‘Rare Value’ High-Priced Wine Smuggler Caught... "1.4 Billion Won Tax Evasion"

A trader who smuggled and sold rare, high-priced wines into the country through illegal channels such as smuggling and abuse of overseas direct purchase was caught by customs.

The Seoul Customs Office of the Korea Customs Service announced on the 29th that it had uncovered three wine sellers suspected of violating the Customs Act and the Food Sanitation Act and sent them to the prosecution without detention.

Status of major high-priced wines and cigars seized by customs. Provided by Seoul Customs, Korea Customs Service

According to Seoul Customs, Mr. A is suspected of smuggling high-priced wines for sale, priced at over 10 million won per bottle, without declaring them to customs.

From March 2013 to November 2021, Mr. A imported 150 bottles of wine worth approximately 280 million won through international mail or travelers' personal belongings, disguising them as other items by declaring them as ordinary beverages to customs.

In particular, among the smuggled wines, the rare and high-priced ones were stored separately in a secret warehouse, and when the market price rose above the purchase price, he held paid tasting events or sold them at a wine bar he operated.

The main buyers of Mr. A’s high-priced (rare value) wines were high-income individuals such as doctors and lawyers recruited as paid members (with a monthly membership fee of about 1 million won).

Mr. B and Mr. C are suspected of evading customs duties and other taxes by abusing the simplified customs clearance system for overseas direct purchases, declaring high-priced wines at low prices.

They exploited the overseas direct purchase simplified customs clearance system, which does not impose customs and value-added taxes on goods under $150 (up to $200 in the U.S.) for personal use without formal import declaration, by importing 7,958 bottles (Mr. B) and 1,850 bottles (Mr. C) of wine via overseas direct purchase from June 2019 to May 2023, submitting receipts to customs with prices written at about 1/20 of the actual wine price.

Using this method, Mr. B evaded taxes including customs and liquor tax amounting to 1.3 billion won, and Mr. C evaded 140 million won. Notably, they also showed meticulousness by distributing imports under the names of family and friends to avoid detection. They judged that repeatedly importing high-priced wines under their own names would likely be caught by customs, so they used this trick.

Mr. B and Mr. C are also suspected of importing wines for sale by falsely claiming them as personal use items, thus failing to meet the import food requirements under the Food Sanitation Act.

A Seoul Customs official stated, “We will take a firm stance against acts that evade high taxes and import requirements while purchasing luxury goods such as high-priced alcoholic beverages through overseas direct purchase,” and added, “Consumers need to be aware that imported alcoholic beverages without Korean labeling as required by the Food Sanitation Act and Liquor Tax Act are highly likely to have been illegally imported and should exercise caution.”