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The European Commission has officially launched a countervailing duty investigation into imports of solar panels from China into the European Union.

The move follows the lodging of a complaint in September by industry association EU ProSun, led by SolarWorld, that subsidised Chinese imports were harming the European solar industry.

The EU is China's main export market for solar panels, accounting for around 80% of all Chinese export sales, which is worth approximately €21 billion (US$26.8 billion). The Commission has said this is the most significant anti-subsidy complaint it has received so far.

Milan Nitzschke, president of EU ProSun, said: “The European Commission has made a landmark decision today to scrutinise the many ways that central and local government bodies of the People’s Republic of China dish out illegal subsidies to their solar manufacturers.”

The investigation is expected to take 13 months in total. According to trade defence rules it is possible to impose provisional anti-subsidy duties within nine months provided there is sufficient preliminary evidence of subsidisation. A provisional deadline of 5 August 2013 has been set.

As part of its proceedings, the Commission will now send out questionnaires to various interested parties (e.g. government of China, exporting producers, Union producers, importers and associations).

The investigation must conclusively show that:

• there is government subsidisation which benefits the exporting producers in the country/countries concerned
• material injury has been suffered by the Union industry concerned
• there is a causal link between the subsidisation and the injury found
• the imposition of measures is not against the Union interest.

Nitzschke concluded: “The EU must act now to stop illegal Chinese subsidies to save European jobs, and what remains of our manufacturing industry. Given the speed with which China is taking over the European solar market, we call on the EU to accelerate its investigation so that measures can be imposed at the earliest date possible.”

The EU has so far initiated four anti-subsidy proceedings against China and currently has measures in force against one product (coated fine paper). In comparison, the US, which is traditionally a more prolific user of anti-subsidy investigations, has imposed 24 anti-subsidy measures against China.