ED New duty free licenses

The Korea Customs Service (KCS) has granted new duty free licenses in Seoul to Hyundai Department Store, Lotte and Shinsegae. SK Networks and HDC Shilla failed to get the ticket.

The customs agency’s decision, however, triggered a strong backlash as it came despite opposition from lawmakers who demanded that the government halt the decision due to the Choi Soon-sil scandal.

After previously redistributing the fixed number of licenses, the KCS suddenly changed its position in April and decided to offer new ones. Now there are suspicions that President Park Geun-hye whose duties were suspended following the National Assembly’s Dec. 9 impeachment vote might have been behind the change.

It turned out that Lotte Group Chairman Shin Dong-bin and SK Group Chairman Chey Tae-won met with Park in February and March in one-on-one meetings. The two executives are suspected of having donated to two dubious foundations controlled by Choi over the new duty free licenses. Some have called into question why the KCS decided to rush its decision at a time when the announcement was expected to be delayed until next year after the current political scandal is resolved.

The customs office dismissed any possibility of favoritism in its decision making, saying it had no legal grounds for shelving its decision. The independent counsel team, which is investigating the Choi scandal, should do its utmost to uncover the truth about suspicions over the licenses.

The recurring controversy over the duty free licenses is shameful. All this comes from the government’s lack of fairness and transparency in granting them. It may be long overdue for the government to consider changing the current licensing system for duty free stores into a reporting or registration one.

Given that Korea is the world’s largest duty free market, one can’t overemphasize the importance of duty free shops in attracting foreign tourists. That is why selecting new duty free operators must be based entirely on economic feasibility without any political interference.

The KCS’s latest decision will raise the number of duty free stores in Seoul to 13 from nine. The government should create a milieu in which they can compete fiercely to boost tourism.