Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.

  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list

Chile sees grave errors in UN report on copper, oil exports

Electricity | Natural Gas (European) | Crude Oil | Naphtha | Metals

Market Movers Europe, Jun 24–28: Commodities focus on Middle East tensions, OPEC meeting

Metals | Non-Ferrous | Steel

Market Data - Metales

Commodities | Metals | Non-Ferrous

Battery Metals, 2nd Annual

Oil | Refined Products

Descenso interanual de la producción de las refinerías de Brasil en mayo

Chile sees grave errors in UN report on copper, oil exports


The Chilean government Wednesday said a United Nations report about the misreporting of commodity exports from developing countries of containing "serious methodological flaws."

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

The report, entitled "Trade Misinvoicing in Primary Commodities in Developing Countries" and published in July by the UN Trade and Development Conference (UNCTAD), pointed to major discrepancies in trade figures from five major commodity producers -- Chile, Ivory Coast, Nigeria, South Africa and Zambia -- which could reflect attempts to avoid tax by oil and mining companies.

Chile is the world's largest producer of copper, exporting 5.74 million mt last year.

Misinvoicing was calculated by comparing trade figures between exporting and importing countries adjusted for freight and insurance costs.

Article Continues below...

The report concluded that there was a general trend towards net underreporting of commodity exports from developing countries which suggest an attempt to reduce tax payments.

"It is therefore clear that export misinvoicing is an important channel of capital flight from these countries," the report noted.

However, in the case of Chile's copper exports, the report found huge differences between figures between the two sets of data. Exports to the Netherlands were over-invoiced by $16 billion while exports of cathode to China were under-invoiced by $3.4 billion.

"The evidence points to a need to establish a mechanism for better tracking the effective destination of Chile's copper exports," the report said.

But in a statement, Sergio Hernandez, executive vice president of the Chilean Copper Commission, which tracks the country's mineral exports on behalf of the state, said that the report contained "serious methodological flaws."

In particular, Cochilco said the report was based on customs data "which do not reflect the traceability of the globe trade in goods and represent an imperfect source of information to support the author's conclusions."

For example, the case of over-invoicing of exports to The Netherlands was explained by the importance of the Port of Rotterdam as a point of entry for products destined to all over Europe. This explains why the country received shipments of almost 200,000 mt of copper annually, four times more than the country consumes annually, Cochilco said.

Similarly, exports of copper to Germany, a major destination for goods unloaded in Rotterdam, were underinvoiced by $9 billion.

Hernandez also accused the author of assuming that any discrepancy between figures from two countries must reflect deficiencies in the quality of statistics from developing countries.

"This bias, not based on scientific fact, leads to serious errors," he said.

The report attributes the phenomenon of misinvoicing in commodity exports to three causes: tax evasion, the avoidance of currency controls or high transaction costs and long administrative procedures to undertake imports or exports.

Cochilco noted that none of these applied to Chile. The report showed that exporters largely over-reported copper exports to customs, so were if anything paying too much tax while the country's free floating currency and free trade policy made the latter two motives irrelevant.

--Tom Azzopardi,
--Edited by Richard Rubin,