AEC Files New Circumvention Petition on Chinese Aluminum Extrusions

The Aluminum Extruders Council (AEC), through its Aluminum Extrusions Fair Trade Committee (AEFTC), has filed a new circumvention petition against China Zhongwang Holdings Limited and its network of affiliates. AEC alleges that Chinese aluminum extrusions produced by Zhongwang are converted in Vietnam before being exported to the U.S., and that the extrusions are circumventing the antidumping (AD) and countervailing (CVD) duty orders on aluminum extrusions from China. AEC requests that the U.S. Department of Commerce issue its final circumvention determination within 45 days of receiving the petition.

According to AEC, following the department’s determinations in December 2016 and June 2017 that Zhongwang’s pallets, which had initially been exported to the U.S. to evade AD/CVD duties were subject to the orders, Zhongwang shipped substantial quantities of these pallets to its affiliate in Vietnam, Global Vietnam Aluminum Co. (GVA) to continue to circumvent and evade the orders.

In September 2017, the U.S. Department of Justice filed a complaint against Perfectus Aluminum, an affiliate of Zhongwang, claiming that the company imported more than 2 million bogus aluminum pallets between 2011 and 2014 and stored them at separate warehouses with the intent to melt the pallets into aluminum billet for sale in the U.S.

The AEFTC’s petition provides the organization’s evidence that it says shows GVA in Vietnam is changing the shape and form of these Chinese extrusions in minor ways and exporting them back to the U.S., claiming that their origin is Vietnamese, to circumvent the orders.

The public version reads, “Perfectus implemented an ‘export program’ to remove the millions of pallets that had been illegally imported into the United States and instead send them to Vietnam to be melted down and re-extruded for export back to the U.S. market as Vietnamese aluminum, free of AD and CVD duties. Perfectus exported at least 6,337 containers of the pallets from the U.S. according to this plan in 2016.”

According to the petition, 1.7 million tons of aluminum extrusions, worth $5 billion, were amassed by GVA.

“The petition lays out an extensive amount of research, much of which is confidential, of the circumvention scheme,” says Nancy Molenda, director of communications at AEC. “[It’s] a country-wide allegation that would apply to other Vietnamese producers that also convert the circumvented Chinese aluminum extrusions before exporting to the U.S. The evidence indicates that substantial quantities of Chinese aluminum extrusions are being shipped to Vietnam directly from China as well as from various transshipment points across the globe for conversion.”

Jeff Henderson, president of the AEC, calls the petition an important step for the industry to fight to close transshipment and circumvention points and to have the orders enforced fully.

“These blatant attempts to evade duties and flood the market with unfairly traded Chinese aluminum extrusions must be halted,” he says.

The AEC works closely with several of its international partners to monitor transshipment and circumvention of the various extrusions orders against China.

“Transshipment and circumvention by Chinese producers is a rampant global problem that requires a concerted coordinated effort. The Chinese go to great lengths to undermine the remedial relief of orders around the world, combating that requires a global effort,” says Molenda. “The filing of this petition represents months of work and a concerted effort to shut down the rampant transshipment and circumvention taking place. The U.S. producers operate on market principals and play by the rules. They expect the AD and CVD orders they worked so hard for to correct the unfair trade taking place. Allowing Chinese producers to undermine that relief by evading the duties is not acceptable and the AEC and its global partners will work vigorously to combat Chinese cheating wherever it occurs.”

The department has 45 days to initiate the investigation. It will then issue a preliminary determination and a final determination approximately 300 days from the date of initiation.

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