A government audit has uncovered a growing black market for discounted goods from military stores. (Image courtesy of Yonhap)
SEOUL, March 5 (Korea Bizwire) — A government audit has uncovered a growing black market for discounted goods from military stores, with unauthorized resellers exploiting various loopholes to secure products for resale through online marketplaces.
According to a Defense Ministry audit report released by the Board of Audit and Inspection (BAI) on March 4, resellers have increasingly adopted sophisticated methods to purchase and resell goods originally meant for military personnel and eligible beneficiaries.
The audit found that resale operations involved military store users, suppliers, and even store employees. One company, Company A, purchased 420.35 million won worth of military store goods between April 2022 and April 2024 through a beneficiary’s child and resold them for profit.
Another, Company B, bought 4,320 items from a military store supplier in early 2024 for 30,310 won per unit, later selling them on 27 online shopping platforms for between 38,000 and 42,000 won per unit.
“The methods used by resellers to secure military store products are increasingly diverse,” the audit stated. “Tactics include collusion with store employees and siphoning products through suppliers, making preemptive regulation challenging.”
Regulatory Loopholes Enable Widespread Resale
Despite attempts by the Korea Armed Forces Welfare Agency to curb resale activity, online marketplaces have resisted enforcement, citing a lack of legal grounds to prohibit such sales.
The BAI noted that South Korea’s Military Welfare Act lacks provisions explicitly banning the resale of military store goods, effectively allowing 28 known resale operations to continue unrestricted as of April 2024.
The audit board has formally recommended that the Defense Ministry establish regulations to prohibit the unauthorized resale of military store items and prevent further exploitation of the system.
Defense Ministry Faces Broader Accountability Issues
In addition to resale violations, the audit revealed that South Korea’s military has been exceeding its authorized staffing limits for officers without required approvals from the Ministry of the Interior and Safety.
The audit also flagged performance and reliability issues with electromagnetic pulse (EMP) protection facilities and surveillance drones, citing frequent malfunctions and subpar capabilities.
As a result of the findings, the BAI identified 19 instances of legal and procedural violations, issuing formal warnings and requiring corrective actions from the Defense Ministry, Joint Chiefs of Staff, and other military-affiliated agencies.
The Defense Ministry is now under pressure to tighten oversight and enact stricter regulations to close existing loopholes and improve operational integrity.
Ashley Song (ashley@koreabizwire.com)
