The 28-member European Union on Monday said it would impose punitive duties on solar panels imported from China in line with an earlier proposal made by the bloc's executive, the European Commission.

Negotiators in Brussels said the duties would be slapped on Chinese companies which did not comply with export rules agreed jointly by the EU and China last summer, with the punitive tariffs to come into effect on December 6.

From the EU's perspective, the move is meant as a reaction to Chinese companies selling their products abroad below the cost of production or below the price in the domestic market, a practice known as dumping. This, the EU says, is aided by illegal state aid in many cases.

Trade war scenario

Making use of its right to go it alone while national investigations were still ongoing, the Commission imposed temporary duties on Chinese solar panels as early as June of this year, which are now to be turned into permanent punitive tariffs for a full two years.

Brussels and Beijing had earlier agreed on admissible price ceilings and import volumes to be exempt from the duties.

The protracted bilateral row over solar panel imports had led to an alarming level of tensions between the EU and China and had threatened the planned extension of economic ties between the two sides.

hg/pfd (dpa, AFP)