Gov‘t scraps plan to tighten overseas direct purchases

[Photo by Han Joo-hyung]

The South Korean government withdrew its plan to mandate the Korea Certification (KC) safety mark for certain goods directly purchased from overseas on Sunday in response to strong consumer backlash.

The government announced measures to regulate overseas direct purchases last Thursday. It came two months after the Prime Minister’s Office formed a task force (TF) in March 2024 that involved the Ministry of Trade, Industry and Energy, the Korea Customs Service, the Ministry of Environment, and other relevant ministries.

The plan initially aimed to ban direct purchases of 80 items, including 34 children‘s products such as toys as well as 34 electric and household products, unless they are KC-certified.

The government said it would amend the Children’s Products Act, the Electrical and Household Product Safety Act, and the Chemical Product Safety Act to accomplish the policy.

But as it faced strong backlash from shoppers and criticism from political circles labeling the measures as “excessive regulation” that limit consumer choice, the government changed its stance to completely review the proposal.

“The government should have been more specific,” Lee Jung-won, second deputy chief of the Office for Government Policy Coordination, said during a press briefing on Sunday where he apologized for “causing confusion.” He also emphasized that it was not true that the government would preemptively ban or block the direct purchase of the 80 items.

Kim Sang-mo, a director at the Korea Agency for Technology and Standards, added during the briefing that KC certification is not the only method to check product safety, and the agency will listen to various opinions. It will also carefully consider the necessity of legal revisions, effectively indicating the government’s intention not to mandate KC certification for overseas direct sales.

All this suggests that the government narrowed its regulation strategy from a preemptive ban to a post-market inspection.

“The Korea Customs Service, the Ministry of Trade, Industry and Energy, and the Ministry of Environment will intensively investigate the hazards of overseas direct shipments, and those that are found to be hazardous will be blocked from June 2024 onwards,” Lee said. “We will also collect public opinion via public hearings and other means to see if there are other ways to block products that have been confirmed to be hazardous,” he added.

[Graphics by Song Ji-yoon]

Consumers will still be able to make direct purchases, but the government will conduct post-market safety inspections and restrict purchases based on safety. If excessive cadmium is found in a particular product from company A, for example, direct purchases of that product will be banned immediately. The government plans to post these inspection results on the ‘Consumer24‘ overseas direct purchase information website.

For its part, the retail industry reacted with confusion to the de facto nullification of the KC certification requirement for overseas direct purchases.

“Official importers often sell the same products at three times the price of those available through Chinese direct purchases due to customs clearance, tariffs, and logistics costs,” a small business owner who imports and sells shoes and clothing from overseas said. “I was glad to hear that the government had finally taken measures allowing Korean small and medium-sized enterprises to complete on a tilted playing field, but now I feel helpless as it appears nothing has changed.”

There are also calls to revise the KC certification process itself as it is too burdensome for Korean companies. The current KC certification stipulates that a product must be re-certified even if the only change is in the color. The same applies for products with identical materials and even products that are already KC-certified must also be going through the entire recertification process again every five years.

“Considering that KC certification itself has been criticized as ineffective and burdensome for domestic companies, it should be simplified moving forward,” a retail industry insider asserted.