BEIJING // The former Chinese premier Zhu Rongji once said the alleged smuggler Lai Changxing deserved to be executed three times over, and it now seems likely that after more than a decade in Canada, the fugitive will have to face the authorities in China.
Often described as China's most wanted man, Mr Lai, 53, is accused of having masterminded a multibillion dollar smuggling ring involving everything from luxury cars to oil, cigarettes and textiles.
However, in contrast to many convicted of corruption on a far more modest scale, he is unlikely to face the death penalty.
As the Chinese authorities closed in on him in 1999, Mr Lai fled with his wife, two sons and daughter to Canada, and since then has battled in the courts to avoid extradition, adding a further chapter to a story of alleged corruption that so captured the imagination of foreign media that one China-based correspondent wrote a book on the subject.
After an Ottawa federal court ruling delivered late on Thursday went against Mr Lai, reports have indicated he could leave Canada as soon as today, although officials have not confirmed this.
"There have been a lot of corrupt officials fleeing China with a lot of money. The Chinese authorities want to establish a deterrent effect, that they can be prosecuted in China," said Joseph Cheng, a professor of political science at City University of Hong Kong.
China's attempts to secure the extradition of suspects has been hampered by a lack of agreements with other countries, amid foreign concerns over judicial independence and China's large-scale use of the death penalty. China does not reveal how many people it executes each year, but human rights groups believe the number runs into thousands and exceeds the total for all other countries combined. The authorities in Beijing say 600 Chinese citizens suspected of economic crimes are at large overseas.
The Chinese authorities offered assurances to Canada that Mr Lai would not be tortured or executed and these were pivotal in securing agreement for his extradition for alleged smuggling, bribery and tax evasion.
"I think there's a certain respect and certain understanding that, given the tremendous attention this case attracted internationally and domestically, the Chinese authorities will be careful to respect the legal principles and procedures," Mr Cheng said.
In a story that exposed the underworld of a country where economic liberalisation has allowed many to accumulate vast fortunes, Mr Lai set up a series of companies that are said to have been involved in smuggling through the port of Xiamen in south-east China worth $10 billion (Dh36.7 billion). He allegedly did not pay billions of dollars in tax.
Mr Lai has been quoted as saying he was exploiting loopholes, but the authorities have seen it differently and after a crackdown on activities in Xiamen originally ordered by Mr Zhu, there have been more than a dozen death sentences handed out, and more than 300 people jailed. Many senior officials in the local government were implicated, but until now the man said to have masterminded the vast operation has evaded the law.
Mr Lai was first arrested in Canada in 2000, the year after he fled there, and although his application for refugee status was refused in 2002, judicial reviews and lengthy assessments of the dangers he might face from China authorities, among other delays, had prevented his extradition. The delays have strained relations between Ottawa and Beijing.
Two weeks ago the Canadian authorities rearrested Mr Lai. Although his legal team has continued to assert he could face torture or death in the event of extradition, China's assurances that this was not the case, even though one of Mr Lai's brothers died in detention, were accepted by the Canadian federal court judge Michel Shore in a ruling upholding a deportation order.
Canada, which does not impose the death penalty, does not allow extraditions where the suspect could face execution.
China indicated it would give Canadian officials access to Mr Lai in custody and to parts of the judicial proceedings.
"It is assumed that the assurances of the Chinese government, as per its written promises, will be kept, as the Chinese government's honour and face is, and will be, bound and kept respectively, by the monitoring for the lifetime of the applicant," the ruling stated.
The judicial system in China has often been criticised by international observers for its perceived subservience to the Communist Party.
The decision to deport Mr Lai was welcomed by the Chinese foreign ministry spokesman, Ma Zhaoxu, in a statement reported by the official Xinhua news agency.
"The Chinese government's position is very clear that Lai should be deported to China and put on trial," Mr Ma said.
This week, China demonstrated its willingness to clamp down on corruption, seen as widespread within the vast bureaucracy and in business, when it executed two former vice mayors for taking bribes.
dbardsley@thenational.ae
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
UAE currency: the story behind the money in your pockets
Scores
New Zealand 266 for 9 in 50 overs
Pakistan 219 all out in 47.2 overs
New Zealand win by 47 runs
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Key figures in the life of the fort
Sheikh Dhiyab bin Isa (ruled 1761-1793) Built Qasr Al Hosn as a watchtower to guard over the only freshwater well on Abu Dhabi island.
Sheikh Shakhbut bin Dhiyab (ruled 1793-1816) Expanded the tower into a small fort and transferred his ruling place of residence from Liwa Oasis to the fort on the island.
Sheikh Tahnoon bin Shakhbut (ruled 1818-1833) Expanded Qasr Al Hosn further as Abu Dhabi grew from a small village of palm huts to a town of more than 5,000 inhabitants.
Sheikh Khalifa bin Shakhbut (ruled 1833-1845) Repaired and fortified the fort.
Sheikh Saeed bin Tahnoon (ruled 1845-1855) Turned Qasr Al Hosn into a strong two-storied structure.
Sheikh Zayed bin Khalifa (ruled 1855-1909) Expanded Qasr Al Hosn further to reflect the emirate's increasing prominence.
Sheikh Shakhbut bin Sultan (ruled 1928-1966) Renovated and enlarged Qasr Al Hosn, adding a decorative arch and two new villas.
Sheikh Zayed bin Sultan (ruled 1966-2004) Moved the royal residence to Al Manhal palace and kept his diwan at Qasr Al Hosn.
Sources: Jayanti Maitra, www.adach.ae
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