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Terrific News for the AEC

This month we received two terrific decisions out of Washington D.C.  The first was the report by the Wall Street Journal that Liu Zhongtian, founder of China ZhongWang, has been indicted by a federal grand jury on charges that he evaded nearly $2 billion in tariffs as part of a conspiracy to smuggle massive quantities of aluminum into the U.S.  The second was the final decision being made in our circumvention case against Vietnam.

First, Mr. Liu.  The AEC has been in a state of conflict with ZhongWang (ZW) since before we won our case.  ZhongWang and its affiliates were the number one exporter of aluminum extrusions into the U.S. prior to our filing.  Reports indicate that anywhere from 65-85% of all extrusions dumped into the U.S. from 2008-2010 were from ZW or its business affiliates.  Many of us will remember Peng Cheng, as one example.  Then the AEC exposed the perplexing mountain of extrusions produced in China and shipped to the Mexican desert, which led to the attempt to open a re-melt facility in Barstow, CA.  But ultimately, it was the fake pallets that caught up to Mr. Liu.  Reports flooded the market of massive amounts of fake aluminum pallets being exported to the U.S. and stored in warehouses.  At that point the AEC launched its scope clarification case against ZhongWang, which we won.  That decision declared the fake pallets to be covered by our orders and subject to duties.  Since then it has been widely reported that all U.S. assets of Mr. Liu and his family were seized, including the pallets.  And now, we have the indictment.  It’s impossible to predict if Mr. Liu will be extradited to the U.S. (probably not).  Regardless, it is a tremendous vindication for the AEC to see these indictments and know that after extensive investigation in this matter by U.S. officials the facts proved we were right all along.

Last week we received a final determination in our long-running circumvention case against Vietnam.  Consistent with its affirmative preliminary determination, Commerce continued to find that imports of aluminum extrusions exported from Vietnam that are made from aluminum previously extruded in China are circumventing the Orders. Commerce made a country-wide ruling, applying the results to all imports of merchandise subject to the inquiry from Vietnam, regardless of producer, exporter, or importer.   In addition to relying on the evidence we provided, Commerce again applied adverse inferences due to the failure to participate by Zhongwang.  Likewise, Commerce again found that additional factors, such as the pattern of trade, the affiliation between GVA and Zhongwang, and import trends, also support a finding of circumvention. Lastly, as established in the preliminary determination, to avoid paying AD/CVD cash deposits on entries of aluminum extrusions from Vietnam that were completed in Vietnam using aluminum not previously extruded in China, importers and exporters will need to complete and maintain certifications and supporting documentation that they will need to provide to CBP and/or Commerce upon request. 
Once again the AEC finds itself back in the news chasing bad actors while the global trade war heats up.  It is great to report these results to you considering the long road we’ve taken to get here. However, we must fight these issues so that others will see that the U.S. is serious about enforcing its trade orders.  And as for the AEC, these bad actors are well advised to stay away from our industry!

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