Winter Park, Florida 23/10/2015 - The Aluminum Extruders Council (AEC) has filed a petition against China Zhongwang Holdings Ltd. alleging that the company has "systematically and illegally evaded duties" on aluminium extrusions imported into the United States.
In August, a previously-unknown research house called Dupre Analytics alleged that Zhongwang was exporting lightly fabricated aluminium products to Mexico, Vietnam, Malaysia in an attempt the avoid tax duties.
China currently has a 15-percent duty on the export of primary aluminium but shipments of semi-finished and finished metal are tax-free. The country even offers a refund of value-added tax (VAT) on exports of some products, reducing the cost and making it more competitive in foreign markets.
The AEC, meanwhile, contends that Zhongwang has been exporting 5xxx series alloy extrusions into the US from Mexico in order to avoid US antidumping and countervailing duties.
"The alleged scheme involves hundreds of millions of pounds of aluminium extrusions that are simply cut and welded into aluminium slabs," the AEC said in a release. "Upon entering the US these extrusions are being identified as ‘pallets’ even though the testimony the AEC has gathered makes it clear the sole purpose of these extrusions is to re-melt them back into billets."
In July, the AEC released a statement calling on the US government to investigate issues of transshipment and circumvention by Zhongwang.
"We have made our case to US Customs regarding the transshipment allegations, and now we are filing our circumvention case with the Department of Commerce,” said Jeff Henderson, AEC director of operations, said.
Once filed, Commerce has 45 days to review and decide whether or not to launch a full investigation, according to the release.
In previous statements, Zhongwang has denied any wrongdoing and has argued that Dupre only released the report so that it might profit from a drop in the company's share price.
“We reprimand the anonymous short-seller who irresponsibly released such a malicious report based on fictitious information against the group…The company will consider and take all the reasonable measures to protect investors' interests, and reserve the right to take legal action against the short-selling organization,” Lu Changqing, executive director and vice president of Zhongwang, said in an August 13 statement.