A criminal ring that smuggled 900,000 packs of cigarettes overseas and reaped approximately 10 billion won ($7 million) in illegal profits has been arrested by Incheon Customs, the Korea Customs Service announced Monday.
Incheon Customs said it had referred 11 individuals, including the alleged ringleader identified only as "A," a man in his 30s, to prosecutors on charges of violating the Customs Act. None were detained.
The suspects allegedly amassed large quantities of both genuine domestically distributed cigarettes and counterfeit cigarettes smuggled in from abroad, then illegally exported them to Australia and New Zealand disguised as express courier shipments.
Authorities said A conceived the scheme after working as a tour guide in Australia, where he learned that local cigarette prices are eight to nine times higher than in Korea.
A pack of cigarettes costs around 4,500 won in South Korea—less than half the OECD average of approximately 12,000 won. In Australia, prices reach about 41,000 won per pack, while New Zealand charges around 32,000 won, creating a price gap of up to nine times.
Exploiting this disparity, the group allegedly purchased 900,000 packs valued at approximately 3 billion won between March 2024 and March 2025. After smuggling them abroad as courier parcels, they sold the cigarettes at three to five times the domestic price, generating an estimated 10 billion won in criminal proceeds.
The organization recruited convenience store owners nationwide by offering 4,000 won per carton as commission. They also sourced counterfeit smuggled cigarettes through contacts made via social media chat rooms, including a man in his 40s identified as "B."
To evade X-ray screening and customs inspections, the group wrapped cigarettes in aluminum foil, concealed them inside acrylic boxes, and sealed them with screws.
The operation employed burner phones and aliases within a multi-tier delivery system: intercity transport via express buses, handoffs to regular courier drivers, and final transfer to international shipping companies. Delivery fees were paid in cash through ATMs via associates to avoid detection.
Incheon Customs launched its investigation after receiving intelligence about suspicious express shipments bound for New Zealand. Over 18 months, investigators traced vehicle routes through CCTV footage, analyzed telecommunications and highway toll records, conducted approximately 10 search-and-seizure operations, and carried out surveillance operations before identifying A, a Daegu resident, and arresting all accomplices.
Through international cooperation with Australian and New Zealand customs authorities, investigators seized 850 cartons of Marlboro cigarettes at the point of entry and obtained records of A's previous cigarette smuggling arrests abroad.
"This case exposed a transnational crime exploiting price gaps between countries and international express logistics networks," said Jang Chun-ho, chief investigation officer at Incheon Customs. "We will strengthen comprehensive crackdowns on illegal cigarette distribution and smuggling, covering not only import-export clearance but also domestic distribution channels."
