Direct Purchases Increase... Personal Customs Unique Code Fraud Reports Surge by 60%

7 out of 10 cases caused by overseas sellers
Reissuance also jumps more than twice

The number of reports of personal customs clearance code misuse has surged by 60% compared to the previous year. Experts believe that cases of personal customs clearance code theft are increasing as the overseas direct purchase system is being exploited.

According to data received by Yang Kyung-sook, a member of the Democratic Party of Korea, from the Korea Customs Service on the 17th, the number of personal customs clearance code misuse reports in the first quarter was 2,498, a 59.6% increase from the 1,565 reports received last year (from March 22 to December 31).

Express Logistics Center. [Photo by Yonhap News]

The personal customs clearance code is an individual identification number used instead of a resident registration number during overseas direct purchases. When an individual purchases goods directly online for personal use from overseas, if the price of the goods is below $150 (or below $200 for goods from the United States), import declaration is not required, and no customs duties or value-added tax are imposed. In this case, the unique code is used to track individual purchase records.

For commercial goods, formal import declarations and payment of customs duties are required. However, cases of misusing others' personal customs clearance codes to disguise goods as personal use items and importing them in a dispersed manner are increasing.

Last year, 192 cases of abuse of the overseas direct purchase system were detected (amounting to 59.8 billion KRW), an 18.5% increase from 162 cases in 2021. Up to March this year, 47 cases (20.2 billion KRW) have been detected.

Among the personal customs clearance code misuse cases that occurred this year, 7 out of 10 were found to be the work of professional "overseas sellers." According to data submitted by Jeong Tae-ho, a member of the Democratic Party of Korea, from Incheon Airport Customs, a total of 1,198 reports of personal customs clearance code misuse were received up to September this year, with actual misuse confirmed in 1,160 cases.

Excluding 168 cases where the perpetrator was unidentified, over 90% of the misuse was found to be by overseas exporters.

Since March last year, the Korea Customs Service has been separately managing misuse reports to monitor personal customs clearance code misuse.

Additionally, a service is in operation that notifies individuals when their personal customs clearance code is used and allows for easy reporting of misuse. Plans are also underway to establish measures to prevent personal customs clearance code misuse.

As awareness of personal customs clearance code misuse and management has increased, the number of reissuances has also surged. From the beginning of this year to March, the number of personal customs clearance code reissuances was 116,390, which is 2.4 times the total reissuances (49,097) for the entire previous year.