Customs Act (Republic of Korea) By Ministry of Legislation INTRODUCTION Details of Enactment and Amendment ● Enactment: The Customs Act was enacted in 1949, and after being amended over more than 35 occasions, wholly amended in the year of 2000, and then partly amended in the year of 2002. This Act provides not only the regulatory details on the imposition and collection of customs, but also the matters concerning the overall customs administrative details, such as the taxpayer's right and procedure for filing objections, bonded area, clearance procedures, and punishment of customs criminals, etc. ● Amendment: The recent amendments of the Customs Act have been made in the year of 1998, 1999, 2000 and 2002, and such amendments are meant to improve the bond systems in order to induce foreign investments, to simplify the appeal procedures against the imposition of customs, and to strengthen the guarantee of duty payer's right by enacting the Charter of Duty Payer's Rights. The grounds for TSG (Transitional Safeguard) against China are newly established according to the joining of China in WTO, the e-delivery system and the system of designation of e-document brokerage operator are newly introduced to implement e-government, and the requirements for the return of travelers' personal effects excessively carried in are strengthened to restrict indiscreet shipping-in of personal effects. Main Contents ● The customs are imposed in principle based on the time of import declaration, but their tax rates are separately stipulated in the Tariff Schedule: Provided, That the simple customs are imposed on personal effect, mail, and consignment. And, in case where the anti-dumping duties (51~56), countervailing duties (57~62), retaliative tariffs (63~64), safeguards (65~67), special emergency duties on farm and dairy product (68), control tariffs (69~70), quota duties (71), seasonal duties (72), international cooperation tariff (73), convenience duties (74·75), or general preferential tariff (76·77) are imposed, the customs rates as listed in the Tariff Schedule are applied after the required adjustments. ● The bond systems have been improved in order to induce foreign investments. A selected area is designated as a bonded area, and by making it possible to comprehensively perform the functions of bonded warehouse, bonded factory, bonded exhibition facilities, bonded construction site, and bonded stores within the general bonded areas, the occupying companies are to become capable of producing, storing, selling and exhibiting goods and products under the conditions of foreign goods. Also, the renovation works, which have been allowed only within the bonded area, are now allowed to be made outside of the bonded areas. ● The appeal procedure against the imposition of customs duties are adjusted so that the payers of customs duties are now given the prompt reliefs to rights. Previously, in case where any person was dissatisfied with the imposition of customs duties, an administrative litigation might be initiated only when going through the request for investigation and of trial; however, it has been amended that such an administrative litigation may be initiated if one goes through only one of the said requests. In case where a customs collector intends to collect, on account of any shortage in payment of customs duties, such an insufficient amount by means of revising the amount of customs duties, he shall notify in advance the tax payer thereof. If the tax payer is dissatisfied with such a revision of customs duties, he is entitled to request an investigation on the legitimacy of such duties. Furthermore, the period for requesting a revision, in case where the tax amount returned and paid is excessive, has been extended to within 2 years from the date of first tax return, from the previous period of one year. ● The Commissioner of the Korea Customs Service shall set forth the Charter of Taxpayers and publicly notify thereof, and if any customs official investigates a case of offense against an evasion of customs duties, illegal reduction or exemption, and illegal refund, or makes an investigation by visiting the taxpayer for a disposition of customs duties imposition, he shall deliver the Charter of Taxpayers to the relevant taxpayer. If any taxpayer requests for an information required for exercising his rights, the customs official shall provide it swiftly, and at the same time, every effort has been made for ensuring that no taxpayer shall be subject to any disadvantages due to insufficient information, by providing the information of which the taxpayers are to become aware, along with the information requested by them. ● The permit system for a temporary unloading of foreign goods on board the ships or aircraft and a cargo transfer, etc. between the transport means has been converted into the report system, and the approval system for the cargo unloading by the vehicles gaining access to the border and the transport of domestic goods by foreign trade ships or trade aircraft has also been converted into the report system. ● The rapid clearance system has been introduced for the goods in the electronic commercial transactions, and the goods for which a storage period has been expired are now allowed to be sold in the cybermalls. ● Emergency tariffs may be imposed in case where the increased import of the goods of a particular country causes disruption to the domestic market or is seriously feared to cause disruption to the domestic market or where the goods of a particular country are additionally imported to Korea following measures taken by other member nations of the World Trade Organization against the goods of such particular country to relieve or prevent their damages. ● The head of any custom house may make e-delivery by means of a computer. E-delivery shall be made only when any person entitled to taking such delivery applies for such e-delivery and shall be deemed to be delivered when it is input in the computer designated by the person entitled to taking the delivery. Any person who intends to run the business of brokerage of e-declaration using electronic data-processing equipment shall get his intended business designated by the Commissioner of the Customs Service. ● The return of travelers' personal effects as otherwise determined by the Commissioner of the Customs Service shall be subject to any method and time as determined by that Commissioner. Wholly Amended by Dec. 29, 2000 Act No. 6305 Amended by Aug. 26, 2002 Act No. 6705 Dec. 18, 2002 Act No. 6777 CHAPTER I GENERAL PROVISIONS SECTION 1 Common Provisions ■ Article 1 (Purpose) The purpose of this Act is to properly administer the imposition and collection of customs duties and customs clearance of goods exported and imported and to secure revenues from customs duties with the aim of contributing to the development of the national economy. ■ Article 2 (Definitions) The definitions of terms used in this Act shall be as follows: 1. The term "import" means the shipment of foreign goods into Korea (including any foreign goods shipped into Korea through any bonded area in the country) for consumption and use (including the consumption and use of foreign goods made in the process of transporting foreign goods in Korea and excluding the consumption and use of foreign goods falling under each subparagraph of Article 239) in the country; 2. The term "export" means the shipment of domestic goods out of Korea into foreign nations; 3. The term "foreign goods" means goods falling under each of the following items: (a) Goods (including marine products, etc. collected or caught by foreign fishing boats, etc. in the high seas) which arrive in Korea from any foreign nation before an import declaration thereon under Article 241 (1) (hereinafter referred to as "import declaration") is accepted; and (b) Goods whose export declaration under Article 241 (1) (hereinafter referred to as "export declaration") is accepted; 4. The term "domestic goods" means goods falling under each of the following items: (a) Goods which exist in Korea and which are not foreign goods; (b) Marine products, etc. collected or caught by Korean fishing boats in the high seas; (c) Goods whose import declaration filed under Article 244 (1) prior to their arrival in the port of entry (hereinafter referred to as "import declaration prior to port entry") is accepted; (d) Goods shipped into Korea upon shipment approval prior to the acceptance of an import declaration under Article 252; and (e) Goods shipped into Korea on the immediate shipment declaration prior to the import declaration under Article 253 (1); 5. The term "foreign trade vessel" means the vessel sailing between Korea and foreign nations for international trade; 6. The term "foreign trade aircraft" means the aircraft flying between Korea and foreign nations for international trade; 7. The term "domestic vessel" means the vessel sailing exclusively within the territorial waters of Korea; 8. The term "domestic aircraft" means the aircraft flying exclusively in the territorial sky of Korea; 9. The term "vessel supplies" means beverages, foodstuff, fuel, consumables, ropes, spare parts used for repairs and components, office fixtures and other similar goods which are exclusively used in the relevant vessels; 10. The term "aircraft supplies" means supplies which are corresponding to the vessel supplies and used exclusively for the relevant aircraft; 11. The term "vehicle supplies" means supplies which are corresponding to the vessel supplies and used exclusively for the relevant vehicle; 12. The term "customs clearance" means exporting, importing or returning goods according to procedures prescribed by this Act; 13. The term "transshipment" means the act of transshipping goods from any entering or incoming transportation means onto any departing or outgoing transportation means in the jurisdictional area of the same customhouse; and 14. The term "operator" means the person falling under each of the following items: (a) A person who has been granted a licence for establishing and operating a licensed bonded area under Article 174 (1); and (b) A person who has filed a report on the establishment and operation of a general bonded workplace under Article 198 (1).