CHINA S customs authorities detained a Glencore trader as part of an investigation into the potential evasion of millions of dollars in taxes on fuel imports, sources with direct knowledge of the situation said Friday.
Chinese customs authorities have since late last year been looking into imports of power kerosene, a fuel of a quality between diesel and kerosene that can easily be turned into diesel, but is not subject to a hefty consumption tax which otherwise applies to diesel or kerosene.
China levies a consumption tax of about US$125 per ton on imports of diesel or jet kerosene, but power kerosene is exempt.
Li Buhua, a Chinese national who is a member of Glencore s Beijing-based trading team, was detained by local customs authorities and released the week before last on bail, sources with direct knowledge of the situation told Reuters.
Glencore confirmed an employee had been detained but did not identify him. It said it sold 120,000 tons of mixed kerosene and power kerosene, which was stored at a Singapore tank farm. The customer, Guangdong Zhenrong Energy, took the cargo away in four ships over a period of about two months.
These were cargoes that were sold free-on-board at Singapore to a Chinese customer the title and economic interest transferred to the customer at Singapore, a Glencore spokesman said. It s not clear to us why our field officer was arrested. We presume it was to help the authorities.
Officials at Zhenrong s Beijing headquarters were not immediately available for comment.
The investigation involves a 100,000-ton cargo Glencore brought in through China s Zhuhai customs port late last year, said the sources. On those figures, the shipment would be worth around US$80 million and value of the tax would be about US$12.5 million.(SD-Agencies)
