Aluminium road wheels from Morocco: the EU countervailing duties explained

Commission Implementing Regulation (EU) 2025/500 of 13 March 2025 imposes definitive countervailing (anti-subsidy) duties on imports of certain aluminium road wheels (ARW) originating in Morocco. The legal basis is Article 15 of Regulation (EU) 2016/1037, the EU's basic anti-subsidy Regulation.

The investigation was initiated on 16 February 2024, following a complaint lodged on 3 January 2024 by the Association of European Wheel Manufacturers (EUWA, anonymised at its request for fear of customer retaliation).

The measure runs in parallel with definitive anti-dumping duties of 9.0% to 17.5% already in force on the same product, imposed by Commission Implementing Regulation (EU) 2023/99 of 11 January 2023. The countervailing duties stack on top of those anti-dumping duties, subject to the rule against double-counting export subsidies.

This is the EU's first countervailing-duty action against Morocco. Its defining feature is the application of the cross-border subsidy doctrine: preferential financing provided by the Government of China under the Belt and Road Initiative, channelled through the Chinese group CITIC Dicastal into its Moroccan subsidiary Dika Morocco Africa (DMA), is treated as a subsidy attributable to the Government of Morocco as the country of export.

CITIC Dicastal built its Moroccan factory partly to circumvent the EU's existing anti-dumping duties on Chinese aluminium road wheels and partly using cheap financing from Chinese state institutions. Morocco's government set up the investment framework, granted special-economic-zone access and authorisations, and retained powers to monitor the investment under a Steering Committee established by the investment agreement. On that basis, the Commission attributed the Chinese financing to Morocco.

The case rests squarely on the Court of Justice judgment of 28 November 2024 in the joined Egyptian fibreglass cases (Hengshi Egypt and Jushi Egypt, C-269/23 P and C-272/23 P, ECLI:EU:C:2024:984), the most recent authoritative ruling on the cross-border subsidy doctrine. It is the first case to apply that judgment as binding precedent after it was handed down.

CITIC Dicastal is a major Chinese manufacturer of aluminium road wheels. It established Dika Morocco Africa S.A. (DMA) as its Moroccan subsidiary, siting the factory in a Moroccan special economic zone. The Commission found two interrelated motivations for this investment: first, to circumvent the EU's existing anti-dumping duties on Chinese aluminium wheels (in force since January 2023); second, to take advantage of preferential financing available from Chinese state institutions under the Belt and Road Initiative.

The financing provided to DMA included de facto loans linked to capital goods (5.44% of DMA's total subsidy rate), de facto loans linked to inputs (2.03%), capitalised loans (1.29%), capitalised payables (1.10%), and loans from Dicastal Asia and Dicastal HK (0.51%), totalling over 10% of DMA's subsidy rate from financing instruments alone.

The Commission found that the Government of Morocco (GOM) actively enticed CITIC Dicastal to invest, offering domestic subsidies, special-economic-zone access and authorisations, while expecting in exchange Chinese technical know-how and preferential financing under the Belt and Road Initiative. Crucially, the GOM set up the cooperation framework, granted the relevant authorisations and economic-zone access, and retained monitoring powers through a Steering Committee established under Article 25 of the investment agreement.

That level of involvement by the host government crossed the attribution threshold: Morocco set up the arrangement under which the Chinese financing flowed, so the Commission treated the financial contribution as one by the Government of Morocco as the country of export. Morocco's own domestic subsidies (tax and import-duty exemptions, grants and preferential input pricing) were assessed and added on top.

The GOM rejected the attribution reasoning and argued that the WTO Agreement on Subsidies and Countervailing Measures does not allow countervailing "transnational" subsidies. The Commission noted that once the financial contribution is attributed to the GOM as the country of export, the subsidy is not transnational: it is simply a financial contribution by the country of export, to which standard CVD rules apply in full.

The Government of Morocco argued that Articles 8 and 9 of the EU-Morocco Euro-Mediterranean Association Agreement prohibit countervailing duties between the Parties, with exceptions only in Articles 24 to 27 of that Agreement (which cover anti-dumping and safeguards but do not expressly mention countervailing duties).

The Commission rejected this argument by reference to Article 36 of the Association Agreement, which makes the GATT Article VI rules (and therefore the WTO Agreement on Subsidies and Countervailing Measures) the applicable disciplines for trade-distorting subsidies, in the absence of specific implementation rules adopted by the Association Council under the Agreement.

Since no specific implementation rules on anti-subsidy measures have been adopted by the EU-Morocco Association Council, and GATT Article VI together with the WTO ASCM expressly permits countervailing duties on subsidised imports, the basic Regulation (Reg (EU) 2016/1037) applies in full. The Regulation expressly notes that nothing in it prejudges Morocco's choice of dispute-settlement avenue under the Association Agreement.

• Countervailing duty: a duty imposed to offset a countervailable subsidy granted by a third-country government that confers a benefit on exported goods, enabling those exports to undercut or undersell domestic producers in the importing market.
• Countervailable subsidy: a financial contribution by a government (or a public body or a private body entrusted by the government), conferring a benefit on the recipient, that is specific to an enterprise or industry or group of enterprises or industries within the meaning of Article 4 of Regulation (EU) 2016/1037 and the WTO SCM Agreement.
• Cross-border subsidy: a subsidy granted by the government of one country (here China) to an undertaking operating in a third country (here Morocco), treated as a countervailable subsidy attributable to the third country as the country of export where the host government's conduct demonstrates that it granted, or allowed the firm to benefit from, the financial contribution. Confirmed as lawful under EU trade defence law by the Court of Justice in the Hengshi/Jushi Egypt judgment (C-269/23 P and C-272/23 P, 28 November 2024).
• Lesser-duty rule: a rule in anti-dumping law allowing duties to be set at the level of the injury margin rather than the full dumping margin if that is lower. There is no equivalent in the current basic anti-subsidy Regulation (Reg (EU) 2016/1037). Countervailing duties are therefore set at the full subsidy amount (Article 15(1) of that Regulation).
• Material injury: significant harm to the Union industry, assessed under Article 8 of the basic Regulation by reference to volume, market share, price effects and profitability indicators. Distinct from "threat of material injury" (imminent but not yet actual harm). This Regulation finds actual material injury (not merely a threat).
• Basic anti-subsidy Regulation: Regulation (EU) 2016/1037 of the European Parliament and of the Council of 8 June 2016 on protection against subsidised imports from countries not members of the European Union (CELEX 32016R1037). The procedural and substantive framework for all EU countervailing-duty investigations.
• TARIC additional code: a four-character alphanumeric code appended to the standard Combined Nomenclature (CN) code in the EU's Integrated Tariff (TARIC) to identify a specific producer subject to an individual duty rate. The codes in this Regulation are C897 (DMA), C873 (Hands 8) and C999 (all other Morocco).

The most recent and highest-profile anti-subsidy case in the family. Three sampled Chinese BEV producers (BYD 17.0%, Geely 18.8%, SAIC 35.3%) plus Tesla Shanghai (7.8%) and a residual rate of 35.3%. Threat of material injury (not actual injury); all five undertaking offers rejected. The BEV case and the Morocco ARW case share the same legal framework (Reg (EU) 2016/1037, no lesser-duty rule) but differ on injury finding, product scope and attribution methodology.

Read the BEV CVD deep-dive

The founding case of the cross-border subsidy doctrine in EU law. The Commission found that Chinese subsidies granted to production located in the China-Egypt Suez Economic and Trade Cooperation Zone were attributable to Egypt as the country of export, using the acknowledgement-and-adoption doctrine drawn from Article 11 of the ILC Articles on State Responsibility. Duty rates: CNBM Group (China) 30.7%, Yuntianhua Group (China) 17.0%, Egyptian CNBM operations 10.9%. The Morocco ARW case is the direct heir of this precedent, now confirmed by the Court of Justice.

Read the GFF deep-dive

The intermediate step in the doctrine's development: Chinese financing channelled to Indonesian producers through the Morowali Industrial Park, found countervailable on cross-border attribution grounds. Countervailing duties range from 4.3% to 21.4%, reaching a combined maximum of 42.8% with anti-dumping duties. The Morocco ARW case is the clearest post-judgment application of this doctrine, demonstrating that the attribution analysis works equally for BRI-financed manufacturing operations outside special economic zones.

Read the stainless steel deep-dive