By Dan Harris
An article from CBCNews, entitled, B.C. winery owners facing life in Chinese prison for smuggling, shows how risky it can be to get on the wrong side of China’s customs service. The article is on a Canadian couple facing a long jail term in China for allegedly underreporting the value of the British Columbia wine they were importing into China:
Many in Canada see this case as a political one and calls are going out to get Prime Minister Justin Trudeau to intervene. One Canadian politician is quoted as saying “the Trudeau Liberals are mishandling the case by treating it as a consular issue, instead of a serious trade dispute.” The Canadian lawyers for the couple have also expressed their dissatisfaction with the Canadian government for not “holding China customs to account.” The lawyers also submitted a briefing paper to the Canadian government that “hints the couple became a target of Chinese wrath because they maintained their innocence” and further stating that “‘many other foreign wineries…were similarly charged but released shortly after admitting to the under–reporting and paying…fines.’”
We used to write fairly often about foreigners getting caught for China customs violations, but we mostly stopped when the number of such cases began to decline. But since Trump’s election as President, we have seen a rapid uptick in China customs problems — at least for U.S. companies. But in terms of how to avoid China customs problems, what we wrote in a 2013 post, entitled, China Customs Problem? Keep Your Mouth Shut! still holds true today:
The point is that no matter how warm and fuzzy you want to get with China customs, it has zero desire to get all warm and fuzzy with you. Their goal is to fine you as much as they can and then maybe just toss you in jail for good measure. Their goal is to make their quotas and you are their quota. If China customs comes gunning for you, seek help and fast. For more on this, please check out and read China’s Detention Of Foreigner For Alleged Customs Violation Should Be A Strong Warning
So what can you do to avoid a major China customs problem? The following is the bare minimum:
- Do not underreport or in any other way lie to China customs. China customs is really good at discovering the truth and they — like pretty much everyone else — do not like those who try to dupe them. What always shocks me is not that the companies that come to our China lawyers after having been caught by China customs were caught by China customs, but their shock at having been caught. If your website says you sell your widgets for USD$1850 and you declare their value with China customs at USD$450, you will get caught. If you have a valid basis for pricing your product differently for China (maybe the product just looks the same as the one on your website, but it isn’t) you may be able to avoid a customs problem. But if you don’t, you are in trouble and saying that everyone else does it or that your Chinese general manager told you to do it is not a defense.
- If China customs seems to be coming after you, it almost certainly is coming after you and the odds are good they are thinking about criminally prosecuting you. In other words, if China customs questions something you did, they are likely gathering up evidence to proceed against you criminally. And at this point, there two things you should do: shut your mouth and get a good lawyer.
- And if you did violate China customs laws, it often makes sense not to claim innocence because China goes much easier on those who confess. The article above hints at this But before you admit anything, get a lawyer because there are right and wrong ways to admit to things.
Be careful out there.
Dan Harris is founder of the Harris Bricken law firm, a boutique international law firm focusing on small and medium sized businesses that operate internationally. China is the fastest growing area for the firm. Dan writes ChinaLawBlog.com as a source of China legal and business information.