Raw Material Importers Facing FTC Investigation

The Korean Fair Trade Commission has opened an investigation into possible disruptive activities by processors and importers of raw materials by abusing their leading market status through illicit hoarding and cornering of the market.

``The FTC has launched a probe into raw material importers, processors and brokers, as prices of raw material imports, such as nonferrous metals, scrap iron and grain, drastically surged recently due to the global economic recovery and raw material demand by China. The probe targets possible abuses by major importers in the market,'' an FTC official said.

The FTC suspects that a considerable number of importers have raised the prices of raw materials far above their import prices to take advantage of a recent supply shortage. It added that major importers are also believed to be delaying their inbound shipments of raw materials in the hope that prices will continue to rise.

Prices of imported raw materials have recently been surging because they are in short supply. The anti-trust agency will look into industrial areas including welded angles, shapes and sections made with scrap iron, nonferrous metals like copper, zinc and aluminum, and grinding and edible oil made from grain.

The commission said government ministries, including the Ministry of Finance and Economy, National Tax Service and local governments will join its investigation activities.

The FTC official said stern legal punishment would be imposed on importers abusing their dominating positions in the market.

Violators are subject to fines of up to 3 percent of their sales, on top of FTC penalties, to correct the abuses. Korea Times