The Customs Agency is intensifying its crackdown on financial crimes based on trade, including the manipulation of import and export data to fraudulently obtain government subsidies and policy financing, as well as inflating corporate value in capital markets.
On September 10, the Customs Agency announced that it, along with relevant ministries, has defined financial crimes based on trade manipulation as 'Trade-Based Financial Crimes (TBFC)' and is operating an integrated joint inspection and enforcement system.
This decision comes as trade crimes have expanded beyond mere customs evasion to include government subsidies, capital markets, public procurement, and policy financing. Recent cases highlighted include inflating export and import figures to boost sales disclosures and stock prices, as well as misrepresenting low-cost foreign products as domestic goods for public procurement.
The Customs Agency will initially focus on four areas: capital market disruptions, fraudulent public procurement, improper receipt of government subsidies, and exploitation of policy and trade financing.
In the capital markets, the agency will investigate companies that manipulate export figures to avoid delisting or to inflate figures for new listings. It plans to analyze companies suspected of manipulating export data around market actions such as designation as an unfaithful disclosure company, investment warnings, management item designations, and delistings, as well as checking for export data manipulation among new listing and review companies on platforms like KOSDAQ and KONEX.
In public procurement, the focus will be on companies that misrepresent low-priced imports as domestic products. This involves registering items as domestically produced while actually supplying imported goods to profit from the price difference. The Customs Agency will analyze relevant items and companies and conduct joint inspections with the Public Procurement Service regarding origin verification. Actions involving the manipulation of export figures to qualify for the Public Procurement Service's excellent company designation will also be scrutinized.
In the area of government subsidies, the agency will analyze the export figures of companies applying for subsidies, as these figures are used to determine eligibility and the scale of support. The aim is to prevent cases where companies inflate their export figures to receive subsidies. The Customs Agency will share information with the Ministry of SMEs and Startups and other relevant departments to verify any manipulation of export figures before and after applications. It has already begun inspections on 16 companies among the three support program targets of the Ministry of SMEs and Startups.
In the policy and trade financing sector, the agency will check for manipulation of export figures to increase loan limits or receive interest benefits, as well as the use of false trade documents to obtain financial support. The Customs Agency plans to share information with policy financing institutions such as national policy banks and analyze financial support details from organizations like the Korea Trade Insurance Corporation and private banks to verify any manipulation of trade documents like letters of credit.
To facilitate this, the Customs Agency will operate a special investigation team for TBFC, led by the head of the investigation division. This team will be composed of the TBFC information analysis center and departments related to investigations and foreign exchange investigations. It will receive information from relevant agencies about companies listed in capital markets, public procurement contracts, subsidy recipients, and policy financing beneficiaries to identify suspicious companies for inspection and investigation. The results of these crackdowns will be shared with relevant agencies to lead to sanctions and institutional improvements.
The Customs Agency plans to share the progress of these crackdowns with the Ministry of SMEs and Startups, the Public Procurement Service, and the Korea Trade Insurance Corporation, and will establish a basis for institutionalizing a collaborative system. It is considering signing a memorandum of understanding (MOU) for joint work among relevant agencies, and if necessary, will pursue measures to specify the basis for information provision in customs laws.
A Customs Agency official stated, 'We will share information with relevant agencies and link inspections and crackdowns to block actions that disrupt national finances or capital markets through trade manipulation.'
* This article has been translated by AI.
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