Extension of Domestic Sales Period for Duty-Free Stock Items Allowed Until First Half of Next Year

Provided by Korea Customs Service

[Asia Economy (Daejeon) Reporter Jeong Il-woong] The period allowing the domestic sale of stock duty-free goods has been extended until the first half of next year.

The Korea Customs Service announced on the 1st that it will extend the period of the "measure allowing domestic sales of stock duty-free goods after import customs clearance" in response to requests from the duty-free industry.

In principle, stock duty-free goods are only allowed to be returned to the supplier or discarded.

However, reflecting domestic and international conditions such as the COVID-19 pandemic and the global economic downturn, the Customs Service temporarily allowed domestic sales only for stock duty-free goods that have undergone import customs clearance (customs declaration and payment of duties) since April 2020.

Through this, from April 2020 to October this year, 29,142 cases of duty-free shop stock goods worth approximately 426.8 billion KRW were imported and cleared through customs.

However, this measure has been operated temporarily, and the duty-free industry has continuously requested the customs authorities to extend the period allowing domestic sales of stock duty-free goods.

The reason for the extension request is the difficult business environment due to the normalization of overseas travel not yet occurring domestically and internationally.

In response to the duty-free industry's request, the Customs Service has decided to maintain the measure allowing domestic sales of stock duty-free goods until the first half of next year.

Additionally, it left room to decide on further extension after the first half of next year, considering the conditions of the duty-free industry.

In particular, the Customs Service will also implement the "FTA Agreement Tariff Application Guidelines" from today, which allows stock duty-free goods to benefit from preferential tariff rates under FTAs, thereby reducing customs burdens.

Stock duty-free goods that can be sold domestically are only some of the unsold items initially brought into the duty-free shops, and it is difficult to prove the identity between the goods issued with FTA certificates of origin and the imported goods.

For the same reason, many cases have occurred where duty-free shops gave up FTA preferential tariff rates when selling duty-free goods domestically.

In this regard, the Customs Service has established an institutional device that links the serial numbers among the "certificate of origin - duty-free shop import declaration - import declaration" to verify the identity of the goods, and introduced a new "FTA preferential tariff application goods declaration form" that replaces seven types of documents previously submitted, such as commercial invoices, to reduce the burden of proof on duty-free shops.

With the allowance of domestic sales of stock duty-free goods and the application of preferential tariff rates to stock duty-free goods, the Customs Service expects to reduce the inventory burden on the duty-free industry caused by the prolonged COVID-19 pandemic and alleviate customs burdens.

A Customs Service official said, "Measures such as allowing domestic sales of stock duty-free goods are follow-up actions to the 'Duty-Free Industry Revitalization Plan (September 2022)' and are implemented considering the uncertainties and difficulties faced by the domestic duty-free industry due to the global economic downturn, active support measures for the duty-free industry by major competing countries, and the ongoing COVID-19 situation." He added, "The Customs Service plans to comprehensively review the progress of follow-up measures and discover and promote additional plans for 'duty-free industry revitalization.'"

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