Uncovered a new method of laundering money by selling luxury items used by Chinese entrepreneurs

Agents of the National Police and the Tax Agency have uncovered a novel method of money laundering through the sale of luxury items through the system ‘daigou’, with which some Chinese businessmen avoid paying taxes in Spain using intermediaries to change of economic compensations.

According to a police statement, the investigations, which began in November 2016, show that the intermediaries, called ‘daigou’ or ‘shoppers’, are Chinese citizens residing outside their country and engaged in the online sale of luxury products. . They receive money in cash that is not taxed by Chinese businessmen based in Spain and with that money they obtain luxury items that they later sell in China.

To do this, they visit luxury establishments and obtain photographs of the articles, then expose them in personal accounts of well-known social networks in the Asian country for sale between individuals. Thus, they contact potential buyers, residents in China, who later pay the product in ‘yuan’ through online payment platforms.

The products are sent personally by tourists or relatives of the buyers who return to their country. Through this type of commercial transaction the ‘daigou’ can obtain economic benefits in three different ways: selling the item at a higher price than the one acquired in the establishment in Spain; claiming the VAT refund of the products purchased; or by means of the currency exchange when the payment is made through online payment platforms, marking a yuan / euro exchange rate higher than that quoted in the financial market.

Finally, the ‘daigou’ enters the money provided for the purchase of luxury items in a current account in China in the name of the entrepreneur residing in Spain who initially gave him the money in cash. The transfer is made between two current accounts located in the People’s Republic of China. This type of transaction is called hawala and is not officially registered, so it violates established legal channels and causes a damage to the State coffers.

104 DETENTIONS

The investigations began in November 2016 after discovering that several Chinese businessmen living in Spain avoided paying taxes to the Public Treasury by sending the profits obtained in our country using the ‘daigou’ as intermediaries.

Thus, within the framework of the ‘Shopping’ operation, 104 arrests were made, 19 house searches in Seville, Barcelona, ​​Palma de Mallorca, Alicante, Valencia, Las Palmas de Gran Canaria, Tenerife, A Coruña, Guipúzcoa, Vizcaya, Burgos and Torremolinos (Málaga), as well as 15 records in companies and industrial warehouses located mostly in the Cobo Calleja estate of Fuenlabrada (Madrid).

In addition, the researchers intervened more than 2.5 million euros in cash, 12 vehicles, innumerable luxury items of first commercial brands, electronic storage devices, relevant documentation and a multitude of counterfeit effects related to electronics and telephony.