Korean Air to appeal Russian court's $46 million penalty ruling

Industry

Published: 26 Jul. 2023, 11:38 Updated: 26 Jul. 2023, 16:02

Korean Air to appeal Russian court's $46 million penalty ruling

Korean Air Lines' Boeing 787-9 [KOREAN AIR LINES]

Korean Air Lines has been fined 4.15 billion rubles ($46 million) by a Russian arbitration court for an "omission" in the airline's departure process at a Moscow airport in early 2021.

The Russian court on July 20 ruled the airline must pay the fine to the Russian customs authorities. This fine marks a decrease from the 8 billion rubles that the Russian customs authorities originally imposed.

The carrier intends to appeal the court's decision.

The incident leading to the fine occurred when Korean Air failed to obtain a seal from Moscow airport customs for its cargo flight KE529, which was en route from Incheon to Frankfurt, Germany, via Moscow on Feb. 22, 2021. The penalty was imposed about a year after the incident.

Korean Air said there was no intention to violate any laws, adding it had adhered to Russian regulations by submitting necessary documents and data and obtaining prior approval from the customs authorities.

It called the fine "excessive and harsh," and also based on what the company considers an unjust interpretation of the law.

"We provided an explanation to the Moscow Sheremetyevo Airport customs authorities multiple times and worked with various [Korean] government departments, including the customs agency, the Ministry of Land, Infrastructure and Transport, and the Ministry of Foreign Affairs to sort out the problem," Korean Air said in a statement Wednesday.

Some Korean media reports raised the possibility of a connection between the hefty fine and Russia's invasion of Ukraine. The economic sanctions imposed on Russia by the West have reportedly caused financial strain, leading the country to take aggressive law enforcement measures and impose harsh fines as a means to generate revenue. The timing of the fine, which was imposed on February 24 last year, coincides with the start of the Ukrainian invasion.

Moreover, the current frayed relations between Korea and Russia are also seen as a potential factor in this situation. President Yoon Suk Yeol's recent remarks about the possibility of providing military support to Ukraine during the ongoing conflict have added to the complexities surrounding the case. Korean Air declined to comment on the matter.

The airline's stock closed at 24,150 won ($18.9) on Wednesday, a decrease of 2.42 percent from the previous trading day.

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]