10/25/2010
HEADLINES
EU Probes China Fastener Transshipments Through Malaysia

Chinese exporters are using Malaysia as an illegal transshipment hub to evade European Union import duties on steel screws and bolts, Reuters reports.
 

“The Commission has at its disposal several emails from various operators in the EU and in China that confirm transshipment practices via Malaysia,” the confidential EU document claims.
 

The European Commission is likely to launch an investigation by the end of October, with 85% duties applied to fasteners manufactured by companies found participating in the illegal activity.
 

“One likely trigger for Brussels’ action is that EU fraud officials have been questioning operators in China and Malaysia for several months to uncover illegal activities by EU importers,” writes Juliane von Reppert-Bismarck of Reuters.
 

That anecdotal evidence reportedly is backed up by Malaysian export data, which shows soaring sales of fasteners to the EU. When EU duties were first applied to Chinese fasteners in 2008, Malaysia’s exports of the same product nearly tripled to 32,700 tons.
 

That trend continues, with Malaysia exporting more than 20,000 tons of fasteners to the EU in the first quarter of 2010, pushing its exports from 1% of overall EU demand in 2008 to 10%. 

The EU is working with the International Trade and Industry Ministry as well as other Malaysian agencies in its investigation.

The EU adopted antidumping duties on certain fasteners from China after concluding that Chinese producers had flooded the market with fasteners at 30% to 50% below European prices. 
 

The World Trade Organization recently criticized the way those duties were assessed, saying the EU unfairly judged China as a non-market economy when it applied duties on fasteners in January 2009. ©2010 GlobalFastenerNews.com

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