December 17, 2018

Smuggling has been haunting China’s seafood industry for a long time, and the country’s customs bureaus have decided to take stricter measures to eradicate the problem. They have recently cracked down on a series of smuggling cases through cooperation with other departments.

For example, customs bureaus in China’s nine cities like Tianjin, Shenyang, Shanghai, Qingdao, Zhanjiang and Nanning have taken action together and broken up 16 smuggling gangs in China. This case involved 30,700 tons of frozen seafood and its value was about 1.45 billion yuan (~$210 million USD), according to one initial estimation. These gangs are said to have sourced seafood in regions like South America since 2015, according to media reports, and smuggle them into China through border trade.

In late October, Zhanjiang customs broke up another nine seafood smuggling gangs and arrested 25 suspects with the support of customs from six other cities such as Nanning, Shanghai and Qingdao. Customs officials uncovered 1,400 tons of frozen seafood like shrimps and dozens of documents like contracts and invoices on the spot. These gangs have been in operation since 2015 and smuggled more than 7,800 tons of frozen seafood worth about 417 million yuan (~$60 million USD) in total into China through border trade, according to state and media reports.

Guangxi customs also announced recently that it seized 5,993 smuggling cases involving commodities like frozen seafood and beef from January to September, for a total value of about 1.78 billion yuan (~$258 million USD). It is very difficult to smuggle seafood into China through border trade now, said an anonymous manager for a logistic company in Guangxi, and the costs have grown considerably. Recently, thousands of containers were abandoned in Haiphong because their buyers have been arrested, according to media reports.

Meanwhile, some local people’s procurators have initiated public prosecution against smuggling gangs. For example, a court in Jiangsu province recently tried such a case. The defendants are three local sellers who allegedly smuggled shrimp products supplied by two Vietnam companies, Cty Tnhh Anh Khoa and Trang Khanh Seafood, into China through border trade from February 2015 to December 2017. They were reported to have evaded tariffs and other taxes of more than 52 million yuan. They supposedly also bought from a Malaysian supplier and then similarly smuggled them into China between July 2015 and November 2017, which resulted in tax evasion worth more than 3 million yuan.

To deal with this, domestic seafood traders have taken actions such as changing to domestic basa. Foreign traders, like white shrimp suppliers in Ecuador, have started to sell seafood to China through legal channels. In the meantime, the government has also taken measures to boost seafood imports in order to satisfy he demand of domestic foodies. In addition to signing free trade agreements with seafood suppliers, China has spent great effort securing customs clearances quickly and improving logistics.

For example, one trade company in Chongqing finished customs clearance of 1.2 tons of white shrimps from Thailand in less than one hour this month. It used to take about three hours for the company to get seafood after it was landed, which led to survival rates of about 70 percent. But now the survival rates have risen about 10 to 20 percent, thanks to local customs’ one-hour fast lane for fresh food clearance. Generally speaking, local clearance periods dropped by 61.4 percent for cargo flights and 71.4 percent for those carrying both passengers and commodities now, compared with the beginning of 2018.

Apart from Chongqing, Shenzhen customs has also simplified clearance procedures, according to reports. Furthermore, importers can apply online once flights loaded with their purchases take off in foreign countries. If everything matches he relevant documents, they can get heir commodities immediately without further inspection. These measures have cut clearance periods by more than one half, while also boosting local fresh imports. Earlier this month, it cleared abalones imported from Australia in about 50 minutes, which helped increase the survival rates and maintain food freshness.

China’s seafood industry has been overshadowed by smuggling gangs for long time. Now the government is determined to break the vicious cycle before it’s too late. Its carrot-and-stick approach seems to be working well at present, media has reported. This is believed to benefit the industry in the long term, though its drastic changes may have caused some temporary labor pains.