Export Cigarettes Sold Openly Domestically, and at Low Prices?

Seoul Customs of the Korea Customs Service uncovered a group smuggling export-only domestic cigarettes, Chinese cigarettes, and counterfeit cigarettes for distribution and sale within the country, and referred them to the prosecution. Export-only domestic cigarettes seized from the group are displayed in the storage warehouse. Provided by Korea Customs Service

[Asia Economy (Daejeon) Reporter Jeong Il-woong] A group involved in smuggling domestically produced cigarettes exported from Korea to China, Chinese cigarettes, and illegal counterfeit cigarettes, and selling and distributing them at low prices domestically, was caught by customs authorities. The group was found to have earned criminal proceeds by evading taxes imposed on cigarettes through smuggling.

On the 29th, the Seoul Customs Office of the Korea Customs Service announced that it had reported and sent three Chinese nationals and two Koreans to the Seoul Central District Prosecutors' Office on charges of violating the Customs Act and Trademark Act.

According to Seoul Customs, the cigarettes smuggled from China totaled about 550,000 packs and were mainly sold and distributed in areas densely populated by Chinese residents such as Seoul, Busan, Daegu, Suwon, and Ansan through a covert distribution network in the form of a cell organization.

The group stored the smuggled cigarettes in places disguised as ordinary residences or offices, and contacted buyers through SNS platforms such as KakaoTalk and WeChat. They then disguised the cigarettes as items sent from clothing stores or machinery parts companies and delivered them by courier.

Seoul Customs tracked and identified the covert distribution network through surveillance, tailing, and CCTV analysis, and seized about 320,000 packs of export-use domestically produced cigarettes smuggled by the group.

Additionally, through digital forensic evidence collection and tracing criminal proceeds accounts, it was confirmed that about 230,000 packs of smuggled cigarettes had already been sold and distributed domestically.

In their criminal activities, the group sold and distributed the smuggled cigarettes at 2,500 KRW per pack (smuggling price 1,500 KRW), earning a profit margin of 1,000 KRW per pack. Including the profit from cigarettes already distributed, the total criminal proceeds amounted to 230 million KRW.

Moreover, they evaded taxes imposed on cigarettes through smuggling.

A pack of cigarettes sold on the market (priced at 4,500 KRW) is subject to taxes totaling 3,300 KRW, including customs duty (40%), value-added tax (10%), tobacco consumption tax (1,007 KRW), individual consumption tax (594 KRW), local education tax (443 KRW), health promotion charge (841 KRW), and waste disposal charge (42 KRW).

However, the group was able to evade these taxes by smuggling cigarettes into the country and illegally distributing and selling them.

Jung Seung-hwan, head of Seoul Customs at the Korea Customs Service, stated, “Customs will continue to crack down on the distribution of smuggled cigarettes to protect domestic cigarette brands (K-brands) and public health,” and urged, “The public should refrain from personal cigarette transactions via mobile platforms and purchase genuine cigarettes at regular prices from certified cigarette retailers and duty-free shops.”

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