Overseas professional buying to be hit by new customs rules

Want China Times, Staff Reporter 2014-09-11

A man from a computer dangles a handbag in front of a group of zombies. (Photo/CFP)

A month after China's General Administration of Customs announced a new law on cross-border e-commerce goods, overseas professional buyers have become wary of the risks they take, while coordination between authorities is needed to fully carry out the new regulations, reports People's Daily.

The Declaration No. 56 on Cross-border E-Commerce Goods Supervision released on Aug. 1 regulates that overseas purchases on someone else's behalf should be taxed and items have to be declared. Professional buyers not following the rules will be seen as guilty of tax evasion and smuggling. The rule comes partly in response to the rising volume of unreported merchandise entering the country in the guise of personal gifts or items that are free of tariffs and quality checks at customs.

These items are often purchased by professional buyers living overseas who receive requests online from buyers from China, purchase the items on their behalf and send them to China in return for a commission.

Many such professional buyers are Chinese overseas students or residents and supplement their income with the commissions from buyers.

The new law also seeks to guard the consumer, as many of the branded items bought in this way are knockoffs, the report said — perhaps somewhat speciously.

Xiao Lin is a Chinese student in Canada and a professional buyer of luxury bags. She claims to help people buy authentic branded merchandise. According to the People's Daily, she is selling knockoffs.

In many cases, the imitations were originally made in China, sent abroad to be repackaged and flown back to China to be sold as the real thing, said the report.

"Overseas purchasing via professional buyers is based on mutual trust between the buyer and the service provider." said Xu Xiao, another professional buyer. "It can be a barrier for the Chinese buyers, who cannot distinguish the fake from the real, and are not likely to take the items for inspection at a proper store."

A staffer at the customs administration said overseas professional purchasing occurs under the regulations on cross-border personal items. Some professional buyers split large quantities of merchandise into small packages disguised as personal items which seldom attract attention as long as the volume is kept within "reasonable" limits.

Xu Xiao, who has been in the trade for four years, said she has never been caught with a large amount of foreign goods with her when she goes through customs. In other words, the definition of a "reasonable amount" can be tricky and has there is certainly a gray area, according to the report.

Xiao Lin said the cost of her business will go up significantly if she has to report the items she sends and pay tax on them. "I will wait and see for a while," she said. "If the situation is not good, I'll have to change my job."

A customs officer in Shenzhen said however that the industry and authorities such as the finance department, customs, quality inspection departments and the banks are largely working independently. The rules should be strengthened and the authorities must cooperate in the system that carries out the supervision of the regulations.