital intensive, the ability to raise capital 
is crucial. The economic recession had a certain impact on the situation of the Union 
industry.  The  investigation  showed,  however,  that  despite  the  growth  of  the  Union 
market between 2009 and 2011, the situation of the Union industry deteriorated as a 
result  of  the  subsidised  imports  from  the  PRC  heavily  undercutting  the  Union 
industry’s  sales  prices.  It  was  therefore  concluded  that  the  potential  effects  of  the 
financial  crisis  was  aggravated  by  the  increase  of  subsidised  imports  from  the  PRC 
and  that  the  limited  access  to  finance  was  largely  a  consequence  of  the  negative 
market climate, the situation and prospects of the Union industry a consequence of the 
subsidised imports.  

(710)  Moreover it was examined whether the injury suffered by the Union industry was due 
to  the  Union’s  industry  failure  to  seek  appropriate  financing  while  they  were 
profitable.  The  investigation  showed  that  e.g  in  2010  that  Union  industry  was  still 
profitable, the level of investment increased for modules by 315 % compared to 2009, 
while at the same time for cells by 10 %. As the PV industry is capital intensive, it is 

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expected  that  the  Union  industry  is  continuously  seeking  appropriate  financing  in 
order  to  improve  its  cost  efficiency  and  compete  with  the  unfair  subsidised  imports. 
Therefore,  it  is  concluded  that,  the  lack  of  access  to  finance  was  a  result  of  the 
distorted situation and not the cause. 

(711)  Following the final disclosure, one interested party reiterated that the injurious effects 
of the financial crisis should be separated and distinguished and not be attributed to the 
subsidised  imports.  This  party  referred  to  publicly  available  information  indicating 
that at least one Union producer perceived the financial crisis as the main cause for its 
injurious  situation.  The  current  investigation  based  its  findings  on  specific  company 
data  which  go  significantly  beyond  publicly  available  statements  of  specific 
companies.  Therefore,  the  publicly  available  statement  to  which  reference  was  made 
cannot devaluate the findings that while the financial crisis had a certain impact on the 
situation  of  the  Union  industry,  it  could  not  break  the  causal  link  between  the 
subsidised imports and the material injury suffered by the Union industry. Therefore, 
this claim had to be rejected. 

(712)  Another  interested  party  claimed  that  the  different  access  to  financing  between  the 
Union industry as compared to the Chinese exporting producers should be taken into 
consideration. This party claimed that this was one of the main factors which caused 
the material injury to the Union industry and not the subsidised imports. However, the 
preferential access to financing of a number of Chinese exporting producers has been 
found to distort the market and may well be one of the main reasons allowing Chinese 
exporting producers to export the product concerned at subsidised prices. This factor 
can therefore not break the causal link between the subsidised imports and the material 
injury suffered by the Union industry. This claim was therefore rejected. 

(713)  On these grounds, it was concluded that, while the financial crises had a certain impact 
on the situation of the Union industry, it could not break the causal link between the 
subsidised imports and the injury suffered by the Union industry. The arguments were 
therefore rejected. 

5.3.11.  Export performance of the Union industry 

(714)  Some  interested  parties  claimed  that  the  Union  industry’s  export  sales  dropped 
significantly during the period considered and especially between 2009 and 2011 for 
modules and between 2009 and first quarter of 2012 for cells and that this has caused 
the material injury suffered by the Union industry.  

(715)  However,  as  shown  in  the  table  below,  the  export  volumes  for  modules  remain 
significant  despite  a  slight  decrease  in  the  IP  and  average  price  levels  during  the  IP 
were above the average costs of modules throughout the period considered. Therefore, 
this could not have caused the injury suffered by the Union industry. As for cells, the 
export volumes represented only around 12 % of the total production volume of cells. 
Therefore,  despite  the  low  prices  during  the  IP,  this  could  only  have  had  limited 
impact  on  the  situation  of  the  Union  industry.  The  arguments  in  this  respect  had 
therefore to be rejected. 

Table 13-a 

Modules 

Volume 

of 

2009 

989 

2010 

1 279  

2011 

1 157 

IP 

1 148

EN 

161 

   EN 

 
 
 
 
 
 
 
 
 
 
exports 
modules 
MW 

in 

(Index  2009  = 
100) 

Average  export 
price 
(EUR/kW) 

(Index  2009  = 
100) 

Source: Europressedienst 

Volume 
exports  cells 
MW 

of 
in 

(Index  2009  = 
100) 

Average 
price (EUR/kW) 

export 

(Index  2009  = 
100) 

100 

129 

117 

116 

2 500 

1 900  

1 470 

1 230

100 

76 

59 

49 

Table 13-b 

Cells 

2009 

2010 

2011 

IP 

62 

100 

320 

516 

315 

508 

1 350 

1 050  

830 

100 

78 

61 

238

384

640

47 

Source: Europressedienst 

(716)  On  these  grounds,  it  was  found  that  the  impact  of  the  Union’s  industry’s  export 
performance was not such as to contribute to the material injury suffered by the Union 
industry. Therefore, the parties’ arguments in this respect had to be rejected.  

5.3.12.  The discovery of shale gas deposits in the Union 

(717)  One interested party claimed that the injury suffered by the Union industry was caused 
by  the  discovery  of  shale  gas  deposits  in  the  Union  and  the  prospect  of  increasing 
production of cheap shale gas in the Union has reduced public and private investments 
in renewable energy projects. 

(718)  The  investigation  found  that  the  consumption  for  the  product  under  investigation 
increased  substantially  throughout  the  period  considered,  as  already  mentioned  in 
recital  (509)  above.  Moreover,  the  investigation  did  not  bring  into  light  any  factual 
evidence  that  the  injury  suffered  by  the  Union  industry  was  due  to  the  discovery  of 
shale gas deposits in the Union. The claim was therefore rejected.  

5.3.13.  The European Union’s Emissions Trading Scheme (ETS) 

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(719)  The same party claimed that the injury suffered by the Union industry was caused by 
the  low  investments  in  solar  energy  production  due  to  the  low  market  prices  for  the 
European Union’s Emissions Trading Scheme CO2 emission credits.  

(720)  No evidence was however provided and the investigation did not bring into light any 
factual circumstances confirming these allegations. To the contrary, the investigation 
showed  that  the  consumption  of  the  product  under  investigation  was  increasing 
substantially during the period considered. On these grounds, the claim was rejected.  

5.3.14.  Management decisions 

(721)  Some interested parties claimed that the material injury suffered by at least one of the 
Union  producers  was  caused  by  a  wrong  management  decisions.  These  allegations 
were based on the annuals accounts, some information contained in a letter sent by a 
shareholder of the company to the other shareholders and a press article. 

(722)  None of the information in the file showed that any of the management decisions of 
the  company  concerned  were  unusual  or  imprudent  or  had  an  impact  on  the  entire 
Union industry. Therefore, the arguments in this respect were rejected.  

5.3.15.  Other government policies 

(723)  One  interested  party  claimed  that  the  material  injury  suffered  by  the  Union  industry 
was caused by other government policies such as renewable energy policies, policies 
aimed at encouraging innovation, policies of cutting red tape, trade facilitation policies 
and  grid  access  regulations,  as  these  policies  benefit  the  exporting  producers. 
However, even if it is true that certain of the claimed policies might facilitate imports 
from  other  third  countries  and  overall  growth  of  solar  industry,  these  policies  would 
also  benefit  the  Union  industry.  Moreover,  these  policies  should  not  be  meant  that 
such  imports  in  the  Union  should  be  made  at  injurious  subsidised  prices.  Therefore, 
the arguments in this respect were rejected.  

5.3.16.  Other arguments 

(724)  One interested party claimed that the injury suffered by the Union industry was due to 
the  forerunner  disadvantage  and  the  lack  of  political  support  from  the  European 
Commission  in  previous  years.  This  party  also  claimed  that  apart  from  the  national 
support  schemes,  also  population,  GDP,  electricity  consumption, 
financing 
opportunities  and  connectability  to  the  grid  are  important  factors  in  each  market. 
However, the above party was not able to substantiate its claims which were therefore 
rejected.  

(725)  Following  the  final  disclosure,  the  same  interested  party  reiterated  that  the  injury 
suffered by the Union industry was due to the forerunner disadvantage. However, the 
claim was neither analysed nor substantiated; therefore it had to be rejected. 

5.4. 

Cumulative assessment of those other factors that have been found  to contribute to 
injury 

(726)  The investigation has shown that the following other factors may have contributed to 
injury: Imports of the product concerned from Taiwan; Reduction in the level of FIT; 
Long-term polysilicon contracts of a limited number of Union producers; the financial 
and economic crisis. 

(727)  As has been shown above in sections 5.3.1 respectively 5.3.7, the possible contribution 
of imports from Taiwan and of long-term polysilicon contracts of a limited number of 

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Union  producers  are,  at  best,  marginal,  as  any  impact  of  them  was  further  diluted 
through the value chain.  

(728)  With regards to the economic and financial crisis, the investigation has shown that the 
main reason for difficulties of the Union industry in accessing the capital needed for 
investments  were  the  subsidised  imports,  which  prevented  the  Union  industry  from 
selling its products at profitable prices when the Union market showed strong growth 
rates (2009-2011). 

(729)  With  regards  to  FIT,  third  parties  have  not  been  able  to  demonstrate  that  FIT  levels 
during  the  IP  would  have  been  so  low  that  they  would  have  prevented  Union 
producers from selling the product concerned at non-injurious prices. The Institutions 
take  the  view  that  reductions  in  FIT  levels  may  explain  reduced  demand,  as 
investments  in  certain  locations  were  no  longer  viable.  They  cannot,  however,  break 
the  causal  link,  even  taken  together  with  the  other  factors  that  have  been  found  to 
contribute to injury, because they were still at a level at which, absent the subsidised 
imports, the Union producers could have sold their products at non-injurious prices. 

(730)  Therefore, even if the cumulative effect of the four other factors possibly contributing 

to injury is assessed, the causal link between subsidization and injury is not broken.  

5.5. 

Conclusion on causation  

(731)  The investigation has established a causal link between the material injury suffered by 
the Union industry and the subsidised imports from the PRC. Other possible causes of 
injury,  such  as  imports  from  other  third  countries,  non  subsidised  imports  from  the 
PRC,  consumption,  FITs,  other  financial  support  granted  to  the  Union  industry, 
overcapacity,  impact  of  raw  material  prices,  self-inflicted  injury,  competition  from 
thin-film, financial crisis and its effects, export performance of the Union industry, the 
discovery  of  shale  gas  deposits  in  the  Union,  managements  decisions,  the  European 
Union’s  Emissions  Trading  Schemes,  other  government  policies  were  analysed  and 
none of them was found to be such as to break the causal link established between the 
subsidised  imports  from  the  PRC  and  the  material  injury  suffered  by  the  Union 
industry.  

(732)  All  the  effects  of  the  injury  factors  other  than  the  subsidised  imports  have  been 
individually  and  collectively  analysed.  Therefore,  it  is  concluded  that  the  collective 
assessment of all the factors that may have had an impact on the injurious situation of 
the Union industry (i.e. imports of third countries, FITs, impact of raw material prices, 
financial crisis) collectively fail to explain the injury suffered by the Union industry in 
particular  in  terms  of  low  prices  and  financial  losses  due  to  the  penetration  of  low 
priced imports in significant quantities of the product concerned from the PRC. Based 
on the above analysis, which has properly distinguished and separated the effects of all 
known factors on the situation of the Union industry from the injurious effects of the 
subsidised imports, it was therefore concluded that there was a causal link between the 
subsidised  imports  from  the  PRC  and  the  material  injury  suffered  by  the  Union 
industry during the IP. 

6. 

UNION INTEREST 

6.1. 

Preliminary remarks  

(733)  In  accordance  with  Article  31  of  the  basic  Regulation,  it  was  examined  whether, 
despite  the  above  findings  on  injurious  subsidisation,  compelling  reasons  existed  for 
concluding  that  it  was  not  in  the  Union  interest  to  adopt  countervailing  measures  in 
this particular case. For this purpose, and in accordance with Article 31(1) of the basic 

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Regulation, the analysis of the Union interest was based on an appreciation of all the 
various  interests  involved,  including  those  of  the  Union  industry,  companies  in  the 
upstream and downstream markets of the PV sector, importers, users and consumers of 
the product concerned. 

(734)  Around 150 operators made themselves known after the initiation of the parallel anti-
dumping  investigation  and  were  duly  considered  in  the  framework  of  the  current 
investigation.  Specific  questionnaires  were  sent  to  unrelated  importers,  upstream 
operators  (including  a  raw  material  producer  and  suppliers  of  production  equipment 
for  the  product  under  investigation),  downstream  operators  (including  project 
developers  and  installers)  and  BEUC  a  consumer  organisation.  Three  associations 
representing  various  operators  (Union  industry,  upstream  and  downstream  operators) 
in the PV sector submitted information. 

(735)  It  was  claimed  that  the  assessment  of  the  Union  interest  was  not  based  on  a 

representative number of operators.  

(736)  The Commission has contacted the different operators in the following manner. 

(737)  As concerns upstream and downstream operators: as mentioned above in recital (734), 
the  Commission  sent  specific  questionnaires  to  about  150  operators  including  those 
unrelated importers that had come forward after the initiation of the investigation, and 
which  had  therefore  the  opportunity  to  provide the relevant data to the Commission. 
Twenty-one questionnaire replies were received. Moreover, not only the replies to the 
questionnaires  but  also  verifiable  and  duly  substantiated  comments  and  submissions 
provided by interested parties within the deadlines were taken into consideration in the 
investigation,  irrespective  of  whether  or  not  these  parties  had  replied  to  the 
questionnaire. In particular, AFASE has transmitted to the Commission comments on 
behalf of its members - PV operators that were also analysed. 

(738)  As concerns unrelated importers, as mentioned in recital (25) above, the Commission 
contacted all the 250 unrelated importers made known by the complainant and selected 
a provisional sample in accordance with Article 27 of the basic Regulation to cover the 
largest representative volume of imports which can reasonably be investigated within 
the  time  available.  However,  only  one  of  the  companies  provisionally  selected  was 
indeed, after verification, confirmed to be an unrelated importer. At a later stage of the 
investigation,  further  unrelated  importers,  which  had  initially  submitted  a  sampling 
form  at  the  initiation  stage  but  were  not  sampled,  were  invited  to  cooperate  further 
with  the  investigation.  Six  of  them  agreed  and  received  a  questionnaire,  and  five 
submitted a reply out of which three were considered to be sufficiently complete. The 
definitive sample of unrelated importers therefore comprises four unrelated importers, 
representing  a  range  of  2  %  to  5  %  of  the  imports  of  the  product  concerned.  With 
regards to that low percentage, it has to be kept in mind that the majority of imports of 
the product concerned into the Union does not take place via unrelated importers. 

(739)  To  sum  up,  for  the  analysis  of  Union  interest,  the  following  information  has  been 

relied on:  

– 

the  questionnaire  replies  received  from  eight  sampled  Union  producers  and 
four  sampled  unrelated  importers  as  well  as  the  replies  to  the  specific 
questionnaire received from eight upstream and thirteen downstream operators 
(seven project developers/installers; six service providers also active in the PV 
sector)  out  of  150  operators  that  had  come  forward  after  the  initiation  and 
received the specific questionnaires;  

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– 

– 

the data verified during the on-site verifications at the premises of eight Union 
producers,  one  unrelated  importer,  two  upstream  operators,  four  downstream 
operators (project developers/installers) and one association (see recital (17) to 
the provisional antidumping Regulation and recital (29) above) 

the  data  on  Union  interest  submitted  by  other  interested  parties,  including 
associations,  as  well  as  publicly  available  data  on  the  evolution  of  the  PV 
market 
in  particular:  EPIA’s  Global  Market  Outlook  for 
Photovoltaics 2013-2017.  

in  Europe, 

6.2. 

Interest of the Union industry 

(740)  The Union industry directly employed about 21 000 people in the IP in the production 

and sale of the like product.  

(741)  The  investigation  established  that  the  Union  industry  has  suffered  material  injury 
caused  by  the  subsidised  imports  from  the  country  concerned  during  the  IP.  It  is 
recalled that a number of injury indicators showed a negative trend during the period 
considered. In particular, injury indicators related to the financial performance of the 
cooperating  Union  producers,  such  as  profitability,  cash  flow  and  return  on 
investments were seriously affected. In fact, the Union producers of modules and cells 
were  loss  making  in  2011  and  in  the  IP.  Consequently,  some  Union  producers  were 
already forced to close down their production facilities while some others have faced 
insolvency. In the absence of measures, a further deterioration in the Union industry’s 
economic situation appears very likely. 

(742)  It  is  expected  that  the  imposition  of  countervailing  measures  duties  will  restore  fair 
trade conditions on the Union market, allowing the Union industry to align the prices 
of the like product to reflect the costs of production thus improving its profitability. It 
can also be expected that the imposition of countervailing measures would enable the 
Union  industry  to  regain  at  least  part  of  the  market  share  lost  during  the  period 
considered,  with  a  positive  impact  on  its  overall  financial  situation.  Moreover  the 
Union industry should be able to have better access to capital and to further invest in R 
&  D  and  innovation  in  the  PV  market.  Finally,  the  investigation  also  pointed  to  a 
possible restarting of the business activity of the Union producers who were forced to 
stop the production as a result of the pressure of the Chinese imports. Overall, under 
this scenario, not only the existing 21 000 jobs of the Union industry (in the IP) would 
be  secured  but  there  would  also  be  a  reasonable  prospect  for  further  production 
expansion and increase in employment. 

(743)  Should measures not be imposed, further losses in the market share are expected with 
a  further  deterioration  of  the  Union  industry’s  profitability.  This  would  be 
unsustainable in the short to medium-term. As a consequence, in addition to the large 
number  of  the  Union  producers  that  were  already  forced  out  of  the  market,  other 
producers could be facing insolvency which would in the short to medium term lead to 
a likely disappearance of the Union industry with the consequent significant impact of 
the existing jobs. 

(744)  Some  interested  parties  contested  that  the  Union  industry  would  be  able  to  benefit 
from any countervailing measures arguing that (i) the measures will lower the demand 
for  PV  products  in  the  Union  and  therefore  the  Union  industry  will  not  be  able  to 
increase  their  sales,  (ii)  the  Union  industry  has  small  production  facilities  and  is 
therefore  not  able  to  meet  the  demand  of  certain  types  of  installations  such  as 
commercial rooftop and large ground-mounted installations, (iii) the Union producers 

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are not ‘bankable’ (iv) the imposition of duties on cells will de facto increase the cost 
of  production  of  the  Union  producers  of  modules  and  make  them  less  attractive  for 
consumers,  (v)  in  case  of  significant  drop  of  Chinese  imports,  the  producers  from 
other  third  countries  will  most  likely  take  advantage  of  the  fewer  imports  from  the 
PRC. 

(745)  Concerning  the  claim  that  measures  will  lower  the  demand  for  PV  products  in  the 
Union  and  therefore  the  Union  industry  will  not  be  able  to  increase  their  sales,  it  is 
noted that the parties were unable to provide any verifiable evidence of the existence 
of a direct link between the imposition of measures and the decrease demand for PV 
product which proved to be influenced over the years by several factors. 

(746)  In  reply  to  the  claim  that  the  Union  industry  has  small  production  facilities  and  is 
therefore  not  able  to  meet  the  demand  of  certain  types  of  installations  such  as 
commercial rooftop and large ground-mounted installations, it should be noted that the 
investigation has showed that the Union industry has the capacity to supply both the 
commercial  and  industrial-installations  (between  40  KW  and  1MW)  and  the  utility 
market  segment-  installations  (1  MW  and  10  MW).  Moreover,  the  investigation  did 
not reveal that products supplied by different manufacturers could not be used in the 
same project. This claim was therefore rejected.  

(747)  The  argument  that  the  Union  industry  would  not  benefit  from  the  measures  because 
Union  producers  are  not  “bankable”  and  that  investments  funds  would  not  accept  to 
finance  projects  using  EU-made  modules  was  not  substantiated.  In  any  event,  it  is 
expected  that  the  imposition  of  measures  will  restore  fair  market  conditions  which 
should reassure investors, including from the banking sector, as to the ability of Union 
industry to develop viable projects. On these grounds, this argument was rejected.  

(748)  With reference to the claim that the imposition of duties on cells will de facto increase 
the  cost  of  production  of  the  Union  producers  of  modules  and  make  them  less 
attractive for consumers, while it is not excluded that a certain increase in prices could 
occur  further  to  the  imposition  of  duties,  it  should  also  be  considered  that  public 
available sources indicate that the price trend of modules and cells is downward. Thus, 
even if the cost of cells might increase as a result of measures, the overall decreasing 
trend of prices should result in decreasing costs of modules. The producers in question 
may  also  decide  to  source  their  cells  in  the  Union,  and  no  longer  from  the  PRC. 
Finally,  it  is  expected  that  the  imposition  of  measures  will  increase  the  capacity 
utilization of cells producers in the Union thus increasing their economy of scale and 
as a consequence reduce costs. This claim was therefore rejected.  

(749)  The  argument  that  in  case  of  a  significant  drop  of  Chinese  imports  further  to  the 
imposition  of  measures,  the  other  third  countries  will  most  likely  take  advantage  of 
this,  rather  than  the  Union  industry  was  not  confirmed  by  the  investigation.  The 
investigation did not reveal any clear indications that the other third countries would 
direct their exports massively to the Union market, in particular taking into account the 
likely  expansion  of  other  third  country  markets,  notably  in  Asia,  as  forecasted  by 
publicly  available  sources.  Finally,  there  is  no  indication  that  even  if  imports  from 
other third countries would increase as a result of a drop of Chinese imports, the Union 
industry will not be able to compete with imports from these countries. 

(750)  In reply to the final disclosure some parties argued that it is unrealistic to expect the 
emergence of a sustainable Union industry manufacturing modules and cells because 
there  is  no  rational  investor  that  would  invest  in  the  Union  producers  that  allegedly 
suffer  from  an  unfavourable  cost  structure  and  can  therefore  not  produce  at 

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competitive  prices.  The  investigation  did  not  confirm  that  the  Union  industry  is 
suffering from an unfavourable costs structure, as explained in recitals (202) and (203) 
to the provisional anti-dumping Regulation. Therefore, absent subsidized imports and 
utilising the production capacities to a larger extent should bring economies of scale 
and allow for the emergence of a sustainable Union industry. In view of the above the 
argument was rejected. 

(751)  One party argued that the demand in the Union is driven by the development of FITs 
and the expected return on investment by the investors is linked to this development. 
In particular, it claimed that, if prices increase in the Union, as a consequence of the 
duties, and FITs do not follow this increase accordingly, demand will decrease and the 
Union industry will not benefit from the duties imposed.  

(752)  In reply to the above claim, it is noted that despite the correlation between the level of 
FITs  and  the  demand  for  PV  installations,  the  evidence  collected  during  the 
investigation indicates that future demand will be less and less dependent on FITs and 
other support schemes as PV grid parity is likely to have been reached by certain types 
of  installations  in  several  places  in  the  Union.  Furthermore,  the  expected  return  on 
investment should be based on fair market prices. Finally, while it is not excluded that 
a certain increase in prices may occur further to the imposition of measures, it should 
be  noted  that  public  available  sources  indicate  that  the  overall  price  trend  is 
downward. The argument was therefore rejected. 

(753)  Interested parties have pointed out that because demand for solar panels is driven by 
support schemes, in particular FIT, and by the level of electricity prices for the final 
consumer (which determine grid parity), price elasticity of demand can be very high. 
Whereas  it  is  correct  that  an  important  increase  in  prices  may  lead  to  an  important 
reduction  of  demand  because  of  the  particular  nature  of  the  market  pointed  out  by 
those interested parties, the argument has to be rejected because it is very unlikely that 
price  increases  caused  by  the  measures  will  be  important,  for  the  following  reasons. 
First of all, all available sources confirm that the important decrease in prices for the 
product  concerned  throughout  the  IP  and  since  the  IP  until  today  will  continue. 
Secondly,  the  economic  effect  of  the  undertaking  that  has  been  accepted  by  the 
Commission is that Chinese exporting producers will supply the product concerned at 
a minimum import price of less than 60 c/W, which is far below the price that has been 
observed during the IP, at a volume that corresponds roughly to their current market 
share. At this price level, demand is very unlikely to drop in a significant manner, as 
that  price  level  ensures  sufficient  demand  both  under  the  current  level  of  support 
provided by support schemes and under the current levels of grid parity. Furthermore, 
the price of electricity for final consumers is expected to increase, whereas the price of 
the  product  concerned  is  expected  to  decrease.  Through  an  indexation  formula,  the 
undertaking  ensures  that  further  price  decreases  of  the  product  concerned  are  taken 
into  account  for  the  minimum  import  price.  Therefore,  those  arguments  have  to  be 
rejected. 

(754)  Several  interested  parties  argued  that  the  interest  of  the  Union  industry  is  not 
significant since the value added created by the upstream and downstream industries is 
far  more  significant  than  the  value  added  created  by  the  Union  industry  in  the  PV 
value chain. The argument that the various segments in the PV sector have a different 
added value is not disputed. The investigation established that the Union industry has 
suffered  material  injury  caused  by  unfair  trade  practices.  Indeed  some  Union 
producers have already been forced to close down and in the absence of measures, a 
further  deterioration  appears  certain.  As  all  segments  in  the  PV  sector  are  closely 

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interrelated,  the  disappearance  of  the  Union  production  would  be  detrimental  to  the 
whole PV sector making it fully dependent on outsourced supply. Therefore, also for 
reasons of security of supply, the argument was therefore rejected. 

(755)  In reply to the final disclosure, one interested party reiterated the claim that the higher 
value-added  created  by  the  upstream  and  downstream  industry,  as  compared  to  the 
Union industry of the product concerned, is relevant to whether countervailing duties 
should be imposed. In this respect, it is confirmed that in assessing the Union interest 
the  Institutions  did  balance  the  positive  and  negative  consequences  the  duties  may 
have  on  the  various  economic  operators.  Whereas  the  impact  on  the  upstream  and 
downstream  industry  is  limited,  the  measures  will  afford  the  Union  industry  the 
possibility to recover from injurious subsidisation. 

(756)  One  party  contested  the  number  of  jobs  that  would  be  secured  by  the  imposition  of 
measures. It claimed that the Union industry employs about 6 000 people, and not 25 
000 as reported in recital (229) to the provisional anti-dumping Regulation.  

(757)  No  evidence  was  however  provided  to  support  the  above  claim  and  therefore  it  was 
dismissed.  It  is  clarified  that  in  view  of  the  exclusion  of  wafers  from  the  product 
scope, the employment in the Union industry amounted to around 21 000 employees 
during  the  IP.  Interested  parties  did  not  provide  any  proof  that  the  number  of 
employees in the Union industry has changed significantly post-IP. 

(758)  In conclusion, the investigation proved that the Union industry suffered material injury 
from  the  subsidized  imports  from  the  PRC,  being  unable  to  recoup  the  investment 
through profitable sales. It is expected that the imposition of measures will restore fair 
trade  conditions  on  the  Union  market,  allowing  the  Union  industry  to  compete  on 
equal footing. The likely decrease in imports from the PRC should enable the Union 
industry  to  increase  their  sales  in  the  Union  and  thus  better  utilise  the  available 
production  capacities  in  the  short  term.  This  in  turn  may  bring  economies  of  scale. 
While  it  is  possible  that  the  prices  of  the  like  product  will  raise  in  a  short  period  of 
time due to the measures, the overall descending price trend is likely to be maintained 
also  thanks,  on  the  one  hand,  to  the  further  decrease  of  cost  of  production  of  the 
product under investigation, and, on the other hand, the competitive pressure from the 
third countries' producers, which would also compete in the Union market. 

(759)  It  is  therefore  concluded  that  the  imposition  of  definitive  countervailing  measures 

would be in the interest of the Union industry. 

6.3. 

Interest of unrelated importers 

(760)  As  mentioned  in  recital  (26)  above  the  situation  of  the  sampled  importers  was 

analysed. 

(761)  Overall, during the IP, the activity of the four cooperating unrelated importers related 
to  the  product  concerned  varied  between  60  %  and  100  %  of  their  total  business.  In 
addition, the four cooperating unrelated importers sourced from the PRC between 16 
% to 100 % of their total imports of modules, only one sourcing exclusively from the 
country  concerned.  The  profitability  of  the  four  cooperating  unrelated  importers 
related to the product concerned was on average 2.3 % in the IP. 

(762)  An  argument  was  put  forward  that  the  imposition  of  measures  on  the  product 
concerned  will  negatively  affect  the  importers’  business  activity.  Firstly,  the 
imposition of duties should not result in the elimination of all imports from the PRC. 
Secondly,  although  it  can  be  expected  that  the  imposition  of  measures  may  have  a 
negative  effect  on  the  financial  situation  of  the  importers  importing  only  from  the 

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PRC,  in  view  of  the  possible  increase  of  imports  from  other  third  countries,  the 
importers  sourcing  from  the  PRC  should  be  in  the  position  to  shift  their  sources  of 
supply. 

(763)  One  interested  party  argued  that  the  impact  of  the  duties  on  the  unrelated  importers 
was underestimated as there are no immediate alternative sources of supply that could 
replace the Chinese imports of the product concerned if the duties were imposed and 
that  changing  a  source  of  supply  is  difficult  in  view  of  the  fact  that  the  major 
production is based in the PRC and this would entail additional significant costs.  

(764)  In  this  respect,  it  is  recalled  that  the  imposition  of  measures  should  not  result  in  the 
disappearance  of  the  imports  of  the  product  concerned  from  the  PRC.  The 
investigation indicated that the possible decrease of imports from the PRC will impact 
in  particular  those  importers  that  source  the  product  concerned  exclusively  from  the 
PRC, which is the case only for one out of the four cooperating unrelated importers. 
Concerning  the  impact  of  measures  on  the  unrelated  importers'  financial  situation,  it 
was  not  excluded  that  it  can  be  negative,  but  it  has  been  concluded  that  this  will 
largely depend on their capacity to switch sources of supply or to pass at least part of 
the possible price increase on to their customers. For operators importing the product 
also from other sources than the PRC or importing also other products than the product 
concerned  the  negative  impact  will  be  further  limited.  The  Commission  therefore 
considers that although there is likely to be a negative impact on the importers of the 
product concerned, this impact will, on average, remain limited. 

(765)  One  unrelated  importer  argued  that  it  needs  significant  working  time  and  financial 
investment before accepting the products of a new supplier. In this respect a claim was 
made  in  reply  to  the  final  disclosure  that  relevant  evidence  was  provided  to  the 
verification  team  at  the  time  of  the  on-the-spot  visit  on  the  long  testing  requirement 
that  an  importer  must  do  before  taking  the  decision  to  supply  from  a  particular 
exporter.  

(766)  It  is  acknowledged  that  the  setting  of  a  new  relationship  between  an  importer  and  a 
supplier may entail additional costs and time investment (e.g. in testing the product). 
However, this does not outweigh the need to restore fair competition in the market.. At 
the same time, changing suppliers seems to be a normal risk calculated in an importers' 
professional activity and is related to the fact that the PV market is maturing and thus 
undergoes constant changes (e.g. bankruptcies, consolidations) requiring switching to 
new suppliers. Moreover, it can be assumed that new types of modules that reach the 
market on a constant basis (containing e.g. new efficiency characteristics) also require 
testing. In this respect, testing of a new product (even from the same supplier) appears 
to be a standard rather than an unusual activity. The argument is therefore rejected. 

(767)  In reply to the final disclosure two parties reiterated the claim that the interest of the 
unrelated  importers  was  not  properly  considered.  One  party  claimed  that  the  lack  of 
the  non-confidential  version  of  the  replies  to  the  questionnaires  by  the  additional 
cooperating importers did not allow a proper assessment by the parties. It questioned 
the Commission's assessment regarding the possibility that other third country imports 
in  the  Union  would  increase  thus  allowing  the  importers  to  switch  their  supplies,  on 
the basis of the allegation that other third markets are booming. To this end, the party 
claimed that such assumption is in contradiction with the conclusion set out in recital 
(749)  above  i.e  .that  ,  imports  from  other  third  countries  would  not  be  massive. 
Another  party  questioned  whether  the  Commission  respected  the  principle  of  non-

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discrimination  as  the  Union  producers  were  given  more  prominence  in  the 
Commission's assessment than the other operators. 

(768)  First,  it  is  confirmed  that  the  non-confidential  version  of  the  replies  to  the 
questionnaires  received  after  the  publication  of  the  provisional  anti-dumping 
Regulation  by  the  additional  cooperating  importers  was  included  in  the  file  for 
consultation  by  interested  parties.  Secondly,  there  is  no  contradiction  between  the 
assumption  that  the  imports  from  other  third  countries  can  increase  in  response  to 
lower imports from the PRC and that such increase should not be massive in view of 
the growing demand for PV installations world-wide. At the same time, as the Union 
industry  is  expected  to  retake  a  certain  part  of  the  market  share  that  was  previously 
held  by  products  from  the  PRC,  a  certain  loss  in  business  for  unrelated  importers 
cannot be excluded. However, it is observed that the overall size of the PV market is 
expected to continue to grow in the long term, as grid parity is reached in more and 
more locations. Finally, it is clarified that, as in all trade defence investigations, while 
the  situation  of  the  Union  industry  was  assessed  in  order  to  establish  if  it  suffered 
material  injury  due  to  the  subsidised  imports,  in  the  context  of  the  Union  interest 
analysis the interest of the Union industry was assessed on an equal basis to the other 
economic  operators,  including  the  unrelated  importers.  It  is  also  clarified  that  the 
investigation whether or not the Union industry suffered material injury is governed in 
particular by Article 8(4) to the basic Regulation which set the minimum standards of 
such investigation. The Union interest is only analysed once a positive determination 
of injurious subsidisation was made in accordance with the standards set out in Article 
31 to the basic Regulation. As a result it was considered that the likely negative impact 
of the measures on certain importers, in particular those sourcing exclusively from the 
PRC,  did  not  outweigh  the  benefits  of  the  measures  for  the  Union  industry  and  the 
mid- and long term benefits to the Union PV market resulting from fair competition. 

(769)  It was therefore concluded that the imposition of measures at the proposed level may 
have a certain negative impact on the situation of unrelated importers  of the product 
concerned. 

6.4. 

Interest of the upstream operators 

(770)  The upstream operators are mainly active in the production of the raw materials and in 
the production and engineering of the manufacturing equipment for the product under 
investigation.  Eight  replies  were  received  to  the  questionnaires  from  the  upstream 
operators.  Two  verification  visits  were  carried  out  covering  a  raw  material  producer 
and a producer of manufacturing equipment. 

(771)  Overall, during the IP, the activity of the eight cooperating upstream operators related 
to the product under investigation varied in proportion to their total activity and only 
for one cooperating company represented 100 % of its business, while for the others it 
varied between 6 % and 80 %. On average, in the IP, the activity related to the product 
concerned  represented  around  41  %  of  the  total  activity  of  the  cooperating  upstream 
operators. In terms of jobs, the eight cooperating upstream operators employed in the 
IP  about  4  200  people.  Profitability  varied  according  to  segment  and  individual 
company  from  high  rates  to  slightly  negative  profitability.  The  investigation  showed 
that  those  operators  with  a  negative  profitability  suffered  from  the  deteriorated 
situation of the Union industry, as some of the clients they lost were Union producers 
of the product under investigation, and from the decline in consumption. Following the 
exclusion of wafers from the product scope, the producers in the Union of this product 

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should benefit from the imposition of duties, since the Union industry is expected to 
increase its production of cells and modules.  

(772)  The sales of the Union upstream operators covered the Union, the PRC and other third 
countries. In the IP, the repartition of the sales corresponded on average to around 20 
%  of  sales  in  the  Union,  almost  50  %  to  the  PRC  and  around  30  %  to  other  third 
countries. 

(773)  Some  parties  in  the  upstream  sector  claimed  that  the  imposition  of  countervailing 
measures  would  affect  their  business  activities  negatively  as  the  PRC  is  their  main 
exporting market. It was argued that the duties would seriously limit the imports of the 
product  concerned  from  the  PRC  to  the  Union  as  a  result  of  which  the  PRC  would 
limit  the  imports  of  polysilicon  and  production  equipment  from  the  Union.  As  a 
consequence, the Union upstream operators in the Union would allegedly need to scale 
down their business activities and reduce employment.  

(774)  It  is  noted  that  the  aim  of  the  duty  is  not  to  eliminate  the  Chinese  imports  of  the 
product  concerned  but  to  restore  a  level  playing  field.  Thus,  the  Chinese  imports 
should  continue  to  supply  the  Union  market  to  a  certain  degree,  but  at  fair  prices. 
Furthermore, the investigation showed that the Union upstream operators are present 
globally on different national markets and therefore do not depend exclusively on their 
export to the PRC. It is thus reasonable to assume that in the global PV market, Union 
upstream  operators  would  likely  be  able  to  compensate  the  eventual  decrease  in  the 
export  to  the  PRC  by  the  export  to  the  other  markets  which  according  to  publicly 
available market studies are expected to grow. In any case, the Chinese PV market is 
already  facing  a  significant  production  overcapacity  and  therefore  it  is  doubtful 
whether  the  Union  machinery  producers  would  be  able  to  sell  much  more  of 
manufacturing equipment in the short to medium term in the PRC. 

(775)  Interested parties made the argument that a majority of inputs in the PV value chain 
comes  from  the  Union  and  that  such  advantageous  situation  may  cease  should  the 
duties  be  imposed.  In  reply  to  the  final  disclosure  one  party  pointed  out  that  the 
measures in this case may trigger other measures, which the PRC may impose on the 
Union products. 

(776)  In this respect, Chinese imports are expected to continue to supply the Union market 
even  with  duties  in  place.  In  addition,  various  publicly  available  sources  in  the  PV 
sector, such as EPIA’s Global Market Outlook for Photovoltaics 2013-2017, forecast 
that the possible contraction in demand in the Union should be only in the short-term 
(in  2013  and  2014)  and  that  consumption  in  the  Union  will  increase  again  in  the 
following  years.  Furthermore,  addressing  unfair  trade  practises  is  likely  to  allow 
building a sustainable growth in the PV market in the Union in the mid and long-term, 
from which all operators in the Union should benefit. Finally, as regards the argument 
on  the  possible  retaliation  of  the  PRC  in  reply  to  the  measures  in  this  case,  it  is 
recalled  that  the  PRC  as  any  other  WTO  member,  may  have  a  recourse  to  trade 
defence investigations only in justified circumstances and any such investigation has 
to comply with strict WTO rules. The Commission monitors any such investigation to 
ensure that the WTO rules are respected. The argument was therefore rejected. 

(777)  Some parties contested the argument that the decreased exports of Union PV upstream 
operators to the PRC might be compensated by exports to other markets arguing that 
the duties will decrease the world-wide demand for the product.  

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(778)  In  this  respect,  it  is  firstly  noted  that  Chinese  imports  are  not  expected  to  cease 
completely as a result of the duties. In addition, the information collected in the course 
of the investigation did not establish any correlation between the development of the 
imports  from  the  PRC  in  the  Union  market  and  the  exports  from  the  PRC  to  other 
markets. Moreover, public available sources, such as EPIA’s Global Market Outlook 
for Photovoltaics 2013-2017, forecast that the PV market world-wide will grow in the 
next years. As far as the Chinese PV market is concerned, there are indications that the 
domestic  consumption  in  the  PRC  will  increase  substantially  (e.g.  as  indicated  by 
EPIA). In view of the above, the exports of the Union upstream operators to the PRC 
are not expected to drop significantly as a consequence of the imposition of measures. 

(779)  It should also be noted that the contraction of demand in the Union in 2013 and 2014 
may have a negative impact on the upstream operators. This however cannot be linked, 
at least not for its major part, to the duties. Moreover, concerning the Union producers 
of machinery for the PV industry, due to the existing substantial spare capacity in the 
PRC, it is unlikely that their exports to the PRC can significantly increase even under 
the scenario that the Chinese producers increase their production volume. Finally, the 
information  gathered  during the investigation  indicated that the machinery producers 
may  also  be  impacted  by  the  Chinese  12th  five-year  plan  for  Solar  Photovoltaic 
Industry which foresees that by 2015 80 % of the manufacturing equipment for cells 
should  come  from  the  PRC.  As  long  as  this  change  is  achieved  in  compliance  with 
WTO rules, this may also further limit the possibility of manufacturers of machinery 
in  the  Union  to  compete  in  the  Chinese  market.  The  above  argument  was  therefore 
rejected.  

(780)  In  reply  to  the  final  disclosure  the  GOC  argued  that  the  12th  five-year  plan  for  the 
Solar  Photovoltaic  Industry  offers  only  some  general  guiding  principles  that  are  not 
binding as there are no enforcement powers foreseen, and that therefore it should not 
be considered as an indication that the possibility of manufacturers of machinery in the 
Union to compete in the Chinese market will be limited. In this respect it is noted that 
the  GOC  included  the  PV  industry  amongst  strategic  industries  in  the  12th  five-year 
plan and also issued a specific plan for the solar photovoltaic industry. In this plan the 
GOC  expressed  its  support  for  “superior  enterprises”  and  “key  enterprises”, 
committed  itself  to  “promote  the  implementation  of  various  photovoltaic  support 
policies”,  and  “formulate  overall  preparation  of  supporting  policies  on  industry, 
finance,  taxation  …”.  Furthermore,  as  the  plan  contains  essential  directives  to  be 
achieved by the Chinese industry during the period of five years it has a deep impact 
on the business landscape, both within the PRC and in countries that do business with 
the PRC. Considering the above, there are clear indications that the freedom of choice 
of  the  Chinese  manufacturers  of  cells  and  the  competitive  pressure  of  the  Union 
producers  of  the  manufacturing  equipment  exporting  to  the  Chinese  market  is 
restricted by the plan. Therefore this argument was rejected. 

(781)  One  cooperating  raw  material  producer  contested  the  prospect  of  other  markets 
compensation  for  the  decreased  production  on  the  Chinese  market,  in  view  of  the 
substantial  installed  production  capacity  in  the  PRC,  which  could  not  be  easily  built 
elsewhere.  This  argument  is  dismissed  since  there  are  no  indications  of  the  alleged 
decreased production on the Chinese market. 

(782)  One interested party contested the number of employees in the upstream sector quoted 
in  recital  (236)  to  the  provisional  anti-dumping  Regulation.  It  is  clarified  that  the 
number of 4 200 employees only refers to the cooperating upstream operators, such as 

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equipment  manufacturers  and  polysilicon  supplier,  based  on  their  questionnaire 
replies, and not to the whole sector.  

(783)  In view of the above, it is concluded that the impact of the countervailing measures on 
the  machinery  producers  would  not  be  significant,  while  the  impact  on  the  raw 
material supplier may be negative in the short term in view of the possible reduction of 
its sales to the PRC.  

6.5. 

Interest of downstream operators 

installations.  Thirteen 

(784)  The  downstream  operators  are  mainly  active  in  project  development,  marketing, 
communications  and  PV 
the  downstream 
questionnaires were received from the downstream operators, i.e. seven from operators 
whose activity is directly related to the like product (namely the project developers and 
installers) and six from service providers in the PV sector (logistics, transport, public 
relations, etc.) i.e. operators whose activity is not directly related to the product under 
investigation.  These  questionnaire  replies  included  the  reply  received  from  one 
unrelated  importers  which  turned  out  to  qualify  as  downstream  operator,  as  its  main 
activity is installation (see recital (25) above). 

replies 

to 

(785)  In  recital  (242)  to  the  provisional  anti-dumping  Regulation,  it  was  assessed  that 
overall, the activity of the downstream operators (installers and project developers) in 
relation  to  the  product  under  investigation  varied  as  compared  to  their  total  activity. 
On  average,  in  the  IP,  it  represented  41  %.  The  profitability  of  the  cooperating 
operators  related  to  the  product  under  investigation  was  on  average  around  11  %,  in 
the IP. In terms of jobs, the seven cooperating downstream operators employed in the 
IP about 550 people. 

(786)  Several  parties  contested  the  representativity  of  the  data  concerning  the  downstream 
operators on turnover, profitability and employment derived by the Commission from 
the  replies  to  the  questionnaires  by  the  seven  downstream  operators.  AFASE 
submitted a ‘survey’ conducted amongst its members (installers) to illustrate that for 
the majority of the installers the PV business constitutes a primary source of income. 
AFASE  further  alleged  that  the  downstream  operators,  in  particular  installers,  in 
contrast  to  the  findings  set  out  in  recital  (242)  to  the  provisional  anti-dumping 
Regulation  would  only  realise  one-digit  profit  margins  which  do  not  allow  for 
absorption of any duties.  

(787)  As  regards  the  representativity  of  the  data  used  in  the  provisional  anti-dumping 
Regulation  the  Commission  has  used  all  the  data  provided  by  those  downstream 
operators  that  have  filled  in  the  specific  questionnaire,  as  well  as  the  submissions 
provided by AFASE, as explained in recital (737) above.  

(788)  As regards the claim that the PV business constitutes a primary source of income for 
installers,  further  analysis  of  the  questionnaire  replies  submitted  by  the  seven 
downstream  operators  (installers  and  project  developers)  confirmed  that  the  activity 
directly related to the like product under investigation represented on average around 
42%  of  the  total  activity  of  these  operators  and  the  profitability  equalled  11  %  on 
average. However, when taking into account also their activities (not directly related to 
the  product  under  investigation),  their  overall  importance  increases  substantially  for 
three out of the seven operators. As a result, the corresponding ratio would range from 
around 45 % to 100 % during the IP. In addition, for the seven operators (installers and 
project  developers)  the  profitability  of  the  PV  activity  including  the  activities  not 
directly  linked  to  the  product  under  investigation  would  amount  to  9%  on  average. 

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Employment-wise,  the  PV  activity  including  the  activities  not  directly  linked  to  the 
product under  investigation would amount to around 660 full-time jobs in the IP for 
the seven operators. Apart from PV projects and installations these operators were also 
active in wind energy installations and production of electrical equipment.  

(789)  It  is  considered  that  any  impact  of  measures  on  the  downstream  operators  has  to  be 
primarily assessed on their activity directly related to the product under investigation 
which  in  the  IP  reached  a  profitability  of  11  %  on  average.  However,  even  if  it  is 
assessed  on  the  basis  of  the  overall  PV  activity  not  directly  related  to  the  product 
under  investigation  the  conclusions  will  not  change  significantly  since,  overall,  the 
various factors taken into account, namely profitability and possibility to absorb part 
of the duty, do not vary significantly (the profitability decreases from 11 % on average 
to 9 % on average). In reply to the final disclosure one party on which premises the 
Commission  had  carried  out  a  verification  visit  contested  the  representativity  of  the 
conclusion  on  profitability  of  the  installers  and  developers,  which,  as  far  as  it  is 
concerned,  would  allegedly  be  based  only  on  a  single  transaction.  This  argument  is 
dismissed as the Commission calculated the profitability of the downstream operators, 
on the basis of all data submitted by the downstream operators in their questionnaire 
replies. 

(790)  Regarding  the  survey  conducted  by  AFASE  amongst  its  members,  it  is  firstly  noted 
that  all  operators  had  the  opportunity  to  come  forward  at  the  initiation  of  the 
investigation  and  to  reply  to  the  specific  questionnaire  designed  for  downstream 
operators  requesting  the  necessary  information  for  the  assessment  of  the  impact  of 
duties on these operators. Secondly, the identity of the installers was not provided in 
the survey which did not allow for a verification of e.g. the relevance and reliability of 
the data provided. Thirdly, while a number of questions asked in this survey concerned 
the installers' capacity to absorb the possible duties, the survey lacked any reference to 
the profit achieved by these installers in the IP, thus missing an important element for 
the  evaluation  of  the  impact  of  measures.  As  a  consequence  no  meaningful 
conclusions could be drawn from the survey provided.  

(791)  An argument was raised that measures are not in the interest of the Union as they will 
increase  the  price  of  modules,  thus  discouraging  the  end-users/consumers  from 
making  installations.  Consequently,  the  downstream  operators  would  have  far  fewer 
orders and would have to scale down their businesses. This assessment was based on a 
study  made  by  Prognos  on  the  possible  loss  of  jobs  submitted  in  the  course  of 
investigation.  The  study  foresees  that  the  great  majority  of  jobs  in  the  PV  market  of 
the  Union  are  in  danger,  if  duties  are  imposed.  The  study  uses  an  estimation  by  the 
EPIA according to which the total number of direct jobs existing in 2011 at all stages 
of  the  Union  PV  market  including  Union  producers,  importers,  the  upstream  and 
downstream operators is 265 000. Taking as a starting point the 2011 estimation on the 
total direct PV jobs, the study by Prognos concluded that out of 265 000 jobs up to 242 
000 jobs will be lost in three years, depending on the level of duties. Most of the job 
losses  will  allegedly  occur  in  the  downstream  market,  which  in  2011  was  said  by 
Prognos to employ about 220 000 people. 

(792)  The  investigation  did  not  confirm  the  above  scenario  and  pointed  to  a  much  lower 
number of direct jobs existing in the Union PV market in 2011, during the IP and in 
2012. 

(793)  To start with, the investigation raised doubt as to the accuracy of the total number of 
direct PV jobs as estimated by EPIA. In particular, during the verification visit at the 

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EPIA,  it  turned  out  that  the  underlying  data  leading  to  a  conclusion  of  265  000  was 
imprecise  and  did  not  allow  for  such  conclusion.  In  fact,  the  information  obtained 
during the verification visit indicates that the number of direct PV jobs calculated for 
2011 would have a margin of error of up to 20 %. In addition, the estimation includes 
employment  in  other  European  countries  outside  the  Union  as  well  the  employment 
related to thin film product, which falls outside the scope of this investigation.  

(794)  It is clarified that the margin of error of 20 % in the total number of direct PV jobs as 
estimated  by  the  European  PV  association,  which  may  apply  upward  or  downward, 
became apparent during the verification visit at EPIA. It shows the difficulty to assess 
precise  figures  on  employment  in  the  downstream  sector  as  there  are  few  sources, 
often contradictory, of data collection.  

(795)  Despite  these  doubts,  even  if  the  original  estimation  of  jobs  was  used  to  analyse  the 
impact  on  the  measures  the  following  remarks  must  be  made.  The  estimation  covers 
the European PV jobs in 2011, which was correlated with a very high number of PV 
installations in the Union that year (about 20 GW). It is reasonable to assume that in 
view of the decline in installations reaching about 17,5 GW in the IP and 15 GW in 
2012 the number of downstream jobs in particular, as directly correlated to the level of 
installations  decreased  accordingly.  To  this  end,  publicly  available  specialised  press 
indicated  that  in  Germany,  the  largest  national  market,  between  2011  and  2012  the 
employment in the PV sector decreased from 128 000 to 100 000, including the jobs 
on  the  side  of  the  producers.  Furthermore,  the  investigation  raised  serious  doubts  on 
whether the figure included only full time jobs dedicated solely to the PV industry. To 
this  end,  the  investigation  revealed  that,  especially  in  the  downstream  market 
(installations)  the  PV  activity  is  in  general  only  a  part  of  a  much  broader  business 
activity, primary business activity being heating or electricity  installations, plumbing 
etc.  

(796)  In  view  of  the  above,  it  is  likely  that  the  imposition  of  measures  may  lead  to  an 
increase  of  prices  in  the  Union  of  the  product  under  the  investigation  thus  possibly 
generating less PV installations in the short term. Nevertheless the jobs in this part of 
the  market  may  be  negatively  affected  only  to  a  limited  extent  in  view  of  the 
following. Firstly, the PV related activity for at least some of the installers constitutes 
only  part  of  their  business  activities  and  is  also  seasonal.  Therefore,  the  installers 
should  be  able  to  carry  out  other  activities  in  a  situation  of  reduced  demand  for  PV 
installations. As the renewable and energy efficiency objectives agreed at the level of 
the  Union  are  legally  binding  on  Member  States,  it  is  to  be  expected  that  reduced 
demand for solar installations will translate into increased demand for other forms of 
renewable electricity and energy efficiency. Many of the employees in the downstream 
sector are likely to have the skills necessary to benefit from the increased demand in 
these neighbouring sectors. Secondly, in view of the existing profits in the downstream 
market  (see  recital  (785)  above)  installers  should  be  able  to  absorb  part  of  the  price 
increase  thus  limiting  the  impact  on  the  final  prices  and  on  the  demand  for  PV 
installations. 

(797)  Independently  of  the  imposition  of  duties,  the  publicly  available  forecasts  on  the 
demand for the PV installations indicate a likely contraction in demand in 2013, with 
annual  installations  of  between  9,8  GW  and  16,5  GW  in  2013,  which  would  likely 
have in any event a negative impact on the number of jobs in the downstream market. 

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(798)  Finally,  it  is  remarked  that  the  possible  increase  of  PV  prices  would  be  likely  to 
happen in any event as the production of the PRC supplying the Union market appears 
to be largely loss-making, which is an unsustainable situation.  

(799)  As far as job losses are concerned, the information gathered during the investigation 
confirmed that the downstream sector has been experiencing job losses as a result of 
the  contraction  of  the  demand  for  PV  installations  in  the  Union  of  about  5  GW 
between  2011  and  2012.  These  job  losses  cannot  be  linked  to  the  measures  as  they 
reflected a market evolution. Moreover, a further contraction of demand is foreseen in 
2013  and  2014  and  will  most  likely  result  in  further  job  losses  in  the  PV  sector. 
Similarly,  such  evolution  of  the  demand  was  forecasted  by  major  research  centres 
before  the  initiation  of  the  investigation  and  therefore  such  job  losses  cannot  be 
attributed to the imposition of measures. 

(800)  The  Union  industry  submitted  a  study  by  a  consultant  PriceWaterHouseCoopers 
(‘PWC’) on the possible impact of measure on PV related jobs. The PWC study refers 
to the study by Prognos, which envisaged high job losses in the PV market resulting 
from  the  imposition  of  measures,  which  was  submitted  by  AFASE  prior  to  the 
imposition  of  provisional  anti-dumping  duties  and  which  was  addressed  in  recital 
(791) above. The PWC study criticised the study by Prognos pointing to the fact that 
the total job losses estimated by Prognos exceeded in fact the total number of existing 
PV  jobs  in  the  Union.  Regarding  the  impact  of  duties  in  the  Union  market,  PWC 
reached opposite conclusions than Prognos, forecasting a net positive impact on jobs 
in the Union and that the benefits outweigh the possible negative effects of the duties 
(e.g. on demand).  

(801)  AFASE argued that the Commission did not disclose the source of the margin of error 

of 20 % for the direct PV jobs calculated for 2011 by EPIA.  

(802)  This margin of error of 20%, which may apply upward or downward, became apparent 
during the verification visit at EPIA. It shows the difficulty to assess precise figures on 
employment in the downstream sector as there are few sources, often contradictory, of 
data collection.  

(803)  In  reply  to  the  final  disclosure  some  parties  claimed  that  the  Commission's  analysis 
was silent about the fact that the duties will only add to the loss of jobs resulting from 
the smaller number of PV installations after 2011. It was argued that such job losses, 
in  particular  in  the  downstream  sector,  are  closely  linked  to  the  fact  that  the  PV 
installers  are  dependent  on  the  solar  installations.  In  addition,  AFASE  criticised  the 
Commission  for  not  having  properly  considered  the  survey  it  conducted  amongst  its 
members  and  a  similar  survey  conducted  by  a  UK  Solar  Trade  Association,  which 
allegedly illustrated such dependence.  

(804)  As regards the alleged silence of the Commission concerning the impact of the duties 
on  jobs,  reference  is  made  to  recitals  (799)  and  (800)  above,  where  the  claims 
concerning  the  impact  of  the  measures  on  jobs  in  the  PV  sector  are  addressed  and 
where  it  is  acknowledged  that  indeed  the  jobs  in  the  downstream  sector  might  be 
affected in the short term due to the measures.  

(805)  With regard to the survey conducted by AFASE and the UK Solar Trade Association, 
in  response  to  the  final  disclosure  the  identity  of  the  companies  participating  in  the 
interview  was  provided.  The  surveys  remained  however  deficient,  since  for  example 
certain  replies  were  incomplete.  The  analysis  of  the  surveys  showed  the  following. 
Concerning  the  survey  by  AFASE,  it  is  firstly  noted  that  the  majority  of  the  50 

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installers  who  replied  to  the  interview  declared  to  be  exclusively  active  in  the  PV 
market.  15  out  of  50  installers  declared  to  be  also  active  in  other  non-PV  activities 
such  heating,  electrical  installations,  and  wind  to  a  certain  extent.  In  case  of  the  UK 
survey, 21 out of 31 UK companies who replied to the interview had also other than 
PV  activities.  This  result  shows  that  with  regards  to  a  nearly  a  half  of  the  project 
developers  and  installers,  the  finding  set  out  in  recital  (247)  to  the  provisional  anti-
dumping  Regulation  on  the  ability  to  perform  other  activities  such  as  electrical  and 
heating installations, plumbing and other green energies installations, is correct. It is, 
however, recognized that this ability may exist to a lesser extent than assumed in the 
provisional  anti-dumping  Regulation.  Its  mitigating  impact  on  job  losses  may 
therefore  be  less  important  than  initially  assumed.  Secondly,  some  of  the  operators 
surveyed  by  AFASE  and  the  UK  Solar  Trade  Association  have  been  using  products 
produced in the Union and some foresee buying non-Chinese products following the 
measures to avoid a price increase. Thus, their dependence on the Chinese imports and 
the  impact  of  the  measures  is  expected  to  be  reduced  as  they  can  access  products 
produced  in  the  Union.  Thirdly,  the  estimation  of  the  impact  of  the  measures  on  the 
businesses  of  all  surveyed  operators’  did  not  allow  for  firm  conclusions  as  their 
assessment  was  very  diverse.  Some  companies  were  even  unable  to  assess  such 
impact. Fourthly, also the answers to the question about the number of the PV projects 
that risk cancelling in case of duties ranged from 'not many' to 'all projects' in the UK 
survey.  Some  operators  were  unable  to  make  an  estimation.  Finally,  both  surveys 
lacked  the  question  about  the  profitability  of  the  economic  operators  interviewed, 
which is important for the assessment of the possible absorption of the price increase, 
if any, resulting from the duty. 

(806)  Several parties claimed that installers cannot easily change their activities or switch to 
other green energy installations because of the very different technologies and know-
how involved. Therefore, should the duties be imposed, they would go out of business. 
After  final  disclosure,  this  claim  was  reiterated  by  one  interested  party,  arguing  that 
installers  have  invested  substantial  resources  in  PV  specialisation,  such  a  specific 
training,  which  would  show  that  their  main  focus  is  on  the  PV  sector  and  that  they 
would not be able to switch easily to other activities.  

(807)  This argument was insufficiently substantiated as it was not demonstrated what precise 
knowledge an installer would need to acquire and how difficult and expensive it is to 
obtain  it.  Irrespectively,  the  institutions  acknowledge  that  installers  have  developed 
know-how  specific  to  the  installation  of  PV  modules.  However,  the  development  of 
this know-how  is relatively recent and adds to the primary expertise of the installers 
being electrical and heating installations, plumbing etc. It also developed in response 
to an unfair  practice  namely with  the  massive  inflow  of  subsidised imports from the 
PRC. Independently from the specialised skills of the employees of the installers, the 
argument has to be considered in parallel with the analysis made in recitals (792) to 
(800) above on the employment situation in the downstream sector which in the short 
term might be negatively impacted but which, thanks to sustainable trade, would lead 
to an increase in the employment of installers in the mid- to long term. Therefore, the 
argument was rejected. 

(808)  Several parties contested the ability of the downstream operators to absorb even partly 
the  possible  price  increase.  This  argument  was  insufficiently  substantiated  thus 
preventing from assessing to which extent this allegation was accurate. Profitability of 
the  downstream  cooperating  operators  related  directly  to  the  product  concerned  was 
assessed  at  around  11  %  on  average  which  leaves  to  the  operators  in  question  the 

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possibility to absorb at least partially some price increase if any. In this context, it is 
recalled that the overall trend of prices is downward.  

(809)  In reply to the final disclosure some parties reiterated the claim of the serious risk of 
contraction  of  demand  for  solar  products  in  the  Union  as  a  result  of  the  measures, 
which  according  to  these  parties  speaks  against  the  measures.  One  party  argued  that 
the  solar  energy  currently  has  a  high  price  elasticity  of  demand  and  even  a  limited 
increase in the price of solar products would result in a severe contraction of demand. 
This  party  estimated  that  a  countervailing  duty  in  the  range  of  30  %  may  further 
contract demand by 8 GW whereas a duty of 50 % would contract demand by 10 GW. 
In  the  same  tone,  AFASE  referred  to  a  study  made  by  a  market  analyst,  which  also 
foresees a contraction of demand of up to 2GW in 2013 as a result of a duty of 50 %, 
thus a contraction of a much smaller magnitude.  

(810)  Although  different  contraction  scenarios  were  submitted  by  parties  during  the 
investigation in addition to the ones referred to above, they did not contain comparable 
results.  While  it  cannot  be  excluded  that  the  duties  might  result  in  a  contraction  of 
demand for PV installations, the quantification of such effect is difficult to establish in 
view of the various elements that influence the attractiveness of the PV installations in 
the Union. In addition, even if such contraction were to take place in the short-term, 
the mid- and long-term benefits resulting from fair trade are expected to outweigh the 
short  term  negative  impact.  Finally,  AFASE  itself  recognised  that  the  assessment  of 
the direct link between the demand and the duties would only be available once duties 
are in place. Therefore, this argument was rejected. 

(811)  As  mentioned  in  recital  (784)  above  six  questionnaire  replies  were  received  from 
service  providers  in  the  PV  sector  (logistics,  transport,  public  relations,  etc.)  thus 
operators  whose  activity  is  not  directly  related  to  the  product  under  investigation. 
These replies were found to provide indications on the relative importance of the PV 
related  activity  as  compared  to  the  total  activity  of  the  cooperating  operators 
concerned.  Despite  certain  deficiencies  in  the  replies,  the  data  in  the  questionnaires 
allowed  to  assess  that  the  PV  related  activity  of  these  operators  is  marginal  as 
compared to their total activity. Indeed the PV related activity represented on average 
only  around  5  %  of  their  total  turnover  and  around  8  %  of  total  employment.  As 
regards profitability,  this  was on average around 7 %. However, it is noted that data 
concerning profitability were not complete, as not all operators reported on this item. 
Therefore, it was concluded that any possible impact of the measures on the economic 
situation of the service providers in the PV sector is unlikely to be significant. 

(812)  In view of the above, it was concluded that the impact of measures on the downstream 
operators would be to a limited extent negative in the short term, in view of the higher 
contraction in installations than in a counterfactual scenario without duties forecasted 
by  major  research  centres  and  to  the  extent  the  duty  cannot  be  absorbed  by  the 
downstream operators. Despite the possible reduction in demand for PV installations, 
installers  should  be  able  to  carry  out  other  activities,  whether  related  to  other  green 
energy sources or the installers’ primary business activity, as referred to above. It was 
concluded that, in the light of the data provided, any possible impact of the measures 
on  the  economic  situation  of  the  service  providers  in  the  PV  sector  is  unlikely  to  be 
significant.  

6.6. 

Interest of end-users (consumers) 

(813)  No  parties  directly  representing  the  interests  of  end-users  such  as  associations  of 
consumers  made  any  representations.  In  this  case  reference  is  made  to  two  types  of 

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end-users:  consumers  (households)  and  other  end-users  (e.g.  institutions,  other 
investors).  The  investigation  revealed  that  only  about  a  quarter  of  existing  PV 
installations  in  the  Union  (so  called  roof-top,  smaller  installations)  was  ordered  by 
consumers.  The  other  installations  (ground  mounted,  industrial  and  commercial  of  a 
much bigger scale) were ordered by other end-users. 

(814)  Several parties claimed that if measures are imposed, consumers would suffer from a 
price increase of PV modules. While as a result of duties the prices of PV modules in 
the Union market could be expected to rise somewhat, it is likely that the consumers 
and  other  end-users  would  be  affected  only  to  a  limited  extent  because  the 
investigation  revealed  that  the  price  of  a  module  represents  up  to  50  %  of  the  total 
costs  of  a  PV  installation.  In  view  of  the  profit  margins  earned  by  the  project 
developers and installers, it is reasonable to assume that the eventual price increase of 
modules for the consumer may be at least partly absorbed and therefore mitigated. On 
the basis of the available evidence it is concluded that measures at the proposed duty 
level will be at least partly taken in by the supply chain and, therefore, not necessarily 
result in higher prices for consumers at the retail level. 

(815)  It  is  further  noted  that  should  duties  not  be  imposed,  the  likely  disappearance  of  the 
Union Industry could leave the consumers with only one source of supply of modules 
in the future. In this scenario the Chinese exporting producers would be in a position 
to further increase their very strong position on the market and this could also result in 
increased  prices  in  the  short  to  medium  term  to  the  detriment  of  the  consumers/end- 
users.  In  any  case,  as  mentioned  above,  the  increase  in  prices  would  be  likely  to 
happen in any event in view of the fact that the PRC production is loss-making. 

(816)  Some  parties  argued  that  the  duties  would  increase  the  price  of  the  product  under 
investigation. Consequently there would be a decline in demand for PV installations as 
they  would  be  too  expensive  for  consumers  and  not  attractive  enough  for  the  other 
investors.  

(817)  As  already  mentioned  in  recital  (752)  even  if  a  temporary  increase  of  prices  may 
happen  as  a  result  of  the  imposition  of  measures,  the  overall  trend  of  prices  is 
downward  as  confirmed  by  several  public  sources.  The  argument  is  therefore 
dismissed.  While  it  is  difficult  to  quantify  the  exact  possible  price  increase  resulting 
from  the  measures  and  a  consequent  possible  contraction  of  the  demand,  several 
elements are recalled. Firstly, the product under investigation constitutes up to 50% of 
the  total  cost  of  a  PV  installation  and  therefore  the  duty  may  be  at  least  partly 
absorbed.  Secondly,  the  competition  of  the  Union  industry  with  the  third  countries' 
producers, already present on the Union market, is likely to keep the prices down. At 
the  same  time  the  Union  industry  should  be  able  to  achieve  better  financial  results 
thanks to the economies of scales resulting from a better utilisation of the production 
plants  and  reduced  cost  of  production.  Thirdly,  the  demand  for  PV  installations  is 
correlated  not  only  with  the  price  levels  of  the  product  under  investigation  but  also 
with  the  level  of  FITs.  At  present  low  levels  of  demand,  as  compared  to  those 
achieved in 2011 and the IP, it is expected that the FITs should not decrease as quickly 
as  in  the  period  considered,  allowing  for  continuous  investment  in  PV  projects.  The 
argument was therefore dismissed 

(818)  In reply to the final disclosure one party contested the above reasoning. It claimed that 
the downward price trend cannot be maintained after the imposition of the measures. 
The  party  recalled  that  the  measures  represent  a  very  significant  cost  increase  that 
cannot  be  fully  offset  by  cost  decreases  and  or  imports  from  the  third  countries.  In 

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addition,  it  was  reiterated  that  the  Union  industry  will  not  be  able  to  undertake  new 
investments in plants and machinery and the downstream operators can absorb a little 
if  their  profit  is  11  %.  Finally  there  is  no  evidence  that  suggests  that  FITs  might 
compensate the price increase. 

(819)  It  is  recalled  that  contrary  to  this  claim  it  is  not  expected  that  the  price  increase 
resulting from the measures may be fully offset but rather that a temporary increase in 
prices  following  the  measures  is  possible  (see  recital  (247)  to  the  provisional  anti-
dumping  Regulation).  Indeed,  such  price  increase  may  result  from  the  difference  in 
price levels between the Chinese subsidised prices and the non-Chinese products. Yet, 
the  information  gathered  during  the  investigation  allows  claiming  that  the  eventual 
price increase may be partly absorbed by a number of factors in view of the profits in 
the  downstream  sector  at  the  level  of  11  %  on  average.  Finally,  regarding  the  claim 
that there is no evidence that suggests that FITs might compensate the price increase, 
it  is  reasonable  to  assume  that  FITs  will  be  adjusted  over  time  in  line  with  the 
development of prices for projects 

(820)  One  party  claimed  that  since  March  2013  modules  prices  increased  by  20  %  in  the 
Union  and  that  there  is  a  severe  lack  of  stock  since  2013.  The  argument  was  not 
substantiated  and  to  the  contrary,  the  public  information  sources  confirm  a  relative 
stability of prices in the second quarter of 2013. Even if that information was correct, 
it  would  only  reflect  the  fact  that  following  registration  of  imports,  the  risk  of  a 
possible countervailing duty has been priced in. The argument was therefore rejected.  

(821)  Another party claimed that the PV projects would not generate a return for an investor 
if  the  fall  in  FITs  is  not  correlated  with  falling  project  costs,  including  the  price  of 
modules,  as  they  represent  a  significant  part  of  the  costs  in  a  given  project.  To  this 
end,  it  was  claimed  that  the  duties  would  put  in  question  the  viability  of  many  PV 
projects as they increase the price.  

(822)  As mentioned in recital (752) above, the overall trend of prices of the product under 
investigation appear to be downward. Furthermore, the importance of FIT with regard 
to the market is decreasing as grid parity is likely to be achieved in several regions. On 
these grounds the argument that the price of PV modules could have a negative impact 
on PV projects including the question of their viability was rejected.  

(823)  One interested party provided an internal modelling to prove that the viability of many 

PV projects was endangered if duties were applied.  

(824)  This  modelling  did  not  allow  for  a  proper  quantification  as  to  what  extent  the 
attractiveness  of  the  investment  in  the  PV  installations  (e.g.  return  on  investment) 
could  decline  in  the  event  of  increased  prices  of  the  product  under  investigation. 
Nevertheless, the assumption that any duty would be entirely passed on to end-users or 
consumers,  used  in  the  said  modelling,  is  unlikely  in  view  of  the  existing  profit 
margins of downstream operators. Moreover, an investment decision is not only based 
on the price of modules but also depends on many other factors including inter alia the 
existence of a general  favourable  framework for PV installations in a given country, 
the  level  of  support  respectively  the  electricity  price  (for  grid  parity)  Therefore  this 
argument had to be rejected. 

(825)  On  the  basis  of  the  above,  it  was  concluded  that  the  imposition  of  measures  would 
have overall a limited impact on consumers and other end-users. This is irrespective of 
the role of the national support schemes in stimulating the demand for PV. If national 

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support  schemes  are  adapted  to  higher  prices  for  solar  panels  (by  means  of  higher 
FITs), the impact on consumers may be inexistent. 

6.7. 

Other arguments 

(826)  Some  parties  argued  that  the  Union  industry  is  not  capable  of  supplying  the  Union 
market in the quantities required and thus if countervailing duties are imposed there is 
a serious risk of shortage in the Union, which may lead to a further increase of prices 
of the product concerned. 

(827)  The  investigation  has  found  this  argument  to  be  unjustified.  The  Union  industry  has 
been underutilising their production capacities since 2009. In the IP, the utilisation rate 
of the Union production capacity of modules was 41 % with additional spare capacity 
of  about  5,7  GW;  the  utilisation  rate  of  the  Union  production  capacity  of  cells  was 
63 %, with additional spare capacity of about 1,2 GW. Therefore, thanks to the spare 
capacity,  the  Union  industry  would  be  able  to  compete  for  an  additional  part  of  the 
market  in  short  term.  Also  in  the  medium-term,  it  is  reasonable  to  assume  that  the 
Union  industry  will  expand  its  production  capacity  to  be  able  to  achieve  better 
economies of scale and allow for further price reductions. Furthermore, there are also 
other sources of supply in the world, which are present on the Union market and which 
will  be  able  to  compete  on  the  Union  market  in  case  of  decrease  of  imports  of  the 
Chinese  products.  The  investigation  revealed  that  the  existing  spare  capacity  of  the 
non-Chinese production outside the Union was in the IP, 5,6 GW for modules and, 6 
GW for cells. It is therefore concluded that the total spare capacity of the Union and 
third  producers  outside  the  Union  is  sufficient  to  complement  in  the  short  term  the 
potential decrease in Chinese imports in light of the demand for PV installations in the 
EU as forecasted for 2013 (between 9,8 GW and 16,5 GW) and 2014 (9 GW and 17,1 
GW) by major research centres such as EPIA.  

(828)  Even  if  more  conservative  assumption  on  the  Union  production  capacity  was  made 
(see recital (545) above), the joint Union and third countries spare capacity would be 
sufficient to complement in the short-term the potential decrease of Chinese imports. 
Also  in  the  medium-term  it  is  reasonable  to  assume  that  the  Union  industry  will 
expand its production capacity to be able to achieve economies of scale, which in turn 
would allow for further price reduction. Therefore, this argument was rejected. 

(829)  Some parties also argued that the imposition of duties on the product concerned will 
harm  the  development  of  the  PV  market  in  Europe  and  thus  the  goals  of  the  EU 
Agenda  2020  concerning  the  renewable  sources  of  energy  and  a  reduction  in  EU 
greenhouse gas emissions will not be achieved. 

(830)  To start with, the 2020 goals do not depend on the solar energy exclusively. Equally 
important  are  other  green  energies  such  as:  wind,  biomass,  hydro  etc.  Since  no 
particular  percentage  is  attributed  to  the  solar  energy  for  the  2020  goals,  a  slightly 
lower number of PV installations is not expected to raise the overall cost of the 2020 
Agenda. Furthermore, the price of solar panels is only one of many factors, which are 
vital  for  the  development  of  the  PV  industry  in  the  Union.  Equally  important  are:  a 
favourable  legal  and  financial  framework  at  Union  and  national  levels,  improved 
access  to  financing  of  renewable  energies  projects  and  the  investment  in  R  &  D.  As 
regards  the  financing  of  solar  investments,  the  imposition  of  duties  will  enhance  the 
situation of the Union industry and of the PV sector in total. As a result, it will also 
likely  enhance  access  to  capital  for  both  the  Union  industry  and  investors  in  the  PV 
sector.  Finally,  it  is  recalled  that  the  aim  of  the  duty  is  not  to  eliminate  the  Chinese 
imports but restore fair competition. Should the price of the product concerned rise the 

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evidence on the profits achieved in the downstream market allows the assumption that 
the price increase will be partly absorbed by the operators in the downstream market. 
Therefore 
the  end-
the  price  of  modules  should  not  rise  significantly  for 
users/consumers  and  the  demand  for  solar  installations  could  be  maintained  in  the 
forecasted range. 

(831)  On the basis of the above, it is concluded that the imposition of measures would not, 

overall, have a significant adverse impact on other EU policies. 

6.8. 

Conclusion on the Union interest 

(832)  The overall positive effects for the Union industry outweigh the likely negative impact 

on other operators on the PV market including end-users (consumers).  

(833)  In  view  of  the  above,  it  is  concluded  that  based  on  the  information  available 
concerning the Union interest, there are no compelling reasons against the imposition 
of definitive measures on imports of the product concerned originating in the PRC. 

7. 

DEFINITIVE COUNTERVAILING MEASURES 

(834)  In view of the conclusions reached with regard to subsidisation, injury, causation and 
Union  interest,  definitive  countervailing  measures  should  be  imposed  in  order  to 
prevent further injury being caused to the Union industry by the subsidised imports. 

7.1. 

Injury elimination level 

(835)  For the purpose of determining the level of these measures, account was taken of the 
subsidy  margins  found  and  the  amount  of  duty  necessary  to  eliminate  the  injury 
sustained by the Union producers, without exceeding the subsidy margins found. 

(836)  When calculating the amount of duty necessary to remove the effects of the injurious 
subsidisation, it was considered that any measures should allow the Union industry to 
cover its costs of production and to obtain a profit before tax that could be reasonably 
achieved by this industry under normal conditions of competition, i.e. in the absence 
of  subsidised  imports,  on  sales  of  the  like  product  in  the  Union.  In  line  with  the 
jurisprudence of the General Court, such profit is the one realised at the beginning of 
the  period  considered,  i.e.  before  the  increase  in  subsidised  imports.  Therefore  the 
target profit was fixed at 8 % on the basis of the weighted average profit realised by 
the EU industry in 2009 and 2010 for modules and cells when profitable.  

(837)  Following the final disclosure, the Union industry claimed that the profitability of the 
year  2010  should  be  used  as  the  level  of  profitability  that  Union  industry  could 
reasonably achieve in the absence of subsidised imports rather than the average profit 
margin of the years 2009 and 2010. In this respect, it was argued that, the profitability 
in 2009 was insufficient and the circumstances in the two years were clearly distinct 
given  in  particular  the  development  in  consumption  in  2010  which  alleviated  the 
effects  of  subsidization  in  that  year.  In  this  regard,  it  should  be  noted  that  it  is  not 
relevant  whether  the  average  profit  margin  realised  by  the  Union  industry  was 
‘sufficient’ when determining the injury elimination level. The injury elimination level 
should  be  based  on  the  profit  which  can  be  reasonably  achieved  in  the  absence  of 
subsidised  imports.  It  is  the  Investigating  Authorities’  practice  to  consider  that  this 
level had been reached at the beginning of the period considered. As in this case the 
Union industry realised losses with regard to the sales of cells at the beginning of the 
period considered in 2009, this methodology was unsuitable and it was deemed more 
reliable to base the determination of the injury elimination level on the average profit 
margin of the first and the second year of the period considered. In this regard it was 

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also  considered  that  it  is  irrelevant  that  circumstances  were  different  in  these  two 
years. 

(838)  Another  party  reiterated  that  the  different  target  profits  should  be  established  for 
modules and cells, as the profitability of these product types showed different trends 
during the period considered. While indicators were shown separately for each product 
type,  the  conclusions  reached  for  each  indicator  refer  to  the  product  under 
investigation  as  a  whole.  It  is  also  recalled  that  modules  and  cells  are  one  single 
product  and  therefore  the  subsidy  margins  and  the  injury  elimination  level  were 
established on this basis. 

(839)  On this basis, a non-injurious price was calculated for the Union industry for the like 
product.  The  non-injurious  price  was  obtained  by  adding  the  abovementioned  profit 
margin of 8 % to the cost of production during the IP of the sampled Union producers. 

(840)  The necessary price increase was then determined on the basis of a comparison of the 
weighted average import price of the sampled cooperating exporting producers in the 
PRC,  as  established  for  the  price  undercutting  calculations,  duly  adjusted  for 
importation costs and customs duties with the weighted average non-injurious price of 
the like product sold by the sampled Union producers on the Union market during the 
IP. Any difference resulting from this comparison was then expressed as a percentage 
of the weighted average CIF import value. 

(841)  One party argued that sales of the sampled Union producers focused on the high-end 
market,  such  as  the  residential/small  commercial  sector,  which  attracted  higher  FITs 
and  suggested  that  the  Union  industry’s  sales  price  should  therefore  be  adjusted 
accordingly.  It  should  be  noted  that  this  claim  should  not  be  decisive  for  the 
calculation of the injury margin, since the investigation showed that Union producers 
were not profitable. 

7.2. 

Definitive measures 

(842)  In  the  light  of  the  foregoing,  and  in  accordance  with  Article  15  of  the  basic 
Regulation,  a  definitive  countervailing  duty  should  be  imposed  on  imports  of 
crystalline silicon photovoltaic modules and key components (i.e. cells) originating in 
or consigned from the PRC at the level of the lower of the subsidy or injury margins 
found,  in  accordance  with  the  lesser  duty  rule.  In  this  case,  the  duty  rate  should 
accordingly be set at the level of the subsidy margins found.  

(843)  Given  the  high  rate  of  cooperation  of  Chinese  exporting  producers,  the  ‘all  other 
companies’  duty  was  set  at  the  level  of  the  highest  duty  to  be  imposed  on  the 
companies,  respectively,  sampled  or  cooperating  in  the  investigation.  The  ‘all  other 
companies’ duty will be applied to those companies which had not cooperated in the 
investigation. 

(844)  For  the  cooperating  non-sampled  Chinese  companies  listed  in  the  Annex,  the 
definitive  duty  rate  is  set  at  the  weighted  average  of  the  rates  of  the  sampled 
companies. 

(845)  On  the  basis  of  the  above,  the  rates  at  which  such  duties  will  be  imposed  are  set  as 

follows:  

Company Name 

Wuxi Suntech Power Co. Ltd 
Suntech Power Co. Ltd 

Subsidy 
margin 

4,9 % 

Injury 
margin 

46,3 % 

Countervailing 
duty 

4,9 % 

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Wuxi Sun-Shine Power Co. Ltd 
Luoyang Suntech Power Co. Ltd 
Zhenjiang Ren De New Energy Science 
Technology Co. Ltd 
Zhenjiang Rietech New Energy Science 
Technology Co. Ltd 
Yingli Energy (China) Co. Ltd; 
Baoding  Tianwei  Yingli  New  Energy 
Resources Co. Ltd; 
Hainan  Yingli  New  Energy  Resources  Co. 
Ltd; 
Hengshui  Yingli  New  Energy  Resources 
Co. Ltd; 
Tianjin  Yingli  New  Energy  Resources  Co. 
Ltd; 
Lixian  Yingli  New  Energy  Resources  Co. 
Ltd; 
Baoding  Jiasheng  Photovoltaic  Technology 
Co. Ltd; 
Beijing  Tianneng  Yingli  New  Energy 
Resources Co. Ltd; 
Yingli Energy (Beijing) Co. Ltd 
Changzhou Trina Solar Energy Co. Ltd; 
Trina Solar (Changzhou) Science & 
Technology Co. Ltd; 
Changzhou Youze Technology Co. Ltd; 
Trina Solar Energy (Shanghai) Co. Ltd; 
Yancheng Trina Solar Energy Technology 
Co. Ltd 
JingAo Solar Co. Ltd; 
Shanghai JA Solar Technology Co. Ltd, 
JA Solar Technology Yangzhou Co. Ltd; 
Hefei JA Solar Technology Co. Ltd, 
Shanghai JA Solar PV Technology Co. Ltd; 

Jiangxi LDK Solar Hi-Tech Co. Ltd; 
LDK Solar Hi-Tech (Nanchang) Co. Ltd; 
LDK Solar Hi-Tech (Suzhou) Co. Ltd, 
LDK Solar Hi-Tech (Hefei) Co. Ltd 
Delsolar (Wujiang) Co. Ltd, 
Renesola Jiangsu Ltd  
Renesola Zhejiang Ltd 

Jinko Solar Co. Ltd 

Jinko Solar Import and Export Co. Ltd 

ZHEJIANG JINKO SOLAR CO. LTD 

ZHEJIANG JINKO SOLAR TRADING 
CO. LTD 
Companies listed in the Annex 

6,3% 

41,8 % 

6,3% 

3,5 % 

48,2 % 

3,5 % 

5,0 % 

56,5 % 

5,0 % 

11,5 % 

58,2 % 

11,5 % 

11,5 % 
de minimis 

4,6 % 

58,2 % 
64,9 % 

80,1 % 

11,5 % 
0,0 % 

4,6 % 

6,5 % 

60,1 % 

6,5 % 

6,4 % 

51,1 % 

6,4 % 

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All other companies 

11,5 % 

80,1 % 

11,5 % 

(846)  The  above  definitive  countervailing  measures  are  established  in  the  form  of  ad 

valorem duties. 

(847)  The  individual  company  countervailing  duty  rates  specified  in  this  Regulation  were 
established  on  the  basis  of  the  findings  of  the  present  investigation.  Therefore,  they 
reflect  the  situation  found  during  that  investigation  with  respect  to  these  companies. 
These  duty  rates  (as  opposed  to  the  countrywide  duty  applicable  to  ‘all  other 
companies’) are  thus exclusively applicable to imports of products originating in  the 
country  concerned  and  produced  by  the  companies  and  thus  by  the  specific  legal 
entities mentioned. Imported products produced by any other company not specifically 
mentioned  in  Article  1  with  its  name  and  address,  including  entities  related  to  those 
specifically mentioned, cannot benefit from these rates and shall be subject to the duty 
rate applicable to ‘all other companies’.  

(848)  Any  claim  requesting  the  application  of  an  individual  company  countervailing  duty 
rate (e.g. following a change in the name of the entity or following the setting-up of 
new production or sales entities) should be addressed to the Commission102 forthwith 
with all relevant information, in particular any modification in the company's activities 
linked  to  production,  domestic  and  export  sales  associated  with,  for  example,  that 
name  change  or  that  change  in  the  production  and  sales  entities.  If  appropriate,  the 
Regulation  will  then  be  amended  accordingly  by  updating  the  list  of  companies 
benefiting from individual duty rates.  

(849)  In  order  to  ensure  proper  enforcement  of  the  countervailing  duty,  the  residual  duty 
level  should  not  only  apply  to  the  non-cooperating  exporting  producers  but  also  to 
those producers which did not have any exports to the Union during the IP. 

(850)  Measures  are  imposed  to  allow  the  producers  in  the  Union  to  recover  from  the 
injurious  effect  of  subsidy.  To  the  extent  that  there  would  be  any  initial  imbalance 
between  the  potential  benefit  for  producers  in  the  Union  and  the  cost  for  other 
economic operators in the Union, this imbalance could be offset by an increase and/or 
restart of the production in the Union. However, the envisaged scenario of increased 
production  in  the  Union  may  not  be  in  line  with  the  market  development  in  this 
volatile market. Union consumption of modules increased by 264 % between 2009 and 
2011,  only  to  decrease  by  43  percentage  points  during  the  6  month  period  between 
2011 and the IP. The volatility is even more impressive when looking at the period of 
2006-2011, where the Union consumption of modules increased from less than 1 GW 
to almost 20 GW or an increase of around 2000% in just five years. This volatility is 
expected  to  continue,  and  forecasts  published  by  business  associations  show 
differences  of  100%  and  more  between  the  different  scenarios  even  for  the  medium 
term period of 2014-2015. 

(851)  For  these  reasons,  it  is considered  appropriate,  in  such  exceptional  circumstances,  to 

limit the duration of measures to a period of two years only. 

(852)  This period should be enough for the producers in the Union to increase and/or restart 
their  production,  while  at  the  same  time  not  significantly  endanger  the  situation  of 
other  economic  operators  in  the  Union.  It  is  considered  that  the  period  of  two  years 
will be the most appropriate to analyse whether the imposition of measures had indeed 
the  effect  of  increasing  Union  production  and  thereby  balancing  the  negative  effects 
on other economic operators in the Union. 

102 

European Commission, Directorate-General for Trade, Directorate H, B-1049 Brussels. 

EN 

186 

   EN 

                                                 
(853)  Following  final  disclosure,  one  Union  producer  raised  the  argument  that  the  limited 
duration of 2 years is too short to recover from the injury suffered. In addition it was 
argued  that  a  duration  of  2  years  would  not  allow  Union  producers  to  file  business 
plans for the current and the coming business year. In this respect, it is noted that the 
duration of the measures until December 2015, which should be sufficient for Union 
producers to file business plans until 2015. 

(854)  Furthermore,  the  Union  producer  did  not  contest  the  reasons  for  which  the  duration 
was  limited  to  two  years,  notably  the  volatility  of  the  market.  The  producer  even 
explicitly  appreciated  a  review  in  case  the  measures  need  to  be  changed  due  to 
changed  market  situation.  Since  the  likelihood  of  a  change  in  market  circumstances 
within two years is indeed high in this volatile market, it is considered appropriate to 
limit the measures to two years from the outset. 

(855)  Following  final  disclosure,  the  complainant  argued  that  two  years  are  insufficient  to 
invest in production, referring to recital (852). However, due to the substantial spare 
capacity of the Union industry, an increase in production can be done through a better 
utilisation  of  the  existing  production  capacities,  which  should  be  feasible  without 
significant additional investments. 

(856)  The complainant further argued that an imposition of definitive countervailing duties 
for  a  period  of  two  years  is  insufficient  for  the  Union  Industry  to  recover  from  the 
injurious  effects  of  past  subsidisation.  However,  the  imposition  of  countervailing 
duties  cannot  only  look  at  the  interests  of  the  Union  Industry  alone,  but  needs  to 
balance  the  potential  benefit  for  producers  in  the  Union  and  the  cost  for  other 
economic operators in the Union. On this basis, the decision to limit measures to two 
years is maintained. 

(857)  All  parties  were  informed  of  the  essential  facts  and  considerations  on  the  basis  of 
which it was intended to recommend the imposition of a definitive countervailing duty 
on  imports  of  crystalline  silicon  PV  modules  or  panels  and  cells  of  the  type  used  in 
crystalline  silicon  PV  modules  or  panels,  originating  in  or  consigned  from  the  PRC 
(final  disclosure).  All  parties  were  granted  a  period  within  which  they  could  make 
comments on the final disclosure. 

(858)  The  oral  and  written  comments  submitted  by  the  interested  parties  were  considered 

and taken into account where appropriate.  

7.3. 

Registration and retroactivity 

(859)  As  mentioned  in  above  recital  (7),  the  Commission  adopted  on  1  March  2013 
Regulation  No  182/2013  making  imports  of  crystalline  silicon  PV  modules  and  key 
components  (i.e.  cells  and  wafers)  originating  in  or  consigned  from  the  People’s 
Republic of China subject to registration as of 6 March 2013. 

(860)  As  of  6  June  2013,  registration  of  imports  for  the  purpose  of  protection  against 
dumped imports was terminated through the provisional anti-dumping Regulation. As 
far  as  the  current  anti-subsidy  investigation  is  concerned  and  in  view  of  the  above 
findings, the registration of imports for the purpose of the anti-subsidy investigation in 
accordance with Article 24(5) of the basic Regulation should also be discontinued. 

(861)  As concerns a possible retroactive application of countervailing measures, the criteria 
set out in Article 16(4) of the basic Regulation have to be evaluated. Pursuant to this 
article, a definitive countervailing duty may be levied on products which were entered 
for consumption no more than 90 days prior to the date of application of provisional 
measures but not prior to the initiation of the investigation.  

EN 

187 

   EN 

(862)  In this case, no provisional countervailing measures were applied. As a consequence, 

it is decided that the definitive countervailing duty shall not be levied retroactively. 

8. 

FORM OF THE MEASURES 

(863)  Subsequent  to  the  adoption  of  the  provisional  anti-dumping  measures  in  the  parallel 
anti-dumping  investigation103,  a  group  of  cooperating  exporting  producers,  including 
their related companies in the PRC and in the European Union, and together with the 
China  Chamber  of  Commerce  for  Import  and  Export  of  Machinery  and  Electronic 
Products (‘CCCME’) offered a joint price undertaking in accordance with Article 8(1) 
of the basic anti-dumping Regulation104. The undertaking offer was also supported by 
the  Chinese  authorities.  The  Commission  examined  the  offer,  and  by  Decision 
2013/423/EU105 accepted this undertaking offer.  

(864)  Subsequent to Decision 2013/423/EU, the exporting producers together with CCCME 
submitted  a  notification  to  amend  their  initial  undertaking  offer.  They  requested  to 
revise  the  undertaking  to  take  account  of  the  exclusion  of  wafers  from  the  product 
scope  as  described  in  recitals  (46)  and  (99).  In  addition,  a  number  of  additional 
exporters,  within  the  deadline  stipulated  in  Article  8  (2)  of  the  basic  anti-dumping 
Regulation, requested to be included in the undertaking. 

(865)  The  same  group  of  exporting  producers,  together  with  the  CCCME,  within  the 
deadline specified in Article 13(2) of the basic Regulation106, requested that the terms 
of that Undertaking be accepted by the Commission to eliminate any injurious effects 
also of the subsidised imports. By Decision 2013/XXX/EU, the Commission accepted 
this offer with regards to the definitive duties. 

HAS ADOPTED THIS REGULATION: 

1. 

Article 1 

A definitive countervailing duty is hereby imposed on imports of 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), 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 8501 31 00 81, 8501 31 00 89, 
8501 32 00 41, 8501 32 00 49, 8501 33 00 61, 8501 33 00 69, 8501 34 00 41, 8501 
34 00 49, 8501 61 20 41, 8501 61 20 49, 8501 61 80 41, 8501 61 80 49, 8501 62 00 
61, 8501 62 00 69, 8501 63 00 41, 8501 63 00 49, 8501 64 00 41, 8501 64 00 49, 
8541 40 90 21, 8541 40 90 29, 8541 40 90 31 and 8541 40 90 39) and originating in 
or  consigned  from  the  People’s  Republic  of  China,  unless  they  are  in  transit  in  the 
sense of Article V GATT. 

The  following  product  types  are  excluded  from  the  definition  of  the  product 
concerned: 

– 

– 

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

thin film photovoltaic products, 

103 
104 
105 
106 

Regulation (EU) No 513/2013, OJ L 152, 5. 6.2013, p. 5. 
OJ L 343, 22.12.2009, p.51. 
OJ L 209, 3.8.2013, p. 26. 
Council Regulation (EC) No597/2009 of 11 June 2009; OJ L188, 18.7.2009, p.93 

EN 

188 

   EN 

                                                 
– 

– 

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. 

The  rate  of  the  definitive  countervailing  duty  applicable  to  the  net,  free-at-Union-
frontier  price,  before  duty,  of  the  products  described  in  paragraph  1  and 
manufactured by the companies listed below shall be as follows: 

Company 

Duty rate 

TARIC 
additional 
code 

Wuxi Suntech Power Co. Ltd; 
Suntech Power Co. Ltd; 
Wuxi Sunshine Power Co. Ltd; 
Luoyang Suntech Power Co. Ltd; 

Zhenjiang  Ren  De  New  Energy  Science  Technology  Co.  Ltd; 
Zhenjiang Rietech New Energy Science Technology Co. Ltd, 

Yingli Energy (China) Co. Ltd; 
Baoding Tianwei Yingli New Energy Resources Co. Ltd; 
Hainan Yingli New Energy Resources Co. Ltd; 
Hengshui Yingli New Energy Resources Co. Ltd; 
Tianjin Yingli New Energy Resources Co. Ltd; 
Lixian Yingli New Energy Resources Co. Ltd; 
Baoding Jiasheng Photovoltaic Technology Co. Ltd; 
Beijing Tianneng Yingli New Energy Resources Co. Ltd; 

Yingli Energy (Beijing) Co. Ltd 

Changzhou Trina Solar Energy Co. Ltd; 

Trina Solar (Changzhou) Science & Technology Co. Ltd; 

Changzhou Youze Technology Co. Ltd; 

Trina Solar Energy (Shanghai) Co. Ltd; 

Yancheng Trina Solar Energy Technology Co. Ltd 

JingAo Solar Co. Ltd; 
Shanghai JA Solar Technology Co. Ltd, 
JA Solar Technology Yangzhou Co. Ltd; 
Hefei JA Solar Technology Co. Ltd, 
Shanghai JA Solar PV Technology Co. Ltd 

Jiangxi LDK Solar Hi-Tech Co. Ltd; 
LDK Solar Hi-Tech (Nanchang) Co. Ltd; 

LDK Solar Hi-Tech (Suzhou) Co. Ltd, 

4,9 % 

B796 

6,3 % 

B797 

3,5 % 

B791 

5,0 % 

B794 

11,5 % 

B793 

EN 

189 

   EN 

 
LDK Solar Hi-Tech (Hefei) Co. Ltd 

Delsolar (Wujiang) Ltd 

Renesola Jiangsu Ltd 

Renesola Zhejiang Ltd 

Jinko Solar Co. Ltd 

Jinko Solar Import and Export Co. Ltd 

ZHEJIANG JINKO SOLAR CO. LTD 

ZHEJIANG JINKO SOLAR TRADING CO. LTD 

11,5 % 

0% 

4,6 % 

B927 

B792 

B921 

6,5 % 

B845 

Companies listed in the Annex 

6,4 % 

All other companies 

11,5 % 

B999107 

3. 

1. 

2. 

107 

108 

Unless  otherwise  specified,  the  provisions  in  force  concerning  customs  duties  shall 
apply. 

Article 2 

Imports declared for release into free circulation for products currently falling within 
CN code ex 8541 40 90 (TARIC codes 8541 40 90 21, 8541 40 90 29, 8541 40 90 31 
and 8541 40 90 39) which are invoiced by companies from which undertakings are 
accepted by the Commission and whose names are listed in the Annex of Decision 
2013/XXX/EU,108 shall be exempt from the anti-subsidy duty imposed by Article 1, 
on condition that: 

(a) 

(b) 

(c) 

(d) 

a  company  listed  in  the  Annex  of  Decision  2013/XXX/EU  manufactured, 
shipped and invoiced directly the products referred to above or via its related 
company  also  listed  in  the  Annex  of  Decision  2013/XXX/EU  either  to  their 
related companies in the Union acting as an importer and clearing the goods for 
free circulation in the Union or to the first independent customer acting as an 
importer and clearing the goods for free circulation in the Union; and 

such  imports  are  accompanied  by  an  undertaking  invoice  which  is  a 
commercial  invoice  containing  at  least  the  elements  and  the  declaration 
stipulated in Annex 2 of this Regulation and 

such imports are accompanied by an Export Undertaking Certificate according 
to Annex 3 of this Regulation; and 

the  goods  declared  and  presented  to  customs  correspond  precisely  to  the 
description on the undertaking invoice. 

A  customs  debt  shall  be  incurred  at  the  time  of  acceptance  of  the  declaration  for 
release into free circulation: 

Companies  mentioned  in  Annex  II  of  the  parallel  anti-dumping  Implementing  Regulation  (EU)  No 
XXX/2013 shall have the TARIC additional code mentioned in that Annex II 
See page XX of this Official Journal. 

EN 

190 

   EN 

 
                                                 
(a)  whenever it is established, in respect of imports described in paragraph 1, that 
one or more of the conditions listed in that paragraph are not fulfilled; or 

(b)  when the Commission withdraws its acceptance of the undertaking pursuant to 
Article 13(9)  of  Regulation  (EC)  No  597/2009  in  a  Regulation  or  Decision 
which  refers  to  particular  transactions  and  declares  the  relevant  undertaking 
invoices as invalid. 

Article 3 

The companies from which undertakings are accepted by the Commission and whose names 
are listed in the Annex of Decision 2013/XXX/EU and subject to certain conditions specified 
therein, will also issue an invoice for transactions which are not exempted from the anti-
subsidy duties. This invoice is a commercial invoice containing at least the elements 
stipulated in Annex 4 of this Regulation. 

Article 4 

Registration  of  imports  resulting  from  Commission  Regulation  (EU)  No  182/2013  making 
imports  of  crystalline  silicon  PV  modules  and  key  components  (i.e.  cells  and  wafers) 
originating in or consigned from the People’s Republic of China subject to registration shall 
be discontinued. 

This  Regulation  shall  enter  into  force  on  the  day  following  that  of  its  publication  in  the 
Official Journal of the European Union. It shall be in force for a period of 2 years.. 

Article 5 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 

For the Council 
The President 

EN 

191 

   EN 

 
 
ANNEX 1 

TARIC 
additional code 

Name of the Company 

Anhui Schutten Solar Energy Co. Ltd 

Quanjiao Jingkun Trade Co. Ltd 

Anji DaSol Solar Energy Science & Technology Co. Ltd 

Canadian Solar Manufacturing (Changshu) Inc. 

Canadian Solar Manufacturing (Luoyang) Inc. 

CSI Cells Co. Ltd 

CSI Solar Power (China) Inc. 

Changzhou Shangyou Lianyi Electronic Co. Ltd 

CHINALAND SOLAR ENERGY CO. LTD 

CEEG Nanjing Renewable Energy Co. Ltd 

CEEG (Shanghai) Solar Science Technology Co. Ltd 

China Sunergy (Nanjing) Co. Ltd 

China Sunergy (Shanghai) Co. Ltd 

China Sunergy (Yangzhou) Co. Ltd 

Chint Solar (Zhejiang) Co. Ltd 

ChangZhou EGing Photovoltaic Technology Co. Ltd 

ANHUI 
DEVELOPMENT CO. LTD. 

RINENG 

ZHONGTIAN 

SEMICONDUCTOR 

CIXI CITY RIXING ELECTRONICS CO. LTD. 

HUOSHAN KEBO ENERGY & TECHNOLOGY CO. LTD. 

CNPV Dongying Solar Power Co. Ltd 

CSG PVtech Co. Ltd 

DCWATT POWER Co. Ltd 

B801 

B802 

B805 

B807 

B808 

B809 

B810 

B811 

B812 

B813 

B814 

B815 

Dongfang Electric (Yixing) MAGI Solar Power Technology Co. Ltd  B816 

EOPLLY New Energy Technology Co. Ltd 

B817 

SHANGHAI EBEST SOLAR ENERGY TECHNOLOGY CO. LTD 

EN 

192 

   EN 

 
 
 
JIANGSU EOPLLY IMPORT & EXPORT CO. LTD 

Era Solar Co. Ltd 

ET Energy Co. Ltd 

ET Solar Industry Limited 

GD Solar Co. Ltd 

Guodian Jintech Solar Energy Co. Ltd 

Hangzhou Bluesun New Material Co. Ltd 

Hangzhou  Zhejiang  University  Sunny  Energy  Science  and 
Technology Co. Ltd 

Zhejiang Jinbest Energy Science and Technology Co. Ltd 

Hanwha SolarOne Co. Ltd  

Hanwha SolarOne (Qidong) Co. Ltd 

Hengdian Group DMEGC Magnetics Co. Ltd 

HENGJI PV-TECH ENERGY CO. LTD. 

Himin Clean Energy Holdings Co. Ltd 

Jetion Solar (China) Co. Ltd 

Junfeng Solar (Jiangsu) Co. Ltd 

Jetion Solar (Jiangyin) Co. Ltd 

Jiangsu Green Power PV Co. Ltd 

Jiangsu Hosun Solar Power Co. Ltd 

Jiangsu Jiasheng Photovoltaic Technology Co. Ltd 

Jiangsu Runda PV Co. Ltd 

Jiangsu Sainty Machinery Imp. And Exp. Corp. Ltd 

Jiangsu Sainty Photovoltaic Systems Co. Ltd 

Jiangsu Seraphim Solar System Co. Ltd 

Changzhou Shunfeng Photovoltaic Materials Co. Ltd 

Jiangsu Shunfeng Photovoltaic Electronic Power Co. Ltd 

Jiangsu Shunfeng Photovoltaic Technology Co. Ltd 

B818 

B819 

B820 

B822 

B824 

B825 

B929 

B826 

B827 

B828 

B829 

B830 

B831 

B832 

B833 

B834 

B835 

B836 

B837 

EN 

193 

   EN 

 
 
 
 
B838 

B839 

B840 

B841 

B842 

B844 

B795 

B846 

B847 

B849 

B850  

Jiangsu Sinski PV Co. Ltd 

Jiangsu Sunlink PV Technology Co. Ltd 

Jiangsu Zhongchao Solar Technology Co. Ltd 

Jiangxi Risun Solar Energy Co. Ltd 

Jiangyin Hareon Power Co. Ltd 

Taicang Hareon Solar Co. Ltd 

Hareon Solar Technology Co. Ltd 

Hefei Hareon Solar Technology Co. Ltd 

Jiangyin Xinhui Solar Energy Co. Ltd 

Altusvia Energy (Taicang) Co, Ltd 

Jinggong P-D Shaoxing Solar Energy Tech Co. Ltd  

Jinzhou Yangguang Energy Co. Ltd 

Jinzhou Huachang Photovoltaic Technology Co. Ltd 

Jinzhou Jinmao Photovoltaic Technology Co. Ltd 

Jinzhou Rixin Silicon Materials Co. Ltd 

Jinzhou Youhua Silicon Materials Co. Ltd 

Juli New Energy Co. Ltd 

Jumao Photonic (Xiamen) Co. Ltd 

Kinve Solar Power Co. Ltd (Maanshan) 

GCL SOLAR POWER (SUZHOU) LIMITED 

GCL-Poly Solar Power System Integration (Taicang) Co. Ltd 

GCL Solar System (Suzhou) Limited 

GCL-Poly (Suzhou) Energy Limited 

Jiangsu GCL Silicon Material Technology Development Co. Ltd 

Jiangsu Zhongneng Polysilicon Technology Development Co. Ltd 

Konca Solar Cell Co. Ltd 

Suzhou GCL Photovoltaic Technology Co. Ltd 

EN 

194 

   EN 

 
 
 
 
 
 
 
Lightway Green New Energy Co. Ltd 

Lightway Green New Energy (Zhuozhou) Co. Ltd 

Motech (Suzhou) Renewable Energy Co. Ltd 

Nanjing Daqo New Energy Co. Ltd 

LEVO SOLAR TECHNOLOGY CO. LTD 

NICE SUN PV CO. LTD 

Ningbo Jinshi Solar Electrical Science & Technology Co. Ltd 

Ningbo Komaes Solar Technology Co. Ltd 

Ningbo Osda Solar Co. Ltd 

Ningbo Qixin Solar Electrical Appliance Co. Ltd 

Ningbo South New Energy Technology Co. Ltd 

Ningbo Sunbe Electric Ind Co. Ltd 

Ningbo Ulica Solar Science & Technology Co. Ltd 

Perfectenergy (Shanghai) Co. Ltd 

Perlight Solar Co. Ltd 

Phono Solar Technology Co. Ltd 

Sumec Hardware & Tools Co. Ltd 

RISEN ENERGY CO. LTD 

SHANDONG LINUO PHOTOVOLTAIC HI-TECH CO. LTD 

SHANGHAI ALEX NEW ENERGY CO. LTD 

SHANGHAI  ALEX 
TECHNOLOGY CO. LTD 

SOLAR 

ENERGY 

SCIENCE  & 

BYD(Shangluo)Industrial Co.Ltd 

Shanghai BYD Co. Ltd 

Shanghai Chaori International Trading Co. Ltd 

Shanghai Chaori Solar Energy Science & Technology Co. Ltd 

B851 

B852 

B853 

B854 

B857 

B858 

B859 

B860 

B861 

B862 

B863 

B864 

B865 

B866 

B868 

B869 

B870 

B871 

B872 

EN 

195 

   EN 

 
 
 
 
 
 
Propsolar (Zhejiang) New Energy Technology Co. Ltd 

Shanghai Propsolar New Energy Co. Ltd 

Lianyungang Shenzhou New Energy Co. Ltd 

Shanghai Shenzhou New Energy Development Co. Ltd 

SHANGHAI SOLAR ENERGY S&T CO. LTD 

Jiangsu ST-Solar Co. Ltd 

Shanghai ST-Solar Co. Ltd 

Shanghai Topsolar Green Energy Co. Ltd 

Shenzhen Sacred Industry Co. Ltd 

Leshan Topray Cell Co. Ltd 

Shanxi Topray Solar Co. Ltd 

Shenzhen Topray Solar Co. Ltd 

Shanghai Sopray New Energy Co. Ltd 

Sopray Energy Co. Ltd 

Ningbo Sun Earth Solar Energy Co. Ltd 

NINGBO SUN EARTH SOLAR POWER CO. LTD. 

SUN EARTH SOLAR POWER CO. LTD. 

TDG Holding Co. Ltd 

Tianwei New Energy (Chengdu) PV Module Co. Ltd 

Tianwei New Energy Holdings Co. Ltd 

Tianwei New Energy (Yangzhou) Co. Ltd  

Wenzhou Jingri Electrical and Mechanical Co. Ltd 

Winsun New Energy Co. Ltd 

Wuhu Zhongfu PV Co. Ltd 

Wuxi Saijing Solar Co. Ltd 

Wuxi Solar Innova PV Co. Ltd 

Wuxi Machinery & Equipment Import & Export Co. Ltd 

B873 

B875 

B876 

B877 

B878 

B880 

B881 

B882 

B884 

B885 

B886 

B887 

B889 

B890 

B892 

B893 

EN 

196 

   EN 

 
 
 
 
 
 
 
 
Wuxi Taichang Electronic Co. Ltd 

Wuxi Taichen Machinery & Equipment Co. Ltd 

Shanghai Huanghe Fengjia Photovoltaic Technology Co. Ltd 

B896 

State-run  Huanghe  Machine-Building  Factory  Import  and  Export 
Corporation 

Xi’an Huanghe Photovoltaic Technology Co. Ltd 

Wuxi LONGi Silicon Materials Co. Ltd 

Xi’an LONGi Silicon Materials Corp. 

Years Solar Co. Ltd 

Yuhuan BLD Solar Technology Co. Ltd 

Zhejiang BLD Solar Technology Co. Ltd 

Yuhuan Sinosola Science & Technology Co. Ltd 

Yunnan Tianda Photovoltaic Co. Ltd 

Zhangjiagang City SEG PV Co. Ltd 

Zhejiang Global Photovoltaic Technology Co. Ltd 

Zhejiang Heda Solar Technology Co. Ltd 

Zhejiang Jiutai New Energy Co. Ltd 

Zhejiang Topoint Photovoltaic Co. Ltd 

Zhejiang Kingdom Solar Energy Technic Co. Ltd 

Zhejiang Koly Energy Co. Ltd 

Zhejiang Longbai Photovoltaic Tech Co. Ltd 

Zhejiang Mega Solar Energy Co. Ltd 

Zhejiang Fortune Photovoltaic Co. Ltd 

Zhejiang Shuqimeng Photovoltaic Technology Co. Ltd 

Zhejiang Shinew Photoeletronic Technology Co. Ltd 

Zhejiang SOCO Technology Co. Ltd 

B897 

B898 

B899 

B900 

B901 

B902 

B904 

B905 

B906 

B907 

B908 

B909 

B910 

B911 

B912 

B913 

EN 

197 

   EN 

 
 
 
 
 
 
Zhejiang  Sunflower  Light  Energy  Science  &  Technology  Limited 
Liability Company 

B914 

Zhejiang Yauchong Light Energy Science & Technology Co. Ltd 

Zhejiang Tianming Solar Technology Co. Ltd 

Zhejiang Trunsun Solar Co. Ltd 

Zhejiang Beyondsun PV Co. Ltd 

Zhejiang Wanxiang Solar Co. Ltd 

WANXIANG IMPORT & EXPORT CO LTD 

Zhejiang Xiongtai Photovoltaic Technology Co. Ltd 

ZHEJIANG YUANZHONG SOLAR CO. LTD 

Zhongli Talesun Solar Co. Ltd 

ZNSHINE PV-TECH CO. LTD 

Zytech Engineering Technology Co. Ltd 

B916 

B917 

B918 

B919 

B920 

B922 

B923 

B924 

ANNEX 2 

The  following  elements  shall  be  indicated  in  the  Commercial  Invoice  accompanying  the 
Company's sales to the European Union of goods which are subject to the Undertaking: 

The  heading  "COMMERCIAL  INVOICE  ACCOMPANYING  GOODS  SUBJECT 

1. 
TO AN UNDERTAKING". 

2. 

3. 

4. 

The name of the Company issuing the Commercial Invoice. 

The Commercial Invoice number. 

The date of issue of the Commercial Invoice. 

The TARIC additional code under which the goods on the invoice are to be customs-

5. 
cleared at the European Union frontier.  

6. 

The exact plain language description of the goods and: 

– 

– 

– 

– 

– 

the product code number (PCN), 

technical specifications of the PCN, 

the company product code number (CPC), 

CN code, 

quantity (to be given in units expressed in Watt). 

7. 

The description of the terms of the sale, including: 

– 

– 

price per unit (Watt), 

the applicable payment terms, 

EN 

198 

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– 

– 

the applicable delivery terms, 

total discounts and rebates. 

Name of the Company acting as an importer to which the invoice is issued directly by 

8. 
the Company. 

The name of the official of the Company that has issued the Commercial Invoice and 

9 
the following signed declaration: 

"I, the undersigned, certify that the sale for direct export to the European Union of the goods 
covered  by  this  invoice  is  being  made  within  the  scope  and  under  the  terms  of  the 
Undertaking  offered  by  [COMPANY],  and  accepted  by  the  European  Commission  through 
Commission Decision 2013/XX/EU. I declare that the information provided on this invoice is 
complete and correct." 

ANNEX 3 

EXPORT UNDERTAKING CERTIFICATE 

The following elements shall be indicated in the Export Undertaking Certificate to be issued 
by CCCME for each Commercial Invoice accompanying the Company's sales to the European 
Union of goods which are subject to the Undertaking: 

The name, address, fax and telephone number of the China Chamber of Commerce for 

1. 
Import & Export of Machinery & Electronic Products (CCCME). 

The  name  of  the  company  mentioned  in  the  Annex  of  Commission  Decision 

2. 
2013/XX/EU issuing the Commercial Invoice. 

3. 

4. 

The Commercial Invoice number. 

The date of issue of the Commercial Invoice. 

The TARIC additional code under which the goods on the invoice are to be customs 

5. 
cleared at the European Union frontier. 

6. 

The exact description of the goods, including: 

• 

• 

• 

the product code number (PCN), 

the  technical  specification  of  the  goods,  the  company  product  code  number 
(CPC) (if applicable), 

CN code, 

7. 

8. 

The precise quantity in units exported expressed in Watt. 

The number and expiry date (three months after issuance) of the certificate. 

The name of the official of CCCME that has issued the certificate and the following 

9. 
signed declaration: 

“I,  the  undersigned,  certify  that  this  certificate  is  given  for  direct  exports  to  the  European 
Union of the goods covered by the Commercial Invoice accompanying sales made subject to 
the undertaking and that the certificate is issued within the scope and under the terms of the 
undertaking  offered  by  [company]  and  accepted  by  the  European  Commission  through 
Commission Decision 2013/XX/EU. I declare that the information provided in this certificate 
is correct and that the quantity covered by this certificate is not exceeding the threshold of the 
undertaking. 

10. Date. 

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11. The signature and seal of CCCME. 

ANNEX 4 

The  following  elements  shall  be  indicated  in  the  Commercial  Invoice  accompanying  the 
Company's sales to the European Union of goods which are subject to the anti-subsidy duties: 

The  heading  "COMMERCIAL  INVOICE  ACCOMPANYING  GOODS  SUBJECT 

1. 
TO ANTI-DUMPING AND COUNTERVAILING DUTIES". 

2. 

3. 

4. 

The name of the Company issuing the Commercial Invoice. 

The Commercial Invoice number. 

The date of issue of the Commercial Invoice. 

The TARIC additional code under which the goods on the invoice are to be customs-

5. 
cleared at the European Union frontier.  

6. 

The exact plain language description of the goods and: 

– 

– 

– 

– 

– 

the product code number (PCN), 

technical specifications of the PCN, 

the company product code number (CPC), 

CN code, 

quantity (to be given in units expressed in Watt). 

7. 

The description of the terms of the sale, including: 

– 

– 

– 

– 

price per unit (Watt), 

the applicable payment terms, 

the applicable delivery terms, 

total discounts and rebates. 

The name and signature of the official of the Company that has issued the Commercial 

8. 
Invoice.’ 

EN 

200 

   EN