Kathmandu - Cimex Inc, the authorized distributor of Chinese electric vehicle manufacturer BYD in Nepal, has been found importing SIM cards by obtaining permission for SIM-enabled devices.

On March 26, 2024, Cimex Inc received type approval from the Nepal Telecommunications Authority (NTA) for a device with the model number MTCF-Three.

Using this type approval, Cimex imported China Mobile Hong Kong’s SIM cards in bulk and has been selling them to customers purchasing BYD vehicles. It appears that NTA Deputy Director Hiranya Prasad Bastakoti approved this type certification.

However, the type approval for the GSM device was not obtained by Cimex itself, but by Delkon Compliance Pvt. Ltd. The type approval for the GSM device manufactured by BYD Auto Industry Company Ltd. was granted for five years.

In this manner, by taking device approval but importing and selling active SIM cards from a foreign company, Cimex has been also exporting the data of Nepali consumers directly to China.

As per the Telecommunications Act 1997, any foreign or international telecom service provider must obtain approval from the regulator before operating in Nepal and is required to host its servers within the country. 

The law treats physical SIM cards and eSIMs in the same way. However, Cimex Inc has been importing and selling active SIM cards from China Mobile Hong Kong.

Moreover, Nepal’s Privacy Act guarantees the protection of citizens’ personal data. By importing and selling active China Mobile Hong Kong SIM cards, the data from BYD vehicles operated by customers is directly transmitted to China. 

This indicates a potential violation of the Privacy Act.

In addition, by trading Chinese SIM cards, Cimex appears to have disregarded various provisions of the Telecommunications Act as well as the Radio Act 1957.

Over 10,000 BYD electric vehicles have been sold in the Nepali market so far. Earlier models were found to have included SIM cards, and the latest imported BYD vehicles also contain them.

 During a brief period when SIM card imports were restricted, Cimex reportedly imported and sold at least 5,000 Chinese SIM cards. 

This warrants investigation by agencies such as the Customs Department, the Telecommunications Authority, and the Department of Transport Management.

Data from BYD vehicles operating with Chinese SIM cards—used in roaming mode—flows directly to China.

 In Nepal, BYD electric vehicles are used not only by private individuals but also by political leaders, senior government officials, and members of security and investigative agencies.

Since Cimex has purchased China Mobile Hong Kong SIM cards and sold them to customers, the vehicle data of thousands of users, including government officials, is being sent directly to China. Regulatory agencies remain silent despite this situation.

Meanwhile , telecommunications Authority said that this is a new issue and is still under review. NTA spokesperson Min Prasad Aryal clarified that dealers are not allowed to import SIM cards and that there is no legal provision allowing a company like Cimex to import active SIM cards from a foreign telecom provider.

'The import of SIM cards by a vehicle importing company, particularly active SIM cards from a foreign telecom company, is a new subject for us as well,: said Aryal.

'Our laws do not envision the possibility of a foreign telecom company's SIM card being imported and sold in Nepal. This essentially means all the data from vehicles using such SIMs is going straight to China. We will hold discussions and reach a conclusion soon.'

Cimex declared the purchase value of each imported SIM card at 2,300 Chinese Yuan in customs documentation. 

At the declared exchange rate of 19.14, the per-unit cost amounts to Rs 44,022.

 Including insurance, freight, and applicable taxes, the total landed cost of each SIM card reaches Rs 58,587. 

The government has exempted SIM cards from customs duties.

Cimex imported the SIM cards under the specific customs subheading 8523.52.10 designated for telecommunications use. 

The government does not impose customs duties on SIM cards for telecom purposes but does levy a 10 percent excise duty and 13 percent VAT. The SIM cards imported by Cimex have been cleared under this classification.

Can Cimex Inc be an official distributor of China Mobile Hong Kong?

Nepali law does not envision the import or sale of foreign SIM cards. 

It is outright prohibited.

 However, Cimex Inc—the official distributor of BYD in Nepal—has openly imported and sold SIM cards from the Chinese telecom company China Mobile Hong Kong. It looks like that Cimex Inc is functioning as the official distributor of both BYD and China Mobile Hong Kong.

Despite foreign SIM cards being permitted for individual use in roaming services, Cimex has been importing and selling them in bulk while regulatory bodies remain passive observers.

For over a year now, Cimex has reportedly continued importing and selling active China Mobile Hong Kong SIM cards, while the NTA has remained largely unaware.

NTA spokesperson Min Prasad Aryal reiterated that there is no legal provision for any official distributor to import foreign SIM cards. 

In such a scenario, serious questions arise: Under whose protection, and with what legal basis, has Cimex been importing SIM cards? 

This is a deeply concerning matter.