False Country-of-Origin Advertising

An illegal act of misleading consumers by labeling or advertising a product's country of origin contrary to fact, subject to criminal punishment and fines under the Foreign Trade Act, the Act on Fair

False Country-of-Origin Advertising

Overview

False country-of-origin advertising refers to the act of labeling or advertising a product's country of manufacture or place of production contrary to fact, thereby misleading or confusing consumers or trading partners. It may overlap with a violation of the country-of-origin labeling obligation under the Foreign Trade Act (대외무역법) and with false or exaggerated advertising under the Act on Fair Labeling and Advertising (표시광고법). In particular, the typical case is so-called 'domestic origin impersonation,' in which a product is promoted as domestic while actually being produced in China, Vietnam, or another overseas country. Recently, as origin deception through online shopping malls, live commerce, and cross-border direct purchase platforms has increased, regulatory crackdowns have also been strengthened.

Key Details

Concept and Standards of Country-of-Origin Labeling

Country of origin means the country in which the goods were wholly produced, or the country in which they underwent substantial transformation or processing into a new product. Under Article 33 of the Foreign Trade Act, the Enforcement Decree of the Foreign Trade Act, and the Guidelines for Country-of-Origin Labeling, exported/imported goods and domestically distributed goods must display their country of origin in Korean, and simple assembly, packaging, dilution, cutting, etc. are not regarded as substantial transformation. Therefore, if a finished product is imported from China and only a label is attached in Korea, the country of origin is China, and labeling it as 'Made in the Republic of Korea' is illegal.

Types of Violations

First is the complete false labeling type. This includes labeling an overseas-produced product as domestic or passing off agricultural or marine products from one country as those from another. Second is the misleading type. Ambiguous expressions such as 'uses domestic raw materials' or 'Korean traditional method' cause consumers to misunderstand that the entire finished product is domestic. Third is the omission or concealment type. This includes not labeling origin at all, or labeling it in small print, in a foreign language, or in a difficult-to-identify location, effectively obstructing recognition. Fourth is the online deception type. This includes using domestic imagery at the top of a detail page while listing overseas origin only at the bottom, or inserting 'domestic' into search keywords to induce exposure.

Applicable Laws and Sanctions

Violation of Article 33 of the Foreign Trade Act may result, under Article 53 of the same Act, in imprisonment for up to 5 years or a fine of up to KRW 100 million, and goods that violate origin labeling may be subject to orders for return, disposal, or suspension of sale. Violation of Article 3 of the Act on Fair Labeling and Advertising (prohibition of false or exaggerated labeling and advertising) is subject to corrective measures and fines by the Fair Trade Commission and may lead to criminal accusation. The Act on Origin Labeling of Agricultural and Fishery Products provides for imprisonment for up to 7 years or a fine of up to KRW 100 million for false origin labeling of agricultural and marine products, and the Food Sanitation Act, the Livestock Products Sanitary Control Act, and the Customs Act (tariff evasion through origin laundering) may also apply. In addition, consumers may claim damages under the Civil Act for fraud or nonperformance, and consumer harm caused by violations of the Act on Fair Labeling and Advertising is subject to discussions of punitive damages.

Supervisory Authorities and Enforcement Procedures

The Korea Customs Service is responsible for enforcement and post-verification of origin labeling on imported goods, the National Agricultural Products Quality Management Service is responsible for enforcement of agricultural and marine product origin, and the Fair Trade Commission handles review of violations of the Act on Fair Labeling and Advertising. Local government special judicial police and the Ministry of Food and Drug Safety also participate in enforcement at distribution sites. When a violation is detected, accusation, business suspension, fines, product recall, etc. may be imposed cumulatively, and repeat violations or organized deception are subject to aggravated punishment.

Consumer Harm and Remedies

Harm from false country-of-origin advertising begins with price distortion. If goods that are actually low-priced imports are sold as domestic premium products, consumers may overpay by up to several times. Remedies are provided through multiple channels, including the 1372 Consumer Counseling Center, dispute mediation by the Korea Consumer Agency, reports to the Fair Trade Commission, and the Korea Customs Service smuggling and origin report center. Contract cancellation and refund, compensation for the price difference, and claims for emotional damages are possible, and the right of withdrawal under the Act on Consumer Protection in Electronic Commerce, etc. can also be exercised.

Recent Trends

In 2024–2025, as live commerce and short-form commerce grew rapidly, a new type emerged in which origin deception occurs during real-time broadcasting. Cases in which statements such as 'domestic' during a broadcast did not match subtitles or detail pages were repeatedly detected, and the Fair Trade Commission is strengthening its review in the direction of holding online platform operators responsible for advertising verification. The Korea Customs Service introduced an AI-based origin analysis system and cross-verification against overseas production records to increase the detection rate of 'origin laundering (transshipment),' and expanded post-verification of reverse direct purchase and re-imported goods in response to the surge in cross-border direct purchases. As related notices amended in 2024 specified origin labeling methods, the principle that origin must be displayed in a location easily checkable by consumers even on online detail pages was emphasized. In addition, as ESG management and supply chain due diligence discussions spread, corporate origin management has become a key element of brand trust beyond simple regulatory compliance; conversely, when false labeling is detected, reputation risk leading to media exposure and consumer boycotts has grown. As automatic product description writing using generative AI increases, accidents in which sellers generate or insert the phrase 'domestic' without confirming the actual place of production are also increasing, making platform-level automatic verification and clarification of responsibility major issues.