What if they pretend to be normal and enter the country... Controversy over resuming export of flood-damaged cars

Amendment to the Automobile Management Act Proposed to Allow Export of Flood-Damaged Vehicles
Industry Has Long Demanded Legal Revision... Opposition Remains

A bill to amend the Automobile Management Act, which would allow the export of total loss flood-damaged vehicles that are currently completely banned from export, has been proposed in the National Assembly. This has sparked a heated debate with arguments for and against the bill.

According to the National Assembly Legislative Information System on the 30th, Yeom Tae-young, a member of the Democratic Party of Korea, officially proposed a partial amendment to the Automobile Management Act earlier this month. The core of the amendment is to revise the legal provisions to permit the export of total loss flood-damaged vehicles for recycling purposes. Total loss flood-damaged vehicles are those that have suffered severe damage to major components such as the engine, electronic equipment, and interior due to flooding, making repairs impossible.

Yeom Tae-young’s office explained the purpose of the amendment, stating, “Due to export restrictions, the disposal of flood-damaged vehicles is delayed or not properly handled, raising concerns about environmental pollution caused by the leakage of hazardous substances,” and added, “While major foreign countries allow the export of flood-damaged vehicles to other countries, only we are suffering economic losses.”

Previously, these vehicles were only prohibited from domestic circulation, but not from export. However, after the amendment to the Automobile Management Act passed the plenary session of the National Assembly in October 2022, the export of total loss flood-damaged vehicles and parts installed in those vehicles has been banned since June 2023.

Flooded Vehicles Due to Heavy Rain Photo by Yonhap News

This measure aims to completely prevent flood-damaged vehicles from being disguised as normal vehicles and re-entering the domestic used car market. Accordingly, total loss flood-damaged vehicles have been required to be scrapped within 30 days of being declared a total loss.

The Ministry of Land, Infrastructure and Transport has also strengthened measures to completely ban the circulation of total loss flood-damaged vehicles. Previously, if a vehicle declared a total loss due to flooding was not scrapped upon request, a fine of 1 million to 3 million KRW was imposed. Now, if delayed beyond 10 days, a minimum fine of 2 million KRW is imposed, with an additional 200,000 KRW added for each day thereafter. After more than 50 days, the maximum fine can reach up to 10 million KRW.

However, voices from the recycling industry have since called for the bill to be revised again, arguing that some parts of total loss flood-damaged vehicles can still be resold. An industry insider explained, “For vehicles declared total loss within one year of release, some parts such as interior and exterior materials, excluding electronic equipment, retain high residual value.”

In particular, the industry points out that economic losses are also occurring as major foreign countries allow the export of flood-damaged vehicles. The industry estimates that around 7,000 total loss flood-damaged vehicles occur annually, and exporting them to Southeast Asia and other regions could generate hundreds of billions of KRW in annual revenue.

On the other hand, some still oppose the bill. They argue that total loss flood-damaged vehicles might not be scrapped during the disposal process but instead be disguised as normal vehicles through document forgery and re-enter the domestic market under the pretext of export. Experts warn that total loss flood-damaged vehicles pose safety risks directly related to issues such as engine stalling or brake system failures.

The Ministry of Land, Infrastructure and Transport also stated that it is not currently considering resuming exports. A ministry official said, “If total loss flood-damaged vehicles are exported overseas, there could be issues with credibility. Although there are voices calling for the resumption of exports, there are no concrete alternatives at this time.”