First MOU with African nation targets offshore tax evasion and asset recovery

National Tax Service Commissioner Lim Gwang-hyeon poses for a photo with Liberian Revenue Authority Commissioner General James Dover Jallah after signing an MOU at the first Korea-Liberia tax commissioner meeting in Seoul on June 5. [National Tax Service]
National Tax Service Commissioner Lim Gwang-hyeon poses for a photo with Liberian Revenue Authority Commissioner General James Dover Jallah after signing an MOU at the first Korea-Liberia tax commissioner meeting in Seoul on June 5. [National Tax Service]

South Korea's National Tax Service has established a cooperation framework with Liberia — a West African nation frequently cited as a conduit for asset concealment by high-value tax delinquents — to share information on tax evaders and jointly pursue unpaid taxes.

National Tax Service Commissioner Lim Gwang-hyeon held the first Korea-Liberia tax commissioner meeting with Liberian Revenue Authority Commissioner General James Dover Jallah in Seoul on June 5, the agency said Monday. The two sides discussed measures for information exchange and cooperation to combat offshore tax evasion and recover delinquent taxes.

It was the first time the National Tax Service had held a commissioner-level meeting with an African tax authority. The two countries agreed to use the meeting as a springboard to build a working-level cooperation framework for sharing information on tax evaders and collecting unpaid taxes, and to establish a standing coordination channel.

"Some taxpayers may attempt offshore tax evasion and asset concealment by exploiting Liberia's ship registration and ship finance regime," Lim said, adding that swift and accurate exchange of tax information and cooperation on collecting delinquent taxes between the two countries' tax authorities was essential. Jallah said Liberia would cooperate to the fullest extent possible.

Liberia is one of the world's most widely used flag-of-convenience states, favored by shipping companies globally for its fast registration procedures and flexible regulatory framework. As of the end of last year, 175 South Korean vessels were registered there.

The National Tax Service also requested information on offshore tax evasion cases in which South Korean nationals operate businesses in Liberia under other people's names to avoid domestic tax obligations. The move strengthens enforcement tools for tracking and recovering local assets held by delinquents who evaded taxes in South Korea before fleeing to Liberia.

The cooperation effort appears particularly aimed at tracing the tax evasion and hidden assets of Kwon Hyuk, chairman of Sinokor Group and known as the "shipping king." The National Tax Service notified Kwon in 2011 that it would seek to collect 410.1 billion won (approximately $266 million) in comprehensive income tax and other levies.


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