Tour Leader Sentenced for Smuggling After Bringing 597 Cosmetics Items into China
[Tip]A tour leader purchased a large quantity of cosmetics while leading a tour group abroad and carried them into China upon return. She did not intend them for personal use, but rather as inventory for a Taobao store she co-owned with her close friend. Yesterday, she and her close friend were both convicted of the crime of smuggling. Yesterday, the Hangzhou Intermediate People's Court tried and ruled on the case.
[Case]Xiao Jiang, 35, is an outbound tour leader at a travel agency in Hangzhou; Xiao Fu, 28, is Xiao Jiang’s close friend. In September 2009, the two jointly opened a Taobao store specializing in overseas purchasing of luxury skincare products, and passed Taobao’s Global Shopping certification.
The prosecutor stated: Xiao Jiang was an outbound tour leader who repeatedly took advantage of the opportunity to lead tour groups abroad to purchase cosmetics from overseas duty-free shops, carried the overseas-purchased cosmetics into the country in person, and chose the no-declaration channel when entering. Xiao Fu was mainly responsible for the daily operations and management of the Taobao store, but in November and December 2012, Xiao Fu also purchased cosmetics from overseas duty-free shops on two separate occasions, likewise failed to declare them to Customs, and carried them into the country in person for online store sales. Between March 2012 and March 2013, the two smuggled various types of cosmetics into the country, evading a total of 448,900 yuan in payable taxes.
On March 17 last year, when Xiao Jiang returned to Hangzhou from South Korea with a large bag of cosmetics just purchased from a Korean duty-free shop, she was caught on the spot while clearing customs at Xiaoshan International Airport. On that single occasion, 597 items of various brand cosmetics were found in Xiao Jiang's suitcase. Based on the shopping receipts for cosmetics purchased overseas by the two individuals, their account books, and the warehousing records from the "Wangdian Guanjia" software, which corroborated one another, the investigating authorities determined the total quantity of smuggled cosmetics and then assessed the corresponding unpaid tax of 448,900 yuan.
In the end, the court ruled that Jiang and Fu were guilty of "smuggling ordinary goods." Both were sentenced to three years in prison with a four-year reprieve and each was fined 230,000 yuan. The 597 pieces of cosmetics seized on the spot were confiscated.
(Qianjiang Evening News)
[Study Law] Does Overseas Daigou Evading Taxes Over 50,000 Yuan Constitute the Crime of Smuggling? "Reasonable Personal Use" Is the Key
In fact, many sellers engaged in daigou are unclear about how the law distinguishes smuggling from daigou. Under China's current legal provisions, the threshold for an individual to commit the crime of smuggling ordinary goods and articles is whether the amount of evaded customs duties reaches 50,000 yuan or more. For a unit committing the crime, evaded taxes exceeding 250,000 yuan constitute a crime. Those below 50,000 yuan are treated as smuggling acts and subject to administrative fines and other penalties. If the evaded taxes exceed 50,000 yuan, the party's conduct may constitute the crime of smuggling ordinary goods and articles.
Chinese laws on combating smuggling contain clear provisions regarding daigou (overseas purchasing agents). Under the Customs Law, the supervision of luggage and personal items carried by individuals entering or leaving the country follows the principle of "personal use and reasonable quantities." "Personal use" means items are for the traveler's own use or for gifts to relatives and friends, rather than for sale or lease, or in other words, are non-profit in nature. For inbound resident travelers carrying personal-use items acquired abroad, the customs shall release them duty-free if the total value does not exceed 5,000 RMB (including 5,000 RMB).
However, "daigou" does not equate to "illegal." Generally speaking, bringing items back from abroad for personal use or as gifts is legal, but bringing them back for resale may constitute smuggling. This is why customs anti-smuggling enforcement documents have consistently emphasized "reasonable personal use." Some so-called "daigou" activities are in fact exploiting legal gray areas. For example, if you purchase on someone's behalf but the recipient and the customs declaration ID both belong to that person, it can be interpreted as personal use by that individual, with you merely placing the order for them.
In addition, reselling or purchasing daigou items is also illegal. The Customs Law stipulates that directly purchasing smuggled imported goods or articles from smugglers illegally should also be subject to legal liability. The Criminal Law states that purchasing other smuggled imported goods or articles from smugglers illegally, if the amount is substantial, also constitutes a smuggling crime. Therefore, although daigou has formed an industrial chain and many consumers enjoy its benefits, purchasing daigou items identified as smuggled goods can indeed involve illegal or criminal activities.
