The meaning of “domestic wholesale price” under Article 282(3) of the Customs Act / In a case where there is a material evidence showing a significant difference in the actual domestic wholesale price, whether calculating the domestic wholesale price by such a method is unlawful (affirmative) / Whether the value to be additionally collected when it is impossible to confiscate (i.e., the value equivalent to the benefit that would have been lost if a criminal owns the goods, and the value to be additionally collected may exceed the amount equivalent to the benefit that would have been forfeited if he/she would have been sentenced to confiscation)

Article 282(3) of the Customs Act provides that, when the whole or part of goods subject to forfeiture pursuant to paragraphs (1) and (2) of the same Article cannot be forfeited, an amount equivalent to the “domestic wholesale price” at the time of the offense of the goods subject to forfeiture shall be additionally collected from an offender. Here, “domestic wholesale price” means the price at which a wholesaler purchases imported goods from a trader and openly sells them through a fair transaction method at a domestic wholesale market (Article 266 of the Enforcement Decree of the Customs Act). Meanwhile, the price at which the price of domestic wholesale goods, including taxes on customs duties, customs duties, customs clearance procedures, expenses for customs clearance, and appropriate profits of the company, are set at the arrival price of the goods. Meanwhile, the method of calculating the domestic wholesale price in accordance with the market price reverse rate table shall be calculated based on the price at which the goods arrive at the port of entry at the port of entry at the port of entry at the port of entry at the port of entry at the market price, including expenses for customs clearance, and if any material evidence exists that the price calculated

In addition, when considering that the purpose of confiscation is to deprive the victim of the benefit from the crime and that it is intended to accomplish the purpose of confiscation, the value that should be additionally collected when confiscation is impossible means the amount equivalent to the benefit that the victim would have lost if he/she had been sentenced to confiscation. Therefore, the value that should be additionally collected should not exceed the amount equivalent to the benefit that would have been lost if he/she had been sentenced to confiscation.

Articles 241(1), 269(2)2, 274(1)1, and 282(1), (2), and (3) of the Customs Act; Article 266 of the Enforcement Decree of the Customs Act

Supreme Court Decision 91Do352 delivered on May 28, 1991 (Gong1991, 1824) Supreme Court Decision 94Do607 delivered on October 14, 1994 (Gong1994Ha, 303) Supreme Court Decision 2007Do8401 Delivered on December 28, 2007 (Gong2008Sang, 192)

Defendant

Defendant

Law Firm Liuri, Attorneys Shin Young-han et al.

Seoul Central District Court Decision 2017No283 Decided May 19, 2017

The judgment of the court below is reversed, and the case is remanded to the Seoul Central District Court Panel Division.

The grounds of appeal are examined.

1. Article 282(3) of the Customs Act provides that, when the whole or part of goods subject to forfeiture pursuant to paragraphs (1) and (2) of the same Article cannot be forfeited, an amount equivalent to the domestic wholesale price at the time of the offense shall be additionally collected from a customs offender. Here, “domestic wholesale price” means the price of imported goods purchased from a trader and sold openly by a wholesaler in the domestic wholesale market in a fair transaction manner (Article 266 of the Enforcement Decree of the Customs Act). The price at the arrival price of the goods includes the taxes on customs duties, etc., the customs clearance procedure cost, the cost of customs clearance procedure, and the reasonable profits of the company (see Supreme Court Decision 2007Do8401, Dec. 28, 2007). Meanwhile, if the method of calculating the domestic wholesale price pursuant to the market reverse ratio table is unlawful, the method of calculating the domestic wholesale price at the market price is based on the price at the arrival price or appraised price at the import port, the reasonable profits of an enterprise, or the method of calculating the domestic wholesale price at 194.

In addition, when considering that the purpose of confiscation is to deprive a person of his/her benefits from a crime and to accomplish the purpose of confiscation, the value that should be additionally collected when it is impossible to confiscate means the amount equivalent to the benefits that the criminal would have lost if he/she had been sentenced to confiscation (see Supreme Court Decision 91Do352 delivered on May 28, 191). Thus, the value that should be additionally collected should not exceed the amount equivalent to the benefits that would have been lost if he/she had been sentenced to confiscation.

2. The first instance court calculated the domestic wholesale price at KRW 90,861,400 according to the market-oriented rate table by applying the 607.5% of the ER's duty rate of 12,266,290 to the domestic melting 7,000 kilograms in Korea among the smuggling imported by the Defendant (hereinafter "the instant smuggling imported") and determined that such domestic wholesale price is not illegal on the grounds set forth in its reasoning.

3. However, according to the evidence duly admitted, the following circumstances are revealed.

A. (1) The customs duty rate of melters imported on the recommendation of the Korea Food and Drug Trade Corporation, an agency recommending imported agricultural products (hereinafter “Korea Food and Drug Trade Corporation”) (hereinafter “Korea Food and Drug Trade Corporation”) is 30%, and the customs duty rate of melters imported on the recommendation (hereinafter “Korea Food and Drug Trade Corporation”) is 607.5%.

(2) According to the investigation report including the investigation of the price of illegal goods, and the fact-finding reply to the president of the Distribution Corporation, the domestic wholesale price of the imported goods recorded by the Defendant as of July 31, 2014, which was recommended by the Distribution Corporation as of July 31, 2014, was 4,825 through 4,850 won per kilogram, and the domestic wholesale price of the domestic goods listed in the domestic goods listed in the domestic goods listed in the Korea Distribution Corporation, is 8,250 won per kilogram.

B. The domestic wholesale price of the smuggling imported in this case, which was calculated by the method in accordance with the market price calculation table in the first instance trial, is 12,980 won per 1 kilogramg (hereinafter “instant regional wholesale price”) and is remarkably higher than the domestic wholesale price in the domestic product rating in the domestic product. However, there is no evidence to deem that the domestic wholesale price of the instant smuggling imported in this case is different from the domestic wholesale price in the quality or transaction of the instant smuggling, or that there is a separate sales price in the fair transaction method, and rather, it is difficult to sell the smuggling imported in this case at the regional wholesale price more than twice the regional wholesale price in this case, solely on the ground that the instant smuggling was imported in accordance with the general rule of experience. Accordingly, it is difficult to view the regional wholesale price in this case as the actual domestic wholesale price in the instant smuggling imported in the instant case, and there is no reasonable difference between the domestic wholesale price in the domestic wholesale price recommendation in the instant smuggling imported in the actual manner.

C. In addition, if the Defendant possessed the smuggling of this case, it would have been able to gain the same profit as the recommended revenue recorded in the domestic wholesale market as the imported revenue recorded, and thus, it is reasonable to view that the amount equivalent to the profit that would have been lost if the Defendant had been sentenced to forfeiture is also equivalent to the domestic wholesale price of the recommended revenue recorded.

4. Examining the above circumstances in light of the legal principles as seen earlier, it is reasonable to view that the actual domestic wholesale price of the smuggling imported in this case is equal to the domestic wholesale price of the recommending imports. The investigation report and the reply for fact-finding can be deemed as material with due diligence that the reverse acid price calculated by the method of the market price reverse ratio table is different from the actual domestic wholesale price. Thus, calculating the domestic wholesale price of the smuggling imported in this case by the method of the market price reverse ratio table is unlawful.

Nevertheless, as the lower court determined otherwise, it erred by misapprehending the legal principles as to the collection and calculation of an amount equivalent to the domestic wholesale price as determined by the Customs Act, thereby adversely affecting the conclusion of the judgment. The ground of appeal assigning this error

5. Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Sang-ok (Presiding Justice)