Retailing, Franchising, and Consumerism Business Intelligence in China

Hong Kong Customs Detects Wine Revenue Fraud Case

Customs officers carried out an operation code-named "Operation Recall" against a company in Cheung Sha Wan suspected of involving in revenue fraud activities relating to the importation of wine from Europe.

Investigations showed that the company was suspected of under-declaring the wine price in permit applications to Customs by using forged documents. Initial investigation showed that the total duty evaded in the last 12 months was about HK$1 million.

Five male and three female suspects aged between 23 and 50 including three directors, two purchasing clerks, two shipping clerks and one account clerk of the company were arrested and released on bail pending further investigation.

About four months ago, when vetting permit applications, Customs officers suspected that a liquor importer had under declared liquor value.

After in-depth investigation, a specialized fraud investigation team in Customs – the Revenue Fraud Investigation Team IV targeted two consignments of liquor imported from France and the UK respectively in an operation on August 7. The consignments involved 739 bottles of high-value wine imported by the company concerned.

In the past three years, Customs successfully recovered HK$7 million of duty from liquor importers for under declaration of price.

Under the Dutiable Commodities Ordinance, evading duty on dutiable commodities is a serious offense and the maximum penalty upon conviction is a fine of HK$1 million and imprisonment for two years.

For cases of intentional evasion of duty, a magistrate may additionally impose a fine not exceeding ten times the amount of duty payable on the dutiable goods in respect of which the person committed the offense.

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