The government is investigating allegations that Chinese companies are using Chinese-owned special economic zones in Cambodia to export goods to the US and avoid tariffs, said Ministry of Commerce spokesman Seang Thay.
The move comes after US embassy spokesman Arend Zwartjes said the US had fined several companies for exporting goods via the Chinese-owned Sihanoukville Special Economic Zone to dodge US President Donald Trump’s tariffs on Chinese imports.
Thay told The Post on Thursday that after hearing the news, the ministry immediately acted on it. “We sent a working group to the Sihanoukville Special Economic Zone the same day to see if it is true. We will not allow it to happen,” he said.
Thay said if the accusations are true, the firms will be fined and/or their export licences will be revoked.
“We will not ignore the issue. We will lose the Generalised System of Preferences [GSP] provided by the US if we do not take any action,” he said.
Zwartjes told The Post on Thursday: “Companies sometimes seek to avoid tariffs and pass through products to the US via transhipment.
“The Department of Homeland Security has inspected and fined a number of companies for evading tariffs in the US by routing goods through Cambodia, and has cooperated with the Cambodian government in these efforts,” he said.
Zwartjes said all the companies operated out of the Sihanoukville Special Economic Zone.
However, he refused to say what kind of goods the companies had been exporting, referring the question to Homeland Security.
Cambodian exports to the US have seen a strong expansion this year, surpassing $1 billion in the first quarter for the first time, thanks largely to a boost in travel goods exports.
Cambodian-made suitcases and handbags have been provided access to the US market under the GSP programme since July 2016. Access has significantly contributed to increasing the value of the Kingdom’s exports to the country.
Cambodian Chamber of Commerce vice-president Lim Heng echoed Thay’s comments.
“It will impact Cambodia’s benefits if it turns out to be true. We are provided with GSP and the EU’s Everything But Arms agreement to create jobs for our people. It’s nothing for us if we are merely used for transhipment,” he said.
The ongoing Sino-US trade war has pushed foreign manufacturers to relocate their production bases from China to Southeast Asian countries to avoid tariffs. Some Chinese firms are seeking to avoid tariffs and pass products to the US via transhipment.
Earlier this month, Hanoi declared it will crack down on companies illegally using “Made in Vietnam” labels on items destined for the US in an attempt to skirt the tariffs.
Exporters have begun shifting production from China to Vietnam to avoid 25 per cent levies imposed by Trump on $200 billion worth of Chinese goods.
However, the Vietnamese government said some manufacturers are illegally claiming that their goods, such as seafood, textiles and agricultural products, are produced in Vietnam when they are actually from China.