In a nutshell: Authorities in Hong Kong have arrested a man for allegedly trying to smuggle HK$12 million (about $1.53 million) worth of high-performance CPUs into mainland China. According to the Hong Kong Customs and Excise Department, it seized a total of 596 “high-end” processors, each costing more than HK$20,000 (around $2,500).
The seized items were discovered in a Mercedes-Benz that was intercepted at Shenzhen Bay Control Point on June 13 based on “risk assessment.” According to the Hong Kong Customs Department, its officers conducted a full X-Ray of the vehicle’s trunk and spotted irregularities that they believed needed further investigation. Upon closer inspection, they found the CPUs inside false compartments on both sides of the trunk of the vehicle.
According to investigator Ho Ting-chun, the consignment included server CPUs designed for AI and cloud services. Had the suspect been able to successfully smuggle the processors into mainland China, he would have evaded HK$3 million (around $384,000) in taxes and customs duties. The consignment’s origin and intended destination remain a mystery, but investigators are trying to solve the mystery.
As for the 51-year-old male suspect, he was arrested for attempted smuggling, which is punishable by up to seven years in prison and a HK$2 million (around $250,000) fine. He is currently out on bail, but the officers aren’t ruling out further arrests as the probe gathers steam.
It’s not immediately known whether the high-end, high-performance hardware was legally allowed to be imported into mainland China under the US sanctions, but online speculations suggest that this could be yet another way for the Chinese regime to evade sanctions and import US technology into the country.
Over the years, there have been several other reported cases of smugglers transporting US tech into China in violation of the sanctions. Last year, Hong Kong authorities arrested two suspects for attempting to smuggle old Nvidia Quadro graphics cards into China. A few weeks before the Nvidia bust, a man was arrested for trying to smuggle in 239 Intel CPUs strapped on his body. The Hong Kong government has also reported seizing other tech products at the China border, including memory chips, hard disks, laptops, and more.
