Key point: Today’s article comes from lawyer Tang Shunliang, a compliance expert in the tobacco and vaping sector. From a legal perspective, he puts forward a view—there is no 'transition-period dividend'; defending vaping-related crimes is becoming incre
Today's tweet comes from tobacco and vaping compliance expert Lawyer Tang Shunliang. He presents a viewpoint from a legal perspective—there is no "transition-period dividend," and defending against vaping crimes is becoming increasingly difficult.
In the article, Lawyer Tang Shunliang points out that it is indeed challenging to argue that the transition period does not constitute a crime, and that nicotine-free, flavored vaping products may still be classified as illegal business operations. This serves as a warning for many practitioners who are once again "thinking creatively." Retail practitioners are advised to share this widely.
Introduction:
A few days ago, I saw a fashionable girl smoking a "某刻" vaping device in a restaurant, so I "interviewed" her and found that the device was a "某刻" device, which is highly recognizable, and the "pod" was purchased from a WeChat group as a flavored pod. This indicates that the so-called hundred billion-level stock market, the "food supply" for smokers remains a huge market even after the ban on flavored products. The more it is suppressed, the more scarce it becomes, and the easier it is to sell; illegal operators of flavored pods are becoming increasingly covert.In the first half of 2023, illegal operators were mostly concentrated and cleared through law enforcement. However, media reports occasionally expose major illegal vaping operations, often involving amounts in the millions or tens of millions.However, without a "transition-period dividend," defending against vaping crimes is becoming increasingly difficult.Difficulty! It is indeed hard to argue that the transition period does not constitute a crime.If the production and sales activities of the involved parties occurred entirely after October 2022, or if the production and logistics of the "upstream" occurred before October 1, 2022, but the sales activities to the "downstream" occurred after October 1, 2022.Mainstream defense views believe:That the operating data before October 1, 2022, should not be counted as "illegal business" income. If the amount is large, but the operating amount after October 1, 2022, is small, it can indicate that the operator also has the subjective intention to stop operating, which can be used for a not guilty or lesser charge defense based on subjective fault.However, it is wrong to argue that operating vaping products during the transition period is "legal"!The transition period is a law enforcement buffer:The "Vaping Management Measures" took effect on May 1, 2022, and the national standard for "Vaping" took effect on October 1, 2022. The "transition period" is not a concept of legal effect but rather a delay in the administrative licensing approval for the regulation of vaping, providing a transition for "existing enterprises" to apply for licenses. If the application for the exclusive license is not accepted, the operator should subjectively stop the production and operation of vaping products, including stopping the sale of products produced during the transition period.If a "non-existing enterprise" engages in business after November 10, 2021, and continues to operate after October 1, 2022, then the operating data from November 10, 2021, may be counted as "illegal income" data.In simple terms, those who engage in vaping business after November 10, 2021, as "non-existing enterprises" meet the subjective conditions for constituting a crime: knowing that they need an exclusive administrative license and proceeding anyway.Therefore, the difficulty of the "transition period" lies in whether it can be proven through subjective and objective evidence that it does not constitute a crime, or that the crime is significantly minor.Difficulty! Nicotine-free, flavored vaping products may still be classified as illegal business operations.Many people believe that as long as it does not contain nicotine, it is fine. Recently, products like "Ben Cao Wu Hua" have appeared on the market, which do not contain nicotine but are advertised to include other flavored and herbal components. Since they do not comply with the national standard for "Vaping" (GB41700-2022) which requires that the aerosol must contain nicotine; and they also contain other substances not permitted by the national standard (GB41700-2022), they may be classified as inferior vaping products upon inspection.Article 25 of the Standardization Law of the People's Republic of China states: Products and services that do not meet mandatory standards shall not be produced, sold, imported, or provided.Therefore, such products, upon inspection by provincial-level or higher institutions qualified to identify tobacco and vaping products, can be concluded to be inferior vaping products.Difficulty! Choosing between two charges for a lighter defense is not easy.The classification of vaping products varies, leading to different charges and filing standards. If the involved vaping products are identified as inferior vaping products, they can be punished under the "Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Application of Law in Handling Criminal Cases of Illegal Production and Sale of Tobacco Monopoly Products" (hereinafter referred to as the "Tobacco Monopoly Interpretation") Article 1, paragraph 1, for the crime of producing and selling inferior products. #p#分页标题#e#The filing standard for this crime is the sales amount of inferior products exceeding 50,000 yuan or the value of inferior products not yet sold exceeding 150,000 yuan.If the investigation agency chooses to apply the "Tobacco Monopoly Interpretation" Article 1, paragraph 4, for illegal business operations without determining whether they are inferior vaping products, the filing standard for this crime is illegal business amounts exceeding 50,000 yuan; or illegal income exceeding 20,000 yuan, etc.For these two charges, which one to choose for defense depends on the nature of the involved vaping products and the sales amount. If the sales amount exceeds 50,000 yuan, both constitute a crime. However, if the unsold amount is less than 150,000 yuan, it does not constitute a crime for the production and sale of inferior products.Judicial authorities generally apply the "Tobacco Monopoly Interpretation" Article 5 to require the application of illegal business operations for the conviction and punishment of such vaping products. The reason is that if a crime is constituted, the more serious charge should be applied.This fifth article states that if a person commits the crime of illegal production and sale of tobacco monopoly products, and simultaneously constitutes the crime of producing and selling inferior products, infringing intellectual property rights, or illegal business operations, they shall be convicted and punished according to the more serious provisions.It is necessary to consider various factors such as the "transition period," "involved amounts," and the timing of the operating behavior, the amount of unsold products, and the size of transaction amounts and sentencing ranges to choose which charge can secure the lightest punishment for the criminal suspect, thus determining the defense strategy.Since October 1, 2022, especially starting in February 2023, there has been a nationwide crackdown on illegal vaping operations, but there is still controversy in the legal community regarding the criminalization of vaping operations.Considering the initial administrative licensing policies, the awareness of the parties involved, and the need to maintain economic stability, some regions have adopted relatively mild enforcement strategies. Most suspects detained in related cases have been released on bail, not prosecuted, or sentenced to probation, which has achieved the effect of law enforcement.However, since October 1, 2022, under the temptation of profits from flavored vaping products, new illegal production and sales of vaping products will likely continue to exist. If criminal coercive measures are taken against the involved parties, the difficulty of defense will increase.Finally, this statement can describe the long-term existence of the black market for vaping in China and abroad, as well as the ongoing temptation of profits from flavored vaping products leading to crime.Marx quoted a line from the "Quarterly Review" while writing "Capital":"If there is a profit of 10%, it is guaranteed to be used everywhere; if there is a profit of 20%, it becomes active; if there is a profit of 50%, it dares to take risks; for a profit of 100%, it dares to trample on all human laws; for a profit of 300%, it dares to commit any crime, even risking the gallows. If turmoil and conflict can bring profit, it will encourage turmoil and conflict. Smuggling and slave trading are proof of this."
