The bottom line of compliance in cross-border e-commerce: a list of insurmountable red lines

As an emerging business model, cross-border e-commerce involves many aspects such as customs supervision, tax payable and restricted category management. Due to its e-commerce attributes, it is often accompanied by a series of compliance challenges. According to the General Administration of Customs Announcement No. 194 of 2018, compliant enterprises must strictly abide by relevant laws and regulations during operations and avoid touching the following insurmountable red lines. These behaviors will lead to severe legal consequences, including legal penalties and criminal liability. .

Overview of red line behaviors of cross-border e-commerce

1. False information push
   Enterprises fabricate false orders, payment orders and logistics order information, and submit goods that should be taxed according to general trade to the customs for cross-border e-commerce retail imports.

2. Improper use of order information
   Import the order information of goods sold through other channels (such as other platforms) into the cross-border e-commerce platform and submit it to the customs disguised as valid order information, unless the information is provided by a legitimate postal enterprise or express operator and bears legal responsibility.

3. Fictitious consumer identity
   Forged individual consumer orders on the cross-border e-commerce platform, and falsely reported personal mail products as cross-border e-commerce retail imported goods.

4. False declaration
   When cross-border e-commerce retail imports, false declaration elements such as product name, tariff number, price, and origin are used.

5. Import of goods outside the list
   Violations of relevant management regulations will be regarded as serious violations if goods outside the “positive list” are imported through cross-border e-commerce retail.

6. Secondary sales
   Re-sell the goods that have been imported through cross-border e-commerce retail in China, or store the goods returned by consumers for secondary sales.

7. Illegal use of personal information
   Collect consumers’ personal information through illegal means and use other people’s identities to conduct cross-border e-commerce business, or leak and sell the obtained personal information for illegal activities.

8. False declarations of foreign exchange payments
   Use fictitious cross-border e-commerce import orders and customs declaration materials and other deceptive means to handle foreign exchange payment procedures.

9. Improper way of handling express delivery
   Improper behaviors such as centralized transshipment through express delivery manifests with specific markings, and use of customs-registered vehicles for batch exit and centralized transportation of goods.

10. Use of forged identity information
    For the purpose of domestic collection and sales, goods are purchased in bulk by illegally collecting or forging citizen identity information.

The above behavior will not only lead to administrative liability, but may also constitute a smuggling crime, thereby triggering criminal liability. When enterprises conduct cross-border e-commerce activities, they must strictly abide by legal red lines and ensure legal and compliant operations.