Clothing Supplier Falsifying Origin to Public Institutions Caught
Company CEO Already Given Suspended Sentence for Same Charge
'Trick' to Avoid Heavier Punishment, Even Involving Family Members
The head of a company that changed the country of origin by relabeling and then supplied large quantities of low-cost clothing to public institutions was caught. The apprehended company head also showed meticulousness by establishing disguised companies under family members' names to prepare for heavier punishment under the same charges.
Seoul Customs Office of the Korea Customs Service announced on the 31st that it has sent Mr. A (in his 50s), the head of a domestic clothing company, to the Seoul Central District Prosecutors' Office on charges of violating the Foreign Trade Act.
According to Seoul Customs, Mr. A is suspected of fraudulently supplying low-cost, low-quality foreign-made clothing as domestically produced to public institutions.
Investigations revealed that Mr. A removed the originally attached country of origin labels and disguised the products as domestically produced, fraudulently supplying large quantities of clothing to 19 public institutions in 32 instances. The damage caused by Mr. A's fraudulent supply amounts to 18.6 billion KRW.
Mr. A imported 300,000 pieces of clothing from places such as Vietnam through company B, which was under the name of a former employee, and a third-party trading company (importer), then brought them into a domestic business under the names of relatives, where he swapped the labels indicating the country of origin.
The Public Procurement Service requires that certain items, including clothing used by government and public institutions, be supplied only by products directly produced by domestic small and medium-sized enterprises to enhance their competitiveness and stabilize management.
However, Seoul Customs explained that Mr. A deceived the public institution contract managers into believing that he directly produced the imported goods despite having no domestic production capacity at the time of signing the procurement contracts, and supplied the clothing fraudulently.
In particular, it was confirmed that Mr. A committed the crime again even after being caught by Incheon Customs in 2021 for the same charges and receiving a suspended sentence.
Moreover, during the crime, fearing heavier punishment, Mr. A established disguised companies under the names of company B operated by a former employee, and his son (company C), wife (company D), and son-in-law (company E) to evade customs surveillance, showing meticulous planning.
A Seoul Customs official stated, “We plan to thoroughly investigate and strictly take action, including considering applying the charge of ‘aiding and abetting’ to import companies directly or indirectly involved in Mr. A’s crime.” He added, “Falsely labeling low-cost foreign goods as domestically produced and supplying them is a serious crime that steals market opportunities and jobs from honest domestic small and medium manufacturers. Customs will strengthen crackdowns on such acts going forward.”
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