YONGSAN GARRISON, South Korea — Army and Air Force Exchange Services clerks no longer track beer purchases at base stores in a ration-control policy change that one Seoul customs official said will encourage black marketing.
The reason: Beer prices on base match those off base, marginalizing black-market profits, said U.S. Forces Korea spokesman Kevin Krejcarek.
Seoul customs investigator Kim Sae-hoon said his office was unaware of the change. And, Kim said, high alcohol import taxes — from 150 to 200 percent — imposed by the South Korean government still make base liquor cheaper.
“The price difference between alcohol purchased on base from alcohol purchased off base has always been huge,” Kim said. “Without a doubt, this will raise the amount of black marketing.”
Previously, a clerk checked a customer’s ration and identification card at the time of an alcohol purchase and wrote the customer’s Social Security number on a log sheet. The log sheet also tracked the amount of alcohol purchased.
People are limited to two cases of beer a day, with a maximum of eight cases of month. The log sheets were entered in a central database to track purchases.
Krejcarek said the limits still are in place.
But when asked how base officials will keep track of possible purchase abuse without the database, Krejcarek said there are “other ways.”
USFK spokeswoman Air Force Lt. Col. Deborah Bertrand said the ration log system for beer no longer was needed, hence the change.
Officials couldn’t say when the system was amended.
“The logs were more of an administrative nuisance than an aid to controlling abuse or black marketing, so we discontinued them,” Bertrand stated in a written statement to Stripes.
“In addition, we have not had a problem with black marketing of beer or wine at the point of sale. However, we have many other effective methods in place to monitor and tightly control the sale of liquor within the allowable limits,” she wrote.
Hard liquor sales continue to be tracked by the log, Krejcarek said. An unmarried person can buy three bottles of hard liquor monthly, and a married couple may buy five bottles under the ration limits, he said.
A customer receives a form called “USFK 49” as a ration receipt for the purchase.
Wine, also not logged, is limited to three bottles a day with no monthly limit, Krejcarek said.
People who exceed either a spending or item limit could face punitive action from their chain of command, including loss of ration-card privileges.
The limits were designed to prevent mass purchasing of beer and other goods for off-base resale. The South Korean government allows beer, liquor and goods at the post exchanges to be imported tax-free for use by status of forces agreement (SOFA) personnel.
Those goods are not supposed to be transferred to people without SOFA status. But over the years, black marketing of base goods has been lucrative and ubiquitous, often perpetrated by South Korean AAFES employees, spouses and dependents.
South Korean customs police have arrested at least 25 Korean AAFES employees since 1999 after catching them with duty-free items from U.S. military bases, charging them with tariff violations. South Korean customs officials have reported 13 of those South Koreans were indicted and the others were fined.
It’s not uncommon in places such as the Seoul’s Namdaemun Market and small stores near U.S. military bases to find common food and hygiene-related items for sale for more than double their cost on base.
Recent notable black-marketing schemes have included:
• In September, the former manager of the Hannam Village post exchange was arrested after customs investigators discovered a tunnel leading from an on-base warehouse to an off-base coffee shop. The coffee shop had a hole in the floor; investigators said it was used to smuggle 62,000 cases of booze over two years using a rolling track system. In that case, AAFES reported a $76,000 loss after an inventory was taken.
• Two South Koreans who worked for Camp Casey’s post exchange were arrested along with a third man in October. After the arrests, police seized 4,093 boxes of medical supplies and 26,068 boxes of items such as cold medicine, lotion and canned ham.
Kim, the Seoul customs official, suggested that USFK should cooperate more with customs officials during investigations.
“It’s not enough to merely record the amount of alcohol purchased by the individual,” he said. “USFK should be willing to cooperate more with the customs office by sharing all records so that we can conduct a thorough investigation.”
Beer price comparison
On-base shopette vs. off-base convenience store chain.
Budweiser (in can): On base: Six-pack $3.40; 57 cents per canOff base (sold only per can): $1.69
Hite (Korean beer): On base: 65 cents per canOff base: $1.47 per can
Corona (in bottles): On base: six-pack, $5.25; 88 cents per bottleOff base: $2.58 per bottle
Heineken (in bottles): On base: six-pack $4.50; 75 cents per bottleOff base: $1.15 per bottle
— Staff reports