Gov't to prevent importers from exploiting tariff-rate quota system
Finance Minister Koo Yun-cheol speaks during a ministerial-level task force meeting on stabilizing consumer prices at the Government Complex Seoul, Thursday. Yonhap
The government on Thursday announced a set of measures to improve the country's tariff-rate quota system, including steps to prevent unfair practices by importers exploiting it.
The measures were unveiled during a ministerial-level task force meeting on stabilizing consumer prices, particularly those affecting people's livelihoods. The meeting was chaired by Finance Minister Koo Yun-cheol.
The tariff-rate quota system allows certain volumes of imports to receive lower tariff rates within a specified limit. Under the system, tariffs on designated items, mostly food, can be reduced by as much as 40 percentage points.
Authorities found that some importers have abused the system. Some cases revealed that companies imported goods at reduced tariff rates but stored them in warehouses or delayed customs declarations, later selling them at higher prices.
A shopper selects mackerel products at a supermarket in Seoul, Feb. 8. Yonhap
Under the new measures, the government will designate items with a high risk of irregularities as "intensive management items" to strengthen monitoring, the finance ministry said.
The government will also introduce a requirement for importers to provide proof of distribution performance to ensure that imported goods are promptly distributed in the domestic market.
Customs authorities will launch an intensive investigation into businesses that obtain tariff-rate quota recommendations through fraudulent means.
"We will no longer allow anyone to profit from collusion or unfair practices involving essential foodstuffs and prices that affect the daily lives of the people," Koo said.
In recent years, the government has expanded the number of items eligible for tariff-rate quotas to around 100 annually, supporting more than 1 trillion won ($700.5 million) in tariff reductions each year.