High-Performance Semiconductors Banned from Export to Hong Kong, Smuggling Operators Caught

"First Pre-Indictment Seizure Order"
High-Value Apartment of Strategic Materials Smuggler Provisionally Seized

The court has issued a 'pre-indictment seizure order' against a smuggler who exported strategic materials overseas without government permission. This is the first case of pre-indictment seizure of criminal proceeds related to strategic materials.

On the 25th, Busan Customs of the Korea Customs Service announced that Mr. A (in his 40s) was referred to the prosecution without detention on charges of violating the Customs Act, the Foreign Trade Act, and the Act on the Regulation and Punishment of Criminal Proceeds Concealment.

Provided by Busan Customs, Korea Customs Service

Earlier, Mr. A is suspected of illegally exporting more than 36,000 units of high-performance semiconductors (AD Converters) of U.S. origin (worth approximately 5.1 billion KRW at market price) to Hong Kong without government permission a total of 22 times from February 2020 to November of the following year.

The semiconductors illegally exported by Mr. A to Hong Kong are devices that convert analog signals into digital signals. High-performance products with fast processing speeds are restricted in trade due to their potential military use.

Knowing this, Mr. A established export-import corporations under borrowed names to avoid punishment for his company, importing high-performance semiconductors from the U.S. and then re-exporting them to Hong Kong through a deceptive scheme.

There is also evidence that Mr. A disguised the exported goods as printed circuit boards (PCBs) and low-priced semiconductors (at 1/100th of the actual price) to conceal that the items were strategic materials subject to approval.

Mr. A is also charged with laundering criminal proceeds by inflating the price of PCBs during the payment process for the illegally exported high-performance semiconductors. Because the goods were disguised as low-priced semiconductors, making it difficult to receive the 5.1 billion KRW in criminal proceeds, he pretended to export high-priced PCBs normally to receive payment.

Busan Customs emphasized that, apart from referring Mr. A to the prosecution without detention, they applied to the court for a 'pre-indictment seizure order,' which was accepted, allowing the pre-indictment provisional seizure of Mr. A's high-priced apartment.

The pre-indictment seizure order is a measure to prevent the suspect (Mr. A) from arbitrarily disposing of assets before being prosecuted (during investigation). This is the first case of pre-indictment seizure related to criminal proceeds from strategic materials.

Busan Customs judged that there was a possibility Mr. A might hide assets before the court's ruling on confiscation of criminal proceeds and thus proceeded with the pre-indictment seizure.

Lee Hoon-jae, Head of Investigation at Busan Customs, said, "This case is the first instance of pre-indictment seizure of criminal proceeds related to strategic materials," and added, "Customs will continue to make every effort to track, expand, and recover illegal proceeds obtained through crimes."

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