The cross-border e-commerce "order-pushing" smuggling case handled by Lawyer Hong Can's team was given a reduced sentence by the Guangdong Higher People's Court.
Date: 2024-04-09Recently, the case of a cross-border logistics company's actual controller, who was suspected of smuggling ordinary goods by "order-pushing" and was retried in the second instance, was given a reduced sentence by the Guangdong Higher People's Court, changing the original sentence from four years and three months to two years and six months.
Case Summary
The defendant was the actual controller of a cross-border logistics company and was sentenced to four years in prison by the Guangzhou Intermediate People's Court in the first instance for smuggling goods into the country by falsely declaring the trade method. Dissatisfied with the verdict, the defendant appealed. During the second instance, the Guangdong Higher People's Court found that the defendant had other similar crimes that had not been adjudicated and should be tried together, so it overturned the original judgment and remanded the case for retrial. The Guangzhou Intermediate People's Court sentenced the defendant to four years and three months in prison after retrial. After the increased sentence, the defendant appealed again and entrusted Lawyers Zhao Yue and Zhao Qinjin from Lawyer Hong Can's team as his defense attorneys for the second instance. After the active and effective defense by the two defense lawyers, the defendant was finally sentenced to two years and six months in prison by the Guangdong Higher People's Court in accordance with the law.
Case Handling Process
After accepting the commission, the legal team reviewed all the case files, met with the detained defendant on multiple occasions, and in accordance with the requirements of the team's "Defense Lawyer's Work Process for Criminal Second Instance Cases," prepared a series of defense lawyer work documents, including the "Legal Research Report on Smuggling by False Declaration of Trade Methods," "Similar Case Research Report on Smuggling by False Declaration of Trade Methods in Guangdong Province," "Comparison and Analysis Report of the Indictment and the Prosecution Opinion," "Analysis Report of the Court Trial Record," "Schematic Diagram of the Cross-Border E-Commerce Process," and "Schematic Diagram of the Relationships of the Persons Involved in the Case." These lawyer work results were submitted to the Guangdong Provincial Higher People's Court. The team had multiple phone communications with the presiding judge regarding the core defense points and legally proposed applications for holding a court hearing and meeting with the lawyers to discuss the defense opinions, in order to fully safeguard the legitimate rights and interests of the client.
Key Points of Defense
After sorting out the entire case and drawing on the team's experience in handling similar cases, the lawyers handling the case believed that the main point of contention in this case was the determination of the defendant's criminal status. The prosecution in the first instance sued the defendant as an accomplice, but both the first instance and the retrial first instance courts considered the defendant to be the principal offender. Secondly, the defendant was only partially recognized as having turned himself in. Regarding the additional charges, the original judgment held that since this part of the criminal facts was uncovered by the investigative authorities through active investigation rather than the defendant's voluntary surrender, it was not recognized as a voluntary surrender for this part of the criminal facts. Thirdly, this case has the common characteristics of smuggling cases, that is, there are evidentiary flaws and disputes over the amount in the customs tax assessment.
In response to the above points of contention, the legal team drew a schematic diagram of the entire cross-border e-commerce transaction process, clearly showing on the diagram the participation, division of labor, roles, status, and functions of each party involved in the case. With examples, it illustrated that a cross-border package needs to go through at least more than ten processes from being declared entry in the BC manner to finally being delivered to individual consumers. After presenting the full picture and then focusing on the individual, the defendant's position and role determined that he should not be considered the principal offender.
Additionally, although the two parts of the smuggling crimes in this case were prosecuted successively, they belong to the same type of crime and have been handled together. The voluntary surrender for the entire case of smuggling crimes should be evaluated as a whole. Although the defendant did not confess all the smuggling crimes when he surrendered voluntarily, the amount of tax evaded that he truthfully confessed was more than the amount of tax evaded that he did not confess. According to the second provision of the "Several Specific Issues on Dealing with Self-Surrender and Meritorious Service" by the Supreme People's Court, the defendant meets the criteria of "truthfully confessing the main criminal facts," and the entire case should be recognized as a voluntary surrender.
The legal team put forward defense opinions on all the contentious points in this case from the aspects of legal analysis and the application of legal norms. After full communication with the presiding judge, the collegial panel finally accepted all the defense opinions of the legal team, mitigated the punishment for the defendant, and reduced the sentence by one year and nine months.
Compliance Suggestions
Cross-border e-commerce has emerged as a new business model in recent years, and the practice of "order-pushing" is not uncommon in this field. The "Compliance Guidelines for the Cross-Border E-Commerce Industry in Guangzhou (Trial)" defines "order-pushing" as the act of falsely listing products, importing order information of goods not traded on the cross-border e-commerce platform into the platform, and forging it into order information traded on the platform to be pushed to the customs, or importing transaction data from other cross-border e-commerce platforms and pushing it to the customs.
The "order-pushing" model does not fully comply with the customs' positive regulatory provisions, and there is a risk of tampering with transaction data, making it difficult for the customs to monitor the authenticity of the data. It also exposes all parties involved in "order-pushing" to compliance risks. In addition to the e-commerce platform itself, these parties also include consolidators, logistics companies, customs declaration companies, and other entities that provide connection services for the import process.
Based on the experience of handling multiple similar cases by Lawyer Hong Can's team, the act of "order-pushing" does not necessarily constitute a smuggling crime. However, since the "order-pushing" process often involves under-declaration of prices, resulting in the loss of national tax revenue, it ultimately infringes upon the legal interest of "the state's management of goods and items entering and leaving the country and the tariff system." Therefore, there is a risk of being held criminally responsible.
Although the administrative regulatory policies and legislation for the emerging cross-border e-commerce industry are still being improved, e-commerce companies should operate in compliance with existing customs regulatory provisions and industry compliance guidelines. They should actively establish and improve basic business processes and compliance frameworks and fulfill their obligations as participants in cross-border clearance. If they encounter business risks that they cannot judge on their own, they can seek compliance advice from regulatory authorities or help from legal professionals. They should not blindly "follow the trend of innovation" to avoid facing criminal legal risks for the company and its employees.
