ShanghaiDaily.com has reported that a wine smuggler, Sun Xitai, has been jailed for life for illegally bringing over 70,000 bottles worth 45 million yuan (US$ 7.128 million) to China’s mainland.
This has been China’s biggest wine smuggling case. Despite being previously convicted in 2002 when he was sentenced to 1 year in prison and 1 year’s reprieve in the city of Tianjin, Sun Xitai continued his smuggling activities between January 2004 and December 2009.
Sun, aged 62, set up three Beijing trading companies (one of which was Beijing Jiatai Wine Trading Co Ltd) to cover his smuggling activities. Sun, was said to have imported red wine from France, Britain and Hong Kong amongst others on more than 80 occasions.
To minimize customs payment, Sun is alleged to have declared acquisition prices much lower than the actual prices he paid and lied about the names of the wine.
Sun is alleged to have given high-end red wines unfamiliar Chinese names to pass them off as cheap brands. By doing this, he declared much lower prices for premier wines such as Chateau Lafite Rothschild, Chateau Latour and Chateau Margaux.
Customs officials said they confiscated 27 fake company seals and invoices and found real invoices indicating the true price of imported red wines in Sun’s office. Sun is alleged to have asked suppliers to put a few cheap wines on top and hide more expensive ones below in the container in order to trick customs officials into thinking the whole consignment was one of cheap wine.
Each imported bottle of red wine is taxed at around 50% of its acquisition price. To dodge the tax and increase their profit margin, a Chinese report in Legal Daily said that many people file false declarations to mislead customs officials.
The report also said that about 70% of imported red wines sold in China were smuggled which is sabotaging the legitimate industry.
Sun said at his trial that he had no choice but to smuggle, as the tax rate on wines was too high for him:
“It would be difficult to stay in business if I went through official channels”.
Sun, a native of north eastern Liaoning Province, pleaded guilty at court but insisted his profits were just 4 million yuan. His secretary, Meng Li, was sentenced to five years in prison and fined 2 million yuan for her involvement.
The Legal Daily has said that registering wine with customs under a false name and with a lower price or concealing high-end wines in packages of cheap wine are the most frequent methods of duping customs these days. French customs’ records from 2007 show that the amount of wine exported to China far exceeds the number of bottles recorded as arriving by customs in China – I wonder how the figures add up today?