Last Year, Public Procurement Fraud Deliveries Totaled 124.4 Billion Won... Doubled in Two Years

As illegal activities of misrepresenting foreign products as domestic and supplying them to the public sector increase, the government has decided to strengthen crackdowns to eradicate fraudulent deliveries of procurement goods to public institutions.

On the 10th, the Ministry of Trade, Industry and Energy and the Korea Customs Service signed a "Memorandum of Understanding (MOU) to Eradicate Fraudulent Deliveries of Procurement Goods to Public Institutions" at the Korea Trade Insurance Corporation, attended by 41 major public institutions under the Ministry of Trade, Industry and Energy.

According to the Ministry of Trade, Industry and Energy, the scale of crackdowns on fraudulent public procurement by the Korea Customs Service reached 124.4 billion KRW last year, an increase of 2 billion KRW (1.6%) compared to the previous year (122.4 billion KRW). It surged by 61 billion KRW (96.2%) compared to two years ago in 2021 (63.4 billion KRW).

An official from the Ministry of Trade, Industry and Energy explained, "Recently, illegal acts of misrepresenting foreign products as domestic and supplying them to the public sector have been increasing. To respond effectively, we promoted this MOU to strengthen cooperation with the Korea Customs Service."

According to the MOU, the Ministry of Trade, Industry and Energy will actively cooperate by having its affiliated public institutions provide suspicious information on fraudulent deliveries and procurement contract data to the Korea Customs Service. The Korea Customs Service will investigate suspected fraudulent suppliers based on the provided information and data and promptly share the results with the relevant public institutions. To ensure efficient cooperation, a working-level council involving the Ministry, affiliated public institutions, and the Korea Customs Service will be held regularly.

Jang Young-jin, the 1st Vice Minister of the Ministry of Trade, Industry and Energy, said, "Illegal acts of misrepresenting foreign products as domestic and supplying them to public institutions can cause loss of supply opportunities for domestic SMEs, deterioration in the quality of services directly related to daily life such as electricity and gas for the public, and various serious problems such as safety accidents at public institutions. To eradicate fraudulent deliveries, the Ministry will actively cooperate with 41 affiliated public institutions and the Korea Customs Service."

Yoon Tae-sik, Commissioner of the Korea Customs Service, also emphasized, "With the signing of this MOU, we will secure procurement contract data from public institutions, which were previously blind spots in crackdowns, to effectively block fraudulent public procurement activities directly related to public health and social safety. In the future, we will establish a continuous monitoring system by utilizing a big data analysis system linking procurement contract data from public institutions and import clearance data from the Korea Customs Service."

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Following the signing ceremony of the MOU, the government reviewed the progress of the first quarter innovation plans of public institutions through the "2023 2nd Public Institution Innovation Plan Meeting."

Choi Nam-ho, Director of Planning and Coordination at the Ministry of Trade, Industry and Energy, who attended the meeting, said, "We will proactively address anticipated difficulties such as asset optimization and provide active support through consultations with related agencies if necessary. The Ministry will continue to manage and supervise to ensure that the innovation plans of public institutions are implemented without disruption by checking the implementation status every two months to improve productivity and efficiency of public institutions."

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