[Customs Service Betrayal] Afraid of Smuggling Suspicion... "We Don't Even Look at FTA Crops"

Domestic Companies Avoiding FTA Agricultural Imports
"High Risk of Retroactive Tariffs, Who Would Do Business?"
Facing Smuggling Allegations and Political Pressure
Ultimately, Citizens Must Buy Agricultural Products at Higher Prices

Mung beans for sowing in a mung bean cultivation area in Peru. Photo by Contributor

Among domestic import companies, a 'reluctance to import foreign agricultural products' atmosphere is forming. This is because the Korea Customs Service's investigation into companies importing Peruvian mung beans has been prolonged, and the amount of additional charges is enormous. The industry views the risk as too great since companies must shut down if they fail to submit the documents required by the Customs Service. Ultimately, there are claims that the burden will be passed on to consumers who have to import agricultural products at high prices.

According to Asia Economy's report on the 3rd, the industry importing agricultural products from overseas is on alert. Agricultural imports are mainly conducted with countries that have signed Free Trade Agreements (FTAs) with no tariffs, but it has become known that the 'proof of origin,' one of the importers' obligations, is excessively stringent. The Korea Customs Service is currently demanding bank account statements, remittance details, accounting books, tax reports, and cultivation specifications to verify the origin of Peruvian mung beans.

An official from an import company said, "Even if Korea signs new FTAs with other countries in the future, the atmosphere is to avoid agricultural products," adding, "If companies cannot meet the Customs Service's standards, they will go bankrupt, so who would engage in such a risky business?" Another import company official said, "Even if this situation is resolved well, importing agricultural products seems difficult," and added, "Importing is not a crime, but the risk with agricultural products seems excessively high."

"Importing agricultural products is a crime"... Suffering political pressure amid smuggling suspicions

Seosamseok, Member of the Democratic Party of Korea. / Photo by Dongju Yoon doso7@

Not only the Korea Customs Service but also political pressure is one of the burdens discouraging agricultural imports. If certain agricultural products are brought in cheaply, politicians conscious of domestic farmers' votes raise critical voices. In October last year, the National Assembly's Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee continued to criticize import companies. Seo Sam-seok, a member of the Democratic Party representing Jeonnam, stated, "Despite a 64-fold surge in Peruvian mung bean imports, the Ministry of Agriculture, Food and Rural Affairs did not respond, causing huge damage to mung bean farmers," and added, "Support for agricultural damage caused by FTAs is insufficient, and there are no follow-up measures, so farmers suffer even more."

Import company representatives express that the most unfair aspect is being suspected of smuggling after the Customs Service's investigation became public. One import company CEO lamented, "We have meticulously prepared documents to prove the origin, but I did not expect the Customs Service to demand such stringent materials," and self-deprecatingly said, "I saw Peruvian mung beans with my own eyes, yet I am being treated like a smuggler."

This atmosphere could lead to rising agricultural product prices in Korea. Except for rice, Korea depends on imports for most grains. The scale of grain imports ranks seventh in the world. Despite the FTA's enforcement, if import companies' supply of agricultural products remains low, domestic consumers will have to purchase agricultural products at high prices. In the case of Peruvian mung beans, 99% enter Korea, but exports decreased from 8,643 tons in 2021 to 2,500 tons in 2022 after the Customs Service investigation began.