Bad CSR: Unilever Sued For Smuggling In China

November 4, 2009 | Print | Email Email | Comments | Category: Law & Order

According to local Chinese media, Unilever, one of the world's largest consumer products conglomerates, has been involved in a smuggling scandal in China.

It is reported that four parties — Unilever China's purchasing department and the department's chemical outsourcing assistant manager Fan Jun; Bronson and Jacobs (Shanghai) International Trading Company; an importing agent of Unilever; and its acting business manager, Zhang Hao — have been taken to court and accused of smuggling. The parties were said to have intentionally used another name in importing chemical materials for Unilever to evade tax payments and the total tax they evaded had amounted to CNY3.17 million.

It is reported in various media that from October 2002 to February 2008, Unilever's purchasing department imported 74 quotas of steroid through Bronson and Jacobs (Shanghai), thus evading paying CNY2.19 million in tax. In addition, from January 2005 to April 2006, the company used a similar approach and imported 15 quotas through Shanghai Zhao Heng Industrial Company and eight quotas through NK Chemicals (Nanjing), which helped it evade paying a total of CNY980,000 in tax.

Reports state that transnational companies have long taken advantage of the management loopholes of the Chinese customs to smuggle goods to evade tax. In 2003, Fuji Xerox, another well-known multinational company, was found to be involved in a similar smuggling case.

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One Response to “Bad CSR: Unilever Sued For Smuggling In China”

  1. By Paul DwyerNovember 5th, 2009 at 4:49 pm

    This proves that multi-nationals in China can be both good and bad at their own CSR. For example UniLever does much good with their green buildings and donations but their procurement process is still much to be desired.

    I would like to see an international campaign that focuses on making sure companies that operate in Country A also so the same business practices in Country B. The United Nations has the Global; Compact but that is presently just not mandatory and it is all based on the own company's desire to issue their reports.

    At the end we need to be vigilant toward these co's the make sure they maintain high corporate responsibility levels in society.

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