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5 months ago
China to punish firms for fake trade data, other foreign trade offences
March 28, 2017 / 6:26 AM / 5 months ago

China to punish firms for fake trade data, other foreign trade offences

Chinese flag waves in front of the Great Hall of the People in Beijing, China, October 29, 2015.Jason Lee

BEIJING (Reuters) - China will punish companies if they are found to be reporting fraudulent trade data, the customs administration said on Tuesday, as it published details on enforcement of a credit system for foreign trade firms.

Companies considered "discredited" may be subject to more stringent inspections when applying for government tax rebates, or see an impact on their import or export quotas, while company representatives may be restricted from traveling abroad.

"Only when discredited firms pay a high economic price can measures create the effect where firms 'dare not to be dishonest and cannot be dishonest'," said a statement from the General Administration of Customs.

Measures announced by the customs administration and 33 government departments will punish companies for various infractions including smuggling goods, tax avoidance, fraudulent company registration information and fake trade data, said customs bureau vice minister Li Guo.

"In order to combat false trade data, these joint disciplinary measures will be applied to companies that report fake trade data, which leads to statistical distortions," said Li at a news conference.

Analysts say Chinese firms have used fake trade invoices as a way to move money offshore and avoid China's strict capital controls.

The government has tightened oversight of cross border capital flows in recent years as accelerating outflows contributed to a weakening yuan, which fell 6.5 percent against the U.S. dollar last year.

Li declined to comment on the fake invoicing phenomenon when asked by reporters on Tuesday.

Reporting by Elias Glenn; Editing by Kim Coghill

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