Customs office uncovers over 1tr won of illegal offshore foreign transactions

South Korea's customs agency said Monday that it has uncovered illegal currency transactions valued at more than 1 trillion won (US$933.7 million) taking place through offshore tax havens. The Korea Customs Service (KCS) launched an investigation into the outflow of wealth through illegal foreign currency transactions in June, in line with the government's stepped-up crackdown on offshore tax evasion and underground economic activities. Since 2011, the KCS has set its sights on offshore tax evasion attempts by South Korean nationals in 62 regions abroad that have a history of being designated as tax havens by the Organization for Economic Cooperation and Development and other expert groups. According to an interim report that summarizes what has been achieved from the months-long investigation, the KCS said that it has found 1.01 trillion won worth of illegal foreign currency transactions taking place through those areas, that include the British Virgin Islands. A total of 40 Korean companies were found to have been involved in those transactions. The methods used by those companies to evade taxes include manipulating prices of products being imported and exported, concealing commission fees, stashing away money they earned from evading tariffs in foreign countries, the report said. Offshore tax evasion has been drawing keen attention recently since an independent journalist group earlier disclosed a list of people who it claimed have used paper companies in tax havens in order to evade paying due taxes. Of the companies, the KCS said that it has launched an investigation into 26 firms suspected of engaging in illegal business activities and detected a total of 738.9 billion won worth of foreign currency transactions involving 13 companies.