3 smugglers' sentences stir debate

Three people who bought goods overseas to sell in China have been charged with smuggling and received severe sentences, triggering a heated discussion over whether the booming online purchasing agents industry has crossed a line.

Li Xiaohang, 30, a former flight attendant, was sentenced to 11 years in prison for buying makeup from duty-free shops in South Korea and passing the items through customs as personal belongings instead of goods "many times" between 2010 and August 2011.

The import duty on cosmetics, the most popular type of overseas purchase, is high in China.

Li evaded 1.13 million yuan ($178,000) in taxes, according to Beijing No 2 Intermediate People's Court, which heard this case on Monday. She also received a 500,000 yuan fine. 

Li's partners, Chu Ziqiao, 31, and Shi Haidong, 40, were responsible for buying goods from duty-free shops in South Korea and selling them through their online shops on Taobao, according to the court. 

Chu was sentenced to seven years in prison and Shi five years. 

"It's very rare to see such kind of cases involving smuggling in this way in recent years, and I never heard of a similar punishment for smuggling makeup," Li Zhitao, a publicity official of the court, told China Daily. 

In response to the case, the management authority for Chinese online marketplace Taobao, where the smuggled goods were sold, on Thursday called on other shop owners who provide online purchasing services to obey the laws and regulations and make their businesses legal.

"No more detailed measures to prevent such smuggling of goods have been released yet," said Suo Chao, a Taobao public relations staff.

More than 5,000 verified shops on Taobao provided overseas purchasing services in 2011. 

A woman surnamed Ling, who opened her online shop on Taobao two years ago to purchase goods for others from Japan, admitted that most individual purchasing agents carry or send goods as personal items through customs. 

"If they follow the process of declaring goods to customs, that will take a long time, and they won't make any money," she said, adding that competition among purchasing agents and their online shops is quite fierce, especially in recent years when more and more people have joined the industry.

She said flight attendants and people studying or living overseas are more willing to be a purchasing agent "because they can take advantage of their jobs and have plenty of time".

Even though Li and her partners were arrested, Ling said most purchasing agents who smuggle goods are not caught. 

"It's because the amount of goods we sell is not large and they can only find the previous ones through our selling records," she said, adding that she has been caught several times and been forced to pay back the duty fees. "It's just been bad luck."

Ling said she believes the punishment for Li and her partners was too heavy, and many netizens agreed.

Tang Hongxin, a lawyer specializing in criminal cases from Yingke Law Firm in Beijing, disagreed and said the 11-year sentence was not very severe. 

Under the Criminal Law, people should be sentenced to 10 or more years if the amount of taxes evaded on smuggled goods reaches 500,000 yuan, Tang said. Li's sentence was not heavy based on the taxes she evaded, he said.

"The quantity of makeup that the three smuggled must have been very large, otherwise the evasion of taxes would not have reached 1.13 million yuan," he said.

To prevent similar cases, customs officials and Taobao employees should pay more attention to purchasing agents, since they use loopholes to illegally earn money, he said.

Chen Jianwei, an analyst with Central China Futures Corp in Zhengzhou, Henan province, said a more effective way to cut down on the amount of smuggling is to reduce duties and taxes. 

"I think the high custom duties and taxes forced them to risk smuggling goods, especially individual purchasing agents. They should receive more preferential measures than companies who are in this industry," he said.