CEO of Petrochemical SME Reporting Exports Tens of Billions Understated... Suspended Sentence in First Trial

Fine of 500 Million Won Also Sentenced
Court: "Industry Practices Influenced the Crime"

[Asia Economy Reporter Oh Gyumin] The CEO of a small and medium-sized enterprise (SME) accused of filing export declarations at amounts lower than the actual export prices due to concerns that manufacturers they trade with would raise supply prices was sentenced to probation in the first trial.

On the 22nd, Judge Yoon Angji of Criminal Division 10 at the Seoul Western District Court announced that on the 14th, he sentenced Mr. A, the CEO of a petrochemical SME, who was indicted for violating the Customs Act, falsifying official documents, and using falsified official documents, to 10 months in prison with a 2-year probation. Additionally, Mr. A and the corporation tried for the same charges were fined 500 million KRW.

Mr. A, as the CEO of a petrochemical product export sales company, is accused of filing 1,183 false low-price export declarations from 2017 until August of last year. The amount underreported by Mr. A reached approximately 3.6 billion KRW.

According to the court, the company operated by Mr. A conducts transactions by purchasing products produced by domestic petrochemical manufacturers upon orders from overseas buyers and exporting them while receiving intermediate margins.

Mr. A realized that manufacturers would check the overseas export prices of their competitors and raise supply prices if the margin exceeded a certain level. Therefore, fearing that manufacturers would increase supply prices if the actual export prices were exposed to them, he filed export declarations at amounts lower than the actual export prices.

The court viewed this case not as an individual issue of Mr. A but as a broader industry-wide problem. The court emphasized, "The defendants have admitted to the crime, and it appears that the practices formed in the petrochemical product export sales industry influenced the commission of this crime."

However, the court stated the sentencing rationale, saying, "The crime was committed repeatedly over a long period and on multiple occasions, and the scale of the false export declarations is large. Furthermore, the crime involved falsifying and using official documents during the false export declaration process, so the culpability of the crime cannot be considered light."

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