Chinese steel steals Vietnam steel to evade EU taxes

The anti-fraud agency of the European Commission (OLAF) said it had discovered that Chinese steel was shipped to Vietnam and labeled "Made in Vietnam" to avoid taxation under the rules.
 
OLAF said organic steel produced by Chinese enterprises was exported to Vietnam to obtain certificates of Vietnamese origin before exporting to the EU. With this practice, Chinese steel companies have evaded antidumping duties of nearly € 8.2 million ($ 9.6 million) from the EU.

 

OLAF said that the amount of steel involved in the case is quite small and that the situation has also ended since the end of 2016. However, according to many participants in the market, Vietnam, although not fraud, but still the 'center' for Chinese enterprises to carry out the steel trade.

OLAF sent financial advisory documents to the customs authorities of EU countries, including Belgium, Greece, Slovenia, Italy, Finland, Portugal, Lithuania, Romania and Switzerland, to revoke anti-dumping and anti-subsidy taxes on Chinese steel.

Trade tensions between Beijing and Western nations continue to increase with the United States offering a tough line even for China, which produces half of the world's steel. Western manufacturers hope the EU will launch a similar fraud investigation into steel products imported from China.

Although no investigation has yet been conducted on this issue, EU officials say they will not hesitate to investigate if fraudulent claims are received.

"If the EU applies China's anti-dumping tax on imports from Vietnam, it will fill the gaps for Asian producers when it comes to imports," said Jefferies analyst Setherd Rosenfeld. EU market ".

 

The United States is due to promptly rule on US-imposed Chinese steelmakers to ship their shipments to Vietnam for processing into anti-hot-rolling and anti-corrosion steels, before selling them to the United States.

According to some estimates, up to 90% of the total value of Vietnamese steel exported to the US is produced in China.

The United States is also investigating a similar case involving 1 million tons of aluminum allegedly shipped to Vietnam and then to Mexico to evade US taxes. China now produces half of the world's aluminum output.

"OLAF's lawsuit will undoubtedly increase the suspicions of the US Department of Commerce, and it is not surprising if there is an EU complaint about fraud through Vietnam," said Laurent Ruessmann, a partner. of the law firm FieldFisher.

Authorities in Vietnam have not commented on this issue, while the Commerce Ministry said it has not been informed of the US or OLAF case.

US imports of stainless steel and cold rolled steel from China are on the downward trend since the government decided to levy taxes in the year, according to a report by the World Steel Council (ISSB). 2016, reduced to more than 45,000 tonnes from 1.2 million tons by 2015.
Vietnam is the 6th largest importer of steel in the world.
 
However, imports of these two products from Vietnam in the same period increased 10 times to nearly 700,000 tons.

In the EU, imports of stainless steel China is relatively stable in the year ended in August, but at the same time, imports of this item from Vietnam increased sharply. EU began imposing countervailing duties on stainless steel originating in China from August this year.

Vietnam is the 6th largest importer of steel in the world. Accordingly, the government imposed a number of tariffs on Chinese steel in recent years in an effort to protect the domestic steel industry and overcome the steel trade deficit with China.

According to the Organization for Economic Co-operation and Development (OECD), Vietnam's steel output has nearly doubled last year to 21.15 million tonnes, almost meeting domestic demand, at 22.3 million said Vietnam Steel Association.