By under-quoting the goods price and the foreign trade company depositing US$2 million overseas without authorization, does this constitute a crime of foreign exchange evasion?

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According to the criminal law, there are two behavioral patterns for the crime of foreign exchange evasion. Specifically, companies, enterprises or other units violate national regulations by depositing foreign exchange abroad without authorization, or illegally transferring domestic foreign exchange abroad in relatively large amounts.

Let’s look at a case to understand:

On October 20, 2012, a Taiwan-funded shoe company in Dongguan signed an export supply agreement for casual shoes with an American company. According to the agreement, the foreign party should pay a payment of US million. Wang, the general manager of a shoe industry company, felt that it was inconvenient to go abroad to obtain foreign exchange, so he privately discussed with several major leaders to retain the foreign exchange for future use abroad.

Therefore, an internal resolution was passed to use a low-price method to evade customs inspection, and then signed two agreements with the United States, one with a full amount of 10 million U.S. dollars, and one with a total amount of 2 million U.S. dollars. The foreign party would transfer the 12 million U.S. dollars of goods. A customs declaration of US million was made, and US million was deposited in a U.S. bank according to Wang's instructions. Later, the company's main leaders went to the United States to use the US dollar funds. However, due to conflicts among the main leaders, in February 2014, someone reported it to the foreign exchange administration authority, and the case was discovered.

May I ask what crimes in the criminal law the shoe company and Wang are suspected of committing?

According to Article 190 of the Criminal Law, the crime of foreign exchange evasion refers to serious acts by companies, enterprises or other units that violate national regulations and deposit foreign exchange abroad without authorization, or illegally transfer domestic foreign exchange abroad.

The Supreme People's Procuratorate and the Ministry of Public Security's "Regulations on the Prosecution Standards for Economic Crime Cases" companies, enterprises or other units that violate national regulations shallAnyone who deposits foreign exchange abroad without authorization, or illegally transfers domestic foreign exchange abroad, with a single transaction or cumulative amount exceeding US million, shall be prosecuted.

In this case, the shoe industry company violated the national foreign exchange management system.Using fraudulent means to evade foreign exchange supervision and depositing foreign exchange earnings abroad for the company's main leaders to use internally abroad is a serious matter. Therefore, according to the above provisions of the mainland's "Criminal Law", it has constituted the crime of evading foreign exchange on behalf of others.. As the general manager of the shoe company, Wang is the person directly responsible for the crime and should also bear corresponding criminal responsibility for the crime of foreign exchange evasion.

In the 1997 Criminal Law, the crime of foreign exchange evasion was stipulated as a separate crime for the first time. In terms of content, it referred to the "Foreign Exchange Management Regulations" at that time, which included "depositing foreign exchange abroad without authorization, or illegally transferring domestic foreign exchange abroad". Conduct is criminalized.

However, the 2008 "Foreign Exchange Administration Regulations" canceled the requirement for compulsory foreign exchange settlement. From the original version, it stipulated that "the current account foreign exchange income of domestic institutions must be transferred back to the country" and "the current account foreign exchange income of domestic institutions must be sold to designated foreign exchange banks. or open a foreign exchange account in a designated foreign exchange bank with approval" was adjusted to "foreign exchange income of domestic institutions and domestic individuals can be transferred back to the country or deposited overseas" and "foreign exchange income from current accounts can be retained or sold to businesses for foreign exchange settlement, "Financial institutions that sell foreign exchange", which means that the criminal law's description of companies "depositing foreign exchange abroad without authorization" is no longer compatible with the current foreign exchange management regulations. A large number of domestic trading companies earn After the foreign exchange is earned, it will be deposited into an offshore company account in Hong Kong, or settled directly at local financial institutions, exchange shops, etc., or directly used as a means of payment for trade costs. These behaviors may be illegal under the compulsory foreign exchange settlement system. If an enterprise is deemed to have "deposited foreign exchange abroad without authorization" or "sold foreign exchange to a designated bank without complying with national regulations", after the implementation of the new "Foreign Exchange Administration Regulations" in 2008, the enterprise can withdraw foreign exchange income from current accounts of trade in services and goods. You can choose to store it overseas or use it and settle foreign exchange.

For domestic foreign trade companies, if they obtain a large amount of foreign exchange income through export trade, and then store, pay, lend, or sell to local foreign exchange shops or private underground banks, these behaviors themselves can no longer be used as Evaluation of the crime of foreign exchange evasion. Of course, the act of selling foreign exchange to underground banks or other enterprises is an illegal foreign exchange settlement, but it cannot be evaluated as a crime of foreign exchange evasion.