[Square] Customs Administration in the Era of Private Trade

Im Jae-hyun, Commissioner of the Korea Customs Service. Photo by Korea Customs Service

Overseas direct purchasing has become a part of everyday life these days. Whether students, office workers, or homemakers, anyone can select and purchase foreign goods from online sales sites and receive them at their homes within a few days.

Thanks to the evolving information and communication technology (IT) environment and the supply chain ecosystem established by the e-commerce industry, consumers can now easily purchase foreign goods without going through the complex procedures of export-import contracts, transportation, and foreign exchange settlements that were previously handled by specialized trading companies. The era of personal trade, where one can buy products from overseas with just a few taps on a smartphone, has arrived.

According to data published this year by the United Nations (UN) Conference on Trade and Development, as of 2019, more than 360 million men and women aged 15 and older worldwide have experience purchasing overseas goods through e-commerce, with total purchase amounts reaching 440 billion dollars. In South Korea, the number of overseas direct purchase users has already exceeded 12 million, and the number of purchases is rapidly increasing by more than 30% annually, expected to reach 80 million transactions this year.

This scale is about four times larger than the number of traditional business-to-business (B2B) import transactions, illustrating that personal trade (B2C) has moved to the center of export-import transactions.

However, the current customs clearance system is designed based on business-to-business trade and has limitations in accommodating these changes in the trade environment. For example, in e-commerce imports, platforms, purchasing agencies, and others hold concentrated transaction information such as orders and payments and play a key role.

Nevertheless, the systems and regulations applied remain centered on import companies. In e-commerce exports, due to the small amount and multiple transactions nature, it is inconvenient to file export declarations with customs for each transaction, resulting in frequent cases where exporters do not receive customs refund benefits despite exporting.

In response, the Korea Customs Service established a dedicated e-commerce team last March and is currently working on restructuring the customs clearance system to suit the characteristics of e-commerce. First, it plans to sign business agreements with major domestic e-commerce platform companies and conduct pilot projects that utilize transaction information such as orders and payments they hold for customs clearance review.

Additionally, the customs import-export declaration items will be expanded to include domestic and international supply chain participants such as overseas sellers, platforms, and purchasing agencies, who are key players in e-commerce, and customs clearance benefits will be differentially granted based on their safety levels.

Efforts are also focused on providing convenience to the increasing personal trade while effectively blocking the import of illegal goods. The aim is to prevent the import of harmful items such as drugs, firearms, and counterfeit products by exploiting the relatively simple customs clearance procedures for overseas direct purchases.

Broadly, the core goal is to ensure that goods from companies guaranteed for safety and reliability are cleared quickly, while strengthening control over illegal transactions through selective and focused risk management.

In particular, November is the peak season for overseas direct purchases with large-scale discount events such as the United States' Black Friday and China's Guanggun Festival. The Korea Customs Service plans to intensively crack down on illegal and harmful goods imports during this period, as well as illegal activities such as the resale of duty-free cleared goods intended for personal use within the country.

Through these efforts, the Korea Customs Service will continue to support a healthy consumer culture and create a safe society in line with the era of personal trade.

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