China Central Television is reporting 30,000 tonnes of New Zealand grown kiwifruit is in the hands of Shanghai Customs officials after they seized it and arrested Zespri's import agent for smuggling.

A clip from the China Central Television report showing Zespri kiwifruit in the hands of Chinese officials. Watch the CCTV report here. Zespri is stating its fruit are not seized.

The news report says Zespri's agent in Shanghai is under arrest for evading about US$9.4 million in import duties since 2007 and shows pictures of a large store of Zespri kiwifruit in the hands of customs officials.

The agent, Liu Xiongjie, was arrested in June on suspicion of tax evasion.

He is chairman of importer-distributor Shanghai Neuhof Trade Co.

He has been held by Chinese authorities since June 22, accused of under-invoicing imported kiwifruit.

Shanghai Neuhof Trade Co is thought to be the largest of Zespri's four agents in China, distributing about three million trays of Zespri kiwifruit in the Shanghai district last year.

China Central Television reports the seizure is the single largest fruit import smuggling case with the largest value ever involved in China.

Zespri spokesman Dave Courtney says Zespri is aware of its agent's arrest, but says none of its kiwifruit are seized, and the season is continuing as normal.

He says Zespri is a witness in the investigation and is working with Chinese customs authorities to gain a full understanding of the situation.

He says Zespri's 2011 selling season to China remains on track and the exporter will continue to monitor the situation closely for any adverse impact as a result of the arrest.

The CCTV story says Shanghai Customs' suspicions were roused by fluctuations in the prices declared for the kiwifruit.
'After comparison and analysis, we found that the kiwifruit with a high declared price has the same specification and trademark with the kiwifruit with a low declared price,” says Xie Liming, investigator of Songjiang division, anti-smuggling bureau, Shanghai Customs.

'If we want to make sure whether the company understates the true price for smuggling, we have to go to the company to investigate whether they have two sets of invoices and accounts, the real one and the fake one,” Xie Liming told CCTV.

To get the real price of the kiwifruit imported from New Zealand, Shanghai Customs made contact with New Zealand Customs through the International Cooperation Organisation of the Anti-Smuggling Bureau, China Customs.

Feedback from New Zealand showed that the price the company declared to Shanghai Customs was greatly lower than the price it declared to New Zealand Customs.

'The company asked the foreign enterprises to prepare fake invoices when they applied for Certificate of Origin. Then the company declared value to the Shanghai Customs with the fake invoice to evade taxes,” says Wang Jiabin, deputy director of Songjiang division, anti-smuggling bureau, Shanghai Customs.

When searching in the company, investigators found large amounts of data confirming the company tampered with the customs declaration documents, reports CCTV.