PHNOM PENH • The US yesterday urged Cambodia to investigate a Chinese-owned special economic zone after uncovering efforts by firms operating there to evade duties on products destined for export to the US.

The Sihanoukville Special Economic Zone (SSEZ), west of the Cambodian capital, Phnom Penh, has denied US accusations that it allowed companies to transship goods through the zone, saying an internal investigation had found no such activity.

"The United States will aggressively pursue allegations of duty evasion and utilise all available legal tools, to deter violators of US customs and trade laws," US embassy spokesman Emily Zeeberg said in a statement to Reuters.

Such tools could include civil and criminal penalties or other enforcement actions, she added.

"We call on Cambodian government authorities to look closely at governance and compliance issues at the Sihanoukville SEZ."

A spokesman for Cambodia's commerce ministry, Mr Seng Thai, declined to comment and referred to a June 23 government statement that called the allegations "baseless", and added that the operating procedure in such zones was clear.

Since 2017, there have been two cases of companies operating from the SSEZ importing transshipped goods, such as the chemical glycine and steel pipe-fittings, and charged anti-dumping duties, the embassy added in its statement.

The escalating US-China trade war has seen tit-for-tat tariffs on each other's goods.

REUTERS