Three employees of the Japanese company Marubeni have been detained on suspicion of smuggling in China in an apparent investigation into tax payments on imported soybeans.
The detention of the three Chinese nationals in Shandong Province came to light on the same day that Mitsui OSK, the Japanese shipping group, agreed to pay Y4bn to secure the release of a container ship impounded by a Chinese court in a wartime compensation dispute.
The container ship case had raised concerns that tensions between China and Japan are spilling into the commercial realm.
This previously occurred in 2012 when Chinese travel agents refused to book tickets to Japan during a particularly heated episode in a longstanding dispute over uninhabited islands in the East China Sea. The customs bureau in Qingdao, the main port in Shandong, confirmed the three Marubeni staff were detained on suspicion of smuggling.
Marubeni confirmed their employees had been detained but said China had not explained why they were under investigation. The three work for Columbia Grain, a US-based trading company which is controlled by Marubeni.
The detentions come after a number of Chinese processors in Shandong refused to accept contracted soyabean shipments after they were unable to open letters of credit amid tightening scrutiny over loans for commodities imports.
One of the companies, Chenxi Group, said in March it would reduce previously contracted shipments between March and July. This week Chenxi posted on its website a letter from Columbia Grain’s office in the Chinese port city of Dalian, which said that “co-operation is good and business is normal”. The letter added: “There have been no cancellations in letters of credit.”
Columbia Grain’s Dalian office declined to comment yesterday. A Chenxi executive denied reports of soyabean shipment cancellations and said he was not aware of any detentions.
There was no immediate evidence that the detentions were politically motivated. Citizens from other nations have in the past been detained in China in connection with disputes over shipment defaults and customs fees. Asked about reports that China was investigating whether Columbia Grain had evaded taxes on soyabean imports, Marubeni said paying such taxes was the responsibility of the ultimate buyers.
Additional reporting by Owen Guo