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How this Chinese entrepreneur bypassed European customs duties for years

Lijun D.

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How this Chinese entrepreneur bypassed European customs duties for years

Lijun D. was finally caught by the patrol. Suspected of high-level fraud, this Chinese entrepreneur fell into the nets of the European prosecutor. Since 2018, he would have "implemented a system of circumvention of European customs duties, for damage estimated at 26 million euros", affirm our colleagues from Parisian, at the origin of these revelations confirmed by the AFP. At 43, Lijun D. is the head of Leon Cycle, a German multinational at the head of the global electric bike market. Arrested last Wednesday by customs officers from the Financial Judicial Investigation Service (SEJF), Lijun D. was quickly placed in police custody, before being indicted on Friday and finally imprisoned in the prison of Health.

Still, getting hold of the CEO of Leon Cycle was no easy feat. Because it must be said that the system of circumvention of customs duties put in place seems well oiled. The customs officers would have discovered the pot of roses by chance. At the bend of a simple check, the customs officers note irregularities on the goods imported by the giant of the cycle. After investigations, the judicial customs discover that the electric bicycles in question were manufactured in China, while they were stamped as coming from South Korea. Since the rights to enter goods into the European Union are not the same from one country to another, Leon Cycle benefited from a reduction in customs duties.

To this original scam would be added a second. “The bicycles are also delivered in kit form, making it look like spare parts. A nuance that also allows you to pay a much lower value added tax (VAT), ”notes the Parisian. Once the customs barriers of the European Union have been crossed, the kits would be assembled in the Czech Republic, Romania or even Portugal, the Ile-de-France daily believes. Such final assemblies would then allow the bikes to be sold as products made in Europe.

To crown and lock this system, the fraudulent money produced would ultimately be laundered. "Leisger Holdings Limited, "the main holding company" of Leon Cycle, is registered in the Cayman Islands, a notoriously known tax haven", points the finger at Le Parisien.

But these overwhelming suspicions are only “extrapolations”, protests Me Flahaut-Prévot, the lawyer for Lijun D. The council is worried about seeing his client become “the stake in a commercial war between Europe and China", at a time when the European Union is trying to tighten the screws of its customs system. "If the customs file on the circumvention of anti-dumping duties is presented as unavoidable by the prosecution, most of the elements can be disputed", he adds in the columns of Le Parisien, adding that "on money laundering, there is no to nothing. The European Public Prosecutor makes an extrapolation because the main holding company is in the Cayman Islands. Mr. D. is a businessman with a stable situation who has no place in detention”. The suspect, already implicated in Germany for similar facts, defended himself by affirming to the customs officers of the SEJF that "there is no offense", "no assembly to try to circumvent the rights customs".

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