Korea Customs Service: "Gold Smuggling Targeting Kimchi Premium on the Rise... Intensive Crackdown"

The government is stepping up crackdowns to block attempts to smuggle gold aimed at profiting from domestic and international price differences.

According to the Korea Customs Service on the 5th, the so-called 'Kimchi Premium' phenomenon, where domestic gold prices are formed 14 million to 27 million KRW (10-20%) higher per kilogram than international prices, has become prominent recently, leading to an increase in attempts to smuggle gold for profit.

On the 5th, an employee at the Export-Import Customs Clearance Building of Incheon Airport Customs is unveiling smuggled gold items. March 5, 2025. Photo by Kang Jin-hyeong

Gold smuggling mainly occurs in two forms: 'direct domestic smuggling,' where gold is smuggled directly from foreign countries such as Hong Kong into Korea, and 'transshipment to a third country,' where gold is smuggled through Korea en route from foreign countries like Hong Kong to a third country.

Direct domestic smuggling typically involves travelers from abroad bringing gold into the country through airports via direct flights or routes passing through third countries, or disguising bracelets, necklaces, and other items as personal use and importing them via express delivery, mail, or general cargo. There have also been cases where gold is manufactured or concealed in other forms such as machinery to smuggle it.

In cases of transshipment to a third country via Korea, travelers departing from foreign countries contact travelers departing for a third country at Incheon Airport's transit area and hand over gold products they possess to smuggle them out.

In particular, recently, cases have been detected where gold bars exported from places like Hong Kong were smuggled through Korea to Japan to evade local consumption tax (10%).

For example, the Korea Customs Service apprehended six travelers between the 12th and 21st of last month who attempted to smuggle gold bars (1 kg) and 24 gold products weighing 0.3 to 0.5 kg each (totaling 16.6 kg, worth about 2.9 billion KRW) into the country by hiding them in backpack bottoms, inside pants, inside suitcase wheels, and on their bodies, having brought them from Hong Kong and Taiwan.

On the 5th, an employee at the Export-Import Customs Clearance Building of Incheon Airport Customs is revealing gold smuggled hidden in the wheels of a travel suitcase. 2025.3.5. Photo by Kang Jin-hyung

Earlier, in November last year, a smuggler who disguised 30 gold products such as rings, necklaces, and bracelets worth 67 million KRW as personal jewelry for self-use and smuggled them through express cargo was caught. In January this year, Incheon Airport Customs and the Northern Gyeonggi Police Agency cooperated to apprehend an organization that brought in 78 gold bars processed into clay form (totaling 85 kg, worth 7.4 billion KRW) from Hong Kong to Korea and then attempted to smuggle them out to Japan.

A total of 39 suspects were arrested, among whom some were found to have been involved in smuggling gold bars after being lured by promises of covering their travel expenses to Japan.

The Korea Customs Service judges that gold smuggling aimed at the Kimchi Premium will continue steadily for the time being and plans to strengthen inspections of high-risk travelers and cargo to block it. Additionally, to conduct effective crackdowns, they plan to promote cooperation among the customs authorities of the three countries by exchanging information on gold smuggling with customs in Hong Kong and Japan.

Lee Kwang-woo, head of the Customs Service Investigation Division, said, "Due to the recent 'Kimchi Premium' phenomenon where domestic gold prices are higher than international prices, attempts to smuggle gold are increasing. The Korea Customs Service plans to strengthen crackdowns to block gold smuggling attempts."