Korean Air Fails to Obtain Customs Stamp... Sudden 180 Billion KRW Fine in Russia (Comprehensive)

"Unfair Fine" Claim Rejected
Additional Fine Imposed for Nonpayment..."Pay 120 Billion More"

Korean Air is facing a situation where it must pay a fine exceeding 100 billion won to Russian customs authorities. This is because its cargo plane departing from Moscow Airport took off without receiving a customs stamp. The imposition of the fine was confirmed in the final court ruling. However, a bigger issue is that Russia is under U.S. sanctions, making it impossible to pay the large fine. Due to this, there are concerns that Korean Air may face disadvantages when flights to Russia resume in the future. Korean Air has suspended flights to Russia citing the Ukraine war and other reasons.

According to the Russian legal information portal and industry sources on the 14th, Korean Air cargo flight KE259 departed Incheon International Airport on February 22, 2021, en route to its final destination, Frankfurt, Germany, with a stopover at Moscow Sheremetyevo Airport. It was reported that the cargo plane left Sheremetyevo Airport without receiving a customs stamp from the airport customs office.

Korean Air recently lost a lawsuit against Russian customs. At the end of last month, the Russian Supreme Court upheld the first-instance ruling that Korean Air must pay a fine of 4.158 billion rubles (approximately 58 billion won) imposed by the Moscow Sheremetyevo Airport customs. Korean Air had filed objections with the Federal Customs Service, the higher administrative authority, claiming that the 8.3 billion ruble fine imposed in 2022 was unjust, and appealed three times to the Moscow Commercial Court and the Russian Supreme Court. However, except for the first-instance court halving the fine, the Russian courts sided with the local customs authorities in all cases.

Additionally, Korean Air was separately charged with a penalty for non-payment of the fine. Sheremetyevo Airport customs requested the local court to impose an additional fine, and the court ordered Korean Air to pay an extra 8.3 billion rubles, which is twice the amount of the unpaid fine. From Korean Air’s perspective, the fine that was halved has now tripled. Korean Air plans to appeal this additional penalty.

Korean Air stated, "We followed Russian regulations and procedures properly and had no illegal intent, but it is regrettable that excessive fines were confirmed by applying unreasonable laws." They added, "We will appeal to the appellate court regarding the additional fine and will make effective efforts to mitigate risks through relevant government agencies of both countries."

However, a bigger problem is that due to U.S. sanctions, large-scale remittances via the Society for Worldwide Interbank Financial Telecommunication (SWIFT) are difficult. In other words, there is no way to pay the fine. A representative from a commercial bank said, "It is practically impossible to transfer hundreds of billions of won to Russia through commercial banks."

Korean Air is concerned about the future after Western sanctions against Russia are lifted. This is because it may face disadvantages when resuming direct flight routes. Since March 2022, after the Ukraine war, Korean Air has suspended all routes that transit through or fly directly to Russia. An aviation industry official explained, "If a company does not pay fines imposed by the country, it may be considered delinquent or delayed, leading to refusal to resume routes or suspension of already resumed routes. In severe cases, this could escalate into an intergovernmental issue."