South Korean authorities on Thursday announced that they have been conducting an investigation into a local company’s involvement in producing cigarette filters for North Korean tobacco companies, in a statement by the South’s Korean Coast Guard’s central regional headquarters.

Authorities said a joint investigation by the Incheon Main Customs and the Korea Coast Guard had revealed that an unnamed South Korean corporation, referred to as “company A”, had shipped the cigarette filters to North Korea via China.

In a statement entitled “Exposure of the company taking out the raw materials which are the means of earning hard foreign currency,” it was reported that the cigarettes were to be sold in foreign countries, including China.

A total of 2080 tons of cigarette filters, worth 16 billion South Korean Won (KRW) and more than 14 million U.S. dollars at current market prices, were reportedly sold to the North between 2012 and 2016.

“It is estimated that the cigarettes filters exported to North Korea could produce 676 million packs of cigarettes and earned around of 300 billion KRW and made a profit of around 400 KRW per pack,” a press release carried by the central regional headquarters of the Korea Coast Guard said.

The official told NK News that the filters were being used in North Korean cigarettes such as Ryomyong (려명) Jin Hung (진흥) and Sonbong (선봉) – as well as counterfeit Western brands – and were being exported.

South Korean authorities said the North Korean and foreign branded cigarettes were being sold in Dandong, China and that the National Forensic Service had conducted an investigation confirming that the filters in the counterfeit cigarettes were identical to those produced by the South Korean company.

The Korea Coast Guard said the North Korean tobacco company had produced counterfeit U.S. and Japanese brands, including Marlboros, to earn hard currency. 

The South Korean company is alleged to have sent the cigarette filters to the port of Nampo, DPRK via ship and to Sinuiju city via an overland route without “clearing customs procedure at Dalian Port in China.”

A graph provided by the Korea Coast Guard’s central regional headquarters showed that a Chinese trading broker had been involved.

South Korea’s Ministry of Public Safety and Security confirmed that four people, including a representative of the company and a trading broker, were under investigation on suspicion of violating the Inter-Korean Exchange and Cooperation Act.

The company, based in Miryang city in South Gyeongsang Province, had reportedly exported the cigarette filters to the DPRK legally until all commercial exports to the North were banned under the May 24 Measures in 2010.

But the group reportedly continued to produce filters for domestic cigarettes and “illegally” sold the products to a North Korean tobacco manufacturing companies by making “false declarations to customs,” according to police.

Under the Inter-Korean Exchange and Cooperation Act, any direct trade between South Koreans with the North or export and import via a third country must be directly approved by the Ministry of Unification (MOU).

Edited by Oliver Hotham 

All the photos are credited to Korea Coast Guard’s central regional headquarters, no distribution allowed