Why was the complainant kept anonymous by the Commission?

It is unknown who filed the complaint with the European Commission. As a result, it is difficult to know for certain what motivated the move against Moroccan-made rims. However, within the framework of the European investigation, “it is possible to request confidentiality of the complainant’s identity, but it is not easy to obtain,” says Marie-Sophie Dibling.

The procedure requires proof of a genuine fear of retaliation, “that is the only acceptable justification,” she explains. The lawyer imagines, for example, that the complainant in this case might sell products in Morocco or own a site in China, and that their clients or public authorities might penalize them for their intervention with the European Commission.

That does indeed seem to be the case. “The Commission considered that there was indeed a serious risk of retaliation and accepted that the complainant’s name not be disclosed,” the decision states.

How does an anti-subsidy investigation work?

In Europe, when a local company suspects one of its foreign competitors of receiving subsidies that give it an unfair advantage in the market, it can refer the matter to the Commission. If the European Executive considers the suspicions to be sufficiently grounded, it launches an investigation aimed at assessing the potential benefits alleged by the complainant.

As part of this process, it asks the authorities of the concerned country “to cooperate during the investigation and to complete a questionnaire, which goes into great detail,” explains our source. The subsidy typically comes from the state, so it is up to that state to explain to the investigators how these subsidies work.

And indeed, in the document published by the Commission, Morocco is asked, for example, to provide even the memorandum of understanding signed by the Kingdom and the Middle Kingdom in 2016 — a request that was refused by Rabat.

By what right does Europe request such sensitive information from Morocco?

The request for information as sensitive and confidential as this, in the context of a simple subsidy investigation, may seem excessive. However, it’s important to note that this practice exists in many countries — including Morocco — as indicated on the “Anti-subsidy Overview” page of the Moroccan Ministry of Industry and Trade’s website. Moreover, in practice, some of the information provided by the respondent is supposed to be kept confidential by the Commission. “This is a standard practice that applies to all countries in the world,” says Marie-Sophie Dibling.

Why cooperate?

A legitimate question. After all, if the European Union does not obtain the information it needs to assess the alleged subsidies, the investigation will fall short.

But it’s still a bad idea, comments Marie-Sophie Dibling, because “in the absence of cooperation, the EU resorts to the best information available.”

Often vague, this data is then interpreted to the disadvantage of the non-cooperative country, and customs duties may rise sharply as a result. In other words, “if the country wants the lowest possible customs duties, it cooperates,” summarizes Marie-Sophie Dibling.

Pay or disclose: is Morocco being held over a barrel?

Yes and no. According to the lawyer, in these situations, everything comes down to a balancing act. There are countries, like China, “that never respond to the questionnaire. Never,” she emphasizes.

As a result, their products suspected of being subsidized are subject to high tariffs when entering the EU market.

Other countries, like Morocco, evaluate the strategic value of each piece of information. If Rabat considers a piece of data to be confidential, it keeps it; otherwise, to obtain lower customs duties, the data is provided.

Why is Hands 8 less affected than DMA?

The two companies targeted by the investigation are Hands 8 and Dika Morocco Africa (DMA). The first was subjected to a countervailing duty rate of 5.6%, and the second 31.4%. Both manufacture aluminum rims in Morocco, so how can such a difference in treatment be explained?

The answer comes down to one word: China. Dika Morocco Africa is a Morocco-based company owned by the Chinese group Dicastal, while Hands 8 belongs to a Korean group. But the company’s origin alone does not justify the Commission’s decision.

A close look at the European investigation shows that all of the subsidies granted to Hands 8 came from Morocco. The European Executive determined that these benefits warranted a countervailing duty rate of 5.6%.

For DMA, Moroccan subsidies account for only 5.44% of the countervailing rate, while subsidies and advantages from China were calculated at 26.02%. The subtext seems clear: Europe’s concern lies less with Moroccan-made rims than with the Chinese benefits it accuses them of receiving.

What are these advantages?

On the Moroccan side, the Commission identified four sources of subsidies: a financial contribution in the form of a direct transfer from the Industrial Development and Investment Fund (FDII), tax and import duty exemptions in Industrial Acceleration Zones (ZAI), preferential financing from Attijariwafa Bank, and the provision of land “for less than adequate remuneration.”

Written in French by Marin Daniel Thézard, edited in English by Eric Nielson