The Russian Copper Company (RCC) and Chinese firms are evading taxes and circumventing the effects of Western sanctions by trading new copper coils disguised as scrap. This was reported by Reuters, according to UNN.
Details
According to the newspaper's sources, the copper wire rod was shredded by an intermediary in a remote Xinjiang Uyghur region to make it difficult to distinguish from scrap, allowing exporters and importers to benefit from the difference in tariffs applied to scrap and new metal.
In December, the Russian export duty on copper wire rod was 7%, which is lower than the 10% duty on scrap. Imports of copper wire rod to China are taxed at 4%, while imports of Russian scrap are not subject to the duty.
Sales of new metal disguised as scrap, which began in December, are reflected in the discrepancy between Chinese and Russian data.
Chinese customs data indicate that China has purchased significantly more copper scrap from Russia since December, while Russian data obtained by the publication from a commercial data provider indicate that the volume of scrap exported to the country, which is its largest trading partner, was insignificant.
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.
Recall
The US is seeking to prevent Russia from developing new liquefied natural gas projects, such as Arctic LNG 2, to cut off its gas exports to Europe.