U.S. DOJ Alleges Zhongwang and its Affiliate Evaded $1.5 Billion in Tariffs by Smuggling Aluminum Pallets into the Country
September 15, 2017; Wauconda, Illinois -- The Aluminum Extruders Council (AEC) has learned through a Wall Street Journal report that “the U.S. Department of Justice is alleging that a California company evaded $1.5 billion in tariffs by conducting an illegal effort to smuggle banned aluminum into the U.S.”
The article by the WSJ goes on to say, “The civil complaint signals that U.S. authorities are deepening an investigation into a long-running international aluminum scheme that allegedly involves Fontana, Calif.-based Perfectus Aluminum Inc. The complaint, part of a proceeding to seize assets, alleges that Perfectus Aluminum is controlled and “effectively owned” by Liu Zhongtian, founder and chairman of Chinese aluminum giant China Zhongwang Holdings, Inc. one of China’s biggest aluminum producers and exporters.”
In late 2015 the Aluminum Extruders Council filed a Scope Clarification/Circumvention case against Zhongwang accusing them of violating the Council’s trade orders against the Chinese aluminum extruders by shipping aluminum extrusions into the U.S. disguised as aluminum pallets. The U.S. Department of Commerce agreed with the industry and declared those extrusions to be covered by the antidumping and countervailing duty orders. That decision was not appealed by Perfectus or its parent Zhongwang.
“We want to applaud the Department of Justice’s decision to begin civil proceedings against Zhongwang’s affiliate Perfectus. Today’s filing is the culmination of a concerted effort by the AEC and its members in conjunction with Customs and the Department of Commerce to investigate Zhongwang’s alleged attempts to avoid paying duties since the orders went into effect. The AEC will continue to assist the agencies in their efforts to investigate this matter going forward,” said Jeff Henderson, President of the Aluminum Extruders Council. “Furthermore,” he continued, “this should be a clear signal to those that seek to evade, circumvent, or in any way violate our orders that such activities will be uncovered and prosecuted.”
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The AEC has led the U.S. aluminum extrusion industry in achieving level competition by winning tariff protection that offsets unfair trade practices of extruders/importers of aluminum profiles produced in China. The efforts have been of enormous value to domestic extruders and suppliers. They may have saved the industry. Conservatively, AEC estimates 800 million pounds per year of extrusions are being produced in the U.S. that would have otherwise been lost to China. For more information, visit www.AECFairTrade.org.
The Aluminum Extruders Council (AEC), established in 1950, is an international association dedicated to advancing the effective use of aluminum extrusion in North America. AEC is committed to bringing comprehensive information about extrusion's characteristics, applications, environmental benefits, design and technology to users, product designers, engineers and the academic community. Further, AEC is focused on enhancing the ability of its members to meet the emerging demands of the market through sharing knowledge and best practices. Advocacy programs ensure that aluminum extruders, suppliers and their products remain relevant and viable in an ever-changing legislative and regulatory climate. More than 120 member companies represent primary aluminum producers and other industry suppliers in addition to aluminum extruders operating hundreds of extrusion presses in hundreds of plants worldwide. For more information, visit the website at www.aec.org; contact AEC at firstname.lastname@example.org.