China cracks down on iPhone-smuggling housewives: media

SHANGHAI Fri Nov 16, 2012 5:01pm IST

1 of 2. A man carries packs of Apple iPhone 4S, with each pack containing five sets, outside an Apple store in Hong Kong November 11, 2011.

Credit: Reuters/Bobby Yip/Files

Related Topics

Stocks

   

SHANGHAI (Reuters) - Suppliers for what was one of China's largest online iPhone stores have been hauled to court for allegedly evading taxes by smuggling Apple Inc's (AAPL.O) iPhones and iPads into the country, official media reported on Friday.

On Wednesday, 26 suppliers of Lanyou Shuma.com were tried in a Shenzhen court as part of five rings that smuggled more than 162,000 mobile phones worth over 500 million yuan from Hong Kong over the past two years, the Beijing News said.

Half of the suspects are described as housewives who frequently travel to Hong Kong, according to another newspaper, the Southern Metropolis Daily, adding that they were paid 20 to 30 yuan in commission for each phone they brought back to the mainland.

The official Shanghai Daily said 25 defendants were tried for smuggling both iPads and iPhones.

The Lanyou Shuma.com digital store, once one of the largest on China's Taobao Marketplace, was forced to close in April by Taobao after Hong Kong authorities launched an investigation on possible smuggling of the iPhone 4S, the Beijing News said.

It was not clear if all 26 defendants were suppliers for Lanyou Shuma.com.

Lanyou Shuma.com could not be reached for comment.

Taobao Marketplace, a unit of Alibaba Group, is China's largest e-commerce website with a consumer focus. An Alibaba spokeswoman confirmed the closure of Lanyou Shuma.com store but declined to elaborate, saying the company "demands merchants run their businesses in accordance with all regulations and policies".

Shenzhen court officials declined to comment.

Electronics and luxury products carry steep import and luxury duties when they are sold in China. As a result, many Chinese prefer to shop for these products in places like Hong Kong or Europe where the duties are lower.

This discrepancy in prices has led to a booming smuggling industry where, for example, iPhones are bought in the United States or Hong Kong, carried into China in suitcases by smugglers and then passed to scalpers in China.

China has cracked down on smugglers over the past two years. In 2010 it levied taxes on imported iPads, even if they were for personal use. In September China jailed an ex-flight attendant accused of evading taxes of more than 1 million yuan by smuggling cosmetics from South Korea.

(Reporting by Shanghai newsroom; Editing by Michael Urquhart)

FILED UNDER:

Sony Cyber Attack

REUTERS SHOWCASE

Ten Years On

Ten Years On

10 years on, tsunami warning stumbles at the "last mile".  Full Article 

Exit Polls

Exit Polls

BJP unlikely to form Jammu & Kashmir govt - polls.  Full Article 

Forceful Conversions

Forceful Conversions

BJP distances itself from religious conversions.  Full Article 

Hopeful Dhoni

Hopeful Dhoni

India's new vintage nearly ready, says Dhoni.  Full Article 

Photo

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Ali Hospitalized

Ali Hospitalized

Boxing great Muhammad Ali hospitalized with pneumonia.  Full Article 

Going International

Going International

Bollywood’s Priyanka Chopra sets sights on American TV.  Full Article 

India This Week

India This Week

Some of our best photos from this week.   Full Coverage 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device   Full Coverage