Jail terms loom for smugglers at border

PUBLISHED : Wednesday, 04 May, 2011, 12:00am
UPDATED : Wednesday, 04 May, 2011, 12:00am


Tens of thousands of people smuggling untaxed electronic products, baby formula and other popular merchandise across the border for a quick profit could face jail as Beijing toughens the law against trafficking.

Under a national law amendment coming into force this week, a traveller caught more than twice a year carrying untaxed goods in bulk will face criminal charges, with a maximum penalty of three years in jail.

While the law is imposed uniformly across the country, it will be felt most by cross-border traders regularly coming to Hong Kong to buy cheap, good quality products to sell in Shenzhen.

The phenomenon is so widespread that many Hong Kong families - especially those living in the New Territories - say they have trouble buying milk formula for their babies, as the stock is snapped up by the cross-border traders.

More than 600 residents in the northern New Territories launched a petition earlier this year, urging a departure tax to be imposed on people taking unused infant formula out of Hong Kong. Trafficking of other popular products, such as iPhones or iPads, is also rampant.

Shenzhen customs officials said one trader was caught trafficking untaxed goods from Hong Kong to Shenzhen 32 times in just one day.

'The Hong Kong-Shenzhen border is one of the busiest nationwide, with about 500,000 people crossing it every day. Some smugglers mix in with the crowds. In the past the laws could not effectively deter such behaviour ... now the new law can be a powerful deterrence,' Shenzhen customs said. People bringing products valued at more than 5,000 yuan (HK$6,000) to the mainland must pay a 20 per cent tax. In the past, traffickers faced a criminal offence only if the tax payable was more than 50,000 yuan.

Those caught carrying untaxed products lower than that amount needed only to pay a fine - up to twice the original price.

But under the new law, traffickers will face criminal charges if caught more than twice in a year, regardless of the value of goods carried.

Some shoppers in Sheung Shui yesterday said they were worried, although traffickers could still be seen gathering outside the MTR station, loading up boxes of electronic products, milk formula and smartphones.

Beijing lawyer Liu Cheng of King and Wood said the change was introduced to make the law more flexible.

'It's easier for implementation with fixed figures, but fixed figures make it difficult to reflect the economic development and the great differences in the value of goods in different trades. For some trades the figures might be too low; for others they might be too high.'

But he also warned that the new law may leave too much discretion in the hands of customs officers. He said the judicial interpretation of the law had yet to be released so it would take some time to fully gauge its effect.

A man from Shenzhen yesterday travelled to Hong Kong with 20 colleagues to buy the Apple iPad. The 29-year-old factory worker said he was not doing it for the money but said he was worried about the new rule. 'It is too strict and unreasonable,' he said.

He said an iPad cost two months of his salary, but he still came to Hong Kong every Sunday to shop, spending HK$20,000 to HK$30,000 each time.

'We come here to shop ... sometimes we buy gifts for our friends. If the rule is set that tight, we may not be able to do shopping here anymore.'

Another mainland shopper who bought three mobile phones said she was not aware of the new law but was worried when she heard about it.

'I don't want to be mistaken for a trafficker.'

Taxing trafficker

The number of times one trader was caught trafficking untaxed goods from Hong Kong to Shenzhen in just one day: 32