German customs office uncovers tax evasion scheme with Chinese solar imports

Customs investigators in Bavaria have revealed the smuggling of solar modules from China sold at dumping prices in Germany worth at least 33 million euros. The customs office said it had searched the offices of a company based in Munich that offered the solar power modules as well as the premises of other companies and private persons that are possibly related to the tax and tariff evasion case in three other German cities. "The buyers are suspected to knowingly have purchased Chinese solar modules from the Munich-based company that have been imported to Germany in disregard of minimum import prices," the customs office said. The investigators explained that the suspects had used "a well-known business model," whereby the solar modules are initially declared at the customs office as being bought at regular minimum prices but that part of the purchase price had later been refunded to buyers through so-called "kick-back payments." This means that the buyers ultimately had paid Chinese market prices, which lie far below those required in the European Union. The solar modules had been imported in more than 700 sea containers via the port of Rotterdam and were used in solar farms in Germany and France, the customs office said.

The EU introduced tariffs on Chinese solar modules in 2013 to shield its solar power market from what was regarded as dumping prices enabled by support of the Chinese government. The tariffs expired in 2018, leading to mixed reactions among solar power companies, with those still producing in Europe rejecting the end of trade restrictions while those who merely install, maintain and operate solar farms said lower prices would breathe new life into the sector and help Europe to achieve its climate targets.