Parallel import market distressed over Nhat Cuong Mobile

15:07 | 17/05/2019

A string of local mobile phone stores have removed parallel smartphones from their websites as soon as Nhat Cuong Mobile’s head was arrested for smuggling.

parallel import market distressed over nhat cuong mobile
Hoang Ha Mobile's website replace parallel imports by authorised goods

The Ministry of Public Security’s Police Department C03 on May 14 accused and arrested Bui Quang Huy, general director of Nhat Cuong Mobile and eight others to investigate them for suspected smuggling and violating regulations on accounting activities. Previously, on May 9, Nhat Cuong Mobile store chain was searched, with inspectors seizing several boxfuls of documents and assets.

As of now, except for the store on Giang Vo Street, all Nhat Cuong Mobile stores are closed. Hotlines, websites, and the company's Facebook page have all suddenly been shut down.

Nhat Cuong Mobile’s case has significantly affected other mobile retailers who trade in parallel goods. Accordingly, a sizable number of stores have removed parallel products from their websites, including Hoang Ha Mobile, CellphoneS, Hung Mobile, and others.

Specifically, new models like iPhone XS/XR coded LL/A (Canada, US) and ZP/A (Hong Kong, Singapore) have all been replaced by authorised products with the code of VN/A (Vietnam) and second-hand goods.

At an earlier discussion with VIR, Dang Quoc Tuan, director of iShop Vietnam Ltd., one of the largest parallel Apple products distributors, who co-operated with GSH to open an APR store chain called iCentre, said that parallel imports currently account for 60 per cent of Apple products on the market and the local interest in these products is far higher than in authorised products due to the more reasonable prices and the same service warranties.

Therefore, suddenly cutting off all parallel products will cause difficulties for their business.

Article 188 of the Criminal Code No.100/2015/QH13 on November 27, 2015

1. Any person who conducts deals in the following goods across the border or between a free trade zone and the domestic market against the law shall be liable to a fine of from VND50 million ($2,713) to VND300 million ($13,043) or face a penalty of 6-36 months of imprisonment:

a) Goods, Vietnamese currency, foreign currencies, rare metals, gemstones assessed from VND100 million ($4,437) to under VND300 million (13,043) or under VND100 million ($4,437) but the offender previously incurred a civil penalty for the same offence or any of the offences specified in Article 189, 190, 191, 192, 193, 194, 195, 196 and 200 hereof, or the offender has a previous conviction for one of the aforementioned offences which has not been expunged, except for the case specified in Article 248, 249, 250, 251, 252, 253, 254, 304, 305, 306, 309 and 311 hereof;

b) Relics, antiques, or items of historical or cultural value.

2. This offence committed in any of the following cases shall carry a fine of ND300 million-1.5 billion ($13,043-65,217) or a penalty of 3-7 years of imprisonment:

a) The offence is committed by an organised group;

b) The offence is committed in a professional manner;

c) The illegal goods are assessed at VND300 million-500 million ($13,043-27,739);

d) The illegal profit reaped is VND100 million-500 million ($4,437-27,739);

dd) The illegal goods are national treasure;

e) The offence involves the abuse of the offender's position or power;

g) The offence is committed in the name of an agency or organisation;

h) The offence has been committed more than once;

i) Dangerous recidivism.

3. This offence committed in any of the following cases shall carry a fine of VND1.5 billion-5 billion ($65,217-217,391) or a penalty of 7-15 years' imprisonment:

a) The illegal goods are assessed at VND500 million-1 billion ($27,739-43,478);

b) The illegal profit reaped is from VND500 million-1 billion ($27,739-43,478).

4. This offence committed in any of the following cases shall carry a penalty of 12-20 years of imprisonment:

a) The illegal goods are assessed at VND1 billion (43,478) or over;

b) The illegal profit reaped is VND1 billion (43,478) or over;

c) The offender takes advantage of a war, natural disaster, epidemic or other extreme hardship to commit the offence.

5. The offender might also be liable to a fine of VND20 million-100 million ($870-4,437), be prohibited from holding certain positions or doing certain works for 1-5 years, or have all or part of his/her property confiscated.

6. Punishments incurred by a corporate legal entity that commits any of the offences specified in this Article:

a) A corporate legal entity that commits any of the offences specified in Clause 1 of this Article shall be liable to a fine of VND300 million-1 billion ($13,043-43,478) if the smuggled items are goods, Vietnamese currency, foreign currencies, rare metals, gemstones assessed at VND200 million-300 million ($13,043) or relics, antiques or items of historical or cultural value despite the fact that the offender previously incurred a civil penalty for the same offence or any of the offences specified in Article 189, 190, 191, 192, 193, 194, 195, 196, and 200 hereof, or the offender has a previous conviction for one of the aforementioned offences which has not been expunged, except for the case specified in Point d of this Clause;

b) A corporate legal entity that commits this offence in the case specified in Clause 2 of this Article shall be liable to a fine of VND1-3 billion ($43,478-130,434);

c) A corporate legal entity that commits this offence in the case specified in Clause 3 of this Article shall be liable to a fine of VND3-7 billion ($130,434-304,347);

d) A corporate legal entity that commits this offence in the case specified in Clause 4 of this Article shall be liable to a fine of VND7-15 billion ($304,347-652,173) or has its operation suspended for 6-36 months. A corporate legal entity that commits this offence in the case specified in Article 79 hereof shall be permanently shut down;

e) The violating entity might also be liable to a fine of VND50-300 million ($2,173-13,043), be prohibited from operating in certain fields or raising capital for 1-3 years.

Hoang Van

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