Korea Customs Service Tightens Control on Illegal Foreign Currency Smuggling

The Korea Customs Service is strengthening crackdowns on illegal foreign currency smuggling for travelers using airports and ports.

According to the Korea Customs Service on the 19th, there were 363 cases of detected illegal foreign currency smuggling amounting to 20.4 billion KRW from January to May this year. This represents an increase of 26 cases and 6.6 billion KRW compared to the same period last year (337 cases, 13.8 billion KRW).

The Korea Customs Service analyzed that the attempts to smuggle foreign currency have increased alongside the continuous rise in travelers following the COVID-19 endemic.

The number of travelers and detected cases and amounts before and after the COVID-19 pandemic are as follows: 12.33 million travelers in 2020 (433 cases, 16.3 billion KRW), 266 travelers in 2021 (369 cases, 14.3 billion KRW), 1,698 travelers in 2022 (537 cases, 17.5 billion KRW), and 6,384 travelers last year (678 cases, 46.4 billion KRW), showing a rising trend again. This indicates that attempts to smuggle foreign currency, which had temporarily slowed due to the pandemic, may increase again.

In response to the increasing attempts to smuggle foreign currency after the pandemic and the concentration of travelers during the summer vacation season, the Korea Customs Service has decided to strengthen on-site inspections at airports and ports.

Even if the purpose of use is declared as travel expenses, suspicious transaction information obtained from the Financial Intelligence Unit will be analyzed to verify risk factors, strengthening post-verification. Major verification targets include cases where funds for purchasing virtual assets are falsely declared as travel expenses and foreign currency is carried out.

The amount of foreign currency declared as travel expenses by departing travelers and carried out has steadily increased: 17.3 billion KRW in 2020, 23.3 billion KRW in 2021, 60.5 billion KRW in 2022, 92.6 billion KRW last year, and 50.6 billion KRW from January to May this year.

The Korea Customs Service estimates that a significant portion of this was actually used for purchasing virtual assets rather than travel expenses. This is why post-verification of travel expense declarations is being strengthened. The Foreign Exchange Transactions Act requires travelers to report to the customs officer when carrying foreign currency or payment instruments exceeding 10,000 USD.

When students studying abroad or overseas residents exceed the foreign currency export limit upon departure, they must submit a foreign exchange report (confirmation) certificate received from a designated foreign exchange bank to customs. Travelers must report at the customs foreign exchange declaration desk before passing through security screening. If the foreign currency import limit is exceeded upon entry, travelers must check "Yes" in the foreign currency declaration section of the "Traveler's Baggage Declaration Form," specify the currency unit and amount, and report to customs.

If these regulations are violated by failing to report or by false reporting, the individual will be subject to enforcement and penalties, so caution is required.

The Korea Customs Service emphasized that penalties are not exempted even if there is no intent in illegal foreign currency smuggling. Even if one is caught due to lack of proper understanding of foreign currency reporting regulations, if the violation amount exceeds 10,000 USD but is less than or equal to 30,000 USD, a fine (5% of the violation amount) will be imposed; if it exceeds 30,000 USD, criminal penalties such as imprisonment will apply.

Jeon Seong-bae, head of the Foreign Exchange Investigation Division at the Korea Customs Service, said, “Carrying foreign currency in and out can be used as funds for drug purchases, voice phishing proceeds, smuggling payments, or exploited as a channel for national wealth outflow, so it must be thoroughly cracked down on.” He added, “As the agency responsible for cracking down on illegal foreign exchange transactions, the Korea Customs Service will make every effort to prevent the improper misuse of carrying foreign currency in and out.”