A SUPPOSED distributor for the Greater China Region in Shenzhen that sells a famous brand of Japan-imported water heaters was actually a smuggler that operated underground businesses, according to the Shenzhen Customs on Monday.

    The Shenzhen-based company sells Paloma water heaters to customers around China. However, only a small portion of the water heaters were imported via legitimate channels of China Customs, while the rest of the goods were smuggled through Hong Kong.

    The anti-smuggling department of Shenzhen Customs received tip-offs at the end of March this year, accusing the distributor of smuggling water heaters from Hong Kong.

    Following the evidence provided, customs officers found that the number of imported water heaters declared at Shenzhen Customs did not match the number of water heaters actually sold. The data shows that the company had sold nearly 25,000 water heaters over the last three years, but only around 5,000 water heaters were declared.

    Shenzhen Customs then started looking into the company’s business and eventually discovered how the company smuggled the water heaters produced in Japan after a few months’ investigation. A final operation was launched in mid-July this year with over 300 anti-smuggling officers dispatched.

    Thirteen suspects involved in the smuggling case were arrested in Shenzhen and Dongguan. The operation team also confiscated more than 1,200 Paloma water heaters valued at nearly 50 million yuan (US$7.49 million) from the scene.

    According to the anti-smuggling department, the company was the general agent authorized by the brand of Japan-made water heaters and was the only distributor that imported the goods from Japan and supplied them to domestic retailers across China.

    The company reportedly had water heaters delivered to Hong Kong before distributing the goods to several smuggling groups that would transfer the goods to Dongguan by declaring falsely at Dongguan Customs. Then the imported water heaters would be delivered back to Shenzhen.

    Some of the goods were smuggled by “shuike,” i.e. parallel traders, who hid the water heaters in their luggage when entering the Chinese Mainland.

    Shenzhen Customs said it would focus particularly on smuggled home appliances this year and would impose strict punishments on smugglers. (Zhang Qian)