ANNOUNCEMENT 18 Dec 2013In December 2013, the European Commission announced a change in import formalities.
NUMBER OF INTERVENTIONS
EC regulation 1357/2013
Report on the measure by National Board of Trade, Sweden
On 18 December 2013, the European Union published regulation 1357/2013 amending the non-preferential rules of origin for solar panels and thus enforcing legally binding rules to establish the non-preferential rules of origin for the product at hand.
According to a report by the Swedish National Board of Trade (cf. Sources), this allowed the EU to implement trade remedies against solar panels originating from China (cf. Related Measures):
Previously, the non-preferential rules of origin for solar panels were allowed to be established based on either changes in the tariff heading (solar cells and solar panels are classified under HS code 8541) or an at least 45% addition in the value-added. The former condition was kept in the rulebook yet it does not usually apply as in the step of transforming solar cells into solar panels, the HS code classification remains the same.
The latter rule on value-added, however, has been switched with a specific manufacturing or processing operation rule. This rule was established to rely on the country where solar wafers are transformed into solar cells, i.e. into the intermediate product and not the final solar panel product.
With this change, according to the interpretation in the report of the Swedish National Board of Trade (p.12), the countervailing duties imposed against Chinese solar panels were thus expanded to include all those including intermediate products (i.e. the solar cells) from China.
The regulation came into force one week after its publication, i.e. on 25 December 2015.
The change in the non-preferential rules of origin constitutes a trade distortion and shall be classified as a red measure, as, according to the WTO Agreement on Rules of Origin, "Members are required to ensure that (...) rules of origin are not used a trade policy instrument" and that "rules of origin do not themselves create restrictive, distorting or disruptive effects on international trade" (as cited in National Board of Trade report, p.2).