Korea Customs Service Launches Special Crackdown on Country of Origin Labeling Violations in Public Procurement Goods

The Korea Customs Service announced on September 8 that it will conduct a special crackdown on "violations of country of origin labeling for public procurement goods" from September 8 to October 24.

Provided by Korea Customs Service

Recently, there have been frequent cases where companies exploit the competitive product system for small and medium-sized enterprises (SMEs) by importing low-cost foreign goods, disguising them as domestically produced, and then supplying them at high prices, without actually manufacturing the procurement products in Korea.

The competitive product system for SMEs is operated by the government to support small and medium-sized businesses. Under this system, designated items must be purchased only from SMEs that manufacture them domestically. Last year, the volume of products traded under this system reached 29.3 trillion won, accounting for 13% of all public procurement contracts for the year.

This special crackdown is being conducted to prevent such fraudulent supply practices by suppliers to public institutions. The crackdown targets include false or misleading country of origin labeling, damage or alteration of country of origin labels, failure to indicate the country of origin, or improper labeling.

The Korea Customs Service plans to focus on items contracted for procurement on the condition of domestic production. It will conduct a linked analysis of import customs clearance data and public procurement contract data from the Public Procurement Service (covering 3,025 items and 18,873 companies from procurement contracts over the past five years) to identify and crack down on companies with a high likelihood of illegal activities.

In particular, the crackdown will focus on cases where the country of origin of foreign goods is falsely labeled as Korean, or where domestically produced goods using imported materials are checked to see if they meet the Korean country of origin standards. Companies caught during the crackdown will face strict measures, such as fines and requests for criminal investigations.

Lee Myunggu, Commissioner of the Korea Customs Service, said, "We will ensure that this special crackdown contributes to eradicating illegal and fraudulent activities in the public procurement market and creating a fair competitive environment." He added, "The Korea Customs Service will strengthen its monitoring of country of origin labeling violations in cooperation with related agencies such as the Public Procurement Service, and will focus on protecting public safety and domestic industries."