Liu Dehua, a Chinese national, orchestrated an elaborate scheme to disguise and smuggle large quantities of Vietnamese rare earth minerals into China.

Vietnamese authorities uncovered Liu’s illegal activities as part of a broader investigation into violations related to resource exploration, smuggling, mismanagement of state assets, and environmental damage at Thai Duong Group.

A complex smuggling operation

Between October and November 2021, Liu Dehua purchased over 2 million kilograms of rare earth ore (with a concentration of 14-17%) from Doan Van Huan, Chairman and CEO of Thai Duong Group, at the Yen Phu Mine in Yen Bai. He arranged for shipments to warehouses in Hai Phong.

To process the rare earth minerals before smuggling them to China, Liu rented land in Hai Phong to set up a factory, where he stockpiled raw materials and carried out chemical processing and blending.

To facilitate operations, he used a company owned by Nguyen Thanh Doan, CEO of Truong Son Company, to apply for work permits and entry documents for Chinese workers and specialists brought into Vietnam.

Liu also hired Vu Thi Tuyet, a Hai Phong resident, as a translator and manager responsible for overseeing daily operations, monitoring expenses, and procuring chemicals for rare earth processing.

Disguising rare earth minerals for illegal export

Since the rare earth ore purchased from Doan Van Huan lacked legal invoices and did not meet Vietnam’s required export purity level of 95% Total Rare Earth Oxide (TREO), Liu ordered his workers to mix the 2 million kilograms of ore with chemicals through heat and hydrometallurgical treatment.

The resulting oxalate compound concealed the ore’s true nature, allowing it to pass customs inspections.

Liu then enlisted Khau Wei Beng, a Chinese business operator and director of Guangzhou Company, to handle the export process. The shipments were falsely declared as "Oxalate compound mixtures" instead of rare earth minerals.

Collusion in customs fraud

To execute the export, Khau Wei Beng collaborated with Leng Kai, sales director of WidelyStar Logistics Vietnam, who then contacted Tran Duc, director of Cung Ung Viet Company and Duong Lieu Company, to arrange for export authorization.

Tran Duc agreed to handle the shipments, charging $280–$400 per container. However, as the shipments lacked proper documentation, ownership verification, and foreign trade contracts, he engaged in a series of fraudulent actions.

Duc instructed his staff to use shell companies - Duong Lieu Company and NTS Company (which had no employees and was created solely for fraudulent activities) - to fabricate commercial invoices and file customs declarations falsely listing the shipments as calcium oxalate, neodymium oxalate, and magnesium oxalate.

Between May 5, 2023, and September 2, 2023, Tran Duc submitted eight fraudulent customs declarations at Dinh Vu Port Customs Office in Hai Phong, falsely declaring the export of 200,780 kg of oxalate compounds valued at $501,950.

In reality, the shipments contained rare earth minerals disguised by Liu Dehua for illegal export. Based on the actual agreed price between Doan Van Huan and Liu, the smuggled rare earth ore was worth over $307,000 (7.8 billion VND).

During the investigation, Liu Dehua fled Vietnam and returned to China. Vietnamese authorities are continuing to track his activities and assess further legal actions against all involved parties.

T. Nhung