EU solar probe

The European Commission says it is launching an investigation into suspicions that Chinese solar panels are being illegally shipped through Taiwan and Malaysia to bypass EU trade restrictions.

"The Commission has concluded that sufficient evidence exists to justify the initiation of an investigation," it said Friday in the EU's Official Journal.

The investigation is the latest salvo in a long-running trade dispute between the 28-member bloc and China. The EU long alleged that China, the world's largest producer of solar panels, unfairly subsidized solar companies to undercut European competitors. A 2013 agreement imposed import quotas and set a price floor for most Chinese makers of solar panels. It expires at the end of this year.

The nine-month investigation will try to establish whether Taiwanese and Malaysian companies are true producers of solar-power products or whether Chinese manufacturers used them as fronts in the hope of circumventing the agreement. European companies have repeatedly complained about alleged Chinese violations of the 2013 deal.

The latest probe comes in response to a complaint filed by the EU ProSun industry association. The groups's president, Milan Nitzschke, said struggling European producers were "severely damaged" by the alleged Chinese actions, estimating they had cost European makers half a billion euros ($550 million).

"Such circumvention is customs fraud and must be stopped," he said.

If China is found to be at fault, the European Commission could impose heavy anti-dumping duties on Chinese products.

sgb / hg (AFP, dpa)