Getting illegally earned money out of China?

[Manuel]

A good friend of mine has been working as a teacher while on a student visa for a quite a while and being paid cash-in-hand, which he keeps at home to avoid any awkward questions from banks. Today we met for a chat and he told me how he is saving money to eventually leave China and study in Canada. He thought he had it all figured out until I asked him "how do you  plan to get all that money out of China?". Basically, I foresee a whole load of complications, not just getting the money out of China but also getting it into a bank account abroad. This sort of thing has got harder over the past few years not everywhere. I've heard stories of Chinese exchange students studying in Spain who had funds wired to them by relatives to cover their living and academic expenses and the bank withheld the funds until a bunch of documents were produced.

 

Long story short, I told him I'd give him a hand by asking the question here on Chinese Forums and see if there are any helpful replies.

 

Some ways that came up on Google:

 

1. Brute force: Take the money out of the country as cash spread over several trips so as not to exceed legal limits (I think max its 20k USD)
2. Bitcoin: This has come up several times. Furthermore, Bitcoin is legal in Hong Kong (see next point) as well as most western countries.
3. Hong Kong: Smuggle your RMB to Hong Kong and deposit it into your own HK account which also has branches in your destination country e.g. Canada. Once it's in your account, the money is legally yours and you don't need to prove anything.

 

Are there any easier alternatives? Would be particularly interested in success and/or failure stories. Cheers

[Flickserve]

Find someone who wants RMB in exchange for foreign currency.

[889]

My most helpful reply would be to not get involved in this.

[DavyJonesLocker]

1 hour ago, Manuel said:

e.g. Canada. Once it's in your account, the money is legally yours and you don't need to prove anything.

 

Just on this point 

No that's not true, there are a whole host of checks that need to be done such as antimoney laundering, proceeds of crime act etc. The onus is on the bank to check and has the power to freeze your accounts while investigations are under way. Unless Swiss accounts etc.

However I hardly doubt any department  is doing that for the money he would have earned. 

 

Depending on what amounts your talking about , he could just leave with the cash, several times, make a holiday out of it etc  Do a combination of what you suggest above to spread the risk 

 

[mungouk]

Could answering this question effectively amount to aiding and abetting a crime?

 

This is a very public forum.  Googling "Getting illegally earned money out of China?" already brings up this thread as the second hit, after an ad. 

[roddy]

I'd be taking note of the penalties involved if you get caught. And note that while the legal limit for taking money out of the country is USD20k (or whatever, I don't know), that's not going to stop them asking questions and figuring out you've been working illegally if they spot you with a mere 15k.

1 hour ago, mungouk said:

Googling "Getting illegally earned money out of China?" already brings up this thread as the second hit, after an ad. 

Well, what did the ad say?

[陳德聰]

Lol at aiding and abetting.

 

A lot of banks have shady characters outside asking if you plan to do foreign exchange. If your friend were to launder his money, this is a common way people do it.

 

One note though about physically smuggling cash into Canada, your friend will need to declare any amount higher than $10,000 Canadian to customs, and will be asked to produce some sort of proof of origin there at the border. If your friend is white looking then he can probably get away with not declaring, and just praying they don’t find the money (undeclared cash over $10,000 can be seized).

 

Honestly I think it would be more realistic to open a bank account and bring an amount to the bank that looks like a reasonable amount someone would open an account with at the start of a long stay in the country. Then find friends who will transfer their own money directly to the bank account in exchange for cash (let’s call these the aiders and abettors), maybe around lunar new year, through WeChat red envelopes.

 

Then you can wire yourself $50,000 USD per year from your own Chinese account. 

[Manuel]

I could be wrong but 'friends sending you money' is the oldest trick in the book,  no? Isn't money changing hands theoretical always subject to taxation?

 

Obviously there is a loophole that hasn't been plugged yet, which is the one that enables the school my friend works for to pay him cash and still somehow balance the books. My really basic understanding of bookkeeping tells me that somewhere, at something, the discrepancies are detected. I really don't know how this works. 

[mungouk]

6 hours ago, 陳德聰 said:

Lol at aiding and abetting.

 

Why the lol?

 

Laundering money that was obtained illegally could still land you in trouble if someone wanted to cause you trouble, no?

 

 

[陳德聰]

The lol is because giving vague advice on an online forum is not aiding and abetting anything. We don’t even know if the ‘friend’ exists.

 

But honestly, @Manuel I don’t really know what you expect to get out of this. You will run into problems literally no matter what you do in this situation. It’s just a matter of what kind of risks you want to take.

[Manuel]

I know what you are thinking: 'Doctor, a friend of a friend wants to know if it's safe to stick a pencil up his bottom'. The friend is real and it's not myself. What I want to get out of this is either a solution or a wake-up call.

[Jim]

You could purchase a large quantity of drugs, such as crystal meth, and smuggle those instead. In for a penny, in for a minimum of twenty five years, I say.

[Manuel]

1 minute ago, Jim said:

You could purchase a large quantity of drugs, such as crystal meth, and smuggle those instead. 

Great idea Jimbo

[NinjaTurtle]

The legal limit to bring into the US is 10k USD dollars cash, check, etc. (Canada is the same?) I always carry the money with me as USD cash, in my carry-on backpack, and make sure it is less than the limit. Once I get past security and before I get on the plane, I go into a bathroom and transfer the cash into a belly-pack under my shirt, so the cash is not in my carry-on backpack that can be rifled while I am in the WC in-flight. Once I land and before going through security in the US, I re-transfer the cash back into my backpack. (I do this right in the WC that is in the Customs area at L.A. airport.)

 

I have never felt uncomfortable carrying that much cash in my backpack. Well, the first several times I did, but I now feel it is a very small risk. The only problem would if somebody mugged me and took my backpack, or I lost my backpack, which I just don't think is going to happen. People just don't think travelers are walking around with 9k USD cash in their backpack.

 

I have returned to the US from China and deposited thousands of dollars cash into my American bank account several times. I have never been asked about money laundering or anything like that. If I was, I would just say that it is salary from my job in China. Now if I deposited a couple million dollars, that would be different. But  depositing eight or nine thousand dollars cash doesn't seem to set off any warnings at all.

 

One time a US Customs officer asked me how much money I had, I told him the truth, 6k USD, and it didn't bother him at all.

 

The problem here is international money-laundering by the "international mafia". But I think you would have to already be on an "international mafia" money-laundering  name list that the police already have, which I seriously doubt is happening in your case. Bringing 9k USD cash into the US or Canada 3 or 4 times is not going to be a problem. I do not think that what you are doing even fits the definition of money-laundering anyway, so I don't see any reason why Interpol would be after you. (I do not think Interpol even cares if you were paid by your school under the table. That would be a violation of Chinese law, not US or Canadian law, so I really believe US Customs and Canadian Customs don't care.)

[DavyJonesLocker]

9 hours ago, Manuel said:

 

Obviously there is a loophole that hasn't been plugged yet, which is the one that enables the school my friend works for to pay him cash and still somehow balance the books. My really basic understanding of bookkeeping tells me that somewhere, at something, the discrepancies are detected. I really don't know how this works. 

 

Not a loophole, it's called fiddling the books or just not declaring all their income and paying the teacher out if that in cash. When everything is legit you get paid by bank transfer unless it's one off here and there

 

 

[Manuel]

46 minutes ago, DavyJonesLocker said:

not declaring all their income

But all income must have come from somewhere? Is undeclared income necessarily always cash? If I go to the bank today and withdraw all my money as cash, at that point it becomes untraceable—there is no record of where that money went and nobody asks any questions, unlike when you try to put the money back into the account which probably would raise red flags. Can businesses just withdraw money and not declare what they spend it on?

[DavyJonesLocker]

Well I'm not familiar with the rules in China particularly but when you submit personal tax returns in the UK you simply declare what you have written is correct. In the UK I  am neverrequired to produce bank statements showing expenses and income  etc it's only when the tax office find something suspect then you need to start producing evidence , receipts etc..

Same with a business. The tax office would be swamped if they had to check every expense and receipt . A lot of expenses like "client entertainment" are not expenses at all. The idea is to make income as low as possible and expense as high as possible, so what gets written on the tax forms may not reflect money sitting in accounts. 

 

From a personal bank account Money coming into your account could come from anywhere, car sale, partners, spouses, transfers from other accounts etc it's hard to know what is taxable income and in any case it's  the responsible of the taxman , not the bank to check that The onus is on the bank to highlight any dubious shenanigans but that means money laundering, proceeds of crime act (drugs, smuggling goods etc) and not unpaid tax , vat , undeclared income etc. You can only check a tiny fraction on incoming money otherwise the system would grind to a halt.There simply isn't the manpower. 

 

However they (tax office, criminal investigations) can't just start poking around in your banks accounts without a prior court order. 

 

No clue about China but I'd hazard a guess that not everything can be checked otherwise the work load would be immense 

 

Coincidentally I just this. 

 

Swapsy

I know nothing about it, but might he useful. 

 

I think if it was me I would just go a combination of bitcoins, physically bring it out to an account on HK. 5 trips across the border and it's fair amount

Edited April 28, 2019 at 04:33 AM by DavyJonesLocker

[Manuel]

7 minutes ago, DavyJonesLocker said:

 

No clue about China but I'd hazard a guess that not everything can be checked otherwise the work load would be immense 

 

Coincidentally I just this. 

 

Swapsy

I know nothing about it, but might he useful. 

Thank you, most constructive reply so far ?

 

Re. Swapsy, I suppose it Is OK for people to wire each other funds within the same country. I mean, I use Wechat for all my payment (literally can't remember the last time I saw cash), and I have sent and received money via bank transfer without issue. Maybe you are right, they don't check as thoroughly as I thought. It would be a mammoth task.

[DavyJonesLocker]

its tough of forums as different personalities will have a different view of risk. Its sensible to point out consequences of dubious actions but sometimes people have the mind set to unnecessarily scaremonger and not give a weighted risk opinion.  China is the place whereby if you wait for the green man on the traffic lights before you cross the road you will there for eternity. 

 

Everyone here is mature so can make their own mind up as to what to do in circumstances like this one and other daily life choices  in China.

 

 

 

 

[NinjaTurtle]

Manuel,

 

By far, the biggest problem you will have is the long time it takes to exchange RMB to USD. As a foreigner, you are limited to exchanging only 500 USD a day.

 

I recommend using the Bank of China because Bank of China does NOT require you to have a bank account with them, all you need is cash and a passport. Also, the Bank of China International Money Exchange Tellers (which are separate from their regular tellers) can always speak to you in English. Get there EARLY on Saturdays and Sundays as a long line always starts forming soon after they open. Also, more than likely, you will have to pass through a crowd of black market money changers as you walk in the front door. Just ignore those guys and walk in the front door. Security will stop them if they try to walk into the bank.

 

I once needed to exchange 6k USD. It took six weeks!! I went to the Bank of China every Saturday and Sunday for six weeks and bought 500 USD each visit. I was wondering if they would become suspicious because I was exchanging the maximum every week for several weeks. Not at all. As long as I did not try to exceed the limit (500 USD per day per visit) they never seemed suspicious and never said anything.

 

Just be sure to allow yourself several months before you leave China. Otherwise you will run out of time.

 

One more thing. If you work at a school, if it is the end of the school year, and your school will be renewing your visa for next year, they will take your passport for a couple of weeks near the end of your contract. During this time you will not be able to buy a train ticket, take a train, stay at a hotel, or do any bank business inside a bank! (You will still be able to use your bank card at an ATM.) If this is the case, you will need to allow yourself several more weeks to do money exchange.

 

I have also heard of ICBC Bank running out of USD at the end of the school year because a large numbers of foreigners are all trying to exchange money at the same time, at the end of the school year, so you have to allow for this too.