US Commerce Department Says Zhongwang Evaded Sanctions

US Commerce Department Says Zhongwang Evaded Sanctions
The Herbert C. Hoover Building, the headquarters of the U.S. Department of Commerce. Source: Wikimedia

The International Trade Administration of the United States Department of Commerce announced last week that it believes Chinese aluminium smelter China Zhongwang Holdings has been evading United States trade sanctions. The finding is the latest in a long string of accusations of impropriety leveled at the company this year against its trade practices.

The November 3 determination by the ITA claims that Liu Zhongtian’s firm evaded anti-dumping restrictions leveled at the company six years ago. The sanctions were put into place at the time in order to attempt to curtail the monsoon of cheap aluminium that has drown the United States aluminium production sector.

Commerce was prompted to act on the issue and responded by launching an investigation into the allegations last year. The charges in question were made by domestic aluminium trade groups and alleged that Zhongwang used several methods to avoid American tariffs, including “transshipment,” also known as the fake-semi trade.

The sanctions the Commerce Department says Zhongwang is evading were implemented against several Chinese producers in 2010 after the Department determined that those firms were the recipients of illegal government subsidies and were selling their products at below market prices. Such tariffs, which were as high as 374.15% on some items, led to Zhongwang’s sales in the United States to plunge.

In addition to preliminarily finding that Zhongwang has been evading tariffs, the memorandum, which was penned by the Commerce Department’s deputy assistant secretary for anti-dumping and countervailing duty operations Christian Marsh, also found that a variety of aluminium that wasn’t included in the 2010 sanctions should be added to the list as well.

For Zhongwang’s part, the finding said that the firm did not respond to questions nor cooperate with the investigation. According to the memorandum, Zhongwang “significantly impeded” the investigation by withholding information. In response, Zhongwang president Lu Changqing said it refused to cooperate because it ceased making the products in question prior to the initiation of the proceedings against them.