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Fifty Held in Scheme to Evade Seafood Tariffs

Sustainability Economics Politics +4 more

SHANGHAI, CHINA - Fifty suspects have been detained, accused of avoiding 73 million yuan (US$11.57 million) in tariffs by declaring foreign seafood at artificially low prices, customs authorities commented.

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The Shanghai Customs said the 50 were able to pay less money to the customhouse by declaring the lower prices, which dropped the wholesale price of the fish by 35 per cent to 50 per cent, reports ShanghaiDaily.

Despite an increasing price on the international market, the declaration prices of some popular foreign seafood remained unchanged in 2010 and last year, which aroused the attention of customs officers, who start keeping a close eye on the fishery industry.

Last November, Shanghai Customs suspected a ring engaging in the low-balling practice and began investigating.

"We found the real prices of the imported marine products after analyzing more than 200,000 data copies," an investigator told reporters at a news briefing yesterday.

The breakthrough led police to locate the buyers and their companies.

On 11 and 12 March, some 30 people involved in the ring were apprehended in Shanghai, Beijing, Ningbo, Xiamen, Shenzhen, Guangzhou, Hangzhou and Wenzhou during a special raid.

A company boss, surnamed Ming, was caught by police at the airport in Hangzhou in neighboring Zhejiang Province, as he tried to flee to the United States on 14 March.

Police said Ming asked foreign vendors to send him a genuine invoice and a fake one for the same batch of products. He kept the genuine invoice and used the fake one, which had an amount much lower than the genuine one, to declare clearance at the customs office.

Ming evaded more than three million yuan in tariffs by using the trick, police said.

Shanghai Customs said the smuggling ring had three parties - Chinese buyers, foreign sellers and declaration agents, which dominated the clearance prices of aquatic products in the industry.

Currently, there are about 760 companies importing fish and other seafood in Shanghai, and most are run by individuals. But there are only four agents offering declaration services.

"It is very difficult for individuals to declare clearance because they are unfamiliar with the rules and they can do nothing when urgent matters come," said an insider.

"Many companies choose agents because they don't want to take trouble. Without agents, you have to look for shipping companies and negotiate prices with them," the insider said.

"Here, the quickest and safest way to receive your overseas products is to listen to your agents and obey their rules. That's why many companies fell to the pressure," the insider said.

Ye Jing, an official with Shanghai Customs, said the practice was a hidden rule in the local fishery industry and that many companies, both foreign and domestic, were obliged to give in to pressure to understate the price.

Fan Shoulin, secretary-general of the Shanghai Fishery Trade Association, said the association will carry training programs to promote a healthy development of the industry.

"Shanghai has become a large consumption place for high-end marine products. It is necessary for local companies to be self-disciplined and keep themselves away from violating the laws," Fan said.

Tang Tailai, a supervising official at Tongchuan Road Seafood Market, said the bust caused a shortage and price hike of some foreign marine products, such as Australian lobsters. But the prices have returned to its normal level now, Tang told Shanghai Daily.