Scheme to export imported magnesium alloy worth around 49 billion won as Korean-made uncovered

[Financial News] Busan Headquarters Customs of the Korea Customs Service (KCS), led by Chief Yu Yeong-han, said on the 10th that it had uncovered a company that exported foreign-made magnesium alloy after falsely obtaining certificates of origin identifying it as Korean-made, and disguised its imports as raw materials to conceal the scheme. The company was referred to the Busan District Prosecutors’ Office on suspicion of violating the Foreign Trade Act and the Customs Act, among other offenses.
After orders for magnesium alloy from overseas buyers surged beyond the capacity of its own production facilities, the suspected company imported large quantities of foreign-made magnesium alloy with specifications identical to domestically manufactured products, mixed it with its own products, and then falsely obtained certificates of origin identifying the goods as Korean-made.
Since 2022, the company was found to have fraudulently exported magnesium alloy as Korean-made on around 490 occasions, totaling 9,822 tons with a market value of approximately 49 billion won, and to have made illicit gains of about 9 billion won.
The company was found to have smuggled in 5,881 tons of the imported magnesium alloy, worth approximately 36 billion won, after mislabeling it as “pure magnesium,” a raw material, to avoid suspicion from customs authorities and overseas buyers.
The customs investigation team’s tracking of foreign-exchange remittance transactions led to the additional discovery of the company’s price-manipulation scheme involving imported goods.
The suspected company siphoned approximately 1.6 billion won overseas by inflating the import price of magnesium alloy above its actual price, then brought the money back into Korea through accounts held by domestic affiliates, among other channels. The funds were confirmed to have been misused for private purposes, including purchases of luxury goods and other high-end items for the company’s head and family.
Yeom Seung-yeol, head of the investigation bureau at Busan Customs, pointed out, “Exporting foreign-made goods under the guise of Korean-made products not only undermines the competitiveness of the domestic manufacturing industry but is also a serious crime that severely damages the international credibility of Korean-made products (K-Brand), built up in global markets.” He stressed, “There is a very high likelihood that such origin-laundering schemes will also involve secondary crimes, such as smuggling to evade enforcement or illicitly moving foreign currency abroad for personal gain.”
Busan Headquarters Customs plans to continue stepping up targeted crackdowns on similar systemic origin-laundering schemes and illegal foreign-exchange transactions to protect legitimate domestic manufacturers and establish a fair trade order. 
[email protected] Byun Ok-hwan Reporter