The trading company smuggled rare earths, and both the company and the legal representative were fined

The trading company smuggled rare earths, and both the company and the legal representative were fined

Q: Our company imports a batch of goods, and is investigated by the customs and believes that it needs to apply for an import license for dual-use items and technologies, and our company will be punished, how will it be punished?

Answer: It depends on your company's illegal situation. If your company does not have the subjective intent to evade the import license of dual-use items and technologies, you may be subject to a fine. If there is a subjective intention to evade the import license of dual-use items and technologies, it constitutes smuggling, and the corresponding administrative or criminal punishment must be imposed in conjunction with the crime of smuggling. According to Article 35 of the Administrative Measures for the Import and Export Licenses of Dual-Use Items and Technologies issued by Decree No. 29 of 2005 of the Ministry of Commerce and the General Administration of Customs, any person who imports or exports dual-use items and technologies without permission or beyond the scope of the license shall be punished in accordance with relevant laws and administrative regulations; where a crime is constituted, criminal responsibility is pursued in accordance with law. Therefore, if your company declares to the customs for the import of goods that need to apply for import licenses for dual-use items and technologies due to lack of professional knowledge, it violates the above laws and regulations. According to the provisions of Paragraph 1 of Article 14 of the Regulations on the Implementation of Customs Administrative Penalties, if the consignee or consignor of the imported or exported goods is restricted by the state in violation of the national import and export regulations, and the consignee and consignor of the imported and exported goods fail to submit the license when declaring to the customs, the import and export goods shall not be released and a fine of less than 30% of the value of the goods shall be imposed. To sum up, your company's behavior is a violation of customs laws and norms, and the specific legal consequences should be determined in combination with the facts of the case.

Typical case: On September 28, 2018, Zhong acquired a company named a trading company and moved the company to Q County, and on July 16, 2019, it was changed to a trading company in Q County (hereinafter referred to as a trading company). Zhong hired Zhu, Huang and others to carry out rare earth import and export business in T City. Mr. Zhong is the legal representative of the company and is responsible for the daily business and management of the company. Mr. Zhu and Mr. Huang are responsible for the company's customs clearance, logistics and other businesses. After verification, a trading company in the process of importing rare earth products, the actual transaction price of imported rare earth products is determined in accordance with the following methods: specifically for the owner and the mine owner at the same time to send personnel to the site to sample and send the delivered rare earth products for inspection, rare earth products to take samples in triplicate, of which the mine owner retains one, a trading company retains one, and the other is sent to the National Tungsten and Rare Earth Product Quality Supervision and Inspection Center for composition and content testing, after the test results come out, according to the sample praseodymium (Pr), neodymium (Nd), The content of rare earth elements such as terbium (Tb) and dysprosium (Dy), combined with the price of the above-mentioned metal elements published on the Shanghai non-ferrous metal trading network on the day of delivery by the miner, the actual price of imported rare earth is calculated according to a fixed formula, and a "settlement statement" (marked with the specific transaction price and calculation method) is formed, which is signed and confirmed by both the owner and the miner, which means that the actual transaction price of the rare earth product is determined. In order to obtain illegal benefits, a trading company made false import contracts, invoices and other materials for customs declaration, and deliberately understated the actual transaction price of rare earth products when declaring the import of rare earth products, and the import price of rare earth products declared by a trading company was much lower than the real transaction price of imported rare earth products. Between March and May 2019, a trading company smuggled a total of 4 imported rare earth products with customs declaration numbers of XXXXX0191000000574, XXXXX0191000000892, XXXXX0191000001441 and XXXXX0191000001559 in the above-mentioned understated price, and the total actual transaction price of imported rare earth products was RMB 10,839,176.21, while a trading company was limited The total price of imported rare earth products declared by the company to the customs is only 3,430,109.8 yuan. According to the calculation and verification of the G Customs of the People's Republic of China, a trading limited company is suspected of tax evasion of rare earth products imported under the above-mentioned four import declarations totaling 1,088,583.23 yuan, and the total value of the above-mentioned goods involved in the case is 12,436,516.97 yuan.

Legal Analysis and Compliance Guidelines: According to the provisions of Article 82, Paragraph 2 (1) of the Customs Law, any person who violates this Law and relevant laws and administrative regulations by evading customs supervision, evading tax payable, evading the state's prohibitions or restrictive management on entry and exit, or transporting, carrying, or mailing goods or articles prohibited or restricted by the state from entering or leaving the country, or goods or articles subject to tax payment in accordance with the law, is an act of smuggling. According to the provisions of Paragraph 2 of Article 82 of the Law, if any of the acts listed in the preceding paragraph are committed but do not constitute a crime, the customs shall confiscate the smuggled goods, articles and illegal gains, and may impose a fine; Goods or articles that are specially or repeatedly used to cover smuggling, and means of transport that are specially or repeatedly used for smuggling, are to be confiscated, and special equipment used to conceal smuggled goods or articles is to be ordered to be dismantled or confiscated. According to Article 7, Paragraph 2 of the Regulations on the Implementation of Customs Administrative Penalties, a person who violates the Customs Law and other relevant laws and administrative regulations, evades customs supervision, evades the tax payable, evades the state's prohibitive or restrictive management of entry and exit, evades customs supervision by concealing, camouflaging, concealing, making false declarations or other means, and transports, carries, or mails goods or articles that are prohibited or restricted from entering or leaving the country or goods or articles for which taxes shall be paid in accordance with the law through the place where the customs is established. According to the provisions of Article 9, Paragraph 1 (2) of the Regulations on the Implementation of Customs Administrative Penalties, if a person commits any of the acts listed in Articles 7 and 8 of these Regulations, and fails to submit but fails to evade taxes, or smuggles goods or articles restricted from entering or leaving the country by the state, the smuggled goods, articles and illegal gains shall be confiscated, and a fine of less than the equivalent value of the smuggled goods or articles may be imposed. In accordance with Article 56 of the Regulations on the Implementation of Administrative Penalties of the Customs, if the Customs makes an administrative penalty decision to confiscate the goods, articles and smuggled means of transport, if the relevant goods, articles or smuggled means of transport cannot or is inconvenient to confiscate, the Customs shall recover the equivalent value of the above-mentioned goods, articles and smuggled means of transport.

In this case, on September 28, 2018, Mr. Zhong acquired a company named a trading limited company, and moved the company to Q County and changed it to a trading company in Q County (hereinafter referred to as a trading company), and Mr. Zhong was the legal representative of the company and was responsible for the daily business and management of the company. Mr. Zhu and Mr. Huang are responsible for the company's customs clearance, logistics and other businesses. Between March and May 2019, a trading company smuggled four bills of rare earths by underreporting prices, and the actual transaction price of imported rare earth products totaled RMB 10,839,176.21, while the total price of imported rare earth products declared by a trading company to customs was only RMB 3,430,109.8. According to the calculation and verification of the G Customs of the People's Republic of China, a trading limited company is suspected of tax evasion of rare earth products imported under the above-mentioned four import declarations totaling 1,088,583.23 yuan, and the total value of the above-mentioned goods involved in the case is 12,436,516.97 yuan.

To sum up, the smuggling of rare earths by a trading company by understating the price constitutes the smuggling behavior listed in Article 82, Paragraph 1 (1) of the Customs Law and Article 7, Paragraph 1 (2) of the Regulations on the Implementation of Customs Administrative Penalties. In accordance with the provisions of Article 9, Paragraph 1 (3), Article 32 and Article 56 of the Regulations on the Implementation of Customs Administrative Penalties, and Article 11 of the Discretionary Criteria for Customs Administrative Penalties (I) (Announcement No. 182 [2023] of the General Administration of Customs), L Customs imposed the following administrative penalties: (1) recovering the equivalent value of the smuggled goods of RMB 7,409,066,410 from a trading company of the party; The person in charge and the person directly responsible for the parties to this case, Zhong, was warned and fined RMB 20,000.

Recommended Reading:

1 imported drying furnace, voluntarily disclosed that the operation failure was fined more than 1.45 million?

How to characterize the export of gambling chips that have not been declared?

Cockroaches lying in beef noodles

When he returned home from shopping in South Korea, he did not declare that he was convicted of smuggling

The crime of smuggling goods and articles prohibited by the state from importing and exporting: several normative sources of "prohibited" and related cases

Processing Trade Manual: False declaration of documents, consumption of smuggling, criminal non-prosecution, administrative punishment after non-prosecution

Cross-border e-commerce direct purchase (9610) regulatory method to declare the export of obscene materials

Logistics companies collude with other companies to smuggle by falsely reporting trade methods, product names and prices

The Customs Law was passed: Individuals need to enhance their awareness of customs tax-related legal risks

The freight forwarding company declared 8 bills of aluminum ingots on behalf of customers, and employees were fined more than 140,000 yuan for using the wrong certificate of origin

The main institutional innovations of the Customs Law

Declared the import of 2 game cartridges and was fined 800,000

The declaration of exporting two bird-repellent drones was fined more than 120,000 yuan

Import goods with coconut mango flavored shower gel, need a dual-use item and technology import license?

Imported substandard food must be destroyed and disposed of without authorization to feed livestock to others

Knowing that the Korean customer had sent more pomfret when he delivered the goods, he failed to truthfully declare that it constituted smuggling

Export of dangerous goods: two types of legal risks, three compliance suggestions