In criminal proceedings involving illegal business operations of Vapes, the calculation of the illegal business amount is a decisive factor for case filing, prosecution, and sentencing. Chinese law sets clear thresholds for establishing criminal liability, and the valuation of seized vapes is carried out under strict regulatory guidelines.
Legal Standards for Criminal Filing
According to Article 71 of the “Provisions on Standards for Filing and Prosecution of Criminal Cases under the Jurisdiction of Public Security Organs (II)” issued by the Supreme People’s Procuratorate and the Ministry of Public Security, a case of illegal operation of tobacco products, including Vapes, must be filed for prosecution if one of the following conditions is met:
- Illegal business amount of RMB 50,000 or more, or illegal gains of RMB 20,000 or more;
- Illegal operation of 200,000 cigarettes (sticks) or more;
- Within three years, if a person has been administratively punished twice or more for illegal tobacco operations, and again engages in illegal operation of tobacco products with an amount of RMB 30,000 or more.
Sentencing Guidelines
The Supreme People’s Court and the Supreme People’s Procuratorate’s Judicial Interpretation further clarifies sentencing benchmarks under Article 225 of the Criminal Law (“Illegal Business Operations”):
Serious Circumstances:
- Illegal business amount ≥ RMB 50,000, or
- Illegal gains ≥ RMB 20,000, or
- Illegal operation of ≥ 200,000 cigarettes.
- Illegal business amount ≥ RMB 250,000, or
- Illegal gains ≥ RMB 100,000, or
- Illegal operation of ≥ 1,000,000 cigarettes.
👉 This distinction is crucial because whether the amount exceeds RMB 250,000 determines if the sentencing range falls under five years or over five years of imprisonment.
How Are Seized Vapes Valued?
The determination of the illegal business amount for seized Vapes involves two main steps:
1. Product Identification
The Provincial Tobacco Bureau’s Quality Supervision Station first confirms whether the seized goods are indeed Vapes or related products.
2. Price Certification
The Provincial Tobacco Monopoly Administration then issues an official valuation based on the “Administrative Measures for the Pricing of Vapes Involved in Cases” (December 14, 2022) issued by the State Tobacco Monopoly Administration.
Key provisions include:
When actual purchase or sales price can be verified → valuation is based on that price.
When actual price cannot be verified → valuation follows a structured hierarchy:
(a) Identifiable Brand & Model (listed on the vapes trading platform):
Use the suggested retail price at the time of seizure.
(b) Identifiable Brand but Model Not Listed:
Use the national average suggested retail price of that brand in the previous year.
(c) Unidentified Brand/Other Circumstances:
Use the previous year’s national average suggested retail price of vapes.
Average Suggested Retail Prices are calculated separately for:
Pods (cartridges)
Devices (vape kits)
and are weighted by national sales volume. Combination kits are calculated by counting both pods and devices individually.
Key Takeaways
- Case filing depends on business amount (≥ RMB 50,000) or illegal gains (≥ RMB 20,000).
- Sentencing severity hinges on whether the illegal business amount exceeds RMB 250,000.
- Valuation is standardized: if actual transaction prices are not available, authorities rely on national average retail prices from the official vapes trading platform.
- The system ensures consistency, fairness, and transparency in judicial determinations.
✅ By understanding how illegal business amounts are calculated for seized Vapes, stakeholders—including legal practitioners, compliance officers, and businesses—can better assess regulatory risks and navigate China’s increasingly strict enforcement environment.