An AI-enhanced image and inspection solution for South Korea Customs Service

Summary:

With an AI inspection system, the Korean government has achieved 82.7% of reading accuracy and improved the efficiency of customs clearance by changing the existing visual inspection on reading method to detect illegal duplication.

Clients:

The National IT Industry Promotion Agency (NIPA) is a specialized government organization in South Korea dedicated to advancing the country’s information and communication technology innovations. NIPA undertakes various initiatives to enhance national competitiveness and establish future growth drivers by integrating software technologies such as AI, VR/AR, 5G, and cloud computing into traditional industries.

The Korea Customs Service (KCS), founded in 1970, is a tax organization in South Korea operating under the Ministry of Economy and Finance. Its main office is located in the Seo District of Daejeon.

Problem Statement: 

In South Korea, cases of infringement of intellectual property rights (IPR) have risen due to the influx of illegal duplicates  imitating domestic products. In 2019, customs authorities detected 30,856 instances of goods infringing IPRs, amounting to $0.4 billion annually. These illegal duplications have caused a $15 billion annual decline in company sales, led to 31,753 job losses, and resulted in a $0.3 billion loss in tax revenue. Consumers face direct health and safety risks, such as ingesting counterfeit medicines and experiencing appliance fires. For instance, Hyundai Mobis suffered $18 million in annual losses due to the distribution of cheap counterfeit Chinese products, including sensors, infotainment systems, steering devices, lamps, and body parts. In 2020, recognizing the significant impact of illegal duplications on industry and consumers, NIPA and the Korea Customs Service through collaboration with Stratio, Inc, an AI and sensor company, began developing an AI-based solution to detect illegal duplicates using customs clearance data. 

Results: 

• Achieved 82.7% of reading accuracy and improved efficiency of customs clearance by changing the existing visual inspection on reading method to detect illegal duplication based on AI & customs clearance data. 
• Prevention of infringement of IPRs by 60% (0.24 billion dollar per year compared to 0.4 billion dollar per year) of the overall inflow amount through illegal duplication. 
• Reduction in time of notifying the right holder after detecting initial suspected goods, less than 5 minutes in the case of introducing AI solution from more than 1,440 minutes through visual inspection.

AI Solution Overview:

Stratio, Inc. is a company specializing in AI and sensor technologies, focusing on developing portable infrared solutions to enhance public safety. 

In collaboration with South Korea’s National IT Industry Promotion Agency (NIPA), Stratio initiated key developments for a new AI-enhanced image inspection solution in 2020 as part of the “AI Convergence for Illegal Counterfeit Inspection System” initiatives. Stratio significantly contributed to helping the Korean government identify design infringement cases at border checkpoints by developing an innovative app that detects counterfeit designs.

This new AI inspection system compares photos of objects to images within an IP database, streamlining the previously time-consuming process of sorting through numerous designs. The solution is now condensed into a user-friendly mobile app. Combined with Stratio’s sensor technology, the AI platform efficiently translates the data for accurate detection.

To improve the system’s accuracy, extensive data is required to accurately identify pirated items. By 2022, Stratio had secured data on at least 300,000 genuine and similar items across various fields, including luxury brands, beauty products, home appliances, and fashion. Additionally, with support from Korean customs, the system undergoes field demonstration tests and is refined based on feedback from customs employees, who are the primary users of the system.

The system enables users to photograph suspicious items with their mobile devices, and within 5 seconds, it generates a list of designs, identifying the rightful owner and providing results with prioritized probabilities.

References: 

1. Stratio and South Korea’s National IT Industry Promotion Agency (NIPA) Announce Technology Roadmap in 2023. https://www.globenewswire.com/news-release/2022/12/15/2574626/0/en/Stratio-and-South-Korea-s-National-IT-Industry-Promotion-Agency-NIPA-Announce-Technology-Roadmap-in-2023.html
2. AI Convergence Reading System for Illegal Duplication Project. https://oecd-opsi.org/innovations/ai-convergence-reading-system-for-illegal-duplication-project/
3. Blockchain, artificial intelligence and big data: how Korea Customs Service leverages technology to supervise e-commerce. https://mag.wcoomd.org/magazine/wco-news-96/blockchain-artificial-intelligence-and-big-data-korea/

Industry: Public Services

Vendor: Stratio, Inc.

Clients: The National IT Industry Promotion Agency (NIPA) and  the Korea Customs Service (KCS), South Korea

Publication Date: 2021