Shanghai Customs announced on December 6 that it had cracked a smuggling case for textile machinery parts. Criminal suspects smuggled imported textile machinery spare parts by registering domestic companies and exclusively acting as foreign brands, with underreporting prices, with a low reporting rate of 90% and a case value of 100 million yuan.

Articles such as top combs are very important accessories in the textile industry. Due to their relatively complicated precision requirements, China relies partly on foreign imports. In January 2015, the Shanghai Customs Anti-Smuggling Police passed the price comparison and found that the price of the top comb from Shanghai Shiyi International Trading Co., Ltd. imported from a German company was significantly lower. The case handlers also found three sets of invoices in the company’s staff computer. They are: price invoices imported from foreign countries, counterfeit price invoices, and real settlement invoices.

After investigation, from March 2009, the suspect Ma Mou made a proposal for smuggling for profit from the foreigner S who was the domestic agent of the German brand. After listening to Ma’s suggestion, Ms. S transferred the company to Ma’s business, and she went abroad to avoid the legal risks brought by smuggling. Ma took the form of counterfeit invoices and under-reported payment models. Among them, the price invoices imported from foreign countries are higher than the real sales price, which are displayed to customers for marketing and promote sales; the counterfeit under-reported price invoices are lower than the real sales price, and are used for tax evasion when reporting to customs. The settlement invoice, which is the actual sales price, is used for settlement with the company.

According to the data, the import volume of the enterprises involved in the case accounts for 90% of the imports of textile machinery parts in China. In the absence of a large number of market competitors, if legally operated, the annual turnover of the products of the agent can reach RMB 30 million. But under the temptation of greater interests, the criminal suspect Ma chose to take risks.

At present, the Shanghai No. 3 Intermediate People's Court has issued a judgment. Shanghai Shiyi International Trade Co., Ltd. was fined 50 million yuan, and the defendant Ma was sentenced to 8 years in prison. (Legal Network)