Criminal Case Involving an Indian National Suspected of Smuggling General Goods and Articles

Case Overview

(I) Basic Information of the Parties and Agents

Suspect: M, a foreign national from India.

Defense Attorney: Xu Jun, lawyer at Guangdong KingBridge Law Firm.

Investigative Agency: Customs Anti-Smuggling Bureau of a certain city in Yunnan Province.

Prosecuting Agency: People’s Procuratorate of a certain city in Yunnan Province.

(II) Basic Case Information

The family of the suspect, M, has been engaged in the business of buying and selling human hair in India since his father’s time. Between 2014 and 2018, Chinese buyers placed purchase orders with him. M, entrusted by the Chinese buyers, collected goods from other Indian suppliers and authorized an Indian logistics company to handle the export procedures. M charged a commission based on the weight of the collected goods. M did not handle the customs clearance procedures for exporting goods from India or importing them into China. The suspect is accused of knowingly allowing the Chinese buyers to import the human hair at a lower declared price, thus smuggling the goods into China at a lower cost. This case was investigated by the Customs Anti-Smuggling Bureau of a certain city in Yunnan Province. The suspect was criminally detained by the Customs Anti-Smuggling Bureau on August 29, 2018, for suspected smuggling of ordinary goods. The People’s Procuratorate of the city approved the arrest, and the Customs Anti-Smuggling Bureau executed the arrest on September 29, 2018.

II. Opinions of the Parties

Investigative Agency’s Opinion:
The Customs Anti-Smuggling Bureau of a certain city reviewed and concluded that between October 23, 2014, and August 6, 2018, the suspect M sold Indian human hair to Chinese buyers. M was aware that the Chinese buyer, Zheng, was smuggling human hair into China by underreporting the price, yet he still handed over the human hair to Zheng for low-cost customs clearance. M is suspected of smuggling three batches of human hair, evading customs duties amounting to RMB 617,132.35.

Defense Attorney’s Opinion:
Attorney Xu Jun intervened during the investigation stage, visiting the suspect multiple times in the detention center to understand the details of the interrogation by the investigative agency. During the review and prosecution stage, he visited the procuratorate multiple times to review the case files, analyzing the statements of the parties and the evidence, focusing on the conviction evidence and exploring key defense points.

According to M’s statement, he had sent all invoices, stamped with his legally registered company’s seal in India, containing the true transaction price of the goods, to the customers or their designated customs clearance companies in China via WeChat or email. He claimed no involvement or knowledge of how these invoices were declared to Chinese customs. M’s role was to collect goods from suppliers in India on behalf of the Chinese buyers and manage the supplier relationships, charging a commission based on the weight of the collected goods. He had no direct financial interest in the customs duties levied by Chinese customs, lacking the subjective intent to commit a crime, and had no collusion with Chinese buyers to underreport prices for smuggling purposes.

Based on M’s statements, the defense attorney repeatedly requested the investigative and prosecuting agencies to thoroughly investigate the communication records between M and the Chinese buyers and the Indian logistics company involved. Considering the existing evidence, there was insufficient basis to establish that M and the Chinese buyers had a common criminal intent and actions.

M indeed lacked the subjective motive and intent to commit a crime. His objective actions indicated that he had already provided all the invoices related to the case to the domestic buyers or their designated logistics companies, and the customs duties collected by Chinese customs had no direct financial impact on him. The defense attorney repeatedly requested the city procuratorate to review and determine that M’s actions did not constitute the crime of smuggling ordinary goods and items, requesting a decision of non-prosecution based on the facts and evidence.

III. Outcome and Reasoning

After two supplementary investigations by the public security organ, the People’s Procuratorate of a certain city in Yunnan Province still believed that the criminal facts of the case were unclear and the evidence was insufficient, not meeting the conditions for prosecution. Therefore, on November 14, 2019, it issued a non-prosecution decision numbered ×检公×邢不诉【2019】×× and delivered it to the criminal suspect, M. On November 15, 2019, the suspect was released from a detention center in a certain district of Kunming City, Yunnan Province, and safely returned to his home country.

IV. Reflections on Handling the Case

The harm of the crime of smuggling general goods and articles is mainly reflected in violating customs regulations, evading customs supervision, and evading payable tariffs. The target of infringement is the state’s management system for the import and export of general goods and articles and the tariff collection system.

The crime of smuggling general goods and articles is a simple crime. In criminal defense, defenders need to rely on administrative laws and regulations such as the Customs Law to fill in the gaps. Specifically, the “Customs Law of the People’s Republic of China” and the “Implementation Regulations of the Customs Administrative Penalties of the People’s Republic of China” both provide detailed descriptions of specific smuggling behaviors. Smuggling or actions treated as smuggling include: transporting, carrying, or mailing goods or articles prohibited or restricted by the state or goods or articles that should be taxed without approval from the State Council or its authorized organs; transporting, carrying, or mailing goods or articles that should be taxed or are prohibited or restricted by the state through customs by means of concealment, disguise, underreporting, or false reporting; using forged or altered manuals, documents, seals, accounts, or electronic data to evade customs supervision and selling goods or articles under customs supervision or inbound transportation tools without authorization within the territory; using forged or altered manuals, documents, seals, accounts, or electronic data to evade customs supervision and remove goods or articles from bonded zones or special customs supervision areas such as export processing zones without authorization; knowingly buying smuggled goods or articles directly from smugglers; or transporting, purchasing, or selling goods or articles that should be taxed without legal proof within inland waters, territorial waters, boundary rivers, or boundary lakes.

In handling this case, the defender combined the evidence materials of the entire case and the suspect’s statements to defend with the aim of obtaining a non-prosecution decision due to doubts. Ultimately, the procuratorate concluded that the facts of the case were unclear and the evidence was insufficient, leading to a non-prosecution decision. Based on this case experience, key points for defending the crime of smuggling general goods and articles were summarized:

(1) The Objective Aspect Does Not Meet the Constitutive Requirements of the Crime

1. Indirectly purchasing smuggled goods or articles from smugglers does not constitute the crime of smuggling general goods and articles.
2. If the prosecution’s evidence is insufficient to prove that the purchaser and the trustee participated in the smuggling, the trustee is innocent.

(2) The Subjective Aspect Does Not Meet the Constitutive Requirements of the Crime

1. If it cannot be proven that the defendant knew the true name of the involved goods, the defendant cannot be deemed to have the intent to smuggle.
2. If the prosecution’s evidence is insufficient to exclude reasonable doubt about whether the defendant knew he was selling bonded goods, it does not constitute the crime of smuggling general goods.
3. If the defendant only worked under someone else’s employment to receive and assist in selling imported goods, and the evidence cannot fully prove the defendant’s intent to smuggle, the act does not constitute the crime of smuggling general goods.
4. If the defendant was indeed unaware of the concealed items in the smuggled goods, the provision of conviction based on the actual smuggled items cannot be applied.
5. If the prosecution’s evidence is insufficient to prove that the actor could gain illegal benefits by not truthfully declaring to customs, the evidence is insufficient to prove the actor’s intent to profit.

(3) The Subject Aspect Does Not Meet the Constitutive Requirements of the Crime

According to the “Opinions on the Application of Laws in Handling Criminal Cases of Smuggling”: if the following characteristics are present, it can be recognized as a unit smuggling crime:

1. The smuggling crime is committed in the name of the unit, meaning it is collectively decided by the unit or decided and approved by the person in charge or other authorized personnel of the unit.
2. The purpose is to seek improper benefits for the unit or the illegal income mainly goes to the unit. Simply committing the crime in the name of the unit is not sufficient to determine a unit crime.

(4) The Evaded Tax Amount Does Not Reach the Statutory Standard for Conviction

1. If the amount of evaded tax due to smuggling goods or articles does not reach the standard for a large amount, it does not constitute the crime of smuggling general goods or articles.
2. For suspects who have no conspiracy or cooperation with each other, if the prosecution cannot prove their respective amounts of evaded taxes, the suspects cannot be convicted of the crime of smuggling general goods or articles.

In handling this case, the defense mainly focused on proving the lack of intent to smuggle. The proof of subjective intent is generally done through presumption, which can be divided into factual presumption and legal presumption. Factual presumption is based on the actor’s social status, life experience, occupation, work performance, and the cognitive level of the average person in the industry. Legal presumption is based on objective behavior stipulated by law to presume the actor’s subjective state of mind. The subjective state of mind for smuggling crimes must be intentional. If importers and exporters of goods mistakenly report elements such as the name or transaction price of the goods due to objective factors or negligence, it theoretically constitutes false declaration and does not constitute a smuggling crime due to the lack of subjective intent. Therefore, in practice, criminal suspects often avoid being identified as having subjective responsibility by claiming “wrong reporting” or “mistakenly shipped goods.” According to judicial interpretations, the following situations can directly identify the actor’s awareness of the smuggling behavior: (a) evading customs supervision by transporting, carrying, or mailing goods or articles prohibited from entering or leaving the country; (b) smuggling goods or articles using specially made equipment or transportation tools; (c) transporting, purchasing, or selling illegal goods or articles without customs approval at non-customs-established docks, shores, land borders, etc.; (d) providing false contracts, invoices, certificates, and other commercial documents to entrust others to handle customs clearance; (e) entrusting others to handle import and export business at a price significantly lower than the normal payable tax amount; (f) having been criminally or administratively punished for the same smuggling behavior. Whether the subjective intent constitutes direct or indirect intent can be argued from the above aspects, and counter-evidence should be allowed for both legal and factual presumptions. For instance, in the legal presumption mentioned, the listed six situations are foundational facts. When the foundational facts are proven, it can be presumed that the actor is aware of the smuggling behavior. Simultaneously, if there is evidence proving the actor was indeed deceived, it can be used as counter-evidence to negate subjective intent.

The essence of smuggling crimes is that individuals or units intentionally violate customs regulations by various means to transport contraband in and out of the country or evade tariffs. The investigating and prosecuting organs determine whether an individual or unit has committed smuggling by examining the declared value of the goods and the actual product value, and whether the evaded tax amount meets the prosecution standard. Additionally, in determining the amount, the relevant procedural regulations, such as strictly adhering to electronic data extraction standards, must be followed. Otherwise, it may lead to the conclusion that the facts of smuggling crimes are unclear and the evidence is insufficient. This is also the key point that defense lawyers should focus on when handling smuggling cases.