Reforming the 'Bose Factory System'... Korea Customs Service Innovates Customs Clearance and Logistics Regulations

The Korea Customs Service is revising the bonded factory system to enhance the export competitiveness of the nation's advanced industries.

On the 9th, the Korea Customs Service announced the "Customs and Logistics Regulatory Innovation Plan" at the "Emergency Economic Ministers' Meeting and Export Investment Countermeasures Meeting" chaired by Deputy Prime Minister Choo Kyung-ho.

The bonded factory system allows raw materials to be brought into domestic factories from overseas for manufacturing and processing without import declaration (without paying customs duties, etc.).

The main sectors utilizing this system are advanced national industries such as semiconductors, displays, shipbuilding, and bio industries. As of last year, the export share using bonded factories in these sectors was around 90%, playing a pivotal role in supporting the export of the nation's advanced industries.

However, the current bonded factory system has been criticized for weakening companies' export competitiveness due to regulatory hurdles. Representative regulations include restrictions on cargo management such as export/import and transportation to prevent customs evasion, limitations on goods stored within the bonded factory's own warehouse, and storage period restrictions.

Accordingly, the Korea Customs Service plans to enhance the export competitiveness of bonded factories by expanding the omission of customs declaration and approval procedures, abolishing restrictions on export/import and stored goods, and relaxing storage period limits.

First, excellent companies designated as self-managed bonded factories will be allowed to replace prior approval procedures for outsourcing external processes outside the bonded factory with their own record-keeping and management.

Additionally, for goods requiring rapid logistics support such as raw materials, intermediate goods, and finished products in advanced industries, export/import declarations will be automatically approved immediately upon filing. In cases where defective analysis goods need to be urgently exported at night or on holidays, they will be allowed to be exported without import declaration and then declared within 10 days.

Restrictions on export/import goods will also be abolished. Previously, companies could not bring in or store goods unrelated to the manufacturing process in the bonded factory's own warehouse, requiring them to rent additional bonded warehouses for storage. However, going forward, the Korea Customs Service explains that goods unrelated to the manufacturing process, such as those for storage or sale, will be allowed to be stored and exported/imported in bonded factories.

Furthermore, the storage period for goods brought into bonded factories will be relaxed from the existing one year to "until the patent period," and administrative sanctions for delayed import declarations (warnings for delays over 30 days) will be abolished to reduce the burden on companies.

The regulatory innovation plan also includes expanding electronic commerce customs clearance infrastructure by region. Recently, the mode of e-commerce cargo transport has shifted from air to sea, and customs clearance areas have expanded from the metropolitan area to nationwide. However, customs clearance facilities are concentrated in the metropolitan area, making it urgent to install overseas direct purchase customs clearance facilities in major ports and to accommodate the increase in overseas direct purchases by residents outside the metropolitan area.

Therefore, the Korea Customs Service plans to establish and foster regional e-commerce customs clearance hubs in areas such as the Gyeongin region (Incheon Port), the West Coast region (Gunsan Port), and the Yeongnam region (Busan) to promote rapid customs clearance of overseas direct purchases, reduce logistics costs, and revitalize local economies.

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