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China Customs Problem? Keep Your Mouth Shut!

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I try hard not to be an ass, but sometimes it is impossible.  The other day it was impossible.

Months ago, a company wrote me because it was having a problem with one of their employees. This employee had left the company and at that moment, the company realized it should have made this employee sign various trade secret agreements long ago. They came to me for some help and I essentially told them that they had left the barn door open and the horse had sprung free and now about all that we could do was try to get the horse back by using a lot of sugar.  Well, I didn’t really use such a stupid farm analogy, but you get the point.

At the end of their email, they mentioned that they were also being investigated by Chinese customs.  To which I told them that they should stop right there and retain experienced professionals to assist them.  I then regaled them with horror story after horror story of clients who had come to us after having cooperated with Chinese customs, only to have Chinese customs “turn” on them and threaten them with criminal actions, after having seen the documents.  I stressed that they should treat any Chinese customs investigation as a criminal investigation and act accordingly.  They assured me that they would. I told them not to reveal anything to China customs as “anything can and would be used against them.” They assured me that they would act accordingly.

Just got an email from them saying that they didn’t but trying to assure me that they are confident everything will work out just fine. My response was somewhat along the lines of how I had just thrown a lit match into a can of gasoline but everything would be fine.  Well, I didn’t really use such a stupid car analogy, but you get the point.  Anyway, I cannot reveal more because the matter is still ongoing, but I am a lot less optimistic than they are about how it will all get resolved.  Maybe the can won’t explode.  Maybe.

So what is the point?  The point is that no matter how warm and fuzzy you want to get with China customs, they have 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.  I am not kidding.  If China customs comes gunning for you, seek help and fast.  Why the weird picture of Kim Jung Un, especially when this blog is somewhat famous for never ever using pictures?  Two reasons.  One, Kim Jung Un looks so warm and fuzzy but he isn’t.  Two, I just figured I needed to do something/anything out of the ordinary to get people to listen on this point.

For more on this, please check out and read China’s Detention Of Foreigner For Alleged Customs Violation Should Be A Strong Warning

What do you think?

  • Ward Chartier

    About 5 years ago my employer in China was investigated not by Customs, but some other agency. Under guise of conducting a normal audit, the investigator and two assistants arrived to do the “audit” then used the information gained to extract a very large fine for violating some highly unusual law. The investigator later apologized for having lied to my employer. The source of the investigation was a ratting-out by a disgruntled former employee in a far away city. How he knew of this unusual law remains a mystery.

    The warnings in this article make tremendous sense.

  • Whirld Peas

    Though we have never spoken, your description is what happened to my company. We were approached by China customs with some questions relating to a potential small calculation error on some recent shipments. We had one of our Chinese employees gather up the documents we thought would show that nothing was wrong. Two years later and about $450,000 poorer in fines and attorney fees and threats that some of our people would be going to jail, we are finally done. Unbeknownst to us, one of our employees in China had been intentionally mislabeling incoming shipments and pocketing the difference. We didn’t know about that and if we hadn’t turned over documents that showed this, we would have been fine, since we had stopped doing that years ago and since we gave them way more documents than they needed. I like your advise to treat any requests from China customs as a criminal investigation because that is what they turn into so often. We have learned our lesson.

  • http://www.chinalawblog.com/ Dan Harris

    This comment came to me via email and it is too good/important not to post. I have redacted out anything that might lead to being able to identify the person who sent it to me.

    Interesting, but what happens when they are 100% wrong and it is bloody obvious that they are wrong? I import ________ in customs books. It is in rough form at x number of mm. The exported product is at x -10 number of meters (normal) and the recovery rate cannot therefore be higher than ___% of volume. But wait, we lose ___% (of total) in dockings so ___% and ____% (of total) of the width in machining, so ____%.

    Easy primary school stuff, but they say “no, it must be your technology”. The argument is ridiculous, but the upshot is that they want tax on the missing _______ product at the full import value (not as waste). All horse shit my friend and the reason is that they are in league with the Chinese producers who want to have falsely high recovery rates so that they can substitute _______in their customs book to avoid hefty export tax. Everybody wins except the honest players and the national treasury.

    No advice sought or needed. Just letting you know how things actually work and it has nothing to do with the law.

  • ollumi

    Very familiar story.

    Supposed disgruntled ex-employee alpha
    complained to bureau y, which then comes to our doors with no court
    document, no dictum, no id that they want to show you not to mention
    leave a copy of, no evidence of the supposed complaint in
    question(sciq), goes through your various records then pulls a
    completely arbitrary item that’s completely unrelated to the sciq but
    which may or may not be in violation of obscure law x, then you pay a
    fine or sanctions are levied based on their “evidence” and
    “interpretation” gathered.

    After the first time, which we
    resolved by making as big of a ruckus about it as possible; we’ve
    basically told every succeeding attempt(and there have been many over
    the years, some years more frequent than others) to show me sealed and
    stamped official court papers or shove it.