7/22/2012

Prosecutors are investigating CJ Cheiljedang, a core unit of retail giant CJ Group, for alleged tariff evasion, sources said Sunday.

The Seoul Central District Prosecutors’ Office, acting on a report by local customs authorities, is looking into allegations that the nation’s largest food maker dodged nearly 5 billion won ($4.38 million) in tariffs on imported pork belly by underreporting its inventory volume.

Locally called samgyeopsal, pork belly is one of the most popular types of meat in Korea. The government applies a zero tariff on imports of the meat under a set quantitative limit, as part of the tariff-rate quota system. Imports above the quota face a 22.5 percent tariff.

Investigators suspect that CJ Cheiljedang reported its remaining inventory level of pork belly imported last year to be about 10 percent, not the actual 25 percent, in order to earn the zero-tariff benefit on more imports this year.

They plan to summon company officials for questioning in the coming days.

“Some of the meat in stock was in the process of being returned, because it was unfit for sale, showing bad color and so on,” CJ Cheiljedang said. “It is not that we tried to deceive customs authorities.”

The firm imported 5,900 tons of pork belly meat in 2011, all exempt from tariffs.