India says local Oppo evaded $550 million in customs duties

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The Indian Fiscal Intelligence Authority, part of the country’s finance ministry, said on Wednesday that phone maker Oppo’s Indian division evaded $550 million in customs duties after similar investigations at local divisions of fellow Chinese giants Xiaomi and Vivo prompted Beijing to issue a warning earlier this month.

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The Treasury Department said it found evidence that Oppo India deliberately misrepresented some of the items it imported, allowing it to take advantage of a $374.3 million duty exemption.

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The ministry said it had raided the offices of Oppo India and members of its management team, who the ministry said “accepted the submission of an inappropriate description to customs at the time of import.”

Oppo India is also working with other brands including OnePlus and Realme in the country, the ministry said. If you combine the market share of all these devices, Oppo India will become the largest smartphone supplier in the country. He did not immediately respond to a request for comment.

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“During the course of the investigation, DRI conducted searches of Oppo India’s offices and the homes of its key executives, unearthing incriminating evidence pointing to deliberate misrepresentation of certain items imported by Oppo India. for use in the manufacture of mobile phones, Ministry of Finance said in a statement.

In addition, Oppo India also paid more than $176 million in royalties and license fees to other companies, including some in China, and did not disclose these transactions with the value of goods they imported, in violation of Section 14 of the Customs Act 1962. , added the ministry.

The ministry added that Oppo India “voluntarily contributed” about $56.5 million in partial differential customs duty.

Wednesday’s announcement follows the Enforcement Authority, India’s anti-money laundering agency, raided dozens of operations and manufacturing sites of phone maker Vivo in several states across the country.

Last week, the Enforcement Authority said a Vivo-linked firm used fake documentation while registering in India. The agency seized 119 bank accounts with $58.7 million associated with Vivo India, it added.

The ED’s actions prompted the Chinese Embassy in India to criticize the Indian authorities. The embassy said such “frequent investigations” by local subsidiaries of Chinese firms “hinder the improvement [the] business environment” in India and “undermines the confidence and willingness” of other foreign companies to invest in and operate in the South Asian market.

The embassy said China always asks its firms to abide by laws and regulations abroad and “wishes” the Indian side to provide a “fair, fair and non-discriminatory business environment” for Chinese firms.

Tensions between the two neighboring nuclear-weapon countries escalated in 2020 after a skirmish on the border. Since then, India has imposed several restrictions on Chinese firms (without ever mentioning China in their orders).

New Delhi has banned hundreds of Chinese apps over the past two years, including TikTok, UC Browser and PUBG Mobile, citing national security concerns. India also amended its foreign direct investment policy in 2020, requiring all neighboring countries with which it shares a border to seek New Delhi approval for their future transactions in the country. Previously, only Pakistan and Bangladesh were subject to this requirement.

The Indian Cellular and Electronics Association, a lobbying group representing several tech giants including Apple and Amazon, urged New Delhi to intervene in May and said ED does not understand how royalty payments work in the tech industry. (The Enforcement Authority of India previously said that Xiaomi transferred $725 million to three foreign entities “under the guise of royalties.”)

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