Imported bananas and meat are piled high in a warehouse, as customs officials inspect items and quantities.

These are typical items subject to tariff quotas.

Tariff quotas temporarily lower import tariffs to as low as 0% to help stabilize prices, but companies have been caught abusing the system to pocket unfair profits and passing the costs onto consumers.

According to the Korea Customs Service's investigation of 21 importing companies, illegal and unfair practices worth 540 billion won were uncovered at 10 companies—about half of those investigated—with tax evasion amounting to 58.6 billion won.

One banana importer brought in bananas at a normal import price of $10 with a 30% basic tariff, making it $13. However, once a 0% tariff quota was applied, the company inflated the import price to $15.

By avoiding tariffs while instead inflating import payments to overstate procurement costs, they lowered their operating profit margin and evaded corporate tax.

Ultimately, because the benefits of the tariff quota were not reflected in domestic distribution prices, the damage fell back on consumers.

Companies that put forward so-called front companies to secure larger volumes of tariff-quota goods were also caught.

The distribution costs incurred from paying commissions to these front companies directly translated to rising consumer prices.

Beef subject to tariff quotas must be released to the market within 45 days of receiving a recommendation letter, but some companies stored it in warehouses for up to 137 days, blocking distribution and driving up prices.

[Lee Jong-wook / Commissioner of the Korea Customs Service: Delaying the market supply of tariff-quota goods and distributing them at prices nearly double their import prices undermines domestic price stability and consumer price stabilization….]

Through some 1,500 on-site inspections, the Korea Customs Service cracked down on 292 tons of stockpiled goods and imposed 1.4 billion won in fines and delayed-reporting penalties.

(Reported by Jeong Seong-jin | Video by Won Hyeong-hee | VJ: Lee Ji-hwan | Produced by SBS Digital News)