Domestic Korean cigarettes for export back in the country?… 1.79 million smuggled cigarette packs seized

Diagram illustrating the method of mislabeling product names and the so-called curtain technique used in cigarette smuggling. Provided by the Korea Customs Service.

[Asia Economy (Daejeon) Reporter Jeong Il-woong] #Mr. A stored 150,000 packs of export-destined Korean cigarettes (worth approximately 600 million KRW) imported from Cambodia at Busan Port and falsely declared to customs that they were being re-exported to Sri Lanka. However, during the bonded transportation process to Incheon Port, he attempted to smuggle the cigarettes by swapping them with empty cigarette packs.

The Korea Customs Service, suspicious of the unusual import-export route of the cigarettes, discovered empty cigarette packs during an export inspection and traced the movement path in reverse to prove the criminal activity, resulting in the arrest and prosecution of the smuggler.

On the 13th, the Korea Customs Service announced that it had arrested and prosecuted 41 individuals, including smugglers like Mr. A and domestic distributors, involved in illegally smuggling cigarettes.

The total number of cigarette packs they attempted to smuggle and distribute was 1.79 million packs, valued at approximately 7.2 billion KRW.

Besides Mr. A’s swapping method, the smugglers mainly used tactics such as smuggling undeclared cargo mixed with legitimate goods, transshipment smuggling on the high seas using leased fishing vessels, and disguising product names or using the “curtain method” under the name of Tangni.

For example, Mr. B is suspected of smuggling about 760,000 packs (worth approximately 2.3 billion KRW) of export-destined Korean cigarettes, counterfeit cigarettes, and Chinese cigarettes by colluding with bonded warehouses and transport operators to import cigarettes without declaration by mixing them with other legitimate cargo.

Additionally, Mr. C attempted smuggling by receiving about 530,000 packs (worth approximately 2.8 billion KRW) of Chinese cigarettes from a Chinese vessel on the high seas using a leased fishing boat, and Mr. D was caught attempting to smuggle 200,000 packs (worth approximately 800 million KRW) of export-destined Korean cigarettes by hiding them inside a container under the guise of importing masks, a method known as “curtain method,” using the name of an acquaintance who is a clothing importer.

Smuggled counterfeit Korean cigarettes were seized at customs. Photo by Korea Customs Service

The Korea Customs Service applied the “Act on the Aggravated Punishment, etc. of Specific Crimes” for the first time in a smuggling case involving the formation of a criminal organization, arresting 13 individuals and detaining 28 without arrest. They also enhanced the effectiveness of the crackdown by tracking and arresting domestic distributors.

In particular, the Korea Customs Service explained that the amount of cigarettes seized by customs in the first quarter of this year was more than double that of the same period last year, and the scale of Chinese cigarette smuggling was the largest ever recorded. In fact, the volume of Chinese cigarette smuggling from January to March totaled 890,000 packs, significantly higher than 30,000 packs in 2018, 150,000 packs in 2019, and 20,000 packs in 2020.

Reflecting the increasing number of smugglers seeking illicit profits by smuggling cigarettes through illegal channels, the Korea Customs Service plans to continue crackdowns. Typically, importing one pack of cigarettes with a cost price of 500 KRW into the country incurs taxes and charges amounting to 3,238.5 KRW (648%).

A Korea Customs Service official said, “Cigarette smuggling is used as a route to evade various taxes, undermining fair market distribution order and potentially harming public health through counterfeit cigarettes. Customs will focus on blocking cigarette smuggling through continuous crackdowns.”

He added, “To enhance the effectiveness of crackdowns, public interest and cooperation are necessary. Cigarettes without Korean smoking warning labels (export cigarettes) or duty-free marked cigarettes sold in the market are likely illegally imported, so we urge active reporting and tips.”

This content was produced with the assistance of AI translation services.