18 March 2016
Yet Another Attempt to Challenge Solar Panel Minimum Import Price Dismissed
Traders will be interested to hear that the EU General Court has yet again dismissed a legal action lodged by European solar panel producers, including German SolarWorld, against the undertaking agreement and minimum import price in place for imports of mainland Chinese photovoltaic modules and cells.
It is recalled that definitive countervailing and anti-dumping duties were imposed by means of Regulations 1238/2013 and 1239/2013, published in the EU’s Official Journal on 5 December 2013. However, these definitive measures do not apply to imports of cells and modules from mainland China if they are exported by one of the mainland Chinese producers of solar panels which are part of the price undertaking accepted by the Commission, as long as the conditions provided for in the price undertaking are respected. The main condition is that modules and cells cannot be sold on the EU market below a certain minimum import price.
Following the imposition of the measures and the acceptance of the price undertaking, the European industry has continuously sought to challenge the outcome of the investigations.
Further to a request from European solar panel producers, the Commission opened an investigation into circumvention practices, leading to the extension of the measures to imports consigned from Taiwan and Malaysia on 12 February 2016. The Commission also initiated a review investigation, again upon the request of European producers, to assess if the methodology of calculating and adapting the minimum import price was still appropriate. This review investigation was terminated on 7 January 2016, without modifying the minimum import price or the methodology for its adaptation.
On 23 September 2013, SolarWorld, together with other EU producers, lodged an action at the EU’s General Court, asking for an annulment of the price undertaking agreed upon between mainland Chinese solar panel producers and the Commission. SolarWorld argued that the minimum import price is not high enough to remedy the harmful effects of dumping.
The General Court dismissed this claim in an order of 14 January 2015, holding the action inadmissible, since the price undertaking does not directly affect the legal situation of the European producers. In addition, the Court noted that the Commission decision accepting the undertaking is not a regulatory act susceptible to an action for annulment.
With a separate action of 28 February 2014, SolarWorld again brought legal proceedings before the General Court, this time attacking the price undertaking by challenging Article 3 of the Regulation imposing definitive measures. This Article stipulates that duties do not apply to companies for which an undertaking has been accepted. With its action, SolarWorld aimed to have the duties apply to all imports of solar panels from mainland China, without any exception for imports of products that comply with the conditions of the price undertaking.
By means of an order of 1 February 2016, the General Court sided with the Council and Commission and dismissed SolarWorld’s action as inadmissible. It was noted that challenging one aspect, i.e. the price undertaking of the Regulation imposing definitive measures, would fundamentally alter the conditions of the anti-dumping duties. Without the undertaking, duties would become applicable to all imports rather than to a part of imports, and it cannot be certain that, under such conditions, the Regulation imposing definitive duties would have been adopted in the first place.
Since the contested measure, Article 3 of the Regulation imposing definitive duties, is not severable from the remainder of the definitive Regulation, it cannot be challenged by an action for annulment.
While the duties were originally only imposed to last until December 2015, the measures are currently still in place as the Commission is conducting an expiry review investigation. If the Commission were to find that revoking the measures could lead to a continuation or recurrence of injury and dumping/subsidisation, the measures can be extended for a new period of up to five years.