Constitutional Court Unanimously Rules Constitutional
"Need to Prevent and Strictly Punish Large-Scale Smuggling Crimes"
A large-scale gold bar smuggling ring, sentenced to an astronomical fine for smuggling over 40,000 gold bars, filed a lawsuit with the Constitutional Court (Constitutional Tribunal) claiming that the sentence imposed on them was unconstitutional, but it was not accepted.
According to Yonhap News on the 4th, the Constitutional Court made a unanimous decision on the 29th of last month to uphold the constitutionality of Article 6, Paragraph 3 of the Act on the Aggravated Punishment of Specific Crimes, which was challenged by three people including Mr. Yoon in a constitutional complaint case.
Mr. Yoon and others were indicted on charges of smuggling over 40,000 one-kilogram gold bars over one and a half years from July 2015 to December 2016 (violations of the Act on the Aggravated Punishment of Specific Crimes and Customs Act, etc.).
They illegally profited by receiving gold bars smuggled from Hong Kong at domestic airport transit areas and then smuggling them out to Japan. When Japan raised its consumption tax from 5% to 8% in 2014, gold prices surged, so they purchased gold bars cheaply in Hong Kong, where no tax was imposed on gold bars, and sold them in Japan. They exploited the price difference of 3 to 4 million KRW per bar between Hong Kong and Japan, with each gold bar worth about 50 million KRW.
In particular, they recruited Korean travelers through social networking service (SNS) advertisements and paid them a portion of the transportation fee to hide 5 to 6 gold bars per person and send them to Japan. For ordinary travelers, Japanese customs enforcement was lax, and even if caught, the traveler carrying the gold bars would be punished, allowing the smugglers to avoid responsibility.
After going all the way to the Supreme Court, in January 2020, Mr. Yoon was sentenced to 4 years in prison and fined 666.9 billion KRW, Mr. Yang was sentenced to 1 year and 4 months in prison and fined 662.3 billion KRW, and Mr. Kim was sentenced to 1 year and 6 months in prison and fined 591.4 billion KRW. The court also ordered them jointly to pay confiscation amounting to about 2 trillion KRW.
Article 6, Paragraph 6 of the Act on the Aggravated Punishment of Specific Crimes stipulates that if the cost of goods smuggled without declaration exceeds 500 million KRW, a fine equivalent to the cost of the goods shall be imposed. They applied for a constitutional review, arguing that this provision violated the constitutional principle that responsibility and punishment should be proportional, but after it was dismissed, they filed a constitutional complaint in March 2020.
The Constitutional Court stated, "In the case of large-scale smuggling crimes, it is highly likely that the crimes are organized to generate enormous criminal profits," and "Considering the difficulty of investigating and punishing such crimes, it is necessary to impose economic disadvantages to prevent and severely punish large-scale smuggling crimes motivated by economic incentives."
It added, "The legislature's decision to necessarily impose fines equivalent to the cost of the goods does not exceed the limits of legislative discretion or constitute excessively harsh punishment," and ruled that it does not violate constitutional principles.
Meanwhile, the gold bars smuggled by them are known to have a total market value of about 2 trillion KRW. If Mr. Yoon and others fail to pay the fines, they may be detained in a labor camp for up to 3 years, with Mr. Yoon’s daily labor valued at about 610 million KRW.
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