Customs Service Drives Regulatory Innovation in Bonded Warehouse System to Support Key Export Industries

The Korea Customs Service is easing regulations on bonded warehouse systems to support the development of domestic export industries.

On the 3rd, the Korea Customs Service announced that it will revise and implement the "Notice on the Operation of Bonded Factories" and the "Notice on the Management of Goods Exported and Imported in Free Trade Zones" for this purpose.

The revised notices include ▲ complete omission of customs procedures for outsourced work at self-managed bonded factories ▲ simplification of export-import procedures between manufacturing and logistics supply chains ▲ relaxation of import customs clearance regulations for facility materials ▲ improvements in the patent period of bonded factories and the operation of the patent review committee.

Provided by Korea Customs Service

The complete omission of customs procedures for outsourced work applies to self-managed bonded factories (excellent bonded factories that meet specific requirements among companies with outstanding export-import safety management) that carry out bonded processing outsourced to external partners at work sites outside the bonded factory. This allows for the rapid manufacturing and processing of export goods without prior customs approval or administrative procedures, thereby reducing costs.

With the revision of the notice, rapid movement of raw materials and export goods will also be possible in the future.

Previously, to move raw materials and export goods between bonded factories, free trade zones, and complex logistics bonded warehouses, a separate cargo management number had to be created and a formal bonded transportation declaration had to be made. This regulation has been abolished, allowing export-import declarations and bonded transportation declarations to be processed simultaneously without a separate cargo management number.

The relaxation of import customs clearance regulations for facility materials focuses on abolishing administrative sanctions (warnings) imposed when machinery and equipment used in bonded factories for manufacturing and processing export goods are not cleared within 30 days of import, and extending the storage period of facility materials in bonded factories from one year to the duration of the patent period.

The Korea Customs Service has also improved the overall operation of the bonded factory patent period and the patent review committee.

Provided by Korea Customs Service

Previously, if some leased facilities were included in the area applied for the bonded factory patent, the patent period was limited to the lease period, requiring repeated renewals of the bonded factory patent according to the lease contract period (1 to 2 years).

However, from the revision of the notice onward, even if leased facilities are partially included in the bonded factory patent application area, long-term patents of up to 10 years can be granted.

In addition, the Korea Customs Service has revised regulations related to the bonded factory patent review committee and reflected many requests from export-import sites, such as abolishing work scope restrictions for bonded factories with import purposes.

A Korea Customs Service official said, "The revision of the notice is part of regulatory innovation, guaranteeing the autonomy of bonded factory operations and simplifying procedures related to the bonded factory system, including the import and export of goods and manufacturing and processing. The Korea Customs Service will continue efforts to boldly improve unnecessary regulations in manufacturing and logistics sites and expand the autonomous management of bonded cargo by sincere companies to invigorate the domestic export economy."

Meanwhile, "bonded" (保稅) means deferring the collection of customs duties imposed on foreign goods, and bonded factories can manufacture and process foreign raw materials in a bonded state for export.

Most of South Korea's major export industries currently utilize the bonded factory system, and the export share using bonded factories accounts for about 90% in industries such as semiconductors and shipbuilding.

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