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Court sides with e-cigarette liquid importers in suit against ministry over surcharges for millions of won

Published: 25 Jan. 2026, 17:23

An e-cigarette store in Mapo District, western Seoul is seen in this file photo [YONHAP]

A court has ruled in favor of a group of e-cigarette liquid importers in an administrative suit against the Ministry of Health and Welfare over whether the liquid qualifies as “tobacco” under the law.

The plaintiffs are six individuals who imported around 6,100 liters (1,610 gallons) of e-cigarette liquid from China across 61 shipments between 2018 and 2020.

In 2020, the Health Ministry charged them for amounts ranging from 270 million won to 1.04 billion won ($187,000 to $719,000), for failing to pay the required fees for importing tobacco.

The plaintiffs filed suit, claiming that they had not imported tobacco and therefore should not be liable for the surcharge.

At issue was whether the nicotine in the imported e-liquid was extracted from the leaves of the tobacco plant. Under the Tobacco Business Act at the time, “tobacco” is defined as a product derived from the leaves of Nicotiana tabacum.

In 2016, the Ministry of Economy and Finance issued an interpretation stating that nicotine extracted from the stems or roots of the tobacco plant did not fall under this definition.

Following this interpretation, e-cigarette businesses began sourcing liquids derived from stems and roots instead of leaves. In some cases, leaf-extracted nicotine was reportedly relabeled as stem-derived.

Cigarettes are on display at a convenience store in Seoul on Jan. 15. [YONHAP]

The law requires importers and sellers of tobacco products to pay health promotion surcharges, but stem- or root-derived nicotine was not covered under the earlier legal definition — creating a loophole.

The Health Ministry argued that the plaintiffs had actually imported leaf-derived nicotine and imposed the fees accordingly. However, the plaintiffs’ import declarations stated the nicotine was extracted from tobacco stems and roots.

The Seoul Administrative Court sided with the plaintiffs. The court acknowledged that the nicotine may have been extracted from tobacco leaves in a ruling delivered in November, citing precedent involving the same Chinese manufacturer.

But the court overturned the surcharge orders, saying that there was insufficient evidence that the plaintiffs knowingly concealed the true origin of the nicotine. The court also found no indication of document tampering or collusion in the customs process.

The court noted that the surcharge amounted to 3.5 times the plaintiffs’ revenue, making payment effectively impossible. It further criticized the punitive nature of the combined financial penalties, which included high taxes on top of the surcharge.

People are seen going in and out of a smoking zone near Seoul Station in Yongsan District, central Seoul on Jan. 15. [NEWS1]

“The taxes imposed are of a confiscatory level, effectively depriving the plaintiffs of the ability to continue their business and fundamentally restricting their right to work and property,” the court said.

The court also questioned the legal distinction between leaf- and stem-derived nicotine, stating that both are forms of natural nicotine extracted from the same plant and are not fundamentally different in terms of purity or harmfulness.

“In terms of public health, leaf-derived, stem-derived and synthetic nicotine should all be regulated in the same way,” the court said.

A revision to the Tobacco Business Act passed the National Assembly on Dec. 2 last year expanded the legal definition of “tobacco” to include all parts of the tobacco plant — leaves, stems and roots — as well as synthetic nicotine.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY CHOI SEO-IN [[email protected]]