1,267 tons of mung beans imported in 2021 Peruvian origin detected as counterfeit Peruvian sesame seeds and sesame oil through FTA Tariffs will be abolished starting next year. "We must thoroughly verify violations of country of origin." A 2021 duty-free import of Peruvian mung beans revealed large-scale violations during origin verification, resulting in the imposition of additional duties of approximately 18 billion won. Concerns are rising that origin violations could recur, as tariffs on sesame seeds and sesame oil, another high-tariff product, are scheduled to be eliminated next year under the Korea-Peru Free Trade Agreement (FTA). According to data recently received by Rep. Lee In-seon of the People Power Party (Daegu Suseong District) from the Korea Customs Service (KCS), the KCS closed a case in November last year involving Peruvian mung beans that occurred in 2021. The KCS determined that 1,267 tons imported by 12 companies had falsified their country of origin and collected 18.2 billion won in duties. Some of the companies subject to customs duties were also included on this year's list of high-value and habitual delinquent taxpayers. Among the corporate taxpayers announced by the Korea Customs Service in November, two companies falsified the origin of Peruvian mung beans, resulting in customs duties of 5.2 billion won and 1.5 billion won, respectively. However, their names were made public after they failed to pay. Mung beans are a key sensitive commodity, with tariffs reaching 607.5%. However, tariffs on Peruvian beans were eliminated in 2020, the 10th anniversary of the Korea-Peru FTA. However, until 2020, the Agricultural Product Safeguard (ASG) was in effect, limiting market access. The market will be fully opened in 2021 with the expiration of the ASG. The issue of Peruvian mung bean origins came to the forefront in 2021 when domestic imports surged 63-fold from 133 tons the previous year to 8,561 tons. Suspicions were raised that a significant number of companies were exporting mung beans from neighboring Bolivia and Brazil as Peruvian to avoid FTA tariffs. Consequently, the Korea Customs Service began investigating 79 importers in September 2021. At the time, the Customs Service suspected that a quantity significantly exceeding the production amount had been exported to Korea, based on the fact that the production amount of mung beans announced by the Peruvian Ministry of Agriculture and Irrigation (Midagri) was only 295 tons in 2020 and 2,012 tons in 2021, and launched an on-site investigation. In August 2022, the Korea Customs Service, in cooperation with Peruvian authorities, visited the country to verify production sites and producers. During the on-site verification, the Korea Customs Service visited the northwestern coastal regions of Lambayeque and La Libertad, previously producing mung beans for export to Korea, as well as the southeastern mountainous region of Cusco. While the Korea Customs Service confirmed that commercial production was possible on some large-scale farms in the northwestern coastal region, it found no mung bean cultivation areas in the mountainous southeastern region. Afterwards, the Customs Service agreed to cooperate with the Peruvian government in verifying the country of origin, and after strengthening the verification stage from two to four stages, the case was closed last year by collecting additional duties on some companies that failed to prove the country of origin. However, it is pointed out that the suspicions have not been completely resolved, as the amount imported in excess of Peru's official production in 2021 amounted to 6,549 tons, but the amount subject to additional tariffs was only 1,267 tons. An official from the Korea Customs Service's Origin Verification Division said, "We have strengthened our origin verification procedures in consultation with Peruvian authorities," and "We are improving our origin management capabilities compared to before, such as by distributing origin verification guidelines to importers." There are growing concerns in the industry that large-scale violations of origin rules could recur as tariffs on Peruvian sesame seeds and sesame oil are set to be abolished next year. The 630% tariff on Peruvian sesame seeds and sesame oil, which was in effect since the FTA took effect, will be phased out, with tariffs set to be eliminated starting in 2026, 16 years after implementation. Sesame seeds must meet the 'perfect production standard' to be recognized as Peruvian, but sesame oil can be recognized as Peruvian even if it is produced in Peru using sesame seeds from other countries. The industry is wary of the possibility that sesame seeds produced in South American countries like Bolivia and Brazil are being imported into Peru, disguised as Peruvian, and then exported to Korea. This year, 660 tons of Peruvian sesame seeds were imported. Park Eun-gi, president of the Korea Sesame and Perilla Association, said, “There are growing concerns that violations of origin will occur in sesame seeds, following those in Peruvian mung beans,” and emphasized, “The Korea Customs Service must conduct thorough verification.”