A Russian copper company and Chinese firms are evading taxes and circumventing the consequences of Western sanctions by trading in new copper wire disguised as scrap.
Russia and China find new ways to bypass sanctions by disguising copper as scrap
According to the publication's sources, a middleman in the remote Xinjiang Uyghur region ground the copper wire to make it difficult to distinguish from scrap, allowing exporters and importers to profit 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. The import of copper wire rod into China is taxed at the rate of 4%, and the import of Russian scrap is exempt from the duty.
New metal sales disguised as scrap, which began in December, are reflected in the discrepancy between Chinese and Russian data.
Chinese customs data showed China bought significantly more copper scrap from Russia since December, while Russian data obtained by Reuters from a trade data provider showed that the volume of scrap exported to the country, the largest trading partner, was insignificant.
China has become one of the leading destinations for Russian companies seeking to export their goods after the United States imposed sanctions on Russia over its invasion of Ukraine in February 2022.
What is known about sanctions against Russia
Western countries are constantly imposing restrictions against the Russian Federation for its war in Ukraine and other malicious activities. However, officials believe the already imposed sanctions are insufficient and call for their strengthening.
Earlier, Prosecutor General Andriy Kostin said that pressure should be increased on the Russian Federation, in particular, by introducing sectoral sanctions that will harm the aggressor's economy.
President Volodymyr Zelenskyy also stated that Western countries must strengthen sanctions against Russia. The aggressor country's missiles, particularly "Kinzhal," consist of dozens of foreign parts.
Recently, the European Council called for stronger sanctions against the Russian Federation for its invasion of Ukraine. In particular, it is proposed that a new set of measures be developed that will not allow the aggressor to bypass sanctions through third countries.
