On September 15, the Department of Justice filed a complaint against California-based Perfectus Aluminum, accusing Perfectus of evading $1.5 billion in subsidy and dumping tariffs on Chinese imports of aluminum pallets.

According to the complaint, Perfectus is owned and controlled by Zhongtian Liu, a Chinese national, and the founder and chairman of China Zhongwang, one of the world’s largest industrial aluminum extrusion companies.

DOJ alleges Perfectus illegally imported 2.1 million aluminum pallets from Zhongwang Holdings Ltd. between 2011 and 2014. The government claims the pallets were actually aluminum extrusions, which carry a 374.15 percent countervailing duty (CVD) for the Zhongwang Group.

The complaint accused Perfectus Aluminum of merging several entities in 2014 to dispose of Zhongwang Holdings massive stockpile of aluminum. Pengcheng, Transport Aluminum, Century American Aluminum, American Apex Aluminum, Global Aluminum, Aluminum Source, and Aluminum Industrial were the Chinese companies included in the 2014 merger.

The complaint claims Liu also attempted to develop another facility in Barstow, California, by melting aluminum ballets to be sold as billet in the U.S. However, a stock analysis report alleged Liu Zhongtian of fraudulent activity, causing him to abandon the development. Instead, Liu shipped 6,337 shipping containers of pallets to Vietnam to melt the pallets and re-import the aluminum to the U.S. without having to pay Chinese duties on Vietnamese imports.

According to the DOJ, the purpose of the company’s action was not to use or sell the aluminum pallets, but instead to avoid antidumping and countervailing duties imposed by the U.S. Department of Commerce on certain types of Chinese aluminum.

For more information, contact: Dan Cannistra, Alex Schaefer, Cherie Walterman

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Photo of Daniel Cannistra Daniel Cannistra

Dan Cannistra is a partner in the firm’s Washington, D.C. office. His practice focuses on legislative, executive and regulatory representation of domestic and international clients on a broad spectrum of international trade matters. Dan has represented domestic and foreign companies in over 75

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Dan Cannistra is a partner in the firm’s Washington, D.C. office. His practice focuses on legislative, executive and regulatory representation of domestic and international clients on a broad spectrum of international trade matters. Dan has represented domestic and foreign companies in over 75 U.S. antidumping and countervailing duty cases before the U.S. Department of Commerce and the U.S. International Trade Commission under the Tariff Act of 1930. Many of these matters involved appeals to the U.S. Court of International Trade, the U.S. Court of Appeals for the Federal Circuit, binational panels under the North American Free Trade Agreement (NAFTA), and dispute settlement proceedings before the World Trade Organization (WTO). Dan has also represented clients in antidumping proceedings in the European Union, Canada, Mexico, Brazil, India, Thailand, Singapore, Guatemala and Taiwan.

Prior to joining Crowell & Moring, Dan was a director in a national accounting firm providing customs and international trade guidance to multinational clients related to the supply and distribution of goods and services across international borders. Areas of specialization included antidumping and countervailing duties and policy, trade remedies and litigation, free trade agreements and negotiations, classification and valuation, and international trade and development.

Dan’s government appointments include service to U.S. Trade Representative on the roster of international trade practitioners to resolve antidumping disputes involving NAFTA members. For the European Commission, Dan provided advice and training on international trade and antidumping methodology and practice. In addition, Dan has served as an international trade consultant to the governments of Guatemala and Singapore, providing technical advice to these governments on the application of international trade regulations consistent with international law and World Trade Organization agreements and the General Agreement on Tariffs and Trade, Agreement on Antidumping.

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Photo of Frances P. Hadfield Frances P. Hadfield

Frances P. Hadfield is a counsel in Crowell & Moring’s International Trade Group in the firm’s New York office. Her practice focuses on forced labor and withhold release orders (WRO), import regulatory compliance, and customs litigation. She regularly advises corporations on matters involving…

Frances P. Hadfield is a counsel in Crowell & Moring’s International Trade Group in the firm’s New York office. Her practice focuses on forced labor and withhold release orders (WRO), import regulatory compliance, and customs litigation. She regularly advises corporations on matters involving customs compliance, audits, customs enforcement, as well as import penalties.

Frances represents clients before the U.S. Court of International Trade and the U.S. Court of Appeals for the Federal Circuit, as well as in proceedings at the administrative level. She advises corporations on both substantive federal and state regulatory issues that involve U.S. Customs and Border Protection, the Federal Trade Commission, Food and Drug Administration, and U.S. Fish & Wildlife in matters pertaining to product admissibility, audits, classification, import restrictions, investigations, marking, licenses, origin, penalties, and tariff preference programs.

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