CJ under probe for tariff evasion
By Park Si-soo
CJ CheilJedang, a subsidiary of CJ Group, is under investigation by the prosecution over allegations that the country’s largest food company falsified its inventory volume of imported pork belly cuts, “samgyeopsal” in Korean, to evade customs duty.
The Seoul Central Prosecutors’ Office said Sunday an investigation has been launched at the request of Korea Customs Service’s Seoul office suspecting that CJ illegally earned roughly 5 billion won ($4.38 million) by the falsified report. CJ denies the allegations.
Samgyeopsal is one of the most sought-after cuts of pork in Korea regardless of income level and an estimated 430,000 tons is consumed nationwide each year. Domestic production falls short of meeting demand so the government has set a quota, in which the popular product can be imported without the usual tariff of 22.5 percent.
The exemption only applies when 10 percent or less of any samgyeopsal already imported remains unsold.
The prosecution says CJ reported to the authorities early this year that the firm met the precondition, despite having nearly 25 percent of 5,900 tons of samgyeopsal it had already imported stockpiled, and bringing in a further 4,000 tons between February and May without paying the required duty.
CJ vehemently denies the allegations, claiming the investigation is based on a misunderstanding about its stockpiled samgyeopsal. The company said the meat in question was unfit for consumption so that it was in the process of being disposed of.
“We didn’t summit a falsified report to the customs office,” a CJ spokesman said. “We will fully cooperate with the investigation to be cleared of this suspicion.”
The prosecution will soon summons CJ officials involved in samgyeopsal imports for questioning.
Meanwhile, the government will levy no tariff on 50,000 tons of imported samgyeopsal during the second half of this year.