Diversion outweighs smuggling in Korea

A large quantity of Korean tax-exempt cigarettes earmarked for export are being diverted onto the domestic market, according to a story in The Korea Times quoting the Korea Customs Service (KCS).

The KCS reportedly said the value of the diverted cigarettes had reached about WON100 billion (US$97.5 million) this year, up from WON 3 billion in 2012 and WON40 billion in 2013.

This level of diversion indicates that the value of untaxed Korean cigarettes on the domestic market is greater than the value of cigarettes smuggled into the country from China, Japan, Thailand, the Philippines, the US and Indonesia combined.

Prosecutors in Incheon are currently conducting an investigation into how these cigarettes, which are believed to be sold to bars and karaoke rooms, are distributed.