Toshiba Korea, Samsung, LG Fined for Customs Violation
Jun 24, 2004
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Toshiba Korea Electronics, Samsung Electronics, and LG Electronics have been slapped with 254.7 billion won (approx. U.S. $219.8 million) in fines for violating customs duties, customs officials said.

The Korea Customs Service said it was levying the stiff fines on the three companies because they failed to pay duties on multi-chip-package (MCP) sets they imported. The electronic devices, used for mobile phones and other information technology products, are subject to an 8-percent tariff.

The state authority, or KCS, said all three electronics companies had not filed proper customs reports on the MCPs they imported for the last 2 years.

Toshiba Korea was ordered to pay 54.7 billion won, while Samsung and LG were fined 150.0 billion won and 50.0 billion won, respectively.

The three companies said they will ask the KCS to reconsider its actions and clearly stated that they planned to take up the issue with the National Tax Tribunal.

All three said they did not know MCPs were subject to 8-percent duties. Moreover, the companies pointed out that levying customs duties on this particular product should be scrapped since other countries classified the same part as exempt from import tariffs.

The KCS said, however, they had reviewed the claims made by the electronics companies and countered that the duties are clear and that there can be no confusion.

"South Korea allows for 0-percent duties if parts are imported for use in cell phones," a KCS spokesperson said. He said that because MCPs can be used for MP3 players, personal digital assistants, and digital cameras, waiver rules do not apply across the board and that the importers should have known this.

The official, however, said that if the three companies can come up with supporting documents to prove that the MCPs were used to make cell phones for foreign markets, the fines could be reduced to a certain degree. (Yonhap)

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