‘SA-grade Requests and Smuggling’ 20 Billion Won Worth of Chinese Counterfeit Smuggling and Distribution Operators Caught

A smuggler who illegally imported Special A-grade (SA-grade) counterfeit goods from China and distributed them through domestic online shopping malls was caught by customs authorities. SA-grade counterfeit goods refer to the highest quality fakes that are difficult to distinguish from genuine products.

The Korea Customs Service recently announced on the 9th that the Busan Regional Customs Office had sent Ms. A (female, in her 40s), the CEO of an e-commerce company, to the prosecution without detention on charges of violating the Customs Act, Trademark Act, and the Act on the Regulation and Punishment of Criminal Proceeds Concealment.

Busan Customs is inspecting counterfeit goods seized. Provided by Busan Main Customs

Ms. A is suspected of smuggling and selling over 10,000 counterfeit items such as clothing and bags infringing on famous brand trademarks. The estimated genuine market value of the counterfeit goods smuggled by Ms. A is about 20.8 billion KRW.

Busan Customs identified Ms. A’s online shopping mall as a suspect for smuggling counterfeit goods while analyzing cases where overseas direct purchase items bought from major Chinese open markets like AliExpress were held at customs due to trademark infringement.

After intensive inquiries and searches around residential areas suspected to be storage locations for counterfeit goods, Busan Customs seized about 5,000 counterfeit items (with an estimated genuine market value of 10 billion KRW) stored by Ms. A on-site and arrested her on charges of violating the Customs Act and other offenses.

Investigations revealed that Ms. A commissioned Chinese suppliers to produce so-called ‘SA-grade’ counterfeit goods that are difficult to distinguish from genuine products in terms of material and design. She then imported them in a dispersed manner using international mail and express cargo under the names of family and acquaintances, which have simplified customs procedures, and stored the goods in a one-room apartment near a residential area.

In addition to the counterfeit goods stored in the one-room apartment, Ms. A sold about 5,000 counterfeit items (with an estimated genuine market value of 10 billion KRW) on her online shopping mall from April 2020 to April last year at one-tenth of the genuine price, earning approximately 700 million KRW in illegal profits.

Before being caught, Ms. A also showed meticulousness by dispersing and hiding about 600 million KRW of the proceeds from counterfeit goods sales into multiple bank accounts under other people’s names in preparation for the investigation.

A Busan Customs official said, “Customs suspects there are more counterfeit goods being imported through e-commerce disguised as personal consumption. We will strengthen crackdowns on crimes exploiting overseas direct purchases while conducting promotional activities to eradicate intellectual property rights infringement.”

He added, “We ask the public to report any illegal distribution activities of trademark or other intellectual property rights-infringing goods to the ‘Korea Customs Service Smuggling Report Center.’”