Japanese employee caught smuggling rare earths, company executive outraged: Why arrest instead of fines?

Japan's Kyodo News reported consecutively on June 24 and 25 that two Japanese nationals were detained in Dalian. Japan's Chief Cabinet Secretary Toshio Kimura confirmed the incident at a press conference on the 24th. The two are suspected of violating the crime of smuggling goods and items prohibited from import or export by the state.

Multiple sources revealed that both individuals are employees of Fujitsu Electric, a major Japanese electrical machinery conglomerate, with at least one working for the company’s local Chinese subsidiary. They were detained on May 18 and May 25 respectively, and customs authorities notified Japanese diplomatic missions abroad the day after their arrests.

Another Kyodo News report mentioned that a senior executive based in Dalian expressed confusion over the decision to directly detain personnel from their company rather than impose fines on the enterprise. The executive remarked: “In general, such cases are usually settled with fines, aren’t they?”

The issue lies in the nature of these individuals’ misconduct: attempting to process rare earth magnets into products like motors in a disassemblable form for export. Chinese authorities suspect the intent was to dismantle the exported products afterward and extract the rare earth magnets.

In other words, the two attempted to smuggle controlled rare earth magnets “hidden” inside motors. According to industry group sources, if rare earth magnets are processed into products in a non-removable state, they fall outside the scope of export controls; however, if they can be removed, they may be deemed illegal. The suspects are accused of trying to export processed rare earth materials as items not listed under controlled categories.

From my perspective, the Japanese executive’s confusion and indignation likely stem from two factors. First, he may not consider the severity of the individuals’ actions sufficient to constitute a criminal offense. Second, he is accustomed to the conventional model where corporate violations lead to corporate penalties, and thus fails to understand why this time it’s individual employees being arrested for illegal acts.

Original source: toutiao.com/article/1869041318772748/

Disclaimer: This article represents the personal views of the author