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Millions reported lost in ‘scrap’ scam

China / Dominican Republic – Companies are claiming to have been scammed out of millions of dollars after 89 containers shipped from the Dominican Republic to China and Vietnam were found to be full of ‘mud and dirt’ instead of HMS scrap.

Shipping firm Compania Sud Americana de Vapores (CSAV) and Agentes y Estibadores Portuarios (Ageport) – the port authority in Dominican Republic capital Santo Domingo have denied any involvement in the swindling of the Chinese and Vietnamese buyers who had purchased the ‘scrap’ in the country through a South American broker.

In a statement, CSAV and Ageport claim also to have been the victims of trading firm GH Recycling Export since the containers’ return cost them more than US$ 1 million. They said that, at the end of June 2009, GH contacted them to transport the ‘metal scrap’ they had sold to consignatories in China and Vietnam. They added that they facilitated the 89 containers to GH, 12 of which were sent to Vietnam and the remaining 77 to China. The alleged selling company was able to submit all necessary inspection documentation and customs permissions.

Upon arrival at their destination, the containers were inspected by customs authorities and found to contain stone and mud rather than scrap metal. Vietnamese authorities had already accepted the material but their Chinese counterparts rejected it, obliging the shipping company to return the 77 containers to the Dominican Republic.

The court of justice in Santo Domingo has issued a warrant for the arrest of the selling party. The owner of GH Recycling Export did not appear at an initial hearing and, despite several attempts, the company has not been replying to questions. Since the trade scam, the Dominican government has created a register of licensed exporters of ferrous and non-ferrous scrap.

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