Leaks reveal EU efforts to close Chinese PV offshore loophole

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More details of the EU trade deal have emerged including an attempt to stop Chinese manufacturers from circumventing the legislation by sending production capacity overseas.

According to a document seen by PV Tech, Chinese firms will come under scrutiny by the European Commission should they shift factories to territories such as Taiwan and Malaysia.

Changes to manufacturing operations will have to have clear financial motivations, with those designed clearly in response to the minimum price undertaking on imports into the EU from China considered a breach of the agreement.

The document also anticipates that the 7GW market cap on annual Chinese module imports will be allocated by the Chinese Chamber of Commerce (CCCME) on a first come, first served basis. Imports over and above the annual cap will have the anti-dumping levies, averaging 47.6%, applied to them.

The CCCME will monitor the process and issue reports to the EU every quarter. Separate material seen by PV Tech confirms that CCCME has already developed a tailored online portal for manufacturers to manage their filings for the price undertaking.

All the final details of the undertaking will be put to EU member states at the European Council on 18 October at the earliest.

PV Tech also understands that both the cap and the minimum import price will be subject to change should market conditions alter compared to consumption and price levels as recorded in May and June of this year.

The wording of the price undertaking has left these mechanisms open to some interpretation but it is widely believed that a 5% change in spot prices would result in an alteration of the minimum import price. Changes to the annual quantitative cap are expected require a 10% fluctuation in consumption volumes.

A minimum six to nine month lag time is expected for this process to take place. There is nothing to suggest that these changes cannot be made in both directions.

More details have also been acquired on the price that undertaking applies to. It will be based on the Cost, Insurance and Freight (CIF) Community Frontier price.

PV Tech also understands that modules imported to the European subsidiaries of Chinese manufacturers will be subject to an additional charge if they are then resold.

On top of the €0.56 per Watt minimum import price, a 5% “cost of doing business fee” will be added to the floor price that the European operations of Chinese firms can charge third parties.

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