June 28, 2019 / 4:14 AM / 5 months ago

U.S. urges Cambodia to probe China-owned economic zone on tariff dodging

PHNOM PENH (Reuters) - The United States on Friday urged Cambodia to investigate a Chinese-owned special economic zone after uncovering efforts by firms operating there to evade duties on products destined for export to the United States.

FILE PHOTO: An attendent cleans the carpet next to U.S. and Chinese national flags before a news conference for the 6th round of U.S.-China Strategic and Economic Dialogue at the Great Hall of the People in Beijing, July 10, 2014. REUTERS/Jason Lee

The Sihanoukville Special Economic Zone (SSEZ), west of the Cambodian capital, Phnom Penh, has denied U.S. accusations that it allowed companies to trans-ship goods through the zone, saying an internal investigation had found no such activity.

“The United States will aggressively pursue allegations of duty evasion and utilise all available legal tools, to deter violators of U.S. customs and trade laws,” embassy spokeswoman Emily Zeeberg said in a statement emailed to Reuters.

Such tools could include civil and criminal penalties or other enforcement actions, she added.

“We call on Cambodian government authorities to look closely at governance and compliance issues at the Sihanoukville SEZ,” she added.

The SSEZ did not respond to a Reuters request for comment.

A spokesman for Cambodia’s commerce ministry, Seng Thai, declined to comment and referred to a June 23 government statement that denied the allegations as “baseless”, and added that the operating procedure in such zones was clear.

Since 2017, there have been two cases of companies operating from the SSEZ having been found importing transshipped goods, such as the chemical glycine and steel pipe-fittings, and charged anti-dumping duties, the embassy added in its statement.

“In both cases, U.S. officials conducted on-site inspections in the Sihanoukville SEZ and determined that, although being represented as Cambodian, the goods in question were of Chinese origin on importation into the United States,” it added.

Vietnam’s customs this month said it had also found scores of cases of exporters illegally relabelling Chinese goods “Made in Vietnam” to avoid tariffs imposed in the U.S.-China trade war.

Reporting by Prak Chan Thul; Editing by James Pearson and Clarence Fernandez

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