China Uncovered $10 billion in Fraudulent Entrepot Trade

At a press conference on September 25, 2014, the State Administration of Foreign Exchange (SAFE) discussed its investigations into entrepot trade, a trading post where merchandise can be imported and exported without paying import duties. SAFE stated that its investigations confirmed that the amount of China’s entrepot trade using false documents had reached $10 billion. 

Wu Ruilin, Deputy Director of the Management Inspection Division of SAFE, stated that, since April of last year, SAFE has conducted special investigations of entrepot trade in 13 provinces and cities. In 2014, the effort has expanded to include 24 provinces and cities. 

Wu further explained that these investigations found that entrepot trade has become a speculative arbitrage tool because many companies use forged or altered commercial documents, re-use property documents, or use the import declaration documents for general cargo trade.