General Administration of Customs the department under Chinese Government responsible for smooth functioning of international trades, has recently arrested total 245 suspects in special action towards cracking down smuggling of ferrous scrap which was being exported to South East Asian countries illegally without paying 40% export duty.
The preliminary investigation showed around 2.4 MnT of ferrous scrap was involved in illegal exports which amounted to the worth of RMB 4.8 Billion (USD 750 Million).
General Administration of Customs in China aggressively staged special action towards cracking down illegal exports of ferrous scrap two days ago. Under the unified command ordered to 17 departments at ports like Huangpu, Haikou, Xiamen, Ningbo, Guangzhou, Shenzhen, Nanning and Fuzhou etc around 2068 policemen had instructed to carry out United crackdown through inspections at companies suspicious of illegal collections and exports of ferrous scrap.
In the crackdown operation, around 245 suspects were arrested and around 65 smuggler companies closed down. It is also turned out that, the smuggling bands were used to declare the prices at 30%-60% of the normal ferrous scrap prices in the export market towards Customs in an attempt to evade duties. In an inspection at companies, abundant documents were discovered in support of their smuggling activity.
Mr. Yuangaofeng, the deputy director of Huangpu Custom smuggling suppression department Shatian branch said about this that the suspicious companies knew very well about the real transaction price but they deputed Custom clearing agent to declare low prices for export in order to evade 40% customs duty.
In the suburb of Haikou, the provincial capital of southern China’s Hainan province, smuggling fighters from Customs at a steel recycling yard have already seized suspect associated with illegal collection and export of ferrous scrap.
To avoid excessive export of ferrous scrap from the country, stringent export control was introduced with Custom duty upto 40%. However with the continuous price improvement of ferrous scrap in international markets in past 1-2 years against earlier years, some smuggling companies eyed on lucrative profits through exporting of ferrous scrap. While few companies started exporting and smuggling ferrous scrap illegally out of the country.
Chinese ferrous scrap exports skyrocketed in 2017 – The country surprised the whole world last year for its skyrocketed scrap exports. During CY17, China’s ferrous scrap exports summed up to 2.23 MnT as against minor ferrous scrap exports during CY16. Over a concern of environmental issues, China had closed down obsolete induction furnaces resulting in increased scrap export volumes.
While the country exported 162,690 MT ferrous scrap in Q1, 2018 witnessing sharp plunge of 81% Q-o-Q as against 840,938 MT ferrous scrap exports in Q4, 2017. Vietnam imported highest comprising 54% share in total Chinese ferrous scrap exports in Q1’2018. Followed by other South-East Asian countries like Indonesia (26%), Malaysia (5%) Japan (5%), Thailand (4%) and India (3%) respectively.
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