Trade security violations hit record high

South Korea's Korea Customs Service said it uncovered a company in April that exported 4,606 foreign-made electric motorcycle batteries worth 3 billion won ($2.2 million) to a third country after falsely claiming they were made in South Korea. The company either affixed "Made in Korea" labels to the batteries overseas or carried out only minimal assembly of imported components in South Korea before exporting them as domestic products. Customs officials also exposed a separate relabeling scheme in which 230,000 pieces of semiconductor equipment worth 12 billion won were imported from a specific country and shipped to the United States with South Korean labels despite undergoing no processing in South Korea.

Trade security offenses, including the relabeling of foreign-made goods as South Korean products and the unauthorized export of strategically controlled items, have reached a record high this year.

The Korea Customs Service said Monday that it had uncovered 31 trade security violations worth a combined 770.3 billion won during the first five months of the year, already exceeding the 655.6 billion won recorded for all of last year. Of the total, 20 cases involving foreign-made products disguised as South Korean goods and re-exported to third countries accounted for 527.3 billion won. Another 11 cases involving the illegal export of strategically controlled items or false export declarations totaled 243 billion won.

Customs officials also uncovered six companies that sought to circumvent export controls by declaring they were shipping complete manufacturing equipment for rechargeable battery production to countries where export permits were not required, while actually rerouting the equipment to destinations subject to licensing requirements. Valued at 476.8 billion won, the case is the largest single trade security violation ever detected by the Korea Customs Service. In another case, authorities found that a company had exported 816 artificial intelligence servers equipped with high-performance graphics processing units, worth 250 billion won, without obtaining the required export licenses.

Kim Jeong, commissioner of the Korea Customs Service's Investigation Bureau, said the agency would enhance its analysis of import and export data and deepen cooperation with other government agencies to better detect and block crimes that threaten South Korea's economic security.


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