(Updates to add details throughout of the EU's draft findings)
By Philip Blenkinsop
BRUSSELS, Aug 20 (Reuters) - The European Commission
published on Tuesday the draft findings of its high-profile
investigation into alleged subsidies for imports of Chinese-made
electric vehicles, which included some revisions to proposed
punitive tariffs.
WHAT IS THE DRAFT DEFINITIVE DECISION?
The Commission published what it said was its draft
definitive tariff decision. This could become the EU's final
measure on Chinese-made EVs once its investigation is concluded
in about two months.
It follows the provisional stage of the investigation which
launched in October 2023.
This draft decision reflects the comments received from
interested parties such as EV makers on the provisional duties
set on July 5. It also concludes some investigative steps that
had not been finalised at the provisional stage.
The Commission will confirm whether it will apply final
duties, known as definitive duties, by Oct. 30.
WHAT IS THAT LATEST DECISION?
The main new element was the big cut in Tesla's
extra tariff to 9% from a provisional 20.8% after the U.S. EV
maker requested the Commission calculate a separate individual
rate for it.
Volkswagen's SEAT subsidiary will also receive a
lower tariff on its Cupra Tavascan, produced by VW's
majority-owned joint venture in China. That means it was among
the companies classed as cooperating with the EU probe.
BMW's joint venture in China which produces the
electric Mini will also get a lower tariff.
The Commission said some Chinese companies in JVs with EU
automakers may receive lower planned punitive duties on
Chinese-made EV imports.
It also decided not to retroactively collect countervailing
duties.
WHAT HAPPENS NEXT?
Interested parties such as China and EV producers now have
10 days - until Aug. 30 - to comment and request hearings on the
final disclosure.
The Commission already visited more than 100 sites of
automakers in China and Europe and done the bulk of its
investigation.
As an alternative to duties, exporters can commit to selling
their products at or above a minimum price. Chinese exporters
agreed such an undertaking in the case of solar panels a decade
ago. However, cars are not commodities, so it is hard to see how
a minimum price could be applied.
WHO DECIDES?
The proposed final duties will be subject to a vote by the
EU's 27 states. The Commission's proposal will be implemented
unless a qualified majority of 15 EU members representing 65% of
the EU population vote against.
Definitive duties would be confirmed by Oct. 30 and
typically apply for five years.
Until then, Brussels and Beijing could still thrash out a
compromise to avert or soften tariffs.
WHAT HAPPENS AFTER THE INVESTIGATION?
Any company not in the sample group of BYD,
Geely and SAIC that wishes to have its
own individual duty can ask for an "accelerated review" just
after the imposition of definitive measures. Such a review
should last a maximum of nine months.
The Commission can also carry out an "interim review" after
a year has elapsed if the measures are no longer necessary or if
they are not sufficient to counteract subsidies.
The Commission itself often looks into whether producers are
evading duties via exports of parts for assembly elsewhere. For
the EU, such circumvention exists if 60% or more of the value of
parts are imported from the country subject to duties and if the
value added in the assembly is no more than 25%.
Companies can challenge the measures at the European Court
of Justice. China has launched a challenge at the World Trade
Organization. Both legal paths can take well over a year.
The EU Commission has said it is confident its investigation
and measures are compatible with WTO rules.