As of January 2012, national customs agencies launched a “Border Gate Safeguard Program” to crack down on smuggling connected with online procurement agent services, cross-border shopping and courier companies. In June 2013, a well-known courier company, which was in partnership with the client (a famous cross-border e-commerce business based in Shanghai) was investigated, its executive arrested and another two senior officials fled to the United States. Over a hundred cross-border e-commerce companies that did business with the courier company were also investigated in varied degrees.
China’s courier sector was much under-regulated whereas cross-border e-commerce and overseas procurement agent services sprung up and experienced rapid growth. Therefore, smuggling via cross-border courier became an “original sin” of the above-mentioned businesses and even an open secret among business insiders.
In August 2014, Beijing Customs issued a Notice of Detention to the client, publicized his information online and exercised border control against him. Under these circumstances, the client resorted to Cai and Li for help.
After accepting the mandate, the two attorneys did a background check over the Shanghai-based company and had a cross-border telephone conference with him to assess the value of the subject matter involved in the case. Their conclusion fell between 1mln and 2mln yuan. Meanwhile, attorney Li contacted the Beijing Customs and conveyed the client’s willingness to return to China. However, the customs agency insisted on closing down the client’s business, hunting him down across the globe and freezing his bank accounts overseas. Despite the insistence of the investigator, the attorneys did not lose heart but carried on with the task of collecting and sorting out evidence.
Following a few more rounds of communication with the client, evidence favorable to the client finally emerged. The attorneys decided to submit the evidence as well as a copy of attorneys’ opinion to Beijing Customs. The Customs accepted the evidence but rejected orally the attorneys’ opinion.
The client, stricken by the rejection, hit upon the idea of joining another country and giving up his Chinese citizenship. In that case, the enterprise started all by himself would be dissolved soon. On the other hand, Beijing Customs, due to a lack of key evidence against the client, was faced with the risk of a failed prosecution. The two sides came at a standstill.
The attorneys went to the Customs again, presented pros and cons of the client’s return, suggested treating criminal behaviors of courier companies and cross-border e-commerce enterprises differently, expressed willingness of persuading the client to come back and report himself to the Customs and handed over materials of evidence for another time. What they did won trust from the Customs and another week for the client for communicating further with the attorneys, during which time his business was allowed to stay unaffected.
For the attorneys, the biggest concern now was how to persuade the client to report himself to the Customs at the risk of being thrown into prison. They judged that they could argue for not constituting smuggling with the evidence at hand, but neither was sure as the investigator withheld feedback on the attorneys’ opinion.
The situation called for mutual support and trust between the two attorneys. Attorney Cao has accumulated much experience representing clients in cases related to cross-border e-commerce and smuggling via cross-border courier while attorney Li specializes in criminal defense and excels in connecting with judicial agencies. The two set out separately. One went the Customs and the other met the client in person. Eventually, the client agreed to have a go and bear any and all the consequence.
On the day the client returned to China, the two attorneys escorted the client to the Customs to be interrogated. With the passage of another month, the client was bailed out and relieved from online hunting and border control. By then, this case was finally settled.