Korea Customs Service "No Collateral Guidelines for Re-export Conditioned Imports"

[Asia Economy (Daejeon) Reporter Jeong Il-woong] The collateral burden that companies must provide to customs authorities when importing goods from overseas on the condition of re-export will be temporarily eliminated.

The Korea Customs Service announced on the 15th that it will implement guidelines to temporarily omit collateral provision as a measure to reduce the financial burden on export-import companies due to the prolonged COVID-19 pandemic.

The re-export duty exemption/reduction system exempts or reduces customs duties imposed when temporarily importing machinery and parts for aircraft repairs, industrial machinery repair machines, and the like.

However, at this time, customs authorities require companies to provide collateral equivalent to the customs duty amount on the goods in case re-export does not occur under the condition of duty exemption or reduction. For example, last year, about 3,000 companies provided collateral worth approximately 40.7 billion KRW.

But with the no-collateral guideline, it is expected that companies' collateral burdens will be reduced for the time being. In particular, the Korea Customs Service anticipates significant benefits for airlines and manufacturers that frequently use the re-export system.

The benefit of collateral omission can be received by applying and registering as a COVID-19 affected company at the ‘COVID-19 Customs Clearance Difficulty Support Center’.

A Korea Customs Service official said, “The no-collateral guideline is decided and implemented after consultation with the Active Administration Support Committee within the Korea Customs Service,” and added, “The Korea Customs Service plans to increase external personnel from 8 to about 20 and strengthen the committee’s role through the formation of a specialized committee to remove obstacles to active administration promotion in the future.”

This content was produced with the assistance of AI translation services.