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Oil Trader Gunvor Pursued by China for Allegedly Evading Tariffs

Gunvor Group Ltd., one of the world’s largest energy traders, was ordered to pay the Chinese government $54 million for import tariffs it allegedly evaded by smuggling oil into the country.

Illegal income of 378 million yuan ($54 million) must be confiscated from Gunvor’s Singapore unit and transferred to the Chinese treasury, according to a Guangzhou court ruling dated Sept. 26 and seen by Bloomberg News. That ruling came at the end of a case against Dikun Yin, a former Singapore-based managing director at Gunvor, who was sentenced to 12 years in prison for his role in allegedly evading Chinese tariffs on oil imports.

Gunvor said the company wasn’t a party to the court proceedings against Yin and was unable to defend itself.

“Gunvor contests the conclusion in the judgment and the basis on which it was reached,” a spokesman for the Geneva-based energy trader said in an emailed statement.

The case concerns oil-product shipments into China from the Philippines, which benefit from preferential tax treatment under a treaty with Southeast Asian nations. From August 2014 to May 2016, Gunvor smuggled about 1.3 million tons of light cycle oil in 36 shipments into China by falsely reporting that it originated in the Philippines, the court said. The court said Gunvor transported gasoil and light cycle oil from other countries to Subic Bay in the Philippines, before changing certificates, such as the bills of lading, to show the products were originally produced in that country.

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