Airport delivery service for rich Chinese unravels, leaving Canada jeweller Montecristo with huge unpaid tax bill

Company took watches to airport for customers returning to China who didn’t want to pay Canadian tax, until a border agent got suspicious

Reading Time:3 minutes

Montecristo Jewellers in Vancouver. Photo: handout

Published: 11:39am, 23 Mar 2019Updated: 1:56am, 26 Dec 2021

When Vancouver-based jeweller and magazine publisher Pasquale Cusano opened shop in 1978, he mostly catered to Europeans, but over the years his customer base shifted towards wealthy Chinese with an insatiable demand for luxury watches worth up to C$1 million (US$746,000) apiece.

With foreign fortunes flooding in, Cusano’s Montecristo Jewellers began hearing complaints from customers about taxes on big ticket items they planned to take back to China as gifts. Unlike the European Union with its value-added tax, tourists cannot get a refund of Canada’s goods and service tax on items destined to leave the country.

The sign outside Montecristo’s flagship jewellery shop in central Vancouver, Canada. Photo: Darryl Greer

Cusano sought the advice of a customs broker to find a way for clients to avoid paying GST on items destined for outside Canada, which does not apply GST to exports.

For years, Montecristo sold 1,000 Rolexes a year, as well as up to 2,000 other high-end brands including Breguet, Harry Winston, Blancpain, AP, Column, and Hublot.

Cusano was able to classify certain sales as “exports” by arranging delivery to customers at Vancouver International Airport before boarding flights out the country.