Korea Customs Service to Streamline Operation of Bonded Construction Sites and Bonded Factories

The government is streamlining the operation of bonded construction sites and bonded factories to support the rapid establishment of advanced industry clusters, such as those for semiconductors, and to reduce costs.

The Korea Customs Service announced that it will implement revisions to the “Notice on the Management of Bonded Construction Sites,” with the changes taking effect from October 31.

Provided by Korea Customs Service

The bonded construction site system allows foreign equipment and materials required for building industrial facilities and manufacturing plants to be installed and used under deferred taxation until construction is completed.

This system is mainly used in advanced industries, such as semiconductors, to cut costs and simplify procedures.

The revised notice includes provisions that, when a manufacturing plant completed through bonded construction is to be operated as a single bonded factory together with an existing bonded factory, the head of the customs office with jurisdiction over the existing bonded factory can exclusively handle the licensing and management from the bonded construction site to the bonded factory.

The single bonded factory system allows two or more bonded factories operated by the same corporation within a 30-kilometer radius to be managed as a single factory. This enables swift movement of goods between single bonded factories without the need for procedures such as bonded transportation entry and exit declarations.

Previously, when the customs offices with jurisdiction over distant bonded construction sites and bonded factories were different, separate customs declarations for equipment and materials were required, increasing the risk of reporting errors.

However, the Korea Customs Service expects that the revised notice will resolve previous issues such as reporting errors, effectively prevent delays in cluster establishment, and help companies reduce costs.

An official from the Korea Customs Service stated, “We will continue to pursue bold regulatory innovation so that domestic companies can quickly respond to changes in the export environment caused by the United States’ high tariff policies and maintain their export competitiveness without disruption.”

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