Thread: Chinese Billionaire Linked to Giant Aluminum Stockpile in Mexican Desert

Yes - that is how they operate. Nothing is too sneaky or underhanded for them - even toxic malamine in baby formulas and lead paint on children's toys.

Homeland Security Probes U.S. Aluminum Firms Over Chinese Imports

Investigation focuses on whether Zhongwang-made products were disguised to avoid punitive U.S. tariffs

ENLARGE
The U.S. companies examined by Homeland Security investigators include New Jersey-based Aluminum Shapes. PHOTO: JOHN W. MILLER/THE WALL STREET JOURNAL


By SCOTT PATTERSON and
JOHN W. MILLER
Oct. 26, 2016 9:01 a.m. ET 22 COMMENTS

Federal investigators have launched a probe into whether U.S. companies linked to a Chinese billionaire illegally avoided punitive import tariffs on Chinese aluminum, according to people familiar with the investigation.

Department of Homeland Security agents in recent weeks questioned former employees of companies associated with Liu Zhongtian, the founder and chairman of aluminum giant China Zhongwang Holdings Ltd., the people said.

Homeland Security has been coordinating with the U.S. Department of Justice on the probe, some of the people said.

Agents are investigating whether the companies committed criminal or civil violations that could include smuggling, conspiracy and wire fraud, they said.

The Journal reported in September that the U.S. Commerce Department is investigating whether Aluminum Shapes LLC, a New Jersey company, imported pallets to remelt as a way to avoid tariffs, part of a broader probe into Mr. Liu’s activities.

The Commerce Department said preliminary findings would be released in coming weeks. Aluminum Shapes last month denied that the pallets were used as raw material for its plant.

RELATED

• China Official Disputes U.S. Allegations on Trade Practices (Sept. 29)
• New Jersey Factory Linked to Chinese Aluminum Probe (Sept. 15)
• Chinese Billionaire Linked to Giant Aluminum Stockpile in Mexican Desert (Sept. 9)

Homeland Security’s investigation, which is in its early stages, is focusing on whether aluminum products that Zhongwang produced in China—and which are subject to U.S. tariffs as high as 374.15%—were brought into the U.S. in the form of shipping pallets at much lower tariff rates, people familiar with the matter said.

Homeland Security is also investigating whether nearly one million tons of aluminum shipped to Aluminicaste Fundición de México, a factory once owned by Mr. Liu’s son, were part of an effort to evade U.S. tariffs by routing the metal through another country to disguise its origins, the people familiar with the investigation said.

Mr. Liu and China Zhongwang were subjects of a September Wall Street Journal article detailing allegations that firms linked to Mr. Liu routed aluminum through Mexico in an effort to disguise its origin and avoid American tariffs. Mr. Liu denied any connection to the Mexican stockpile.

Charles Pok, a California attorney who has represented Mr. Liu and currently helps run Aluminicaste, said it “is a totally misguided allegation” to claim the Mexico business shipped aluminum into the U.S. in circumvention of tariffs.

The U.S. companies examined by Homeland Security investigators include Aluminum Shapes and Peng Cheng Aluminum Enterprise Inc. in Walnut, Calif., according to people familiar with the matter.

“Most of the questions were about the pallets,” said Garry Goehring,a former Aluminum Shapes manager who says two Homeland Security agents recently interviewed him about his time at the company. The agents asked about Mr. Liu and whether pallets stored at Aluminum Shapes came from overseas, among other things, Mr. Goehring said.

Solomon Rosenthal, a spokesman for Aluminum Shapes, said the company isn’t aware of the Homeland Security investigation or of any illegal imports of aluminum shipping pallets. “We welcome an official investigation and will participate and assist in any way possible, as we have not engaged in any improprieties,” he said.

A China Zhongwang spokeswoman said the company hasn’t been contacted by U.S. authorities about an investigation and that neither Zhongwang nor Mr. Liu have ties to Aluminum Shapes or Peng Cheng.

In December 2014, Peng Cheng and Aluminum Shapes merged into Perfectus Aluminum, a California company launched by Mr. Liu’s son. Perfectus also is a focus of the probe, people familiar with the matter said. Perfectus and Peng Cheng couldn’t be reached for comment.

Aluminum Shapes has since been spun off from Perfectus, a Shapes spokesman said. Its owner, Jacky Cheung, also owns Perfectus and Aluminicaste. People familiar with the matter say Mr. Cheung is an associate of Liu Zhongtian. Mr. Cheung didn’t respond to requests for comment.

China Zhongwang is the world’s second-largest producer of “extrusions”—pipes, rods and panels used in finished products. Pallets are made by welding extrusions together.

The Commerce Department in 2010 found Chinese producers including China Zhongwang received illegal subsidies in China and were “dumping”—selling aluminum products below market price—in the U.S.

The Commerce Department slapped several of the Chinese producers with tariffs as high as 374.15%. Typical tariffs on other aluminum products are about 5%. That includes pallets, which aren’t subject to punitive tariffs even though they are made from extrusions.

U.S. aluminum-industry officials last year alleged to the Commerce Department that China Zhongwang disguised extrusions as pallets to export to U.S. companies controlled by Mr. Liu. Shipping records show large numbers of aluminum pallets were delivered from China to Aluminum Shapes and Peng Cheng in recent years.

Zhongwang says it has exported aluminum pallets to the U.S. and that it follows all established trade laws. An Aluminum Shapes spokesman last month said the company didn’t own the thousands of tons of Chinese-made aluminum pallets warehoused at its facilities and merely charged storage fees to the owner, who the spokesman said was a former Aluminum Shapes executive.

Mr. Goehring, the former Aluminum Shapes manager who says he spoke to investigators, said the agents showed him black-and-white photos of about three dozen individuals, including Mr. Liu, Mr. Pok and Johnson Shao, who headed Aluminum Shapes and Peng Cheng. Mr. Liu in June said Mr. Shao was China Zhongwang’s U.S. retail agent.

Mr. Pok said he would “cooperate with any investigation.” Attempts to reach Mr. Shao and Mr. Liu’s son were unsuccessful.

Mr. Goehring said he quit in 2014 after Mr. Liu accused him of financial improprieties, which he denies. Aluminum Shapes confirmed Mr. Goehring was a former employee.

The agents also inquired about Chinese workers at the New Jersey plant, Mr. Goehring said. In 2014, Aluminum Shapes brought workers from China to install equipment, according to Mr. Goehring and internal documents reviewed by the Journal.

Officials with U.S. Customs and Border Protection, part of Homeland Security, examined aluminum imported by Shapes in 2015 and decided they weren’t the kind of extrusions covered by the tariffs, a Customs letter the company provided to the Journal says.

http://www.wsj.com/articles/homeland...rts-1477486917

Giant Aluminum Stockpile Was Shipped From Mexico to Vietnam

Unusual moves are connected to businesses associated with family of Chinese billionaire Liu Zhongtian

ENLARGE
Aluminum under tarps at the remote southern Vietnamese port of Vung Tau. Part of the aluminum stockpile was still in the Mexican desert a few months ago. PHOTO: VU TRONG KHANH/THE WALL STREET JOURNAL


By SCOTT PATTERSON,
BIMAN MUKHERJI and
VU TRONG KHANH
Dec. 1, 2016 5:30 a.m. ET 45 COMMENTS

VUNG TAU, Vietnam—One of the world’s largest aluminum stockpiles, which until a few months ago was stored under hay and plastic tarp in a Mexican desert, has been moved to a remote port here in southern Vietnam.

Starting early this year, 500,000 metric tons of aluminum has been trucked out of the Mexican city of San José Iturbide and shipped to Vietnam, according to shipping records and people familiar with the matter. Much of it now sits under black tarps, guarded by baton-wielding men on motorcycles, at a factory and waterfront complex in this South China Sea port about a two-hour drive south of Ho Chi Minh City.

The unusually large shipments have captivated traders and aluminum-industry experts and sparked worries about what it means for global markets and aluminum prices. According to Global Trade Information Services, which tracks world-wide trade, Vietnam was the destination of 91% of Mexico’s aluminum-extrusion exports this year—a rarely used trade route for aluminum in recent years.

The Mexican stockpile, now in Vietnam, was the subject of a Wall Street Journal article in September that traced the metal’s connections to one of China’s richest men, Liu Zhongtian, chairman of aluminum giant China Zhongwang Holdings. American aluminum executives accused Mr. Liu of sending his metal to Mexico to disguise its Chinese origins and evade American tariffs—a charge Mr. Liu and China Zhongwang denied.

RELATED ARTICLES

• Homeland Security Probes U.S. Aluminum Firms Over Chinese Imports (Oct. 26)
• China Official Disputes U.S. Allegations on Trade Practices (Sept. 29)
• New Jersey Factory Linked to Chinese Aluminum Probe (Sept. 15)
• Chinese Billionaire Linked to Giant Aluminum Stockpile in Mexican Desert (Sept. 9)

There are connections between businesses associated with Mr. Liu and his family and the metal piling up in Vietnam, according to shipping and business records and people who have studied the shipments.

Exports of Chinese aluminum extrusions—shaped forms of the metal—to the U.S. are subject to antidumping tariffs as high as 374%, compared with tariffs of about 5% for Vietnamese aluminum extrusions.

The metal’s journey from Mexico to Vietnam coincided with a surge in exports to Vietnam from two other countries: China and the U.S., via ports near businesses associated with Mr. Liu, according to shipping records and people familiar with the companies.

For example, 65% of American exports of aluminum extrusions were to Vietnam through August this year, compared with 3% in 2015, according to GTIS. Vietnamese import records show a substantial amount of the aluminum imported from the U.S. this year came from Perfectus Aluminum Inc.

Perfectus once was owned by Mr. Liu’s son and now is owned by Jacky Cheung, a business associate of Mr. Liu’s who also owns Aluminicaste Fundición de México, a Mexican company that oversaw the Mexican aluminum stockpile, according to business records and people familiar with the matter. Mr. Liu’s son also once owned Aluminicaste.
ENLARGE



Mr. Cheung also is one of the owners of Global Vietnam Aluminum Co., which owns the Vung Tau factory where part of the Mexican aluminum is currently stored.

Mr. Liu has said he had no connection to his son’s businesses in Mexico or the U.S. “In this matter, I have not helped him,” he told The Wall Street Journal in a June interview, referring to Aluminicaste.

Repeated attempts to reach Mr. Liu’s son for comment were unsuccessful.

Aluminicaste, which has denied ownership of the aluminum in Mexico, declined to comment. Global Vietnam referred questions to Mr. Cheung, who didn’t respond to requests for comment.

China Zhongwang spokeswoman Harriet Lau said the company has no connection to the metal in Vietnam.

“Financially, it does not make commercial sense to stockpile aluminum products,” she said, since shipping and warehousing products is costly and doesn’t generate a profit for the company.

Mr. Liu, China Zhongwang and Aluminicaste also have denied any connection to the vanished metal stockpile in Mexico.

All told, since the start of 2015, about 1.7 million tons of aluminum extrusions worth $5 billion have been shipped to Vietnam from Mexico, China and the U.S., according to GTIS.

The world’s next-biggest reported cache of aluminum is in the Netherlands, a metal-trading hub, and only about a third as big.

“It’s an enormous stockpile,” says Eoin Dinsmore, an aluminum analyst at business-intelligence firm CRU Group in London, which estimates the Vietnamese cache represents 14% of the world’s total inventory of aluminum. “If it’s moved into other markets, it will have a significant impact” on prices.

Most of the 1.7 million tons shipped to Vietnam has come through the seaside complex in Vung Tau, according to Mr. Dinsmore, citing satellite photos that show the massive stockpiles. Vung Tau is the primary shipping port of Global Vietnam Aluminum, the only Vietnamese company that could handle a stockpile so large, said Jorge Vazquez, founder of Harbor Aluminum Intelligence LLC, which studies global aluminum markets, including those in Vietnam.

The U.S. Commerce Department in 2010 accused China Zhongwang of selling aluminum products in the U.S. at below-market rates and slapped it with tariffs as high as 374%.

In early November, the Commerce Department said China Zhongwang was circumventing those sanctions. China Zhongwang didn’t respond to the 2010 Commerce investigation.

In a statement last month, the company said it no longer sold the type of extrusion targeted by Commerce in the U.S., in response to the department’s latest investigation.

A large amount of Vietnam’s aluminum imports has come from China.

Nearly all of Vietnam’s Chinese aluminum-extrusion imports came from Liaoning province, where China Zhongwang’s plants are located, said Boyden Gray, former U.S. ambassador to the European Union and a founding partner at Boyden Gray & Associates PLLC.

A representative for Mr. Gray said his firm is studying China Zhongwang and Mr. Liu’s trade activities.

“It is clear that aluminum products held by Global Vietnam Aluminum were produced by China Zhongwang,” Mr. Gray said, claiming clear ties between Mr. Liu and several of the companies that have received and shipped large shipments of aluminum in the U.S., Mexico and Vietnam.

http://www.wsj.com/articles/giant-al...nam-1480588228

Vietnam suspicious of massive aluminum stockpile linked to Chinese billionaire

By VnExpress May 4, 2017 | 04:46 pm GMT+7

The stockpile is believed to have arrived in Vietnam as part of a scheme to evade trade restrictions by a Chinese billionaire.

Vietnamese officials from three ministries will inspect a giant aluminum stockpile at a foreign company's factory in the southern province of Ba Ria-Vung Tau to see if it has been moved to Vietnam as part of a tariff evasion scheme, the government said.

Following instructions from Deputy Prime Minister Trinh Dinh Dung, officials from the trade, the finance and the planning and investment ministries will verify the origin and purpose of the aluminum stock, which was reported by the Wall Street Journal to have arrived in the coastal city of Vung Tau late last year.

The stock is thought to belong to Global Vietnam Aluminium Co Ltd, a $250 million joint venture between Jacky Cheung and Wang Tong, both Chinese-Australian businessmen.

The company is developing a factory with an annual capacity of 200,000 metric tons of aluminum billet, and it is unclear if the large stockpile of aluminum will be used as raw materials for the upcoming factory or re-exported elsewhere.

The aluminum is believed to have arrived in Vietnam as part of a scheme to evade trade restrictions, according to U.S. industry officials and foreign media reports.

Bloomberg has traced the stockpile’s connections to one of China’s richest men, Liu Zhongtian, chairman of aluminum giant China Zhongwang Holdings.

A Wall Street Journal report said the aluminum stock was stored in Mexico before being moved to Vietnam, with about 1.7 million tons of aluminum transported to Vung Tau since 2015 by a company co-owned by one of Liu’s business associates, based on trade and corporate records. Data provided by Global Trade Information Services, which tracks worldwide trade, values the aluminum at about $5 billion.

With Mexico-Vietnam rarely used as a trade route for aluminum in recent years, the report alleged that the unusual business move may have something to do with hiding the real origin of the metal.

Exports of Chinese aluminum extrusion to the U.S. market are subject to anti-dumping tariffs as high as 374 percent, compared with those of about 5 percent on Vietnamese aluminum extrusion products, the report said.

Sending the metal first to Mexico and later to Vietnam would "wash away" its Chinese origin, helping the exporter avoid the stiff tariffs imposed by the U.S.

http://e.vnexpress.net/news/business...e-3579712.html

U.S. hits China with import tax for dumping aluminum foil

This Californian Firm is Being Accused of Illegal Chinese Aluminum Imports

Reuters
Sep 14, 2017

The U.S. Justice Department has accused California-based Perfectus Aluminum Inc of illegally importing aluminum from China, evading $1.5 billion in tariffs, the Wall Street Journal reported citing a government complaint filed on Thursday.

The Justice Department alleges that Perfectus is “effectively owned” and controlled by Liu Zhongtian, founder and chairman of Chinese aluminum firm China Zhongwang Holdings Ltd , and violated a 2010 Commerce Department ban on certain aluminum imports from China, according to the civil complaint seen by the WSJ.

The complaint accuses Perfectus of illegally importing more than 2.1 million aluminum pallets from China into the United States between 2011 and 2014, the WSJ said.The complaint also said the government notified the court that it intends to seize a warehouse in Fontana that is owned by Perfectus as part of a proceeding to seize assets, according to the newspaper.

The Justice Department and Perfectus could not be reached for comment outside regular U.S. business hours.

Reuters could not immediately verify the contents of the complaint.

http://fortune.com/2017/09/14/califo...minum-imports/

Chinese millionaires are buying up this country.

Just wonder if any of them have children born in America while the mother was on 'Chinese vacation'?

If so, they are in - aren't they?