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.