Chinese customs officials bust $80M drone-based iPhone smuggling ring

Posted:
in iPhone
A smartphone smuggling ring has been broken up by Chinese customs officials, one where a gang used a fleet of drones to transport approximately 500 million yuan ($79.8 million) worth of refurbished iPhones across the border from Hong Kong to Shenzhen.




Shenzhen customs officials believe the ring's activities to be the first case in China where drones were used for cross-border smuggling, according to the Legal Daily report seen by Reuters. A total of 26 suspects have been arrested by authorities in the crackdown.

Rather than use the drones to carry the iPhones directly, they were instead used to fly the ends of two 200-meter (660 feet) cables across the border to operatives on the other side. After each successful flight, the cables would be used to drag small bags, each containing more than 10 iPhones, across the border.

Once the cables were secure, gang members needed only seconds to transfer the bag across the border. Estimates by officials suggest the gang were capable of smuggling as many as 15,000 devices in one night using the technique.

China has already implemented strict rules for drone usage, with regulations requiring owners to register craft under their real names, in an attempt to cut down on incidents where drones stray into commercial flight paths.

Shenzhen custom officials advised they will be keeping an eye on new smuggling methods using similar devices in the future, and aim to improve their own detection capabilities with the increased use of drones and other technology.

Prices for the iPhone can vary greatly between the China mainland and Hong Kong, with devices costing up to 30 percent more due to taxes and other levies. The price disparity and the popularity of iPhones makes smuggling of the smartphones a potentially lucrative activity for some criminals.

In July last year, a woman was arrested by Shenzhen Louhu customs officials, for attempting to smuggle 42 pounds of contraband from Hong Kong to mainland China. Discovered by unusual bulges and strange body proportions, officials discovered the woman had wrapped four layers of iPhones around her body, hidden under her clothes.

The woman was carrying a total of 102 iPhones and 15 high-end watches, which turned out to be a record arrest for the officials. Normal smuggling attempts carried "less than a dozen" iPhones into the country, though periodically people would attempt to get past officials with 70 to 80 concealed devices.

Comments

  • Reply 1 of 14

    And people claim free enterprise isn't alive and well in China.  pshaw!

    :)

    racerhomie3rwesSpamSandwich1STnTENDERBITSbrakkendewmecornchip
  • Reply 2 of 14
    Why aren't these people smuggling Samsung Galaxy S models into China if they're supposedly so much better than iPhones? What's also crazy is if the Chinese domestic smartphones are so great, why bother smuggling smartphones into China at all? Why bother to take such a risk smuggling an iPhone if there isn't much demand for it. Is it likely they're using those iPhones for parts? Or is it lots of smuggling is going on and they only bother to mention it if they are iPhones or some other Apple products? The way analysts talk it's as though iPhones are no longer in demand in China.
    randominternetpersonravnorodomStrangeDayscornchipwatto_cobra
  • Reply 3 of 14
    Are they smuggling to avoid taxes/tariffs, or is there some law against refurbished electronics in China?  I expect US border control wishes that bags of iPhones was the problem they were worried about.
    cornchipwatto_cobra
  • Reply 4 of 14
    MacProMacPro Posts: 17,169member
    Personally it amazes me the Hong Kong Special Administrative Region is still autonomous, making this sort of thing happen.
    edited March 30 watto_cobra
  • Reply 5 of 14
    If any gang member was not caught, maybe they can do the same thing to smuggle an iPhone into the jail that the other gang members will be moving into.
    watto_cobra
  • Reply 6 of 14
    lukeilukei Posts: 308member
    MacPro said:
    Personally it amazes me the Hong Kong Special Administrative Region is still autonomous, making this sort of thing happen.
    Hong Kong is far from autonomous. Half the government is chosen by Beijing. 

    But it is a very convenient open market trading area for China. Especially Chinese government and related officials who want to get their cash out of China. 
  • Reply 7 of 14
    SpamSandwichSpamSandwich Posts: 29,068member

    And people claim free enterprise isn't alive and well in China.  pshaw!

    :)

    It’s not really free enterprise, but it is proof that the laws of supply and demand are constant under almost all economic conditions.
    randominternetperson
  • Reply 8 of 14
    SpamSandwichSpamSandwich Posts: 29,068member
    Are they smuggling to avoid taxes/tariffs, or is there some law against refurbished electronics in China?  I expect US border control wishes that bags of iPhones was the problem they were worried about.
    Will be interesting to see what happens once black market trade gets ahold of large clusters of quadrocopters to fly illegal or illicit items past barriers. In fact, there are so many interesting and unexpected uses of these devices which will subvert laws and security measures everywhere.
    edited March 30 jony0
  • Reply 9 of 14
    Why aren't these people smuggling Samsung Galaxy S models into China if they're supposedly so much better than iPhones? What's also crazy is if the Chinese domestic smartphones are so great, why bother smuggling smartphones into China at all? Why bother to take such a risk smuggling an iPhone if there isn't much demand for it. Is it likely they're using those iPhones for parts? Or is it lots of smuggling is going on and they only bother to mention it if they are iPhones or some other Apple products? The way analysts talk it's as though iPhones are no longer in demand in China.
    If they are cramming all of those iPhones all over their body they don't want a phone that's going to explode, that's why no Samsung. 

    They already know what happens when you bite a battery. 
    watto_cobra
  • Reply 10 of 14
    linkmanlinkman Posts: 775member
    The irony of the whole thing is that the largest Foxconn factory is located in Longhua Town, Shenzhen.
    watto_cobra
  • Reply 11 of 14
    dewmedewme Posts: 1,270member
    Necessity is the mother of invention. I'm kind of impressed by the ingenuity and resourcefulness of these crooks. This same technique could be used in maritime applications for conveying lines between ships at sea, in lieu of current shotgun based line throwers, which are used extensively during underway replenishment and refueling operations. Drones could also be used to convey smaller sized essential items between ships at sea, e.g., medicine, electronic and mechanical repair parts, etc., instead of using a conventional helicopter (SH60, CH47, etc.) to do the same thing at considerably greater cost.
    cornchipwatto_cobra
  • Reply 12 of 14
    asciiascii Posts: 5,513member
    It goes to show there's a practical limit to how high of an import tariff you can apply. Up to a certain point people will just wear it, but beyond that you create a black market. And then stomping out the black market starts eating in to your profits from the tariff. 
  • Reply 13 of 14
    nhtnht Posts: 4,054member
    dewme said:
    Necessity is the mother of invention. I'm kind of impressed by the ingenuity and resourcefulness of these crooks. This same technique could be used in maritime applications for conveying lines between ships at sea, in lieu of current shotgun based line throwers, which are used extensively during underway replenishment and refueling operations. Drones could also be used to convey smaller sized essential items between ships at sea, e.g., medicine, electronic and mechanical repair parts, etc., instead of using a conventional helicopter (SH60, CH47, etc.) to do the same thing at considerably greater cost.
    We have the firescout and kmax.  Eventually we’ll have a rpv sh60.  The cost delta is the crew and for some purposes they absolutely required anyway.

    /shrug. 

    I prefer having a real pilot when I’m the cargo. 
  • Reply 14 of 14
    Are they smuggling to avoid taxes/tariffs, or is there some law against refurbished electronics in China?  I expect US border control wishes that bags of iPhones was the problem they were worried about.
    From the article:
    Prices for the iPhone can vary greatly between the China mainland and Hong Kong, with devices costing up to 30 percent more due to taxes and other levies. The price disparity and the popularity of iPhones makes smuggling of the smartphones a potentially lucrative activity for some criminals.


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