Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

The California Department of Justice (DOJ) has found six US-based aluminum companies affiliated to China Zhongwang Holdings guilty of circumventing import laws and tariffs worth an estimated $1.8bn. 


The California DOJ noted in a statement on Wednesday that the six companies imported aluminum extrusions into the US from China, but classified them as pallets, which do not fall under the antidumping scope since it is not a widely traded or imported commodity in the US. From 2011-2014, the parties involved did not make any sales of these items in the domestic market, DOJ investigations found. 


Later, it was discovered that these products were 6000 series alloys extrusions, which were welded together to resemble pallets. After importing, these pallets were remelted to their original form before being sold in the domestic market. In doing so, the companies evaded antidumping and countervailing duties for aluminum extrusions imported from China, the DOJ stated. 


The companies include Perfectus Aluminium, Perfectus Aluminium Acquisitions, Scuderia Development, 1001 Doubleday, Von Karman-Main Street, and 10681 Production Avenue and are tied to Chinese billionaire Liu Zhongtian and China Zhongwang Holdings. 


In 2017, the US Attorney’s Office filed a civil suit against four Southern California warehouses operated by Perfectus, which had received about 279,808 aluminum structures in the shape of pallets. This act created an inflated sales report at Zhongwang as well. Later, multiple Federal investigations led to the indictment issued by the California DOJ against the six companies and China Zhongwang today. 

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