Russia and China sell new copper disguised as scrap to circumvent sanctions
Illustrative photo (Unian)
Russian copper company (RCC) and Chinese firms are dodging taxes and circumventing the consequences of Western sanctions by trading a new copper billet disguised as scrap metal, according to Reuters.
According to sources, the copper billet was shredded by an intermediary in the remote Xinjiang-Uyghur region to make it difficult to distinguish from scrap, allowing exporters and importers to benefit from the tariff differential between scrap and new metal.
In December, the Russian export duty on copper billets was 7%, lower than the 10% duty on scrap. Importing copper billets into China is taxed at 4%, while no duty is applied to Russian scrap imports.
Sales of the new metal disguised as scrap, which began in December, are reflected in the discrepancy between Chinese and Russian data.
Chinese customs data shows that since December, China has purchased significantly more copper scrap from Russia, while Russian data obtained by Reuters from a commercial data provider shows that the volume of scrap exported to the country, its largest trading partner, has been negligible.
China has become a major destination for Russian companies seeking to export their goods after the United States imposed sanctions on Russia for its invasion of Ukraine in February 2022.
Sanctions against Russia
Western countries continuously impose restrictions on Russia for its war in Ukraine and other malign activities. However, officials believe that the sanctions already imposed are insufficient and call for their strengthening.
Earlier, Prosecutor General Andrii Kostin said that pressure on Russia should be increased, particularly by imposing sectoral sanctions that would harm the aggressor's economy.
President Volodymyr Zelenskyy also said that Western countries need to strengthen sanctions against Russia, as missiles of the aggressor country, including Kinzhals, consist of dozens of foreign components.
Recently, the European Council called for stronger sanctions against Russia for its invasion of Ukraine. In particular, there is a proposal to develop a new set of measures that would prevent the aggressor from circumventing sanctions through third countries.
