Customs office discovers illegal foreign purchases of Seoul apartments

Kim Kwang-ho, director of Seoul Main Customs, speaks about the office's recent probe into illegal foreign purchases of Seoul apartments on Tuesday. (Seoul Main Customs)

Seoul Main Customs, the regional office of South Korea’s customs agency, said Tuesday that it discovered apartment purchases in Seoul by foreign nationals who used illicit funds or failed to report their purchases to authorities.

Through investigations into their foreign exchange transactions, bank accounts and searches and seizures, 55 apartments were found to be involved in illegal purchases, worth about 84 billion won ($75.5 million) combined, the customs office said. The probe was carried out for four months in collaboration with the Ministry of Land, Infrastructure and Transport.

The list includes apartments purchased with funds raised through illegal foreign exchange transactions using cryptocurrencies and customs evasions as well as residential units bought without acquisition reports to foreign exchange authorities.

One-fifth of apartments alleged to be purchased illegally by foreigners were located in the wealthy Gangnam area of Seoul. The biggest buyers by nationality were Chinese with 34 people, followed by Americans and Australians with 19 and two, respectively, it noted.

A Chinese couple running a trading firm manipulated the prices of products they imported and exported and used the money they made to buy an apartment. Another Chinese couple evaded customs duty and purchased an apartment in Seoul with the proceeds, officials said.

A Chinese national living overseas brought in funds through an organization doing illegal foreign exchange transactions via cryptocurrencies such as Bitcoin. The suspect then purchased an apartment worth 1.1 billion won.

The customs office further captured 10 organizations it believes carried out unlawful foreign exchange transactions through the ongoing investigation. It so far has nabbed organization members that illegally transferred nearly 1.4 trillion won worth of exchanged funds through cryptocurrencies.

The customs office has already been investigating suspicions of Korean residents’ illegal real estate purchases, but this is the first time the Seoul Main Customs has investigated purchases by foreign nationals.

The office said more investigations will be carried out later on other properties besides apartments.

Seoul Main Customs reported the alleged customs evasion cases to the prosecutors’ office or sent notifications to the suspects. Those who intentionally missed reporting their property acquisitions to foreign exchange authorities will be fined or reported to the financial market watchdog.

“We will continue to put in all-out efforts into cracking down on foreigners’ illicit money bringing to the country. To completely cut off their (illegal) channels and further prevent impacts on the country’s surging real estate prices, we vow to closely cooperate with related government bodies, including the land ministry,” the local customs office said.

By Jie Ye-eun (yeeun@heraldcorp.com)

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