The Korea Customs Service will launch a three-month special crackdown to protect regional small and medium-sized manufacturing companies suffering from unfair trade practices, such as disguising the country of origin of low-priced imported goods as domestic and distributing or exporting them.

The Korea Customs Service announced today (October 28) that the special crackdown will be led by regional customs offices nationwide from next month through January of next year.

Companies caught in the crackdown will face fines of up to 300 million won and criminal punishment under the Foreign Trade Act, along with the collection of evaded taxes in accordance with relevant laws.

This crackdown comes as the price competitiveness and market access of domestic manufacturing companies are being threatened by practices such as disguising the origin of imported goods as domestic, evading taxes by underreporting import prices, and distributing counterfeit K-brand products.

The customs agency plans to select and intensively crack down on "regionally specialized manufacturing items" that have long sustained local economies and jobs.

The items will be selected through a comprehensive review of regional manufacturing status, corporate surveys, opinions from local governments, and past records of unfair practice detections.

It will also introduce an "integrated customs administration crackdown" that links five previously separate enforcement methods: country-of-origin marking inspections, customs audits, free trade agreement (FTA) origin verifications, counterfeit product crackdowns, and offense investigations.

The agency plans to inspect the entire process from import to domestic distribution, processing, and export to simultaneously uncover origin disguises, tax evasion, and the wrongful application of FTA preferential tariffs.

The Korea Customs Service explained that recent cases often involve intertwined forms of unfair trade practices, making individual investigations limited in catching them.

Representative examples include a case this year where semi-finished foreign steel flanges were imported and supplied worth about 5.7 billion won by falsely labeling them as South Korean even though they failed to meet domestic origin recognition criteria, and another case where 1.4 million sets of foreign solar power components were falsely labeled as South Korean, trade documents were manipulated to wrongfully receive FTA preferential tariffs, and exports worth about 4.7 billion won were made.

Alongside the crackdown, the Korea Customs Service will also promote export support for small and medium-sized manufacturers.

Through customs export-import enterprise support centers, it will provide consulting on FTA utilization, responses to origin verifications, and resolution of overseas customs clearance difficulties.

It plans to sign business agreements with local governments and producer organizations next month to share the difficulties faced by regional companies and discover customized support projects.

"By pooling all means of customs administration into one, we will level the playing field distorted by unfair practices such as origin disguises, tax evasion, and knockoffs," said Korea Customs Service Commissioner Lee Jong-wook. "Together with local governments and industries, we will help regional manufacturing companies compete fairly and grow."

(Photo provided by Korea Customs Service, Yonhap News)