Here are some possible reasons for such investigations and actions:
I. Product related issues
1. Intellectual property and origin authenticity
Counterfeiting concerns
Some "Russian Goods Stores" might be found to be selling products that are mislabeled as Russian origin goods. For example, there could be cases where products are falsely claimed to be made in Russia but are actually from other sources. This misrepresentation is not only unfair to consumers who expect genuine Russian products but also violates relevant laws on product origin labeling and consumer protection.
Lack of proper import documentation
Genuine Russian goods entering the Chinese market need to go through proper import channels with complete documentation. Stores that cannot provide valid import certificates, customs declarations, and other necessary paperwork for the products they sell may be subject to investigation. This is to ensure that the products meet China's safety, quality, and regulatory requirements.
2. Quality and safety
Unregulated products
There may be a situation where certain products sold in these stores do not meet Chinese quality and safety standards. For example, food products may not adhere to China's food safety regulations regarding ingredients, additives, or storage conditions. Non food items like cosmetics or handicrafts may also have quality issues such as containing harmful substances or being made with sub standard materials.
II. Business operation issues
1. Business license and compliance
Illegal operation without proper licenses
Some stores might be operating without obtaining the necessary business licenses or relevant permits. This could include not having the appropriate retail license for selling imported goods, or not meeting the requirements for handling certain types of products (such as those requiring special licenses for alcohol or tobacco sales).
Tax evasion and non compliance
There could be suspicions of tax evasion among these stores. If they are not properly reporting their sales, imports, and paying the appropriate taxes, it is a violation of China's tax laws. For example, under reporting the value of imported goods to pay less import tax or not paying value added tax on their sales within China.
2. Market order and competition
False advertising
Stores may engage in false advertising to attract customers. For instance, exaggerating the functions or qualities of Russian products, or making unsubstantiated claims about the exclusivity or superiority of their products compared to others in the market. This distorts the market competition environment and misleads consumers.
Unfair competition
There could be cases of unfair competition among these "Russian Goods Stores". For example, some stores may use improper means to drive out competitors, such as spreading false rumors about other stores or engaging in price fixing behavior, which disrupts the normal order of the market for Russian goods in Shanghai.
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