Origin labeling fraud violated foreign trade law

Four J.estina employees fined

CEO Kim Yu-mi handed suspended prison term

Kim Yu-mi, CEO of J.estina, received a suspended prison sentence in a first-instance ruling after the company used acetone to erase "Made in China" markings on Chinese-made products and sold them as domestically produced goods. The image above is an AI-generated illustration. [AI-generated]
Kim Yu-mi, CEO of J.estina, received a suspended prison sentence in a first-instance ruling after the company used acetone to erase "Made in China" markings on Chinese-made products and sold them as domestically produced goods. The image above is an AI-generated illustration. [AI-generated]

Kim Yu-mi, CEO of jewelry and accessories brand J.estina, has received a suspended prison sentence on charges of passing off Chinese-made watches as domestically produced goods.

Judge Yang Hwan-seung of the Seoul Eastern District Court's Criminal Division 1 sentenced Kim on Thursday to one year in prison, suspended for two years, on charges including violations of the Foreign Trade Act. Four other executives and employees indicted alongside Kim were each fined 8 million won ($5,980).

The court found that J.estina's executives and employees had been aware the country-of-origin labeling was improper but turned a blind eye for business reasons. "Given Kim's position, the symbolic importance of the watch business, and the company's organizational structure and reporting lines, it is not reasonable to conclude that employees would have withheld such a serious matter from her or that she was unaware," the court said.

The court also said the Foreign Trade Act violations were serious offenses, considering the circumstances, methods, duration and frequency of the crimes. "The conduct caused grave harm to the sound order of foreign trade and to international credibility, and the false labeling of country of origin and domestic sales also undermined consumer trust and disrupted the order of commerce," it said.

In explaining the sentencing for Kim, the court cited her clean criminal record and the fact that the practice had been carried out routinely for years before she became CEO and before she was involved with the company. "Rather than actively executing the crimes, she passively condoned them by failing to correct the wrongdoing," the court said.

Kim and the other employees faced charges of misrepresenting Chinese-made products as domestically produced and selling them as such. According to prosecutors, from 2017 to 2023 they removed "Made in China" markings from approximately 120,000 watches imported from China — using acetone and other means — and sold them as Korean-made products.

Investigators also uncovered evidence that the company had falsely represented watches supplied by other manufacturers as its own production. J.estina disguised watches it received from outside suppliers as self-produced goods and delivered them to the Public Procurement Service.

In 2023, J.estina obtained certificates stating the watches had been produced at its own factory, but they were later found to be products from another manufacturer.


20ki@heraldcorp.com