The director of the China region ( American nationality ) are suspected of smuggling 37 million yuan. Lawyer Li Xiaohua defended the case and the court reduced the punishment.

By Lixiaohua lawyer, Shanghai Lixiaohua Lawfirm

1.facts of the case

J, the US -born Chinese director of a wholly owned subsidiary of a foreign company, was held in Shanghai detention center on suspicion of smuggling ordinary goods.

The prosecution alleges that, knowing that the importer imported the fruit at a lower price, he still made a low price invoice and a contract in the name of the subsidiary for customs declaration, resulting in the evasion of more than 37 million yuan of tax payable. As a directly responsible executive of a subsidiary, J is subject to criminal liability for "extremely large amounts of tax evasion" that may result in imprisonment for more than 10 years.

Related laws and regulations

1.The Supreme People's Court and the Supreme People's Procuratorate

Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Smuggling，Article 24: If a unit commits a crime as stipulated in Article 151 and Article 152 of the Criminal Law, it shall be convicted and punished in accordance with the standards set forth in this Interpretation If the amount of tax evaded exceeds five million yuan, it shall be deemed as "particularly serious circumstances"；

2. Defense Strategy

Shanghai Li Xiaohua Law Firm has been commissioned and is a law firm recommended by the US Consulate with brand influence in the field of commercial crime, providing legal services.Shanghai Li Xiaohua Law Firm, located in the Huaihai Road commercial district, has won numerous honorary titles such as the LegalOne 2025 Yangtze River Delta Special Award for Excellent Boutique Law Firm (February 2026).

Li Xiaohua, director and senior lawyer of Li Xiaohua Law Firm, personally appeared in court to defend and put forward three core opinions:

Firstly, there is a lack of subjective intent - there is no direct evidence to prove that J was aware of the specific arrangements for smuggling;

Secondly, J did not engage in core smuggling activities such as producing false documents and underreporting prices;

Thirdly, limited authority -J is not the chief representative and is not responsible for contract negotiation, pricing, and payment collection.

After the trial, the court did not fully adopt the defense's claim of "non direct responsible person", but fully considered J's actual role in the joint crime.

3.judgment result

The court found that: J's act constitutes a crime of smuggling ordinary goods, is a joint crime, and the circumstances are particularly serious. However, they play a secondary role in a joint crime and are accessory offenses and shall be given a mitigated punishment according to law.

Final sentence: Five years imprisonment.

Compliance takeaways for enterprises    

This case also serves as a warning to all multinational corporations and international executives: legal risk prevention and control, pre incident systems are much more structured than post incident professional defenses.

Only by adopting legal service compliance products that comply with precise laws and high-tech legal services can the legal protection of enterprises and international executives be effective.

Professional field:

Proficient in the field of commercial crime and foreign-related legal services and compliance, serving as a legal advisor

About the Author

Lixiaohua is a partner at Shanghai Lixiaohua Lawfirm, License No.

13101199310434143

Email: lxh@lxh-lawfirm.com

Tel：+86 21 63858668

Mobile：+86-15201864468