Shadow traders claim economic hardship pushing them to cross-border smuggling of goods

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*By Therese Tu, edited by Nelson Moura

As local law enforcement authorities continue to carry out a new crackdown on parallel trade activities, some people engaged in parallel trade between Macau and mainland China told the Macau News Agency that their struggles in the social and current difficult economy have led them to illegal smuggling of goods.

A series of actions to combat parallel trade have been carried out this year by Macao Customs and Public Security Police (CPSP), including cross-border joint actions in cooperation with Zhuhai Customs.

The heightened crackdown came after a woman residing in Tanzhou, Zhongshan, who regularly crossed the Gongbei border for parallel trade, tested positive for Covid and drove 8,000 people who were residing or working in the nearby residential area to be tested.

The woman was found to be using a visa to visit family in Macau to smuggle goods into the SAR and was banned from re-entering the city for a year.

Many mainland visitors with family visas and non-local workers have been barred from entering the SAR, while some local residents have been detained by police and the cases have been transferred to the prosecution for investigation, it said. the CPSP to the MNA.

Meanwhile, a tougher anti-shadow trader policy has been implemented since March, with the Novel Coronavirus Response and Coordination Center announcing that those who hold family visit visas and cross the border or port of Qingmao at least three times in one day, have to pay for a nucleic acid test every time they enter Macau and wait for the result to come out before entering.

People who engage in parallel trade – usually referred to as Soi Hak (水客) or “water guests” – come in all shapes and sizes, including middle-aged and elderly people who often cross the border, students who are part of it. part-time jobs or unemployed residents who have taken up smuggling after struggling due to the pandemic-induced economic downturn.

Contraband goods apprehended

Dangerous waters

According to the Macau Foreign Trade Law, shadow traders can be fined up to MOP 100,000 (USD 12,376).

In addition, business owners or employees who establish an “illegal employment relationship” with parallel traders who transfer goods across the border, can be sentenced to a maximum of 8 years in prison for the crime of “employment irregular”.

The relevant penalty for parallel traders in Mainland China is enshrined in Article 201 of Chinese Criminal Law, which states that a taxpayer who files false tax returns or omits to file a tax return, of a relatively large amount and accounts for more than 10 percent of the taxes owing, will be sentenced to a maximum of three years in prison or criminal detention.

If the amount is considered significant and represents more than 30% of the taxes payable, the taxpayer could be sentenced to more than three years but less than seven years in prison.

A woman employed at a local hotel who made the decision to become a shadow trader due to the pandemic told the Macau News Agency that recent crackdown activities have caused great hardship for her business, as transporting goods to the mainland has become more arduous and complex.

While being questioned by MNA, she was packing a bag of cigars and covering them with a few small snacks and medicine bottles, while chatting with the people she had contacted to transport the goods across the river. frontier.

The people interviewed in this article have chosen not to reveal their names due to the sensitive nature of the issue.

The hospitality industry worker said she felt embarrassed and depressed deep in her heart every time she asked for someone to help deliver the goods.

“Because I also know what I’m doing is illegal. I’m afraid to ask someone to deliver the goods because things could end up with that person being detained by the police. Some of them are non-local workers, and their credit cards will be cancelled. For these residents, there is also a risk of being charged, ”she told the MP.

The hotel employee also said that it is very difficult to make money in this business, especially when the customs inspection becomes stricter.

“I feel faceless doing this. If at the time when the local economy was still thriving, I wouldn’t want to take this risk,” she stressed.

She cited as one of the reasons she became a shadow trader a request from her company to take extensive unpaid leave since the start of the pandemic, which has significantly reduced her income.

“At the start of the pandemic, I still had hope for Macau’s economy and the SAR government, however, the local economy never recovers and I have to make a living. Therefore, I made the decision to become a shadow trader, a business I had never considered being involved in before, the woman pointed out.

She added that many hotel employees, especially public relations staff, have joined this illegal trade because they have connections to wealthy mainland customers who are willing to buy luxury goods, cigarettes or good wine.

Also, agents of the parallel trade industry would invite hospitality workers to join.

However, the hotel employee told MNA that it is difficult for them to deal with parallel trade at the moment, as the goods are often detained by the police and cause huge losses.

She noted that one of her colleagues was stopped by the customs officer and that the cosmetics she bought for her personal use were all detained because she had not opened the packaging of these items.

“My colleague asked customs staff why she couldn’t even bring cosmetics under MOP 5,000 for her own use, but the staff told her that even goods under MOP 50 are not allowed to be transported,” said the woman said angrily.

Macau Customs stipulates that citizens and tourists are allowed to bring cigarettes, wine and cigars over a certain amount for their own use, while cosmetics and electronics below MOP 5,000 in total are exempt of tax declaration.

“The regulations say that we have the right to bring these goods [for our own use]. Why can Customs violate these regulations? Why can they do whatever they want, regardless of the policies? the woman voiced her concerns.

MNA has asked Macau Customs to comment on this matter, but no response has been provided as of this article’s publication.

The hotel employee added that strict customs entry policies and limited visit visas approved by mainland authorities mean a drop in business for hotels in Macau, making it difficult for hotel employees. hotel to survive solely based on their original position.

Challenging environment

In early 2020, due to the Covid-19 pandemic, mainland authorities announced a 14+7 day quarantine policy for arrivals in Hong Kong, while a number of border customs between Hong Kong and its neighboring city of Shenzhen have been closed for pandemic control, resulting in fewer shadow traders traveling from Hong Kong to the mainland.

However, as the pandemic situation stabilized in Macau with no medical quarantine imposed on people traveling from Macau to the mainland, and the local economic downturn caused a drop in tourist numbers, many Macau residents and non-local workers began to join the parallel trade to make the lost income.

Macau’s general unemployment rate for 2021 has risen to 2.9%, its highest since 2009.

The general unemployment rate and the unemployment rate for local residents for the three-month period between December 2021 and February 2022 also continued to grow, reaching 3.3 and 4.3%.

The hardest hit employment activities included “construction”; “restaurants and similar activities”; and ‘gaming & junket’, with official statistics also not reflecting the number of residents placed on unpaid leave or reduced pay

A 23-year-old university student, who does parallel trading part-time, told MNA that he believes the current parallel trading crackdown activities are not due to controlling the pandemic, but to socio-economic reasons. .

The university student said that since July 2020, the period when the mainland authorities announced the cancellation of the 14-day quarantine for visitors to Macau, many people have started to join parallel trade as a way to supplement their income. reduced.

As someone who has worked in this industry for a long time, the young man said that some people who now join parallel trade will do anything for money, so they are not afraid to take risks and spend more of items that will easily attract the attention of customs.

These could be items such as edible bird’s nests – bird’s nests created by the saliva of swifts which are highly prized in the Chinese medicine industry – saffron – the most expensive spice in the world by weight – and a huge amount of luxury goods and electronics.

Sometimes even banned drugs and large sums of money in illegal banks are transferred at high risk of being detained by the police, the student said.

“The government has never fought shadow traders so hard in the past, so why are they cracking down so hard now? I don’t think it’s just for pandemic reasons,” he said.

The MNA asked the CPSP to address this concern, with the department responding that the crackdown activities were carried out “due to changes in the pandemic situation in nearby areas.”

Furthermore, the young shadow trader said that he recognizes that smuggling is illegal, but still hopes that the SAR government can leave space for this “grey zone” activity to continue, as long as it is not does not have a huge impact on society.

He added that parallel trade can compensate for the loss of income of citizens, since many people live from it and many people on the continent need these goods.

“I know a guy who was detained and sentenced to about a year in prison for transporting Indian cancer drugs, which of course is illegal and prohibited by law. But what about the cancer patient who waited for the drugs to save his life? ‘ said the young man.

He also added that he has seen some people choose to gradually quit this company because inspections are getting stricter and there is no effective way for them to deal with the crackdown activities carried out by the police.

“We have no way to go, every way is a dead end for us,” he said in frustration.

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