Solar panels – the story continues

One of the effects of the antidumping duties on Chinese solar panels, is that factories in China are considering to relocate their productions facilities to other countries.  Malaysia, Vietnam and even South Africa are, so I have heard, suitable alternatives.

One of the immediate questions that will come up with import of solar panels from any of these countries, is if the panels are of that other country’s origin or (still) of Chinese origin because the panels consist, for example, of Chinese components.  How should you establish what is the origin of such panels?

Just recently, the European Commission published an Implementing Regulation which prescribes how the origin of the solar panels ought to be established.  It concerns implementing regulation No 1357/2013 which explains that the production process of crystalline silicon photovoltaic modules or panels can be divided into the following major steps:

1.       production of silicon wafers;

2.       processing of silicon wafers into crystalline silicon photovoltaic cells;

3.       assembly of several crystalline silicon photovoltaic cells into a crystalline silicon photovoltaic module or panel.

According to this implementing regulation, the most important stage in the manufacture of solar panels is the processing of silicon wafers into crystalline silicon photovoltaic cells. That is the decisive production stage during which the use to which the component parts of the panel or module are to be put becomes definite and where they are given their specific qualities.  The country of origin is therefore the country in which the silicon wafers are processed into crystalline silicon photovoltaic cells.

Any importer would preferably simply rely on the Certificate of Origin for the solar panels, but that involves a substantial risk.  European case law demonstrates that the importer remains to a large extend responsible for verifying the origin. See for example the decision of the European Court of Justice in the case of Lagura Vermogensverwaltung C-438/11 in which the ECJ ruled that … it should be borne in mind that a prudent trader aware of the rules must, in calculating the benefits from trade in goods likely to enjoy tariff preferences, assess the risks inherent in the market which he is considering and accept them as normal trade risks). Although that case is about preferential origin I am convinced that the same would apply for the non-preferential origin.

Because of that responsibility , I think that importers of solar panels, as well as their freight forwarders, ought to be careful  these days and inquire into the manufacturing process of the solar panels, in order to verify if the panels are indeed of the indicated origin.