(ECNS) -- A new customs rule to regulate overseas purchasing services, or "daigou," might put thousands of agencies and individuals at risk of being guilty of smuggling.
Agencies and individuals who make cross-border transactions are subject to oversight from the country's customs authority, including submitting lists of items and filing customs declarations, according to the new rule issued by China's General Administration of Customs that has taken effect since August 1.
Insiders said items will be taxed in accordance with the Tariff on Baggage and Articles Accompanying Incoming Passengers and Personal Postal Articles.
The new rule is mostly aimed at individual purchasing agents, a head of an overseas shopping website told the Beijing News. "If they didn't keep records before, they will be regarded as smugglers."
In China, more and more people have turned to daigou agents to circumvent import duties and get their hands on authentic luxury goods at lower prices.
Yet there is no official number of people working in the daigou business.
A search for the term on Taobao, China's largest online marketplace, produces over 346,000 virtual stores and more than 19 million items, from luxury brand shoes to baby formula.
With the popularity of mobile social networking apps, the daigou business has also found its ways into WeChat, a mobile instant messaging app that allows groups of friends to share their daily experiences.
Qiu Sheng, from the overseas department at the independent third-party online payment company 99bill.com, said it may become more difficult for daigou agents to earn money, as the price gap is reduced because of the import tax.
Wei Qiang, general manager of OneTouch, a Shenzhen-based integrated foreign trade services company, worried that "the customs authority taking tougher measures will also put more pressure on cross-border e-commerce traders."
Dong Yizhi, a lawyer and research fellow with the China e-Business Research Center, said e-commerce giants like Alibaba and JD.com have already made preparations through buyouts of foreign firms.
In 2013, a former flight attendant was sentenced to three years in prison for smuggling cosmetics from duty-free shops in South Korea and then selling them online in China.
New customs rules to regulate overseas purchasing agents
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